Govt alleges Cabinet was by-passed

Press, 26 December 1986, Page 7

Govt alleges Cabinet was by-passed

PA Wellington The last National Government had bought the ammonia urea plant without normal Cabinet approvals, the Government has asserted.

The Treasury had been specifically told by the previous Minister of Finance (Sir Robert Muldoon) not to report on the question of acquiring land for the plant, said the Minister of Trade and Industry, Mr Caygill.

He also said the Crown's negotiators to the synthetic petrol plant had been severely prejudiced by the previous Minister of Energy, Mr Birch, holding private discussions with the oil companies.

He said normal contracting procedures over the Marsden Point refinerv expansion were not followed. The Cabinet Economic Committee had been anxious to obscure

the fact it was guaranteeing finance for the expansion.

Mr Caygill said those aspects of “think big” had been contained in a Cabinet report by the Minister of Finance, Mr Douglas, who had reviewed procedures adopted by the National Government over the “think big” projects. The report was an indictment of the previous Government, he said during a debate on the Supplementary Estimates in Parliament. The Government is seeking approval for 59.7 billion in Supplementary Estimates. More than S 9 billion relates to the financing costs of the largest “think big” projects, including additional debt being taken over for New Zealand Steel, increased provision for interest payments, and changes in the exchange rates.