Govt accused of paying Equiticorp to take N.Z. Steel

Press, 2 December 1987, Page 2

Govt accused of paying Equiticorp to take N.Z. Steel

By

BRENDON BURNS,

political reporter

The Government not only gave away New Zealand Steel but paid Equiticorp to take it away, said the Deputy Leader of the Opposition, Mr Don McKinnon, yesterday. He was continuing his attack on the Government’s handling of the project and its sale.

Mr McKinnon has said Equiticorp ’is gaining $2500 million in tax writeoffs by buying the project for a price of $327 million.

Yesterday in Parliament he attempted to get the Minister of Finance to confirm the value of this tax write-off. But an Asso-

ciate Finance Minister, Dr Cullen, refused to be drawn. This would depend on Equiticorp’s ability to use the tax benefit in offsetting it against other taxable income.

But Dr Cullen said he knew the project had caused the Government to take on debts of about $2OOO million for the project because of the decisions of the Muldoon Administration. Mr McKinnon said the Labour Government had systematically destroyed any chance taxpayers ever had of gaining a valuable asset from New Zealand Steel. “They began by taking

the Government guarantee which necessitated the company renegotiating its loans at much higher interest rates,” he said. Government-induced in-

flation and appalling union practices also priced the plant to a level where it could not possibly run profitably. An understanding on the price of coal for the plan was reneged on, he said.

Treasury officers wanted the Government to sell the project at any cost, said Mr McKinnon, and small New Zealand shareholders had been ripped off.