Jeffries defends Air N.Z. sale decisions

Press, 9 November 1988, Page 8

Jeffries defends Air N.Z. sale decisions

PA Wellington The Associate Minister for State-Owned Enterprises, Mr Jeffries, yesterday defended his decision to announce publicly the Government’s awarding to Qantas preferred-bidder status for Air New Zealand. - Documents released by the former Minister for State-Owned' Enterprises, Mr Prebble, showed that Government advisers had recommended the Government should enter negotiations with British Airways instead of Qantas, and that no public announcement should have been made until any deal was finalised. Mr Jeffries said yesterday there was “honest dispute among advisers and myself” over which airline should be preferred. The matter had been a “big decision” with the choice not simply between right and wrong. “It is a choice between right and right,” he said. “The decision the Government faced and faces again as to whether the future airline partner will' be British Airways or whether it will be Qantas, or whether in the light of the reopening of the bids it may be something else, continues to be a big decision. "I simply want to say the advice was balanced,

it revealed the respective advantages of each airline, and the question of preference was very, very narrow.” Mr Jeffries said he decided to make the announcement in favour of Qantas after receiving written Treasury advice that it was unavoidable that a publication had to be made that day. “The decision to publish in my view was unavoidable because if the Government did not publish that decision, assuredly the party that was asked to enter into final negotiations ... may have published that decision itself and may have published it in the way of these things on terms that were very satisfactory to it and would in fact have narrowed the Government’s negotiating position,” he said.

However, Mr Jeffries said he had received advice later that day not to publish, “but in the end I decided to do so.” Mr Jeffries said politicians must ultimately be supreme in the sale processes. “Advisers are advisers. In the end it is the public figure answerable in public and in Parliament for one’s conduct and judgment that must make the ultimate decisions.” Asked who had advised in favour of Qantas, Mr Jeffries said, “There were various parts of the advice that came in that identified the attractive features of it. “The point about all this is that it has commercial, political, technical factors that had to be worked out and a judgment made. “Different parts of Government that represent those areas had their particular view. “The object of Government is for them to synthesise and weigh up and make a judgment. “The proposition is there was honest division. It is not a simple matter of accepting one airline and rejecting another — both of those particular bidders had very power-, fully attractive features to them.” Asked if his decision went against the main weight of evidence, Mr Jeffries said, “There was division and that is not' surprising.”