Spy base mentioned in leaked documents

Press, 17 December 1988, Page 8

Spy base mentioned in leaked documents

By

PATTRICK SMELLIE

in Wellington

The future of the Waihopai spy station in Blenheim was discussed during the consideration of spending cuts in this year’s Budget. This was revealed yesterday in Cabinet papers which the former Minister of Finance, Mr Douglas, made available to journalists. The papers, which proved that the Prime Minister, Mr Lange, knew there would be a smaller deficit than he warned of in his National Press Club speech, on June 29, contain much previously unreleased material. On the Waihopai spy station at present under construction, they said: “The outcome of discussions between the Prime Minister, the Minister of Finance, and the Minister of Defence is that Waihopai will continue.” This leaves the strong impression that Mr Douglas opposed the Waihopai project for the same

reason as he opposes the frigates project — their cost. Revealing this detail may also be one of the most serious breaches of Cabinet secrecy by Mr Douglas. The Cabinet Manual pays particular attention to matters of national security. Other decisions, not all of which have been acted on, but which have before been made public include: 0 A $2OO million target for savings next year in income-tested health, and sueprannuation benefits. The Ministers of Health and Social Welfare were to report on this by July 31, 1988. • An agreed preference among Cabinet members for leasing rather than selling the assets of the Forestry Corporation. Since then, the sale of the corporation has been announced, contrary to that agreement. 0 Noting that “the Government needs a mediumterm strategy that aims to

be close to a financial surplus in 1989-90, but that no statement be made on the matter.” Mr Caygill said this week that his target was to announce a financial surplus in the election-year Budget. © Agreement to further cut the deficit through reduction of low-quality spending. . ® Noting that early estimates of next year’s deficit meant further consideration of revenue increases would be required. © Noting that there would be no further increase in taxes in this year’s Budget — a possible reference to the revelation by Mr Douglas this week that Mr Lange attempted to raise the top personal and company tax rates. • Rescinding a decision to stop subsidising the Parliamentary catering service. • Discussion of a 50 per cent reduction in primary and secondary-

school bus subsidies, worth $7O million a year. ® Charging the Government Life Insurance company a fee of about $l6 million a year for the use of the word “Government.” • Removing tobacco from the Consumers Price Index (the main measure of inflation) through Budget night legislation. Budget night changes in the price of cigarettes in 1986 added a full 1 per cent to quarterly inflation figures. The managing director of Government Life, Mr Hutton Peacock, said last evening that he was amazed at the suggestion of charging for use of the word “Government.” “We should be charging the Government, if anything,” he said. “Our name gives us no competitive advantage at all. In fact, the board intends changing the corporation’s name altogether next year.”