N.Z. to press for lower frigate price

Press, 22 August 1989, Page 1

N.Z. to press for lower frigate price

By

BRENDON BURNS

in Wellington

Australia is under pressure from New Zealand to reduce its price for Anzac frigates. A visit to Canberra is likely soon by the Ministers of Finance and Defence, Mr Caygill and Mr Tizard.

Today a team of officials will go to the Australian capital to negotiate a cheaper deal, but the Prime Minister, Mr Palmer, believes he will have to send the two Ministers.

Mr Palmer, speaking after yesterday’s Cabinet meeting, said there had not been much movement by Australia on price recently. Complex technical matters were involved but the essence of the negotiations was simple — “How much is it going to cost New Zealand?” The further delay in a Government decision on Anzac frigates was seen by a Just Defence spokesman, Mr Kevin Hackwell, as evidence of a victory for frigate opponents. He said Mr Palmer knew the Government caucus was against buying the frigates. The Prime Minister would use Australian rejection of further price cuts as a face-saving measure when it came to rejecting Anzac frigates, said Mr Hackwell.

But the delay can also be seen as giving Mr Palmer more time to swing a majority of Labour

members of Parliament in behind the deal, particularly if the price can be cut further. Already Australia is understood to be providing ships to New Zealand at about $9O million less than it will pay for its own vessels.

Further union support for the deal has emerged, with the New Zealand Electrical and Electronics Workers’ Union urging involvement.

The union’s secretary, Mr John Fisher, said more than $179 million in work was possible for his industry’s workers.

The project provided a stable long-term base to redevelop New Zealand’s high technology industries.

Mr Fisher endorsed the Manufacturers’ Federation call for the $9OO million of work available to New Zealand, if it buys four frigates, to be written into any frigate contract. A spokeswoman for Australia’s Minister of Defence, Mr Beazley, said yesterday that she was not aware of any proposal for New Zealand Cabinet Ministers to visit Canberra.

But she said Mr Beazley would welcome any opportunity to meet Mr Caygill and Mr Tizard. Australia’s position remained that it was for New Zealand to make its own decision on frigates, but it hoped participation was confirmed, said the spokeswoman.

Mr Palmer yesterday rejected a suggestion that Australia wanted New Zealand to pay for some of the costs of setting up frigate-building industry.

He said the difficulty was how costs should be assessed for such a project. Mr Palmer felt unable to discuss whether the sticking point in negotiations was the sail-away price of the Anzac frigates or the longer term costs.

“Those details become fearsome,” he said.