10. HEATHER ROY (Deputy Leader—ACT) Link to this
to the Minister of Defence
What will the net return to the New Zealand taxpayer be, as at today, under the terms of the current sale offer when all Skyhawk and Aermacchi aircraft and ancillary equipment are sold, after all expenses including fixed, variable and cost-of-sales items are taken into account?
Hon PHIL GOFF (Minister of Defence) Link to this
A heads of agreement was signed with Tactical Air Services for the sale of the aircraft in September 2005, conditional on the approval of the United States Department of State. For reasons not attributable to nor under the control of New Zealand, Tactical Air Services has not yet received that approval. Unless and until that occurs it is not possible to calculate the net return.
I raise a point of order, Madam Speaker. The question asked what the net return would be as at today, with costs being calculated today. It was a very specific question. The Minister has had a good deal of time to investigate the answer. Any Minister worth his or her salt would have a business plan that would look at that before—
Madam SPEAKERAs the member well knows, members cannot require specific answers to questions. Ministers have to address the question, and in this instance the Minister did actually address the question.
When he responded to question for written answer No. 8841 in 2006 by saying that the Skyhawks would be kept at a level to enable operational regeneration by the purchaser, did he mean that all required aircraft consumables and rotables would be fitted to the aircraft; and did the previous Minister of Defence Mr Burton go so far as to sign up to provide additional spares for the fleet as well; if so, is not the cost of this almost as much as the entire sale price?
I am not sure that the member’s question made a lot of sense. The spares do have an accounting value of nil, and, obviously, all the spares would be sold with the aircraft, which are being turned over once a year but are not being kept in a flying state.
H V Ross Robertson Link to this
Can the Minister tell the House what the cost was of operating the air combat wing and what the cost would have been of retaining it?
The monthly cost of operating the air combat wing was approximately $16 million, or around $200 million a year. It might interest the House to know that the total value of the aircraft is much less than the cost of operating them for 1 year. The cost of retaining an air combat wing would have required a capital investment of over a billion dollars, and to operate them would have required an increase in the operating baseline costs of about $1.2 billion over 10 years. That is probably why the National Party has done a total flip-flop and now reversed its position of wanting to retain an air combat wing. Its unreconstructed branch in the ACT party, however, still has that funny delusion.
Dr Wayne MappWhat progress has the Minister made since his visit to the United States in May of this year—where he apparently has very good relationships—towards getting State Department approval for the sale, or will this just go on, and on and will it be the case that, as the Prime Minister says, the aircraft will be simply of interest to “the odd collector”, which she stated last month?
The progress that was made was that I was able to draw to the attention of both the State Department and the Department of Defense the fact that there was a problem. They were able to give an explanation and an expression of regret. The failure to give approval had nothing to do with New Zealand but everything to do with matters between it and Tactical Air Services. In respect of the Prime Minister’s comment, the A4s—the Skyhawks—are, of course, very old aircraft with a limited value. The Aermacchi, however, do have a greater actual value, and if this deal does not go through—and the deal involves the sale of both sets of aircraft—then the Aermacchi would probably be sold separately. They are in flying order.
How much longer must the air force suffer loss of operational budget by having to maintain the Skyhawks and Aermacchis, and when the sale finally goes through, as he insists it will, can the air force expect fair and reasonable recompense for its interest-free lending to the Government for this bungled sale?
I do not know where to begin answering the total misstatements, inaccuracies, and untruths in that statement. Let me remind the member of what I said before. It costs about $130,000 a month to maintain these aircraft. When they were operating we were spending $16 million a month. The ACT party apparently wants to spend several billion dollars on an air combat wing but promises to halve the tax people are paying, and ACT has never explained the discrepancy in those two stances, which are totally inconsistent.
I seek leave to table a statement in the Dominion Post of August this year, where the Prime Minister says—