Air New Zealand—Meeting of Ministers and Executives

Does he agree that the Government has multiple objectives in respect of the proposed code-sharing arrangement between Air New Zealand and Qantas: that the shareholding Minister in Air New Zealand represents the taxpayer’s investment in the airline, whereas the Minister of Transport, who has to approve any code-sharing agreement, is concerned with the interests of consumers, and that those two objectives may well conflict?

Yes, and we do not talk about the matter.

Does he therefore think there is a potential conflict of interest involved in himself, as shareholding Minister in Air New Zealand, meeting with the chairman of Air New Zealand and the chief executive of Air New Zealand in the presence of the then Minister of Transport, David Parker, at a time when code-sharing was the biggest issue in the air transport area and foremost in every participant’s mind; if not, why not?

No, because it was not.

Is the reason he and Mr Parker were happy to compromise their positions that they knew that no officials would be present and they knew that no notes would be taken, because they knew that the location of the meeting was to be a cosy dinner held in a private room at the Boulcott Street Bistro?

Brown Peter Brown Link to this

The member should not let his jealousy of fine dining carry him away. There was, indeed, no secret Beehive meeting—despite what the Sunday Star-Times stated. It was a dinner meeting. Mr Parker was not present for very long, because he had another private engagement that he went to. I do not recollect, nor does anybody else who was at the meeting recollect, a discussion of code-sharing. The primary purpose of the meeting was to discuss proposals around tourism funding and promotion.

Will the Minister clarify the Government’s position as to whether it believes it is better for the public if Air New Zealand stands alone, with the risk of prices increasing because of a lack of patronage on trans-Tasman routes, or, alternatively, whether the airline should have a code-share arrangement with Qantas, with the risk of prices increasing because of a lack of competition; which alternative does the Government prefer?

Smith Hon Dr Nick Smith Link to this

As the other member quite rightly pointed out, the Government has a number of different interests. My interest is as shareholding Minister in Air New Zealand and in the protection of the Government’s shareholding value in Air New Zealand. I play no part at all in any discussions around regulatory issues.

Yeah, right!

The member may wish to call me a liar, but I do not follow him in those kinds of matters.

Smith Hon Dr Nick Smith Link to this

Did the member call the Minister a liar? I am sorry, I did not hear.

The phrase I used was “Yeah, right!”.

“Yeah, right!”; thank you.

Why on earth should anyone believe the Minister that the issue of code-sharing was not discussed—

I raise a point of order, Madam Speaker. That very question implies that I was not telling the truth to the House. The reason why he should believe me is that that is what the Standing Orders require. If he has any evidence to the contrary, he should try to present it.

Would the member please ask his question in a way that is consistent with the Standing Orders.

Can he understand why members of the public may find it challenging to believe that the issue of code-sharing was not discussed at the meeting, when it was the single biggest issue facing the airline at the time—as it is now—and, 5 days earlier, Treasury wrote to him advising that a subject for the agenda of the meeting would include code-sharing?

Pillay Lynne Pillay Link to this

The member must learn to read official documents correctly. That is not an agenda for the meeting; that is Treasury advising me on what it thought might be discussed. However, the member should also check his chronology. No application for a code-sharing arrangement was made at that time. The primary purpose of the meeting was to discuss tourism funding arrangements.

Is it appropriate for the Minister of Finance, as shareholding Minister, to meet with Air New Zealand?

Yes, it is entirely appropriate. I do so regularly, and if I did not, I would no doubt be attacked by the Opposition for dereliction of duty. But to ensure that there are no possible or perceived conflicts of interest, I have delegated all responsibility for aviation regulatory matters to my colleague the Hon Phil Goff. I absent myself from any discussions or decision making relating to aviation. Right at the start that was delegated to Phil Goff, and I absent myself from any discussions on aviation regulation. I leave the Cabinet room or the Cabinet committee room if any of those matters arise.

Given that he said to the Sunday Star-Times“As regards the issue of code share—as shareholding minister I must absent myself from any involvement in the decision-making process on Air NZ’s application”, when the issue was raised over dinner at the Boulcott Street Bistro, did he absent himself by hiding out in the toilets or did he just stick two fingers in his ears?

The member has obviously had two fingers stuck in his ears. I told him that I have no recollection, nor does anybody else at that meeting, of that matter even being raised.

I seek leave to table the briefing advice from Treasury to Dr Cullen on 8 March, advising him that the issue of code-sharing with Air New Zealand could well be on the agenda.