Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: Govt must pay for Pike tragedy

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Mine explosion a national disaster and victims' families deserve $3.41m in reparation

The Govt is paying for the operation to try to retrieve the bodies from the coal mine. Photo / NZ Herald
The Govt is paying for the operation to try to retrieve the bodies from the coal mine. Photo / NZ Herald

John Key's Government has displayed an uncharacteristically tin ear with its stance that New Zealand families who experience tragedies will expect equal treatment from the Government if it funds $3.41 million reparations for the Pike River families.

"Every other family in New Zealand that experiences a tragedy, which may be less high-profile and less politicised, has a right to expect equal treatment to the Pike River families," was how Finance Minister Bill English parried away Labour leader David Cunliffe's cry for Government action in the wake of the blanket refusal by Pike River's directors and shareholders to stump up towards the court-ordered reparations bill.

The Key Government is adamant that the ACC payments available to the victims of all accidents - from the banal and self-inflicted to those caused by rampant incompetence and negligence - should be equal.

But Pike River was a "national disaster" - something out of the ordinary which demands a different response as evidenced by the fact that the families of the 29 Pike River disaster victims are already getting special treatment.

Cabinet ministers turned out en masse for a memorial service on the West Coast to honour the victims of the methane explosion. The Government is also ponying up funds to try to retrieve bodies from the coal mine, an endeavour that while noble is fraught with danger.

English's view that ACC should simply treat the Pike River families on the same basis as any other family that suffers a workplace accident or death, while logical does not fly politically. No Government goes to such an extent for the victims of ordinary-scale accidents such as a motor vehicle crash, a forestry accident or, at the most banal, a fall from a ladder.

And another $3.41 million on top of the millions of dollars of Government cash already spent on the commission of inquiry, court cases and so forth won't break the bank.

But what it will do is underline that the Government has respect for the moral force of Judge Jane Farish's ruling and that the Crown - given the obvious negligence of the prior Labour Department's monitoring of Pike River's safety standards - is prepared to step up.

A failure to do so invites the observation that the Key Government was prepared to take the limelight during the harrowing and symbolic mass mourning that has taken place on the coast and that Key and his Cabinet, having politically elevated the disaster to a national tragedy, prefer to stay absent from the fray and refuse to take a moral stance when political leadership is required.

Their failure to do so has of course given Cunliffe an opening and enabled him to paint Key's Government as a heartless lot. He maintains if Labour was in charge it would pay the money outright and he would then use the "power of the Prime Minister" to get the directors and shareholders to reimburse his Government.

In truth, Prime Ministers have always applied an element of fudge and nudge - including significant dollops of taxpayer cash - to get the private sector to do their bidding. Rod Emmerson's brilliant cartoon (Key Lorde-ing it up) in yesterday's Herald underscored that in contrast to Pike River, the Government has given a $30 million subsidy to the Tiwai Pt aluminium smelter.

It's worth noting that the Cave Creek disaster also set a precedent when a previous Government stumped up $2.6 million to the families of the 14 victims of that tragedy. Then as now there were ministerial resignations. This obviously points to an element of culpability by the Governments and the departments concerned: Conservation (Cave Creek) and Labour (Pike River).

Not surprisingly, the Labour leader's tactics are raising eyebrows in corporate circles, particularly among directors who are starting to feel they will have to factor in an element of political risk (on top of the blindingly complex commercial risks that now exist) if there is a change of government after next year's election. The corporate community tends to believe Farish was out of line when suggesting the $3.41 million reparations should be funded by Pike River's biggest shareholder, New Zealand Oil and Gas, given the fact that the company itself is bankrupt.

But the real issue for Key and his Government is how its stance plays out in the political arena.

Ordinary human tragedies tend to not live very long in the public consciousness.

But the Pike River disaster shocked New Zealanders to their core.

It exposed unbelievable negligence by the Labour Department and the Pike River company.

It was especially shocking as this negligence was on a scale that might be expected in a Third World country, not New Zealand.

Cunliffe is right: The Government should fill the breach and pay the $3.41 million to the families.

- NZ Herald

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