Exchange rules will block MPs' prying eyes from Air NZ

By KEVIN TAYLOR and CHRIS DANIELS


Air New Zealand will now be subject to more rigorous political scrutiny, but its obligations to stock exchange listing rules may prove an obstacle to prying MPs.

Parliament this week voted to give itself the power to scrutinise the airline, which is 82 per cent owned by the Government.

MPs voted without dissent to make it a "public organisation" for the purposes of Parliament's standing orders.

Finance Minister Michael Cullen said the motion put by the Government was in response to concerns raised by a number of MPs since it took a controlling interest in the airline.

Because Air NZ had not been a public organisation under the standing orders it had been impossible for select committees or Parliament to have a "proper examination" of the way the Crown's shareholding was "being operated".

The Government pumped $892 million into the struggling airline in January last year.

Air NZ's annual report will now be tabled in Parliament and be referred to a select committee for examination, like the annual reports and operations of other state-owned enterprises. But details of financial performance may not be disclosed to any inquiry, with the airline likely to say it must tell the stock exchange first.

"As the minister who holds the shares on behalf of Government I think it's perfectly appropriate I should be subject to scrutiny by the select committee if required," Dr Cullen told Parliament on Tuesday night.

But he indicated he would not be responsible for operational matters involving the airline.

National deputy leader Gerry Brownlee said the party supported the motion, but only so it could get more information about the way the Government had structured its investment.

"This is the final act in the renationalisation of Air New Zealand." Air NZ had become a state entity, so was now subject to the scrutiny of Parliament.

"That is not necessarily good for New Zealand and we will be watching very carefully through the processes now available to us how Air New Zealand is structuring and restructuring itself."

Last month Air New Zealand said it was appealing against the Commerce Commission's rejection of its deal which would have seen Qantas take a 22.5 per cent stake.

Pursuit of this unpopular tie-up with Qantas will no doubt be a hot topic when the airline eventually appears before a select committee. Employment issues related to the airline's move to cut the size of its workforce by 1500 people are also likely to attract political attention.

Air NZ spokesman Glen Sowry said the company was accountable to all its shareholders, including the Government.

There would be limits placed on the company when appearing before the select committee, because it would be unable to answer questions that it was precluded from under stock exchange listing rules.

An example of this would be financial prospects for coming months, which would constitute a profit forecast.

The airline may also decide not to divulge confidential business strategies that would tip off competitors.