The Politically Incorrect Show - 19/09/2001
[Music - Die Fledermaus]
Good afternoon, Kaya Oraaaa & welcome to the Politically Incorrect Show for Wednesday September 19, proudly sponsored by Neanderton Nicotine Ltd, the show that says bugger the politicians & bureaucrats & all the other bossyboot busybodies who try to run our lives with our money; that stands tall for free enterprise, achievement, profit & excellence against the state-worshippers in our midst; that stands above all for the most sacred thing in the universe, the liberty of the human individual.
[Music up, music down!]
"Bailing out failing private businesses with taxpayer money is something New Zealand governments have not done for some time."
New Zealand's Finance Minister, Michael Cullen, made that observation two weeks ago, as he was coming under intense pressure to pump taxpayer money into the flagging "flagship," Air New Zealand. His comment raised hopes among free marketeers that he would resist such folly. Alas, it was not to be. The news about Air New Zealand went from bad to disastrous, including losses of over $1 million a day being incurred by its Australian subsidiary, Ansett Australia. It became horribly apparent that Air New Zealand had not done its homework before purchasing Ansett - its acting chairman openly acknowledged as much. Air New Zealand then offloaded Ansett to the "statutory management" of the Australian government, who made it clear they would go after Air New Zealand for liabilities. Hard on the heels of that, Air New Zealand announced the biggest financial loss in New Zealand's corporate history. The clamour for a government bail-out became overwhelming, boosted by the added disaster of flights to the U.S. being grounded. Michael Cullen succumbed, proposing a taxpayer "loan" of $550 million at "commercial rates," conditional upon a satisfactory outcome of "due diligence." Since then, it has become obvious that there will be no such outcome, & that $550 million, even with the proposed additional $300 million from the current major shareholders, Brierleys & Singapore Airlines, will not be nearly enough to salvage the airline.
Why, one wonders, did Dr Cullen buckle? If lending money to the airline in its current state makes any sense, why aren't commercial lenders lining up to do it? Fact is, no private lender would countenance the idea for a second; Dr Cullen is considering it only because it's not his own money that he would be squandering, & because Air New Zealand is somehow "special" - a "national symbol" that for some ineffable reason we simply cannot allow to go under.
Why, for heaven's sake? What is special about an airline that entitles it to stolen money to which other businesses (rightly) are NOT entitled?
As usual, however incompetent the board of Air New Zealand may have been, some of the airline's woes can be traced to government intervention: restrictions on foreign ownership, for one thing; the Australian government's reneging on the "open skies" agreement that would have allowed Air New Zealand to fly in Australia without having to acquire Ansett, for another; & that government's insistence that Ansett fly unprofitable routes for yet another.
And therein lies the clue as to what the New Zealand government should do: get out of the way! Do NOT prop up this or any other failing enterprise with stolen money - just get off its back, stop taxing it, & stay out of the flight-path of any competitors who would fly into the breach should it fall out of the skies. Let him fly who can. It matters not one whit whether he sports a distinctively New Zealand emblem, whatever that might be. Let the market determine who succeeds & who fails, undistorted by gratuitous restrictions & taxes & foolish injections of Other People's Money. Let the wings of freedom soar.
P.S. To the Bush Administration: let your country's airlines fly, too - & let them arm their pilots & cabin crews!
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