Cullen ignored advice on Auckland Airport

NZPA reports on advice from Treasury released under the OIA, which confirm the decision to sabotage the Canadian bid by way of retrospective regulation was economic sabotage, and worse of all breached our legal obligations under international agreements.

The Government’s moves to block Auckland International Airport (AIA) were strongly opposed by Treasury who said it would breach international agreements, scare foreign investors and damage the economy.

Treasury wrote a scathing paper on the suggestions, saying the benefits of the Government’s proposed policy were “likely to be small relative to the detriments”.

It advised against any intervention in the share bid on three main grounds:

* Legal — “It is almost certainly a breach of our international obligations under various multilateral agreements”.

* Commercial — “Such an intervention would create considerable disruption and uncertainty. By affecting investors’ property rights and reducing value it may cause investors to be sceptical … and more wary of investing”.

* Economic — “It is likely negatively impact on international investors perceptions … increase the risk premium for investment in New Zealand with potential to raise the cost of funds for all New Zealand companies”.

It is a pity the Canadian pension fund is not going to court over this. I think they would have a field day. This now puts on the record that he Government ignored the advice of both the Overseas Investment Office and Treasury on this retrospective intervention. Funny how Helen says we couldn’t have tax cuts earlier because of Treasury advice – they do pick and choose.

Some will argue decisions on investment should be at political whim, and not have any consistent rules or laws around them. You can do that, but we will find there is a lot less investment if people can’t trust the law to be applied fairly.