More ski field corporate welfare

Newsroom reports:

Cabinet has endorsed an ownership bid for the Whakapapa ski field and has agreed to loan Whakapapa Holdings up to $5 million to support its purchase.

The funding is conditional on Whakapapa Holdings obtaining a concession from the Department of Conservation to operate in the Tongariro National Park.

If the bidders have a commercially viable bid they should be able to get a loan from a bank. Banks should be those who finance commercial investments, not taxpayers.

If taken up in full, the Government’s $5m loan to Whakapapa Holdings would take direct Crown expenditure to save skiing on Ruapehu post insolvency to $35m.

It’s the sunk cost fallacy – we have already put to much money in, we need to keep doing more to stop it failing.

The Government bravely said no to the ferries sunk costs continuing. They need to do the same here.