The NZ Herald is reporting that Michael Cullen's move to block the sale of Auckland International Airport shares flew in the face of advice from Treasury - here's the story:
Let's reflect on these words:
"It's now emerging just how strongly Treasury supported the Canadian bid to buy a stake in Auckland International Airport.
The Government's moves to block the sale were strongly opposed by Treasury who said it would breach international agreements, scare foreign investors and damage the economy.
Papers released today show that Finance Minister Michael Cullen initially considered rushing specific legislation through Parliament to restrict foreign ownership of AIA."
Here's the grounds that Treasury advanced to Cullen to support their argument:
"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"."
Cullen, as we now know, rejected this advice, and "told ministers to change the regulations.
Papers show the changes were made the same day and later used to block the Canadians' bid for the airport".
So, Cullen rejected the advice of both the Overseas Investment Office and Treasury. And yet he has been only too happy to accept Treasury's advice that tax cuts were unsustainable. Methinks the good Doctor scores highly in the hypocricy stakes.