F & P bailout dubious, criteria must come first

It is critical that Government set clear criteria before moving to rescue Fisher & Paykel or any other company in trouble.

“Government has a definite role in assisting companies in specific circumstances, but this does not include relaxing foreign investment rules,” said Green Party Employment spokesperson Sue Bradford.

“The Greens see a good case for Government involvement in circumstances where local communities are threatened by economic and social devastation with the collapse of a significant industry, for example, the local sawmill at Putaruru.”

“Bending current foreign investment rules, however is not the path this Government should be taking to support New Zealand industry,” said Ms Bradford. “This will only reduce our ability to keep New Zealanders working.”

The Greens consider the following bail-out criteria essential before the Government makes any moves to use tax-payer money to support business in a time of recession:

1. Assistance should only be considered when the loss of a company will have a significant impact in terms of numbers of jobs lost, either locally or nationally.

2. Government financial assistance should be in the form of an equity stake in a company, not a soft loan. Government must have the power to take part in governance decisions that affect its investment.

3. Any shareholding should be conditional on:
· Caps being set on CEO and directors’ fees;
· Jobs being kept in New Zealand, not taken offshore;
· Minimum protections being put in place for all staff, including minimum redundancy agreements and ongoing investment in training or retraining.

“Without such stringent conditions, we risk repeating the mistakes of the first round of US bail-outs which ended up cutting the losses of financiers on Wall Street rather than keeping workers in vital jobs.”