Golden Bay Air will be the first airline to receive a loan from funding ear-marked for at-risk regional air routes, Associate Transport Minister James Meager says.
The airline will receive approximately $1.1 million from the $30 million package set aside by the Coalition Government from the Regional Infrastructure Fund (RIF), designed to stabilise the sector and support regional routes in the short to medium term.
I’m against corporate welfare for regional air travel. I’m against corporate welfare for regional rail. I’m against corporate welfare for ferries to Waiheke Island. Commercial reality, not taxpayer subsidies or loans, should determine routes.
“Golden Bay Air’s loan will ensure the regional airline can refinance existing aircraft debt and fund essential ongoing major maintenance checks. This targeted relief will support it to maintain flights from Tākaka to Nelson, Karamea and Wellington,” Mr Meager says.
If there must be corporate welfare, I prefer a one off grant to a loan. If the business is solid, then it can borrow more commercially. If it is not solid, then a taxpayer loans doesn’t cover the core problem. It just leads to a sunk cost fallacy that as they owe us money, we most loan them even more.
The airline has capacity for around 17,000 passengers a year. If they need $1 million they should charge $6 more per flight (which start at $259) rather than sock the taxpayers.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders
3 comments:
Hear hear
Par for the course with the current coalition. Taxpayers money has gone to:
- landlords ($2b)
- tobacco companies
- private commercial healthcare companies
- roading companies ($22b earmarked)
Someone with a background in maths or at least statistics could keep track of all this easily. Curia, where you at?!
Two points. One, plenty of subsidization to go around, plenty of targets. Two, people work in Wellington. They commute from Golden Bay. If transport costs reasonable, more might live in Golden Bay. Transport costs unreasonable, then we intensify housing in Wellington, ruining more suburbs with brown ugly apartments, block more sunlight, more neighbours in damp houses now in damper houses, more respiratory diseases requiring hospitalization, etc. One needs to measure true costs and think outside the box.
Post a Comment
Thank you for joining the discussion. Breaking Views welcomes respectful contributions that enrich the debate. Please ensure your comments are not defamatory, derogatory or disruptive. We appreciate your cooperation.