29 Sep 2016

Wellington Council defends airline payment

11:10 am on 29 September 2016

Wellington City Council has defended a secret payment made to Singapore Airlines from ratepayer funds, after allegations of corporate welfare.

A Singapore Airlines flight arrives at Wellington Airport.

A Singapore Airlines flight arrives at Wellington Airport. Photo: RNZ / Michael Cropp

Singapore Airlines has begun a service from Wellington to Singapore through Canberra and the Dominion Post has reported that this was secured with a payment of up to $800,000 a year from council money.

The paper also said it was being done in secret.

Council chief executive Kevin Lavery has confirmed money changed hands, but would not reveal how much.

He said payments like this were being done by councils all over New Zealand and he did not want to give potential rivals any information about Wellington Council's own spending levels.

Mr Lavery defended the secret payment on other grounds - that councillors wanted it that way, and the recent spate of negative publicity in the newspaper proved why this was a good idea.

"The current debacle in the press illustrates perfectly why it is not appropriate to have it in the political domain," he said.

"It gets politicised (if it becomes public) and a lot of organisations wouldn't touch us with a barge pole if that happened."

This matter dates back to the establishment of Destination Wellington in 2012, with an annual budget of $1 million initially, growing to $1.8m per year later.

Singapore Airlines announces flights from Wellington to Canberra.

Singapore Airlines announced the flights from Wellington to Canberra earlier this year. Photo: RNZ / Alexander Robertson

Mr Lavery said the council had set up this organisation and deliberately made it off limits to councillors themselves to keep it non-political and to avoid leaks of confidential information to the press or public.

He added that analysis showed bringing Singapore Airlines to Wellington would have a big benefit for the capital.

"The service will introduce competition to the airline market to and from New Zealand which is positive for consumers," he said.

"It also brings anticipated economic benefit of $95m annually in new visitor expenditure and $44m to the economy creating jobs, growth, business opportunity and income."

He said Wellington's investments into airline attraction were modest compared with Auckland and Christchurch.

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