Internal Affairs says replacing three year-old BMWs with new ones is a good deal. The Government has been criticised for selling the relatively new fleet of 34 luxury limos and replacing it with brand new BMWs in tough economic times.
Internal Affairs says replacing three year-old BMWs with new ones is a good deal.
The government has been criticised for selling the relatively new fleet of 34 luxury limos and replacing it with brand new BMWs in tough economic times.
The new cars sell commercially for about $200,000 each but the government gets a discount for bulk buying. The actual cost is not being stated, for commercial reasons.
Prime Minister John Key revealed this afternoon that no minister was contacted about the decision. A six-year deal for the cars was signed by Labour with a three year rollover clause.
"That decision to invoke that rollover and bring new cars in was made by the Department of Internal Affairs without reference either to their minister or to me," he told reporters.
Mr Key found out about the new cars when one of the drivers told him.
"It's not a situation where we, as the government, have decided to do that, the department just made that decision."
The department did not think it had to check as it had authority from the former Labour government.
Mr Key said it was too late to say whether his government would have approved the purchase or not and the cars were due to arrive in New Zealand soon. They would not be returned because of the high cost that would incur.
A spokesman for Internal Affairs told NZPA there was no requirement to inform the government about its decision to chose the option of buying new vehicles.
"It's our contract, we administer it. Our assessment was it was the best value for money to replace the vehicles now and we got a good deal in the first place and we got a good deal now," he said.
"This is just one of many contracts that the department administers on behalf of the government and once the contract is in place the department simply administers it, our responsibility is to make sure we get good value for money."
Had the cars been kept they would have lost value and the resale price would be considerably lower.
"The gap between the price of a new car and a second-hand one selling is greater so you are actually losing more money."
The value of the cars being sold was close to their purchase price and the Department said the contract offered the lowest annual operating costs of comparable cars due to fuel efficiency and tyre costs.
If they had decided to keep the cars and not buy new ones there would have been no penalty.
Earlier, Finance Minister Bill English was critical of Labour's original contract and Green Party criticism of the Government spending in tight financial times.
"I think it does show that being driven by a fad, which at the time was to have lower carbon emissions, means that you can make decisions... turn out more expensive than they expected."
Mr English said when the contract came up for renewal the Government would see if there was a better deal and probably a "more mainstream model of car".
Green Party Co-leader Metiria Turei said the contract should be cancelled or evidence provided that it was value for money.
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