By Tova O’Brien
KiwiRail is planning to cut hundreds of infrastructure and engineering jobs because it cannot afford to operate on its current budget.
The news comes just weeks after KiwiRail's assets were downgraded by the Government and
Labour says this is no coincidence - it believes the Government is stripping to sell.
Prime Minister John Key says the Government is not planning on selling and has no choice but to lay off staff.
“The only other option for KiwiRail would be to raise prices and that runs the risk that there are increased costs for all other New Zealand businesses and that could jeopardise jobs on other work sites,” says Mr Key.
Two weeks ago the Government announced a write-down of KiwiRail's assets - cutting its value in half to $6.7 billion.
“The Government has got a bit of a thing about selling assets in order to pay the bills which is very short term thinking and it could do it with KiwiRail,” says Green Party co-leader Russel Norman.
But John Key says that is not the case.
“The Government has no plans to sell KiwiRail - I mean it's highly skeptical we could even sell KiwiRail,” says Mr Key.
When the Labour government bought back KiwiRail four years ago it cost around a billion dollars all told, Mr Key says that was a mistake and that the tax payer has spent billions on it since for zero profit.
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