Wellington, Nov 3 NZPA - New Zealand Experience Ltd, operator of Rainbow's End fun park, said unionisation of its workforce and government policy have increased its labour costs by 17 percent.

"Last year I mentioned the introduction of the presence of the workers' union at Rainbow's End," chairman Anthony Frankham told shareholders at the annual meeting today.

"This, along with further increases in government determined minimum pay rates and the full year impact of increased statutory annual leave allowances has sharply impacted upon our payroll cost."

In response management reduced hours worked across all divisions and increased gate prices in August.

The company was not facing prosecution over the death of one of its employees in February.

"We continue to ensure that safety in the park is of the highest order," Mr Frankham said.

The company leases land from Manukau City Council and the current lease expires in 2019. Talks on the detail of a lease extension are going on but the Ministry of Justice has indicated wants part of the leasehold land for development of Manukau District Court.

"It remains a paramount objective for the board to secure longer tenure in order to allow us to commit to ongoing capital investment to maintain the attractiveness of the park," he said.

Because of the uncertainty the board has no approval for construction of a new attraction in time for the 2008/09 summer season.

The company is forecasting an after tax net profit of about $1.1 million this year even though it has rained during two school holiday periods this year.

"We will review this forecast in February 2009 following the completion of our busy summer season," Mr Frankham said. All resolutions at the meeting were passed.

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