Growth fund scrutiny gets wide backing

WELLINGTON: The minister in charge of the Provincial Growth Fund is welcoming the Government’s spending watchdog taking a closer look at its operations and finances.

National has also hailed the news that Auditorgeneral John Ryan’s office would be undertaking additional review work and an audit of the PGF.

He said yesterday his priority was to keep a closer eye on the fund and its managers, over the next year, which included MBIE, the Ministry for Primary Industries and the Ministry of Transport.

He intended to carry out three separate audits of those government agencies, focusing on the terms of the contracts with businesses.

Mr Ryan also ordered a review of the Provincial Development Unit within MBIE, which was responsible for administering the fund.

‘‘The fund also requires appropriations to be managed by multiple government departments and organisations, which increases the risk of unappropriated expenditure,’’ he said.

A prize wrangled by New Zealand First for going into coalition government with the Labour Party in 2017, the PGF has become a lightning rod for controversy because of the conduct of its lead minister, Regional Economic Development Minister Shane Jones, and question marks over how some funding has been allocated.

PGF funding has been announced for a large number of projects in the economically depressed Far North, where Mr Jones hails from, prompting accusations by National MPs of porkbarrelling.

Other deals, such as a loan for nearly $10 million to the Westland Milk dairy cooperative, have courted controversy because they appeared to be assisting commercial activities that a bank or shareholders might normally have expected to fund. The loan offer was subsequently withdrawn when a foreign buyer emerged for the commercially challenged West Coast firm.

More recently, Mr Jones was criticised for attending a meeting at which funding of $4.6 million was allocated to a Northland cultural centre that Mr Jones had identified as representing a conflict of interest for him.

He did not participate in the decision, but gave assurances to other ministers about the plan’s bona fides.

A spokesman for Mr Jones said the minister welcomed the Auditorgeneral’s announcement.

‘‘The minister welcomes the fact that the Provincial Development Unit has actively sought to work alongside the [auditorgeneral] and believes the public would expect the largest regional development spend per capita in the OECD would be a focus for the Auditorgeneral.’’

National economic development spokesman Paul Goldsmith has also welcomed the review and audit.

‘‘We would absolutely expect the Auditorgeneral to be looking closely at the Provincial Growth Fund,’’ he said.

Mr Jones had been ‘‘shameless’’ in the way he had ‘‘politicised’’ the fund, he said.

‘‘It is important that close observation by the Auditorgeneral serves to reassure New Zealanders about the workings of the fund.’’ — NZME/RNZ