MBIE denies misleading on spending

The government’s superMinistry has been accused of misleading Parliament after admitting its claim to be spending less on high-priced contractors lacked “clarity” and such spending had actually substantially increased.

The about-turn came at Parliament’s economic development select committee where the Ministry for Business, Innovation and Employment told MPs it had launched a “review” into how it reported its spending on contractors and would no longer exclude spending on Information and Communication Technology (ICT) projects.

ACT Party MP David Seymour said the about-face appeared to show the Ministry had misled Parliament.

“I don’t think any sensible person would say a consultant is not a consultant if they work on computers: Which is effectively the argument they’ve made here,” he said.

MBIE declined to make any officials available for interview, but in a written statement their chief financial officer Stewart McRobie denied misleading anyone and said their new answers to select committee followed new questions being asked.

“This presented an opportunity for MBIE to look at how all costs were reported and we took the decision that for greater clarity we would also itemise contractor expenditure for ICT projects separately,” the statement said.

David Parker, minister for economic development, declined to comment, with a spokesman describing it as a “operational matter” best answered by the ministry.

Excluding ICT projects had seen MBIE previously report spending on contractors and consultants had declined by 20 per cent between 2013 and 2016. However, the fresh inclusion of these projects showed such spending during the period had actually increased by 22 per cent.

The review followed a leak to the Herald late last year of a huge internal MBIE spreadsheet containing contractor and consultant payment data that appeared to show the ministry’s spending was higher than reported.

At the time ministry claimed the spreadsheet was misleading and contained “discrepancies” and said the leaking of it was a “serious issue” that was being investigated.

Seymour laid partial blame at the feet of the former MBIE minister, whose policy capping the public service appeared to have resulted in creative work-arounds.

“You can also blame the Steven Joyce approach of capping the number of direct employees. They’ve been forced to invest a whole new form of accounting to make this work — and appear to have misled Parliament in the process,” Seymour said.