Covid grants inquiry
QUEENSTOWN
STRUGGLING tourism operators have triggered a financial watchdog investigation into how a Covid19 rescue package was distributed, claiming it created unfair advantages for giants such as AJ Hackett Bungy.
Te Anau businessman Chris Adams said confusing eligibility criteria for the $290 million government strategic tourism asset protection programme (Stapp) led to richlisters’ companies getting large grants and many small operators not even applying.
‘‘Only the huge companies applied, and all the small family companies didn’t because they hadn’t sold their car or their house.’’
The coowner of Fiordland Jet was one of more than 50 businesses owners whose complaints over transparency, eligibility criteria and favouritism prompted Auditorgeneral John Ryan to launch an inquiry into aspects of the Stapp funding yesterday.
Applicants for the funding were expected to have exhausted private means of raising capital first, but the group has queried if this criterion was met.
Mr Adams said the launch of the investigation vindicated the concerns first raised by the group in September.
‘‘When you’ve got richlisters who’ve received it when you have to exhaust all financial avenues, then something’s wrong.’’
Mr Ryan said he would examine the information available to potential applicants about the programme’s eligibility criteria, how applications were assessed, and whether there was any evidence of inconsistency.
A $5.1 million grant and offer of a loan matching that amount was given to AJ Hackett Bungy for its sites in Queenstown, Taupo and Auckland.
An Otago Daily Times Official Information Act request revealed the company appealed to the Government because of a 90100% reduction in visitors.
It ticked yes to a box that asked if private funding had been exhausted and that the cost of hibernating was ‘‘insurmountable’’.
The company further submitted it was a ‘‘cornerstone’’ of New Zealand tourism, a ‘‘flag bearer’’ for the country and the reason many internationals chose to come on holiday.
Proving regional or national significance was another prerequisite for applying for the fund that was awarded to 130 firms in total, including Ngai Tahu Tourism, Wayfare, KJet and aviation companies at Queenstown airport.
But the group of 50plus businesses represented by Auckland lawyer Andy Glenie said this was an area of contention.
He said the group contacted the Auditorgeneral after its 10 to 12page letters to ministers were met with just a fourparagraph response.
‘‘We never had a proper reply from them addressing our concerns and that tightens the fear there perhaps isn’t a good explanation.’’
He said how the money was awarded had longterm impacts on the tourism sector and every New Zealander should be able to feel confident the Government was being fair when responding to economic problems caused by Covid19.
‘‘It is not sour grapes to expect government to follow fair process ...
‘‘Everybody expects to be treated fairly, consistently and openly.’’
He said those operators who had not received support were struggling and in some cases the market had been changed by recipients using the money to offer discounts.
Mr Glenie further noted how the Government distributed smaller sums following a public backlash from the multimilliondollar settlement for AJ Hackett Bungy.
The full list of businesses making up the group has not yet been revealed, but there are representatives from Te Anau, the West Coast and Queenstown.
A spokeswoman for the Ministry of Business, Innovation and Employment said the department would fully cooperate with the inquiry, but could not comment further.
AJ Hackett Bungy New Zealand cofounder and owner Henry van Asch, and chief executive David Mitchell, refused interview requests, referring the Otago Daily Times to a public relations adviser. There was no response by deadline.