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The Auditor General has announced an investigation into a controversial government funding plan to save “strategic” tourism businesses.
The $ 290 million strategic asset protection program (Stapp) announced in last May’s budget as part of a $ 400 million tourist rescue package was severely criticized by many in the industry because of the way it was handled, and at one stage the Ministry of Business Innovation and Employment officials recommended getting rid of it entirely.
A group of around 54 tourism companies began pushing for the investigation last year because they were unhappy with the perceived injustice in distributing funds to approximately 130 out of more than 300 applicants, including heavyweights from the industry as AJ Hackett Bungy.
Auditor General John Ryan said Friday that concerns about the program raised in the media and with his office have led to his decision.
“Tourism companies have questioned the clarity and transparency of the Program’s criteria and whether they were applied consistently.
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AJ Hackett Bungy received a $ 5.1 million grant and the same amount in a loan, which saw the financing scheme dubbed the “Hackett Cash” by some in the tourism industry.
“Due to the concerns we have heard, the amount of public funding involved, and the importance of strong processes to ensure public trust is not eroded, we have decided to conduct an investigation.”
Ryan said the investigation would look at what information was available about Stapp’s eligibility criteria and evaluation process.
It would examine how applications were evaluated against the criteria and how those from three companies received funding approval before the formal round of applications began.
Tourism Holdings Ltd’s AJ Hackett Bungy, Whale Watch Kaikoura and Discover Waitomo pre-empted the formal selection process, landing $ 8.6 million in grants before the maximum amount per applicant was capped at $ 500,000.
Ryan said the investigation will seek to see if there was any evidence that the requests have been evaluated inconsistently and “any other related matters that we consider appropriate to report on.
Attorney Andy Glenie is acting on behalf of the 54 companies that complained to the Auditor General after they did not receive funds or did not apply because they believed they did not meet the criteria.
He said the investigation was an outcome for the group because they wanted someone independent to look at Stapp’s process.
“It was not communicated clearly from the outside and there were some surprising changes that were made as it progressed.
“There were special cases that received special treatment and Hackett is a good example of that.”
Glenie said a real problem was the fact that applicants were supposed to have exhausted all other funding sources.
“At the end of the day, a large amount of money was distributed to companies that might not have demonstrated the need.”
The pandemic was far from over and the government would likely have to manage future aid plans, so it was important to establish how to distribute the funds fairly.
