Grants to business a mess says Act

The Auditor-General has criticised the way New Zealand Trade and Enterprise ran its grant schemes and visiting investor programme.

Act leader Rodney Hide said heads should roll for the "appalling" administration of taxpayer money revealed in two reports released yesterday by the Auditor-General.

He called for an end to the Government's "lobby scramble" approach to business development.

One report reviewed five grant programmes and found variable data collection, reporting practices and standards of documents, and inconsistent approaches to risk assessment and monitoring.

The report noted "significant management effort" would be needed to address the administrative weaknesses.

The other report found similar administrative problems with the visiting investor programme, and noted some invoices were so lacking that the purpose of the spending shown could not be determined.

The programme hit the headlines in March when Mr Hide revealed taxpayers funded a $23,000 New Zealand trip by American businessman George Buckley, chief executive and chairman of Brunswick Corporation which invested heavily in Navman, a New Zealand company specialising in electronic and marine products.

Investment New Zealand, a business unit of NZTE, paid for two visits, in 2002 and 2003.

The money went on items such as fly-fishing, limousines and restaurant meals.

Mr Hide has also targeted other NZTE grants, including one to retail giant The Warehouse.

He has rejected Government claims that he is anti-business, saying he opposes "picking winners" because he wants across-the-board help for business, such as tax cuts.

He said the reports were a victory for Act but noted the alarming way $47 million in taxpayers' money had been treated.

NZTE chief executive Tim Gibson said the organisation was addressing the issues raised as quickly as practically possible.

But he noted that the reports had considered how grants and the Visiting Investor Programme were administered - not their effectiveness or the effectiveness of NZTE.

"I have no doubt about the effectiveness of the programmes themselves in terms of helping lift the growth and international competitiveness of New Zealand businesses," said Mr Gibson.

Industry and Regional Development Minister Jim Anderton and Trade Negotiations Minister Jim Sutton welcomed NZTE's assurances the reports were being taken seriously.

The ministers said the reports should be viewed in the context of NZTE's age.

It was formed in July last year from the merger of Industry NZ and Trade NZ.

UNDER SCRUTINY

NZTE programmes reviewed by Auditor-General

* Visiting Investor Programme aims at firms or key individuals considering New Zealand as a location to invest in.

* Enterprise Development Fund which consists of enterprise development and enterprise network grants.

* Growth Services Fund which helps firms with new initiatives and directions.

* Major Events Fund to support events that will help economic growth in key regions and sectors.

* Strategic Investment Fund to supplement and facilitate investments that create either 200 new jobs and/or attract $50 million of new investment.