Taxpayers have contributed more than $100,000 in wage subsidies to Westport's failed sock factory.
Figures from Work and Income show West Coast Socks received $103,338 in subsidies for a total of 23 workers - 13 on Job Plus training and 10 on Job Plus.
The factory closed last Friday with the loss
of six jobs. It opened in June 2001 with 12 staff and a $450,000 loan from Buller District Council.
Since then the council has put in another $228,000, including $120,000 a fortnight ago to pay outstanding creditors. By the time assets are sold, the council expects to have lost more than $400,000 of ratepayers' money.
The privately owned business has also consumed more than $20,000 in free accountancy fees from its present chairman, Peter Campbell, and a $20,000 equity injection from a customer, Postie Plus.
Including the council's money and the job subsidies, West Coast Socks received more than $821,000 worth of help.
Council chief executive Gary Murphy said he had received legal advice on how to wind up the company.
The council had two options: to appoint a receiver, which was a costly but more structured process, or to allow the company to sell off its own assets.
Mr Murphy also indicated the council might take up Audit New Zealand's offer of an independent investigation into why West Coast Socks failed.
"It's something the council is likely to consider for the purposes of ensuring accountability and lessons are learned, which is the main thing - having somebody independent assess what's gone on."
The Westland District Council requested a similar investigation when its planned plastics factory failed to eventuate, costing the council about $587,000.
Buller council's director on West Coast Socks, Graeme Neylon, has already admitted the council ignored expert advice when it set up the factory. Mayor Pat O'Dea also admitted the council made mistakes.
Meanwhile, West Coast Socks workers are working out their two weeks' notice clearing up the factory. They will receive $18,500 in redundancy payments.
- NZPA
