Hackles up over investors' names

New Zealand Trade and Enterprise says it will advise axing a scheme to woo overseas investors if Parliament demands that the agency reveal the investors' names.
Chairman Phil Lough issued the warning during an intense grilling at a foreign affairs, defence and trade select committee hearing yesterday.

The economic development agency came under fire in December after two damning reports by the Auditor-General were released into its business grant schemes and the "visiting investor programme".

The scheme hit the headlines last March when Act's Rodney Hide revealed that the agency 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 electronics and marine products company.

Investment NZ, a business unit of Trade and Enterprise, paid for two visits, in 2002 and 2003. The money went on items such as fly-fishing, limousines and restaurant meals.

Mr Lough told the committee that business people would not want to visit New Zealand if they thought their identities would be publicised.

"I would encourage the committee not to pursue a desire to name individuals, because on that basis it would be our recommendation to the Government to cease the programme entirely."

Mr Lough said he had visited other countries under such schemes as a businessman.

"If I was told that in accepting those invitations I could get named and every detail of what I did - whether I played a game of golf, whether I had my laundry done, what I had for breakfast - was likely to be mentioned in the House of Parliament ... I would not go."

A Trade and Enterprise spokeswoman later confirmed that the committee had not officially sought the names, although the issue of the identity of the investors taking part in the scheme had been raised last year at the commerce select committee.

But she said the foreign affairs, defence and trade committee had sought and been supplied with a detailed breakdown of costs for each visit under the scheme for 2003-04.

Deputy Clerk of the House Mary Harris said committees could ask for any information they wished, and if declined, members had to decide whether they wanted to pursue the request. The committee could ask the Speaker to issue a summons.

Committees had to weigh up refusals to provide information and often had to consider issues of commercial sensitivity.

Meanwhile, Mr Lough and chief executive Tim Gibson defended Trade and Enterprise from attacks by opposition MPs on the business grant programmes, which were slammed for lax administration in one Auditor-General's report.

NZ First MP Dail Jones labelled the schemes a "political sham" with the criteria being set by Economic Development Minister Jim Anderton. Mr Hide said it was a "lolly scramble" and National MP Lockwood Smith dubbed the programmes "corporate welfare".

Mr Lough rejected the claims, saying the schemes were run by "a professional team of experienced, business private-sector people largely ... so they know the ropes".

He repeatedly referred to the difficulties in merging three organisations into one agency.

Trade and Enterprise was formed by the merger of Trade New Zealand, Industry NZ and Investment NZ in July 2003.

Wooing investors: The costs

* 2002-03 $243,165 for 23 visits

* 2003-04 $109,053 for 18 visits