Heather du Plessis-Allan: Govt money is being too freely thrown around

Was James Shaw's judgment clouded by trying to win a political score? Photo / NZME

Opinion

COMMENT:

Hasn't the Green School saga given us an abundance of insights? Couple the James Shaw email with last year's Julie Anne Genter Mt Victoria tunnel letter and we've learnt the Greens have a penchant for sending threats and ultimatums in writing. We've also learned they're prepared to break their own policies as long as the rich kids benefiting are green rich kids. And we've seen how easily the parties are prepared to leak against each other pre-election.

But of all the insights, the most important - and concerning - is the clarity with which we have witnessed how freely money is being thrown around.

It's alarming how little rigour there was around the $12 million pledged to the Green School. By Minister Shaw's own admission his due diligence consisted of looking at the school's website. He pushed ahead despite Treasury opposition.

It is entirely possible that Shaw's good sense was clouded by a desperation to score a last-ditch political win after an entire term of having dead rats force-fed to him by NZ First and Labour. But a political win scored on a worthy project is one thing. Handing over $12m of taxpayer money to a private school to impress your voters is quite another.

Education Minister Chris Hipkins can try to distance himself and Labour from this, but this isn't just a Green Party error. Not only did Hipkins reportedly give his verbal approval, but at least two senior Labour ministers also signed off on this: Grant Robertson and David Parker. Spending of this poor quality should never have got through.

This raises legitimate questions about how much more of the Government's massive Covid budget is as poor quality in spending. There is reason to be suspicious, especially given the lack of rigour around the continued wage subsidy payments. It was absolutely understandable that in the early days of Covid and the first lockdown, the Government operated a high-trust model, where the onus was on businesses to be honest in their applications for the money. But more than five months on, it is completely unacceptable that this is still the loose way with which $16 billion is handed out. The fact that a few hundred businesses have been audited, some have paid back the wage subsidy but no businesses have been prosecuted for fraud is worrying.

It is possible that rigour is a victim of the need to simply find ways to spend all the money. There is a sense that the $50b Covid budget is actually so big there simply aren't enough projects to spend the money on immediately, which means borderline spends like the Green School slip through.

This Covid spend is - worryingly - starting to feel a lot like the Provincial Growth Fund. You'll recall Shane Jones also struggled to get all the PGF money out the door. At last count in August, only $339m of the $3b had been spent. It went to some projects that very clearly did not meet requirements, most obviously the $10.5m spent on a race track in Christchurch. It's no surprise officials argued Christchurch didn't qualify for PGF money. To this day, we don't actually know how many jobs the PGF has created. The best information we have is that around early August, officials called around the various projects and tallied up that around 13,000 people were working on them, but how many of those jobs existed before the spending or were created after the spending, we don't know.

Much of the problem with government spending this entire term is the sense that - like the Green School - too much of it seems to designed to score political wins rather than invest in New Zealand's growth. Those in charge of spending would be wise to remember political wins are fleeting, political legacy is more enduring. This is money we will be paying back for generations. It should be spent carefully.