Payout recovery vexing National

By Andrew Laxon

Taxpayers now look less likely than ever to see the return of $340,000 paid to two former Tourism Board directors - despite a Government commitment to recover the money. The board chairman, Peter Allport, signalled yesterday that it was likely to go to court to test the Auditor-General's opinion that the payments were unlawful.

He also publicly questioned whether legal action might cost more than the $340,000 itself.

Prime Minister Jenny Shipley had previously promised that the Government would "take every step we can to get this money back."

The board is due to report to the Government today on how it will recover the severance payments to its former chairman, Bryan Mogridge and deputy chairman, Michael Wall. It has already had a week's extension. The pair quit after conflict with the policy direction of Tourism Minister Murray McCully, who also resigned his portfolio over the row.

Mr Allport told Parliament's commerce select committee yesterday that the board might simply make another progress report on the payouts because of conflicting legal advice on whether they were unlawful. "Ultimately we may have to go to court solely to decide that issue. If it's not unlawful, then from our point of view that's probably the end of the issue.

"If it is, then we're probably obliged to seek recovery of the moneys."

However, Mr Allport said the board also had to weigh up the cost of recovery. "If we contemplate going to court, we will have to do an estimate of how much that costs.

"I'm not prejudging the situation, but if it was going to cost $1 million to get that $340,000, I would say maybe that's not worth it."

In his report on the Tourism Board row three weeks ago, Auditor-General David Macdonald described the payments as unlawful and recommended that the board recover the money.

The Government then ordered the board to pursue repayment after taking its own legal advice from the Solicitor-General, John McGrath, QC.

It is understood that Mr McGrath's first report suggested the matter might have to be tested in court.

The new Minister of Tourism, Lockwood Smith, said he would not like to see the board go to court to test the Auditor-General's ruling, but "some of these things are realities."

A spokesman for Mrs Shipley said she would wait to see the options outlined today in the board's report.

Earlier, Mr Macdonald told the committee that the amounts paid to Mr Mogridge and Mr Wall were based on their both being reappointed for a second term on the board. Based on their one-year terms, Mr Mogridge should have received $55,000 and Mr Wall $33,000.

He said that if the board did not act, he had "a power of surcharge" to recover the money for the Government.

However, he could recover it only from the board's directors, not from Mr Mogridge or Mr Wall.

Meanwhile, Dr Smith is expected to announce today the disbanding of the Tourism and Sport Advisory Board, which Mr McCully set up to provide him and the Office of Tourism and Sport with private advice on such things as events-related policy.