Questions raised over $4.8m grant to little-known firm

Labour MP Trevor Mallard said the grant is 'half a step away from corruption.' Photo / Mark Mitchell

A little-known, private Auckland firm granted $4.8 million from the Government without a tender process will be closely monitored to ensure it achieves outcomes for the Pacific community.

Prime Minister John Key confessed he knew little about the Pacific Economic Development Agency (Peda), which won a windfall from last week's Budget to help run its social and business programmes.

"Personally I don't know a lot about them," he said, adding the funding decision was made by the Ministry of Pacific Island Affairs.

Questions are being raised around the funding, as the company is not well known, has only been around for just over two years, and is a private company with a sole shareholder.

Pacific Affairs Minister Georgina te Heuheu said there was no tender process for the contract, as the Government did not consider there was anyone else that could deliver the same outcomes.

"We have a purchase agreement with them for the delivery for certain projects that might lift economic development for Pacific communities in Auckland. That's what we'll be monitoring for and getting some accountability for."

Peda had been seeking Government assistance for some time, including at the Prime Minister's Job Summit in February last year.

She said anyone who thought it was an excessive amount of money "clearly doesn't understand the huge need in Pacific communities".

Mr Key said if Peda did not meet expectations, the funding would dry up.

"If they don't meet their objectives and the outcomes we want, the money will stop."

Peda chief executive Anthony Pereira has said the money would not boost the profits of the company, of which he is the sole shareholder, but to projects such as training for unqualified Pacific Islanders and business advice.

Yesterday Labour MP for Mangere Su'a William Sio demanded more transparency around the decision and how the money will be spent.

Mr Key broke down how most of the $1.2 million a year for four years would be spent:

- $715,000: Pacific skilled employment

- $75,000: Leadership plantation

- $65,000: Buy Pacific made

- $60,000: Village framework

- $85,000: Performing arts and Pacific pathways

When asked why the Government was funding a Buy Pacific project but not Buy Kiwi Made, Mr Key said: "Don't know.

"Apparently it's for an expo event in Auckland and we fund events like that. We don't fund Buy Kiwi Made but we fund expo events."

Labour MP Trevor Mallard said it was very unusual to grant Government funds straight from the Budget without a tender process or accountability.

"It's a half a step away from corruption, because what you're doing is having politicians choose individual groups that get Government funding, and our system is not meant to do that."