Spending watchdog gives the Government's 'substantial' Covid-19 spending seal of approval

The Government's spending watchdog has largely given the mammoth amount of money allocated and spent on Covid-19 related response its seal of approval. Photo / Mark Mitchell

The Government's spending watchdog has largely given the mammoth amount of money allocated and spent on its Covid-19 related response its seal of approval but has identified one issue.

In the rush to bring New Zealanders – who would have otherwise been stuck overseas – back home, the Ministry of Foreign Affairs and Trade (Mfat) spent money without the nod from the Minister of Finance.

On March 19, the Government announced it would be closing its borders to non-New Zealand citizens.

Key Government ministers, including Foreign Minister Winston Peters, called on New Zealanders overseas to come home as soon as possible.

But according to the office of the Auditor-General – the independent entity that keeps an eye on what the Government is spending its money on – there was a spending issue when it came to the way Mfat helped New Zealanders get home.

But officials at Mfat identified the issue and are now working with the Auditor-General to fix the problem.

The issue lies in the fact that Mfat essentially loaned money to would-be stranded New Zealanders to help them get home.

The foreign affairs department is allowed to spend money getting Kiwis home in the event of a natural disaster, or other large-scale emergency.

But under New Zealand law, Mfat is not technically allowed to lend money unless the Minister of Finance gives their approval.

The issue, however, does not appear to be significant and there appears to be a simple fix – Finance Minister Grant Robertson and Cabinet need to approve the loans.

This hiccup is the only problem the Auditor-General identified in the Government's Covid-19 spending plans.

In a statement this afternoon, the office of the Auditor-General said given the substantial amount of money being spent and the "extraordinary conditions," it decided to run the ruler over the money being allocated.

In late March, Parliament passed legislation which gave the Government permission to spend up to $52 billion over and above the $129.5 billion already authorised in the 2019/20 financial year.

After running the numbers, the Auditor-General said: "We have not identified any concerns about the system for approving Covid-19-related spending."

"All of the approvals we examined were made correctly. We confirmed that the nature and purpose of the spending, as stated in the approval documents, is related to the Covid-19 response."