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The Country

Auditor-General says public deserves a proper assessment of PGF 'as quickly as possible'

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On Tuesday Shane Jones released figures about jobs linked to the Provincial Growth Fund which were questioned by economists and the Opposition. Photo / Peter de Graaf

Hamish Rutherford
By:

Wellington Business Editor

Hours after releasing figures celebrating job creation, the Provincial Growth Fund's basis for calculating job creation have been questioned by the Auditor-General.

On Tuesday Regional Economic Development Minister Shane Jones released figures claiming that the fund had "outstripped" its job creation target. Earlier the fund had indicated the PGF could create more than 10,000 jobs.

The figures released by the Provincial Development Unit said 13,000 people had worked on projects linked to the fund, which aims to promote jobs and growth in New Zealand outside Wellington, Auckland and Christchurch.

More than half of the jobs were described as "previous jobs" suggesting the jobs were temporary and no longer in place.

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The figures gave no indication of how many of the 6569 "current" jobs were permanent, or part time or whether the jobs were as employees or contractors.

Brad Olsen, senior economist at Infometrics, said it was difficult to assess how many of the jobs were new jobs or whether the jobs were full or part time. Based on the figures, it did not appear the bulk of the jobs being created were sustainable, he said.

"If the Government's only objective was to support employment in the short term, that's quite a bit different from what I think a lot of people were thinking when they heard of the PGF, which was to support employment over the long term with sustainable job opportunities," Olsen said.

Questioned on whether the figures were inflated to make the fund look good, Jones claimed on Radio New Zealand that the New Zealand Institute of Economic Research (NZIER) had "attested to" the figures and he would not accept criticism of their accuracy.

However NZIER refused to comment on the figures on Tuesday, saying the work it had done was for internal client use only.

Robert Pigou, head of the Provincial Development Unit, said officials had undertaken a stocktake of all of the projects funded by the PGF.

"Covid created an opportunity, good and bad, for us all, and we did have time to sit back and do this stocktake."

Later on Tuesday the Auditor-General released a report which urged officials to improve reporting on the progress of the overall fund. It appeared to warn that the fund had not yet defined how it would measure job creation.

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Auditor-General John Ryan said while there had been much publicity about individual announcements, there was little information on how the overall fund had performed.

"Although there have been many fund announcements relating to individual projects, there needs to be full and relevant reporting about the nature and purpose of the fund's investments and the impact of those investments against the objectives set for the fund when it was established," Ryan's report said.

"There could be more more transparency around processes, there could be better reporting about what's been achieved and, ultimately, we need a plan for how we'll know what value for money's been achieved from that spend," Ryan said.

"For $3 billion of taxpayers money we would expect a very high level of transparency, [and] clarity of what's been achieved so far," Ryan told Newstalk ZB's Heather du Plessis-Allan.

An assessment of the fund, expected to be completed in 2020, was now likely to be delayed until 2021. "I have recommended that a plan for evaluating the overall effectiveness of the fund be completed and published as quickly as possible."

Later in the report the Auditor-General said the PDU had still not settled on how to establish "what counts as a job" when evaluating job creation, and whether it included only full-time jobs or temporary or contractor jobs. This was a process which should have been established "much earlier", the report said.

"Effectively the report is strongly implying that they just haven't been counting [job creation] at all, much less properly," Michael Woodhouse, National's regional development spokesman said.

"I find it extraordinary that the Minister [Jones] should be crowing about exceeding the 10,000 job creation target when in fact they have no idea how many jobs they've created and it's almost certain to be far, far fewer than that."

Correction: This story initially misstated the name of the New Zealand Institute of Economic Research