The Provincial Growth Fund was on the cusp of investing $30 million to purchase stakes in two private airlines – including one that had not even applied for funding – before advice from sceptical Treasury and Ministry of Transport officials encouraged ministers to put a stop to the plan.
Thank God for officials.
Applications of between $1 million and $20m are required to go to a Regional Economic Development Ministers’ meeting for sign off. Those ministers are Shane Jones, Grant Robertson, David Parker, and Phil Twyford. The ministers are briefed by the MBIE’s Provincial Development Unit (PDU), and an independent advisory panel on proposals
The PDU advised that the $20m request be downgraded to an investment of $15m, but also recommended that another investment of $15m be made in another airline. This is noteworthy as the second company had not yet applied for funding from the Provincial Growth Fund.
This is what happens when you tell MBIE they have to find ways of spending a billion dollars. They come back with “Hey let’s give millions to this company, even though they haven’t even asked for it”
Ministers appeared interested enough in the proposal to ask for more information, although they were worried about the precedent the proposal would set.
A precedent of giving money to companies that haven’t asked for it.
The proposal was shot down at the Regional Economic Development Ministers meeting on 6 December 2018. Jones said that while he was keen for the proposal to go further, his colleagues were less enthusiastic.
Hooray for Grant, Phil and David who at least have some fiscal rectitude.
The advice notes significant concerns from Treasury and the Ministry of Transport. In particular it records scepticism about soliciting a funding application from a company that had not yet sought PGF funding.
“[The company] has not applied to the PGF for funding, and we have not seen any analysis of what benefit a $15 million investment in this company would provide,” the briefing said.
Easy when it is taxpayer money to not care about things such as benefits. Shane think electoral benefits are the only ones that count.