Probe into controversial Govt funding for tourism operators

Controversial funding for tourism businesses hit by Covid-19 is under fresh scrutiny after complaints to the Government’s spending watchdog.

Auditor-general John Ryan said in a statement today he had decided to conduct an inquiry into "aspects" of the Government’s Strategic Tourism Assets Protection Programme (Stapp) .

More than $290 million has been allocated under the programme, which was aimed at supporting businesses considered strategically important tourism assets for their region and New Zealand as a whole.

Of the 130 businesses to receive the funding, the largest beneficiary was AJ Hackett, which received a $5.1m grant and the offer of a loan for the same amount.

Mr Ryan said concerns were raised with his office by businesses who questioned the "clarity and transparency" of its criteria, and whether the criteria were applied consistently.

"Because of the concerns we have heard, the amount of public funding involved, and the importance of robust processes to ensure public trust and confidence is not eroded, we have decided to carry out an inquiry."

The inquiry would focus on the actions and processes around eligibility and assessment of proposals.

It would examine the information available to potential applicants about the programme’s eligibility criteria and assessment process, how applications were assessed, and whether there was any evidence that applications were assessed inconsistently.

Also to be put under the spotlight is Government ministers' assessment of applications from three tourism businesses that received $10.6m in funding before the formal application process began: AJ Hackett ($5.1m), Whale Watch Kaikoura ($1.5m) and Discover Waitomo ($4m).

"We will not be examining the merits of individual applications or particular funding decisions," he said.

The Otago Daily Times has asked Auckland lawyer Andy Glenie, who is representing the businesses who have complained to the Auditor-general's office, for comment.

The Stapp funding was set up last May as part of a recovery package to address the impact of Covid-19 on the tourism sector.

By the end of July, when all decisions on applications were made, more than $290 million was allocated.

Besides AJ Hackett, other well-known companies with operations in Otago and Southland to receive the funding include Ngāi Tahu Tourism ($450,000), Skyline Enterprises ($500,000), and Wayfare Group ($1.5m), which owns the TSS Earnslaw, Cardrona Alpine Resort and Treble Cone ski areas, and the International Antarctic Centre.