Get back business grants, says Hide

Act Party leader Rodney Hide says New Zealand Trade and Enterprise (NZTE) should recover the money it gave businesses in breach of guidelines.

In two reports, Auditor-General Kevin Brady this week found NZTE's management of $47 million in business support grants in the 2003-04 year had been sloppy and inadequate.

Important documentation was sometimes missing, Cabinet criteria were not met, monitoring was poor, and there was poor risk assessment.

Mr Brady also criticised the Visiting Investor Programme (VIP) - a "red carpet" scheme where NZTE paid the costs of foreign investors meeting local businesses.

NZTE was created in July last year when Trade New Zealand and Industry New Zealand - formerly dubbed Jim Anderton's "jobs machine" - merged.

Mr Hide yesterday said he had written to Mr Brady asking him to recommend NZTE recover money from businesses it had given grants to in breach of guidelines.

He said Mr Brady had identified grants where Cabinet criteria were not met, and others where it was unclear if criteria were met.

"That money should be recovered from the businesses concerned and, if that is not feasible, the money should be deducted out of the NZTE's budget for this year," he said.

Last year, when a grant to the Warehouse by Industry New Zealand was found to breach guidelines, the Auditor-General recommended NZTE remedy the breach.

It cancelled the grant and the money was recovered, he said.

"The same rules should apply." said Mr Hide.

"I have written to the Auditor-General seeking details of the inappropriate payments. That is the first step in seeking the recovery of this money."

In his reports Mr Brady said improvements were needed to all NZTE's grant programmes.

In some cases, proposals for funding, invoices, credit checks and the contract between NZTE and the recipient, were missing from files.

In others, NZTE did not know how much it had given or how many recipients there were.

NZTE chief executive Tim Gibson said yesterday NZTE had already implemented 60 per cent of the Auditor-General's recommendations and expected to have full compliance by next March.

- NZPA