No refunds necessary
- Murray Horton
The significance of the above article (on the constraints that international agreements place on New Zealands economic development options) is that regional development is the policy cornerstone of Jim Anderton, Deputy Prime Minister and Alliance Leader.
In previous issues we have critically analysed one central plank of that policy, namely giving taxpayers money to transnationals and/or their local partners to help them think about setting up in New Zealand. In Watchdog 96 (April 2001), we reported that CAFCA was negotiating with Industry New Zealand (INZ), under the Official Information Act, to get a quarterly supply of information about its Major Investment Fund grants (see 95 & 96 for details on criteria. Ed.). That flow of information is now happening, and runs parallel to the monthly supply we receive from the Overseas Investment Commission (although nothing like as voluminous).
We also reported, in 96, that INZ had refused to supply us with details of the very first grant under that scheme, namely to help fund a feasibility study into setting up a marine engine manufacturing and assembly plant in NZ. The principal site being investigated was the closed down Honda car assembly plant in Nelson. INZ cited the hoary old shibboleth of "commercial confidentiality".
We appealed this to the Ombudsman, and are pleased to report that INZ released the details, in a letter to us (4/9/01). Mr JB Rainey, the local partner of the consortium, was the recipient of a $28,883 grant, as a 50% contribution to the costs of a feasibility study. The consortium was named as: Mercury Marine, a subsidiary of Brunswick Corporation, of the US; Hi Tech Automotives, a South African replica car manufacturer; and XRDi, a US-based engine consultancy firm.
The letter further stated that Mercury Marine was no longer interested in having any ownership interest in the project, and that, in fact, the parties had resolved not to proceed. So what happens to the taxpayers money? A further phone conversation with an INZ official established that it is policy not to ask for refunds should the project(s) not proceed, they are grants, not loans. And its only taxpayers money after all, isnt it?
to Watchdog 98 Index