by Bryce Edwards on the Democracy Project

Was political favouritism involved in the dishing out of millions of dollars by government ministers to tourism businesses? We can’t know, because the Government didn’t keep sufficient records or have proper processes for the handouts. That’s the obvious question arising from a scathing report released by the Auditor General on Thursday, which has received far too little attention.

The Auditor General’s report investigates a scheme set up by the Government early in the Covid crisis (May 2020), called the Strategic Tourism Assets Protection Programme. The report is one of many that have criticised government procedures during Covid for their lack of integrity.

The multi-million-dollar scheme was set up to give money to local tourism businesses, with the aim of keeping them operating despite the lockdowns and the severe reduction in tourism. But every element of the scheme’s design seems to have been poor. While it’s unclear if any untoward handouts were actually made, this is precisely the point – procedures were set up in a way that makes it almost impossible to know.

In the end, 127 tourism businesses were given grants and loans worth at least $166 million. Dozens of businesses were turned down, and many more didn’t apply due to confusion over eligibility because the criteria for funding was so unclear.

Some of the biggest beneficiaries were large tourism operators that were owned by highly profitable companies – such as AJ Hackett Bungy, which was allocated $10m to help them through the pandemic.

Poor processes

According to the Auditor General, Ministers never developed clear criteria for how to dole out the money, and no proper records were kept on their decision-making process for who to give money to. Conventional funding processes were seemingly cast aside. And on investigation, the Auditor General’s office couldn’t get adequate explanations from the ministers as to why they gave millions to certain businesses.

Although it’s the prerogative of ministers to decide how they spend public money, the Auditor General points out in the report that such expenditure still comes with an obligation to ensure decision-making is transparent and consistent, and in this case it wasn’t.

The advice of officials also seems to have been sidelined. Government departments such as Treasury were often kept out of the policy processes. And when the Ministry of Business Innovation and Employment advised the Government to call a halt to the programme, Ministers overruled this.

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