Hide Rodney: Questions for Oral Answer — Questions to Ministers 
Hide Rodney: Questions for Oral Answer — Questions to Ministers 
[Volume:610;Page:7515] 
8.  
RODNEY HIDE (ACT NZ) 
 to the  
Minister for Economic Development 
: On what date did Industry New Zealand learn which suppliers were to receive the $75000 Business Growth fund grant paid to The Warehouse last year and what checks were done of these suppliers against the Business Growth fund criteria? 
Mr SPEAKER 
: The Minister has advised me that his answer will be a little longer than usual. 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 A list of 15 companies was originally proposed when Industry New Zealand approved a grant to suppliers of The Warehouse to become more efficient and therefore better suppliers through an Enviro-Mark certification which is an environmental qualification administered by Landcare Research New Zealand. Industry New Zealand widened the group of companies to be considered to ensure that the most appropriate companies were funded following the initial grant approval. Three agencies were involved in the selection process—Landcare Research New Zealand The Warehouse Ltd and Industry New Zealand. The final group of 10 companies was confirmed on 3 April 2003. 
Before the group of 10 companies was confirmed Industry New Zealand assessed whether they met the Business Growth fund criteria. As a group the companies met the eligibility criteria as Industry New Zealand interpreted them. A subsequent Auditor-General’s office opinion is that Industry New Zealand’s original interpretation was inconsistent with the criteria agreed by Cabinet. New Zealand Trade and Enterprise advises that it has improved its processes to address all issues of concern raised by the Auditor-General. The Auditor-General’s office stated in its report to Trade and Enterprise New Zealand: “It is satisfied that New Zealand Trade and Enterprise has responded appropriately and in a proactive manner to the issues raised by the Auditor-General’s review.” 
Rodney Hide 
: In the light of the Minister’s answer that the list was not finalised until this year how could he as Minister assure the House on 7 November that the suppliers “all met the business growth criteria” when the final list of suppliers had not been finalised and who is responsible for this grant being falsely awarded as the Auditor-General has now shown? 
Hon JIM ANDERTON 
: The policy requirements that Industry New Zealand then followed were set by Cabinet of course. However the operational decisions as the member undoubtedly knows are carried out by the staff and board of Industry New Zealand. In this case the board and the management determined that in principle this application was acceptable for this Business Grant award but in practice they needed to be sure that each of the companies qualified. In their view there was flexibility for them to make that decision. The Auditor-General has indicated that there was not and therefore the processes have been changed. I point out to the member that when one is proactive in assisting the business community of New Zealand to develop there will be flexibility and risks will be taken. This Government is prepared to help business in New Zealand rather than criticise it like the ACT party. 
Hon Matt Robson 
: Is the Minister concerned by this issue being raised? 
Hon JIM ANDERTON 
: No I welcome the question from the Opposition. All public funding should of course be accountable to this Parliament. However this coalition remains committed to New Zealand’s economic development and is prepared to try new ways of working with New Zealand business people even if it entails some element of risk. The question from the ACT party again highlights the commitment of this coalition to create jobs stronger regional and local communities and sustainable business development. I wish the Opposition would wake up and smell the coffee about some of that. 
Mr SPEAKER 
: The answer to the first question was long. That answer was just a little too long and we had better not have any more of that length. 
John Key 
: Has The Warehouse now repaid the $21090.42 that has already been paid out of the $75000 grant and who is repaying the money—The Warehouse or its suppliers? 
Hon JIM ANDERTON 
: The Warehouse has been invoiced for the money and I am quite sure its cash flow will be appropriately large enough to qualify it to pay. The Warehouse has paid the money; it is so committed to this environmental act that it is prepared to fund the companies even though perfectly reasonably entitled to apply for the grant on behalf of the supplier companies. 
H V Ross Robertson 
: How many grants were made by Industry New Zealand? 
Mr SPEAKER 
: That is rather wide of the original question but the Minister can comment briefly. 
Hon JIM ANDERTON 
: Very briefly up to the end of June this year there have been 340 Business Growth grants 850 Enterprise Awards grants and a number of other local and regional grants. This is one of them and I am proud of every single one that has helped the industries in regions of New Zealand develop in the way they have over the last 3 to 4 years. 
Gerrard Eckhoff 
: Is the Enviro-Mark certification which the funding was for still proceeding in the absence of the grant and does the Minister stand by his claim in question for written answer No. 12296 lodged in 2002 that savings to the 12 supplier companies of approximately $350000 per annum are expected and why did he ever think that a project returning 233 percent a year needed taxpayer help? 
Hon JIM ANDERTON 
: Yes and yes and because I stand for the development of New Zealand which the ACT party has never stood for. 
Rod Donald 
: Has the Ministry of Economic Development investigated how many manufacturing jobs The Warehouse has destroyed because it imports hundreds of millions of dollars of products from sweatshop economies that used to be made in New Zealand by New Zealand manufacturers and New Zealand workers and what is the Government doing to promote public loyalty to New Zealand businesses so that jobs can be saved indeed created in our economy so that our massive trade deficit—$2.8 billion for the year to June—can be reduced? 
Hon JIM ANDERTON 
: I have responsibility for New Zealand economic development not for the rest of the world—[ 
Interruption 
] My colleagues are telling me that that will come soon! The reality is of course the Ministry of Economic Development has not carried that out but it has not carried out a study either of how a lot of ordinary New Zealand families have benefited from low prices of commodities and products that they buy from The Warehouse. But the overall growth of New Zealand seems to be in good heart to me. We have the lowest unemployment levels in living memory and the country is doing better than most of its trading partners. We must be doing something right on this side of the House to have achieved those record developments. 
Deborah Coddington 
: Who or what were the two suppliers that the Auditor-General found did not meet the Business Growth fund criteria and what is their annual turnover? 
Hon JIM ANDERTON 
: I do not have the names of the two companies. If the member wants to have them I will ask Industry New Zealand whether there is any confidentiality about their names. 
Rodney Hide 
: When Industry New Zealand senior adviser Mr Richard White the Minister himself and the Industry New Zealand Chief Executive Officer Mr Neil McKay told in turn the  
New Zealand Herald  
Parliament and the Commerce Committee that “the suppliers all met the funding criteria” were they making flippant comments or were they lying in unison? 
Hon JIM ANDERTON 
: I resent the implication that any of those people including myself was lying to anyone. The reality is that Industry New Zealand at the time thought that if collectively the group of companies met the criteria that would be sufficient for the award. There were in fact two companies out of the 10 that did not and that in the view of the Auditor-General has eliminated qualification for the award. I think it was an honest and reasonable mistake for Industry New Zealand to make at the time. The processes have been changed because of the Auditor-General’s report. Again members should understand that when a country is moving towards a proactive stance in terms of industry and business development we are entitled to try some new things and this is one of them—and most of them are working. 
Rodney Hide 
: I seek leave of the House to table the Auditor-General’s report showing that the Business Growth fund was out of order. 
Document by leave laid on the Table of the House.