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Jones defiant, apologetic over Provincial Growth Fund

Jones defiant, apologetic over Provincial Growth Fund politics

By Pattrick Smellie

May 13 (BusinessDesk) - Regional Economic Development Minister Shane Jones mixed defiance with apology for his handling of the Provincial Growth Fund during a briefing intended to demystify the process by which funds from the $3 billion fund are managed.

Fresh from an early Monday meeting with the Office of the Auditor-General, which is taking extra interest in the PGF's operation, Jones made it clear he expected the government auditor to judge systems and processes rather than the political intent of the fund to advance New Zealand First's interests by investing in regional economic activity.

"I think the Auditor-General is very aware that I'm incredibly alert to any suggestion that just because this came from NZ First it should suffer a more intense inspection, or because I have wandered around with a megaphone somehow that means something not quite kosher is happening."

He had been assured the auditor would focus on "the processes and policies of administering money, not the policy of setting the fund up and the way it has been set up".

Controversy has dogged several smaller-scale initiatives funded by the PGF, including an aborted $10 million loan to the Westland Milk dairy cooperative, a repayable grant to a Northland cultural centre development where Jones was alleged to have a conflict of interest, and the fact that several of the early projects have been in the Far North. The province has been identified as a "surge region" for PGF investment because of its high levels of poverty and unemployment, but is also where Jones and his party's leader, Winston Peters, hail from.

Other funds administered by the Ministry of Business, Innovation and Employment attracted "a fraction of the attention" given by media and political opponents to the PGF, said Jones, who accepted that NZ First's involvement in the fund's establishment gave it "a magnetic quality causing people to want to bring me down low".

"Good luck," he said.

He lashed the transport bureaucracy for "frustrating" him by being slow to implement roading projects being funded from the PGF, despite one of the fund's senior officials, Ben Dalton, telling the same briefing that the desire to train a road-building workforce in areas such as Gisborne/Tairawhiti inevitably resulted in delay.

"I've said to the audit department, please investigate how efficiently and productively those entities are executing and delivering for the government their portion of the PGF," Jones said at a long-delayed media briefing which journalists had first sought last year.

Jones also contrasted the swift establishment of the PGF, which was part of NZ First's agreement to form a coalition government with Labour after the 2017 election, with the time being taken to establish the Green Party's $100 million Green Investment Fund. It is in its establishment phase at the half-way mark of the three-year parliamentary term.

"There's no comparison," Jones said, insisting that speed of implementation had been essential to gaining political kudos for NZ First in time for next year's general election.

In a sometimes elliptical address, Jones said he accepted responsibility "as to why there is a perceived large level of 'white water' around this government initiative".

He believed this had "something to do" with his personal approach, "which has led, I think, to a host of media interest and concern to ramp it up, to talk up the size of the putea (investment fund), the reach of the mission, and that has led from time to time to me being perceivably at odds with the media".

He said that was "rubbish", but acknowledged that officials "do attract a level of attention that's possibly related to ... the style in which Matua Shane Jones has taken on this role".

He was unapologetic about the speed with which he had forced the bureaucracy to move to implement the fund because of his "obvious need, from my perspective, to stand before fellow New Zealanders in the voting season and convey to them with a great deal of confidence that: 'this is what we thought we were doing and this is what we've achieved'."

"That is what makes this, in some respects, a political mission."

He left hanging whether it had been the right decision to put the fund's administration under MBIE officials and the "core civil service" rather than using an arms-length vehicle like Crown Irrigation Investments, which the previous government established to vet and underwrite private irrigation schemes.

Using MBIE had "set in train a host of other consequences, and some of those have led me, from time to time, to express my frustration," said Jones, who has gained a reputation in Wellington bureaucratic circles for impatience with official processes and advice.

That was because he was ambitious both for the fund's impact and its potential to serve NZ First's electoral chances in 2020, although Jones said he had at times been "excessively" and "unnecessarily loud" in his advocacy.

He noted also that around a third of the PGF had been "allocated within the state itself" to underwrite the programme to plant one billion trees, upgrade regional roads, and invest in upgrades to the rail system, which he hinted would get a further major funding boost in the Budget on May 30, possibly from the PGF. This funding had drawn little negative comment.

Referring to the NZ Herald newspaper's recent, unflatteringly low rating of four out of 10 for his performance as a minister, Jones said: "I'll tell you something: my worth as an NZ First MP going into the election is 10-plus".


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