Recent revelations that a Serious Fraud Office (SFO) investigation is being opened into the potential misuse of public funds meant for business relief from Cyclone Gabrielle poses serious questions of the Labour government, National’s Cyclone Recovery spokesperson Chris Penk says.

“The possibility of fraud is worrying but this situation was entirely predictable. In fact, it was predicted.

“Documents released to National under the Official Information Act show that the Local Delivery Partners (LDPs) tasked with distributing funding to business had raised exactly these concerns with MBIE. Weekly progress reports showed numerous instances where fraud or individuals gaming the system were suspected. These were ignored.

“One LDP stated that they had ‘picked up several attempted fraud applications and are investigating further. Suspected applications have been paused until resolved. Have requested permission to share suspected bank accounts with other regions but never received a response.’

“Another LDP report explained that ‘[w]e are nervous about audit requirements afterwards, as we have limited resources to do in-depth, ground truthing for every application.’

“Despite statements such as these, neither MBIE nor the Minister responsible, Grant Robertson decided that it was necessary to make any changes to this model of funding distribution.

“National’s consistent view has been that the lack of transparency, oversight, and clear criteria around funding support to regions affected by Cyclone Gabrielle was leading to perverse outcomes.

“The Government’s intended ‘locally-led, centrally-supported’ approach has failed the regions because half of the picture – central government support – has been invisible.

“We will await with interest the result of SFO’s investigations, a process at arm’s length from politicians. Whatever the result, all this ongoing confusion and uncertainty was avoidable.

“It’s just a shame that cries for help from those on the ground, along with National’s warnings, went unheeded.”

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