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Funding Process Could Make For Chilling Precedent

Responding to reports that the Ministry for Business, Innovation and Employment handed over taxpayer money without confirming that private funding was unavailable to AJ Hackett Bungy, the New Zealand Taxpayers' Union is calling for Tourism Minister Kelvin Davis to clarify to businesses that negligence is not the new normal. 

Taxpayers' Union spokesperson Islay Aitchison says, "As one of New Zealand's most successful tourism operators, AJ Hackett Bungy could have survived without corporate welfare. It is completely unacceptable that it received a taxpayer-funded handout of $5,100,000 (and access to a further loan of the same amount) while smaller businesses continue to struggle and fail."

"However, if the Government really was committed to ensuring AJ Hackett Bungy's success, the least taxpayers expect is a thorough process to make sure alternatives are unavailable before public funding is provided. In this case, MBIE and the Minister appear to have just assumed this was the case without seeking written evidence or requiring AJ Hackett Bungy to explore multiple avenues. AJ Hackett Bungy stated that it had not received a response from its bank and the Minister considered that AJ Hackett Bungy was unable to secure private funding."

"On 23 July, MBIE Investment Manager Martin Cavanagh stated that at some stage he did confirm this was the case, although it is unclear when this took place, what (if any) supporting evidence was sought and whether AJ Hackett Bungy's statement was made in writing."

"As the responsible minister, Kelvin Davis must send a strong signal to the wider corporate community that this is not the standard process. Otherwise, businesses may pursue a strategy of making merely token attempts to secure private funding, or making no such attempts at all, before asking for a handout."

The Taxpayers' Union has approached MBIE for comment regarding this issue.

ADDENDUM

AJ Hackett’s reputation should not be tainted by handout

Taxpayers' Union Campaigns Manager Louis Houlbrooke says, "In our annual Jonesie Waste Awards, we nominated the $10 million handout given to AJ Hackett Bungy as an example of unfair corporate welfare. We incorporated the personal story of AJ Hackett into our awards ceremony, and joked that AJ Hackett is the only tourism operator in Queenstown who doesn’t want to throw Tourism Minister Kelvin Davis off a bridge."

"Someone associated with the Hackett family has since informed us that AJ Hackett separated from his company’s New Zealand operations several years ago. He had no involvement with the decision to take taxpayer funding."

"It’s a shame that an iconic New Zealand innovator should have his reputation tarnished, through no fault of his own, as a result of a politically-motivated handout. The Taxpayers’ Union apologises to Mr Hackett, having now learned he is not liable for payments given to the company that bears his name."

"Politicians such as the Tourism Minister need to give greater thought to the way their egregious handouts may in fact cause reputational damage to the recipient businesses and associated individuals."

"Another example is that of the late Sir Paul Callaghan, a great New Zealand scientist whose name has unfortunately been associated with a number of frivolous grants distributed after his passing by Callaghan Innovation, the controversial Crown entity that indulges in corporate welfare largesse while bearing Sir Paul's name."

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