The Labour–NZ First Government gave the greenlight to infrastructure projects that were not fully scoped or planned during the Covid-19 pandemic, the Auditor-General says.
In early 2020, Labour and its coalition partners set up a $12 billion infrastructure fund, called the New Zealand Upgrade Program, and later a $3 billion “shovel ready” Covid recovery fund.
John Ryan, who is responsible for auditing public bodies, has published a 70 page report looking at the investment decision-making process of these funds and found it to be lacking.
“Ministers made decisions to progress some NZUP projects even though those projects were not fully scoped or planned,” he wrote, in an overview.
“Full business cases were not always available or up to date even when the project’s planning was more advanced, such as for transport projects that were already part of the National Land Transport Programme”.
The report acknowledged these decisions were made in challenging circumstances, as Ministers rushed to strengthen economic conditions in the wake of the Covid-19 pandemic.
“The need for early announcements to provide confidence to the public appears to have influenced how quickly these processes were carried out”.
The Auditor-General said he’d made “similar observations” about other Labour-led policies such as the Cost of Living Payment and the Provincial Growth Fund.
“It concerns me that significant spending of public money continues to occur without appropriate processes for ensuring value for money and transparent decision-making”.
The report recommended having Treasury ensure there was regular public reporting on the progress of all Cabinet-level investments and review its expedited decision-making process.
Grant Robertson, Labour’s finance spokesperson, said he accepted the recommendations around better reporting and clarifying investment criteria.
“I think it is important to remember that both of those were done in the face of significant economic issues … and in those situations where you need to respond quickly, not all of the full processes will be done”.
Finance Minister Nicola Willis said the report showed there had been “a lack of rigor” when the previous government chose infrastructure investments.
“Given the information revealed in that report … we do need to look through each of those projects to determine whether they're on track and what's happening”.
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