Prime Minister Jacinda Ardern is backing Shane Jones amid calls for his sacking over conflict of interest allegations.
The Regional Economic Minister, responsible for the Provincial Growth Fund (PGF), has been criticised for attending a funding meeting for a Northland cultural centre that he had earlier been involved with as a Labour MP.
Despite stepping away from the project, documents show Mr Jones recently sat with Cabinet colleagues where $4.6 million was approved from the PGF for the Manea Footprints of Kupe Cultural Heritage and Education Centre in Opononi.
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ACT Party leader David Seymour has asked the Auditor-General to investigate Mr Jones' role, saying it's unacceptable the minister declared a conflict of interest and then attended a funding meeting just 11 days before it was announced.
"I don't see how Jacinda Ardern can keep him in Government on that basis. If it was Helen Clark or John Key, Shane Jones would be moving to the backbenches and no longer a minister," Mr Seymour said.
It's also understood Mr Jones was once touted as a possible chair for the project, which could indicate he had a vested interest, and should not have been seen to be influencing it in any way.
Mr Jones defended himself, telling Newshub the decision for the project to proceed "was made by the Ministers of Transport, Tourism, Economic Development and, finally, the Minister of Finance".
"I was not one of the decision-making ministers".
He said the matter was "canvassed intensively in a series of written parliamentary questions from Paul Goldsmith and David Seymour in the middle and end of last year".
"I declared a conflict of interest in relation to the Manea Footprints of Kupe project once an application for assistance from the PGF was received in late 2017 and asked my colleagues to make any decisions on the progress of this project."
The Prime Minister's Office confirmed to Newshub that she will not be sacking Mr Jones. She said based on the information and advice received, "the conflict of interest was managed in accordance with the Cabinet Manual so therefore I would have no cause to sack Minister Jones".
Mr Seymour says this will be a test for the Prime Minister.
"The Prime Minister should carefully reflect on whether Jones' behaviour is acceptable for a Minister in her Government," he said - particularly when she "promised the most open and transparent Government in New Zealand's history".
The Prime Minister has a history of clashing with the outspoken New Zealand First MP. In March last year, she condemned his calling for heads to roll at Air New Zealand as "a step too far" when the airline discontinued some regional flights.
It's also not the first time Mr Jones has faced controversy around meetings related to the PGF. In November last year, it was revealed he had failed to disclose more than 60 meetings and had to correct 20 answers to questions from National.
National spokesperson for economic and regional development Paul Goldsmith said at the time it was "completely implausible" that Mr Jones did not notice when signing off on his answers to written questions that there were significant volumes of meetings missing.
Mr Jones' spending of the PGF has frequently been called into question. In December last year, Newshub revealed he signed off on millions of dollars of funding, despite his officials explicitly warning him not to support the projects.