Shane Jones under fire over proposed PGF investment for airline that didn't ask for it

Shane Jones put forward an unnamed private airline to receive an investment from the Provincial Growth Fund (PGF) it didn't even ask for and against Treasury advice.

Jones, the Regional Economic Minister, was set to invest $30 million from the $3 billion PGF into two unnamed airlines so they could purchase additional aircraft and pay off some debts, Newsroom reported.

It cited documents that showed a private airline had applied to the PGF for $20 million in exchange for a Crown shareholding - the precise amount unknown as it was redacted in the documents released to Newsroom. 

The Ministry of Business, Innovation and Employment's Provincial Development Unit advised that the $20 million request be dropped to $15 million, but also recommended that another airline receive an investment of the same amount. 

Ministers Grant Robertson, David Parker and Phil Twyford were involved as part of a Regional Economic Development Ministers' meeting, and they all would have had to sign off on the investments. 

According to the documents cited by Newsroom, Jones was not able to form consensus from the ministers, as they were less enthusiastic. It's noted that Treasury and the Ministry of Transport had raised concerns. 

New Zealand First MP Shane Jones.
New Zealand First MP Shane Jones. Photo credit: Getty

Treasury said the unnamed company "has not applied to the PGF for funding, and we have not seen any analysis of what benefit a $15 million investment in this company would provide". 

Jones said he wanted to avoid a situation where "aviation connectivity was going to be weakened", according to Newsroom. He said he respected there was no consensus when the idea was dismissed in December last year. 

Jones told Newshub the proposal was "designed to circumscribe a fund - not unlike the fund that's been set aside for water storage, set aside for digital connectivity - and we were going to have a fund that would be available for aviation connectivity".

He added: "As you know, the four ministers weren't of one mind about that."

National's Regional Economic Development spokesperson Paul Goldsmith has blasted Jones over wanting to "spend taxpayers' money on an unnamed regional airline which hadn't even asked for funding".

"It is tawdry that Mr Jones was pushing this plan at a time when he was carrying out a personal and public vendetta against the CEO of Air New Zealand."

Goldsmith was referring to Jones' row last year with Air New Zealand for cancelling regional routes, saying it was far too focused on Auckland. He later called for heads to roll after the airline's board voiced concern about political interference.

National MP Paul Goldsmith.
National MP Paul Goldsmith. Photo credit: File

"One reasonable interpretation of events is that Mr Jones was angry with Air New Zealand's leaders because they wouldn't do his bidding and he wanted to teach them a lesson by strengthening the airline's competitors," Goldsmith said. 

"This will send a shudder through New Zealand business."

Jones told Newshub: "I find as the Regional Development Minister the easiest thing to do is to do nothing and that is precisely what the provinces are hearing from Mr Goldsmith."

He added: "I find that I waste too much energy generating public responses to such sapless advice. I'm more interested in seeing the provincial trees thrive and not be stripped of fiscal sap."

The Government already owns a stake in Air New Zealand, the country's largest, which was acquired under Helen Clark's government. It currently owns 52 percent, after John Key's government sold down its shares from 73 percent. 

Jones has been criticised for going against Treasury advice in the past. Earlier this year Newshub revealed official advice was ignored on loaning $9.9 million from the PGF to debt-laden Westland Milk Products. 

And in December, Newshub revealed Treasury warned Jones not to fund up to $11.5 million worth of projects in Gisborne. 

Newshub.

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