A loan to a Whangarei berry operation from the Government's Provincial Growth Fund (PGF) is under fire from the Taxpayers' Union.
The $2.37 million PGF loan to Maungatapere Berries was announced by Minister of Regional Economic Development Shane Jones on Friday.
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The company is to develop the first phase of a high-tech education, training and employment operation, as part of a 20ha hydroponic orchard expansion, doubling its workforce to 360 over the next five to eight years.
However Taxpayers' Union Spokesman Louis Houlbrooke said it was wrong for Government money to be used in this way.
"Why couldn't this business get a loan from the bank? If no bank was willing to take a punt, why should taxpayers bear the same risk?" he said.
He said it was a classic example of the Government using taxpayer money to pick winners.
"By giving one business a special favour, Shane Jones is effectively blowing raspberries at other growers who have to compete without taxpayer help," said Houlbrooke.
"If the Government wants to stimulate economic development it can always cut company taxes, which will help all businesses - not just a fashionable few."
But Jones said it was an example of the PGF investing in a diverse range of industries to grow provincial economies and provide jobs and training.
"Berries are increasingly popular both in New Zealand and overseas. This initiative we're investing in looks to produce high-value fresh, frozen and processed raspberries, blueberries, strawberries and blackberries, which are well suited to covered hydroponic growing," he said.
He said New Zealand needed to invest in hydroponics to maximise the potential of the horticultural sector, or be left behind by competitors.