A closer look at Little’s Scenic Circle ineptitude

The accusation:

The “smoking gun” so far looks something like this – 87-year-old businessman, Earl Hagaman, made a sizeable donation to the National Party and the hotel group he founded subsequently won a Government contract in Niue to run the Island’s biggest hotel.

Labour is calling for an Auditor General’s inquiry and leader Andrew Little claims something “stinks to high heaven” about the way money “earmarked as aid” for Niue “has instead been given to upgrade a resort run by a National Party donor”.

Little then goes on to finger McCully by suggesting the group which decided the contract were the foreign minister’s hand picked appointees.

Little deliberately plants a few seeds with this statement; firstly, that money intended for traditional aid (presumably he means crops, humanitarian relief or medical supplies etc) was instead diverted to a luxury resort. And second, that there may be something dodgy about Government appointees deciding the contract.

The analysis:

The first assumption deals with the nature of New Zealand aid to Niue. The Ministry of Foreign Affairs and Trade says New Zealand aid to Niue is focused on “economic sustainability, mainly through developing the tourism industry”.

Increasing economic benefits from tourism is listed as the number one priority, including “supporting the expansion of Niue’s largest hotel, the Matavai Resort, to accommodate growing tourism numbers”. Over the years that has added up to some $18 million in aid money, most of which predates Scenic Hotel Group’s involvement.

The spending has included extra rooms to accommodate 2000 more visitors each year and the development of conference facilities at the resort.

To further boost the island economy, MFAT also provided $1 million last financial year to promote Niue as a tourism destination.

There may be questions about whether New Zealand taxpayers or the people of Niue for that matter, have got value for money out of that investment over the years, given the amount of aid ploughed into it.

But the suggestion that aid intended for more worthy projects was suddenly diverted to the resort after Hagaman’s donation is tenuous.

As for McCully’s handpicked appointees, these are the members of the Niue Tourism Property Trust whose members are indeed appointed by McCully on behalf of the Niue Government.

It has already been widely reported that they include the likes of the island’s High Commissioner and former police officer Ross Ardern. (Ardern also happens to be the father of Labour MP Jacinda Ardern so one would assume he’s not embedded with the National Party).

Great move by McCarten and Little there. Nothing like making it personal for the person who is slated to take your job next time it comes to choosing party leaders.

…our donations regime is at least more transparent than it once was. If anything, the Hagaman donation proves the disclosure regime is working as intended.

Millions of dollars in donations used to be laundered through the likes of like National’s secretive Waitemata Trust. If the consequence of open disclosure is to become a political football then donors, and political parties, will only look for inventive ways to get around those disclosure rules and go underground again.

So Little was right to ask the question but wrong to leap to judgement before the Auditor General decides even whether to take a look.

If every big donation is going to be decried as dodgy there seem to be only two alternatives – either barring donors from tendering for Government contracts, which is probably unworkable, or a fully state funded regime, which is where the first option ultimately leads anyway, given the inevitable drying up of campaign funds.

But State funding opens a whole other can of worms, one that comes at a cost of tens of millions of dollars to taxpayers.

It’s also just as likely to become a football and just as open to abuse.

Anyone who doubts that should cast their mind back to the Labour pledge card scandal of a few years back.

Which is the other problem with where Little may be going.

The public’s suspicion about wealthy donors is probably only rivalled by their scepticism over politicians putting their hands out for more money.

Labour only have state funding of elections left as a viable option. So the strategy to start attacking big donors is expected to provide a “chilling effect” on National’s incoming finances via large donations.


– Tracy Watkins, Stuff

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.