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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  • Simon P

    Labour consider large donations out of the ordinary because they haven’t had any themselves since Helen Clarke was leader.

    If Labour isn’t the one collecting other people’s money it must be dishonest.

  • Barnacles2

    The interesting this is that if the funding is through the state, how would this be divvied up? As Labour are languishing at 28% would they get a correlated proportion of the funding? Would then National would get the lions share, and more complaints about the distribution not being “fair” would no doubt follow…

    • biscuit barrel

      Why is the NZ taxpayer creating a ‘little Venezuela’ in the south pacific. Government subsidised,jobs, flights , shipping, holidays for tourists that is further than Fiji or Samoa yet has no attractions. And

  • Second time around

    Tracy and Stuff normally give Labour a very fair press. Here it is clear they see no merit whatsoever in Little’s outburst last week and even see it having damaging affects on NZ’s political freedoms and accountability. State funding for political parties will be even more contentious than free air time on TV, which ended up with a High Court ruling in favour of Colin Craig last election.

  • Abjv

    The messages are:
    1. If you donate to National, don’t expect to win any government contracts while Labour is in power. We will award them to an overseas company in preference, even if it has a chinky-sounding name.
    2. If you are growing in popularity in the polls and might think of challenging me as leader, I will jump on your relatives from as great a height as possible. You might feel brave for yourself, but what about for your kinfolk?

    What is it with short people e.g. Napoleon, Muldoon, Little?

    • Second time around

      Napoleon and Muldoon were extremely able people, widely respected even by their enemies. Little is in a different league.

    • Larry

      You left out the shortest of them all. Our very own Winston Peters.

  • Keanne Lawrence

    Little hope of Watkins improving with age as a man does while he waits for somebody to pop his cork.
    Stupid does as stupid is. Perhaps Angry Andy is conversant with this process from his own parties history where this was the MO. Then again ignorance is bliss in his case. Might be his only source of bliss.
    This has not always been the case for so many who have gone before him where large donors have seen some outstanding kickbacks from them over the years. This became so blatant at times even the man in the street particularly in the regions was able to connect the dots.
    The funny thing is while the recipient saw some long term gains the regions did not fare so well as it was just another flash in the pan.

  • Doc45

    Little was right to raise the issue. He just did it the wrong way and with the nasty venom that comes with union hacks. He could have handled it with a generous spirit avoided any imputation.

  • Rick H

    So Andy thinks that if the current Govt awards a contract to anybody who votes National, it is very dodgy and stinks to high heaven.

    The Govt should instead, just to be seen to have no “conflict of interest”, award the contract to someone who doesn’t vote National, therefore awarding the contract to somebody on the dole, or a drug addict.

    Yeah, that makes sense Andy.