Government’s Ihumātao land purchase ‘unlawful’ – Auditor-General

The Auditor-General has found the Government’s $30 million purchase of land at Ihumātao was unlawful because it did not seek the correct approvals from Parliament.

Act Party leader David Seymour and National MP Nicola Willis wrote separately to the Office of the Auditor-General about the Government’s purchase of land at Ihumātao in Māngere, Auckland.

Their concerns were around a $29.9m appropriation from the Land for Housing Programme being used to purchase the land at Ihumātao from Fletcher Residential Limited.

They were concerned using that amount was outside the appropriation for that programme and therefore potentially unlawful.

They also wanted to reassure the public that significant sums of taxpayer money were being managed appropriately.

The Treasury had previously advised the Government the Ihumātao transaction did not fit within the existing Land for Housing Programme’s intent.

There was also a risk the expenditure would not fit within the appropriation scope of the KiwiBuild Housing appropriation.

Consequently, on February 3 this year the Ministry of Housing and Urban Development asked the Minister of Finance and the Minister of Housing to approve a new appropriation, Te Puke Tāpapatanga a Hape (Ihumātao), within Vote Housing and Urban Development.

On February 9, the ministers agreed to a new appropriation for $29.9 million and delegated authority to the Ministry of Housing and Urban Development to sign the sale and purchase agreement.

The transaction was settled on February 17.

However in responses to the opposition MPs published today, Auditor-General John Ryan said while the Government intended to establish a new appropriation that would provide authority for the purchase of the land at Ihumātao, there were two “important omissions” from the approval for the expenditure.

“As a result, the payment of $29.9 million used to purchase the land was incurred without the proper authority,” Ryan said.

“Because the Ministry did not seek the correct approvals, the expenditure was incurred without appropriation and without authority to use imprest supply.

“For these reasons, the payment is unlawful until validated by Parliament as part of an Appropriation (Confirmation and Validation) Act.”

Standard procedures for the unappropriated expenditure would follow, Ryan said.

This included requiring Minister of Housing Megan Woods to explain the matter to Parliament, and seeking the correct validations.

Prime Minister Jacinda Ardern insisted today the deal was not a botch-up by the Government.

She said the land will be utilised for housing but there is a “large process to go through” before the house on the land is set up.

The funding was allocated as land for housing, but there is still a lot of work until the housing is built.

Meanwhile National’s housing spokeswoman Nicola Willis said the report showed the deal was “not done by the book”.

“The Auditor-General’s report uncovers extremely dodgy behaviour from Labour Government Ministers as they tried to justify this spending,” Willis said.

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