21 Apr 2016

PM not worried about Niue resort deal

3:15 pm on 21 April 2016

The government isn't the slightest bit worried about a Niue luxury resort deal involving a National Party donor, or any inquiry into it, the Prime Minister says.

NZ Prime Minister John Key in China

Speaking in China, Mr Key said he was not at all concerned and had not followed the issue closely. Photo: AFP

In 2014, businessman Earl Hagaman made a $101,000 donation to the National Party. The next month, his company, Scenic Hotel Group, won a government tender to manage the Matavai Resort in Niue.

The following year the resort received $7.5 million in aid funding.

Foreign Affairs Minister Murray McCully said there was no link between the events, but Labour Party leader Andrew Little has asked the Auditor-General to investigate.

Mr Key, speaking in China, said today that, while he hasn't followed the issue closely, he's not at all concerned.

"People make political donations and that's well and truly disclosed.

"But actually Scenic Hotels have been operators for a very long period of time, that's a management contract from what I can see in Niue - there's nothing untoward there."

Mr Hagaman and his wife, Lani, released a statement yesterday saying they would support any inquiry into what they said was a contestable process for the resort management contract.

They also accused Mr Little of trying to score points at their expense and of spreading what they called "fertiliser", and said they were considering their legal options.

Mr Little stood by his statements and said he believed there was no basis for legal action.

Speaking to Morning Report, he said he would not be doing his job if he did not ask questions about the deal.

Andrew Little during caucus run 1.03.16

Labour leader Andrew Little Photo: RNZ / Alexander Robertson

"If you make massive donations to a political party in government, and you're in the business of tendering for government work - and you get that work, then it is natural that suspicions are aroused and questions are asked. They should be."

Mr Little said the first he heard about the issue was from RNZ News and he had not spoken to Labour MP Jacinda Ardern directly about it. Ms Ardern's father, Ross Ardern, the High Commissioner to Niue, was on the trust that awarded the contract to the Scenic Hotel Group.

Mr Little said National had made something of the connection.

"The implication somehow is that because there's a family member of a Labour MP, sort of involved in some way in this, that therefore I should not take this up, or that I should back off - that's outrageous."

Matavai Resort, Niue

Matavai Resort, Niue Photo: RNZI

Get the RNZ app

for ad-free news and current affairs