Newshub can reveal the Government was explicitly warned by Treasury not to do the deal at Ihumātao the way it did.
It used a workaround with cash from a KiwiBuild programme to fast-track the land deal, and it has opened the Government up to allegations of misusing taxpayer money.
After a protracted and often tense stand-off, a deal was finally struck at Ihumātao in south Auckland just before Christmas. The Government had been forced to step in, but Prime Minister Jacinda Ardern says the deal wasn't rushed.
"No, not at all," she said on Monday when asked if the process was hurried along. "It was something we spent a significant amount of time developing."
But Newshub can now reveal the Government ignored stern Treasury advice about how it tackled the Ihumātao deal.
The Government used a workaround to buy the contested land from Fletcher's for $30 million, taking cash from a KiwiBuild programme called Land for Housing, but Treasury says that's not what the programme was designed for.
Treasury warned ministers: "If Cabinet wants the Crown to purchase the land at Ihumātao, we do not recommend doing so through the Land for Housing Programme."
Officials were worried about fiscal risks, and the Treasury recommendation is clear: do not support. The advice came just three days before the Government announced the deal.
"The Prime Minister weighed into Ihumātao, screwed it up and then misused taxpayer money meant for KiwiBuild to pay off her political problem - it's banana republic stuff," says ACT leader David Seymour.
"Abusing taxpayer money and doing a deal with taxpayer money intended for housing that will actually lead to fewer houses being built - how crazy is that?"
Ardern said she's comfortable with how the deal was done.
"Yes I am."
Seymour says taxpayer money was used as a "slush fund" to solve a political problem the Government "created itself by wading into a conflict".
The whole point of KiwiBuild is to get affordable housing built fast. But the way the deal is structured at Ihumātao means it could take five years before a shovel even hits the ground.
