Controversial religious sect Gloriavale is applying for millions of taxpayer dollars through the Government's Provincial Growth Fund.

1 NEWS has revealed Gloriavale's leaders are looking to set up a new health food enterprise on the West Coast, and they want the public to fund it.

Gloriavale's application to the $3 billion fund is already on the radar of Shane Jones, Regional Economic Development Minister.

"I wouldn't want to knock out any particular application till we had all the facts. But the reality is that particular organisation does represent something of a morality play," Mr Jones said.

And the bid is now raising the eyebrows of others too, including ACT Party leader David Seymour.

"Not even the good Lord himself could deliver a blessing as bounteous as Shane Jones, with all his gullibility and a billion dollar cheque book," Mr Seymour said.

Massey University Professor Peter Lineham said Gloriavale have "set themselves up on the Coast as a curious little isolated place that wants to have nothing to do with the world. Well, then what are they doing asking for the world's money? That's what I'd like to know".

National's Economic Development spokesman Paul Goldsmith said it's not clear to him "how New Zealand benefits from giving money to a closed community".

Gloriavale's spokesman declined to comment about the application to the Provincial Growth Fund when contacted by 1 NEWS.

The Business Ministry is also tight-lipped.

But 1 NEWS understands Gloriavale is seeking many millions of dollars for its new health food company and factory on the West Coast.

Gloriavale comes with a whole lot of baggage. And the Government cannot be comfortable - Massey University Professor Peter Lineham

A former Gloriavale resident, Lilia Tarawa, called for the group to be upfront with the public about how their business pitch would benefit New Zealand.

"And if it does, great, then let's go for it. And if it doesn't, then let's put a cap on it," she said.

Operating as a charity with tax benefits, Gloriavale has amassed more than $35 million in assets.

But it's also mired in controversy, including allegations of sexual abuse within the community.

"Gloriavale comes with a whole lot of baggage. And the Government cannot be comfortable," Professor Lineham said.

Mr Goldsmith said: "Nothing would surprise me with the way that this fund is going at the moment."

While Mr Seymour said: "It's outrageous."

Mr Jones said he's not surprised that "we will get from time to time applications where we'll have to be very, very sensitive".

The Government says it will consider the application in good faith.