Edited Version of RNZ Story
Wellington, June 21, 2023
Prime Minister Chris Hipkins has announced Michael Wood has relinquished all his remaining ministerial portfolios.
Mr Wood was stood down as Transport Minister and a Parliamentary inquiry was instituted after it emerged that he had not declared that shares valued at $13,000 that he had held in Auckland Airport.
As reported earlier, he had purchased the shares when he was a teenager in the 1990s but had failed to declare them in the Public Register of MPs Assets and other interests until 2022. He has since then sold the shares and donated the proceeds to charity.
Mr Hipkins said that newly unveiled additional shareholdings held by a trust at which Mr Wood was a trustee and beneficiary raised concerns about him not identifying and managing potential conflicts of interest.
These included shares in Chorus, Spark, and National Australia Bank (NAB).
Mr Hipkins said that as Immigration Minister Mr Wood decided to include telecommunications technicians on the Immigration Green List, after representations from the telecommunications industry including Chorus, seeking those changes.
Mr Hipkins said that NAB is the parent company of the Bank of New Zealand and that Mr Wood’s shareholding was not disclosed during conversations in the Cabinet about a market study into banking or other recent relevant conversations.
“Despite repeated requests from the Cabinet Office and myself for Michael to manage his shareholdings, he repeatedly failed to identify, disclose and appropriately manage conflicts of interest. When I stood him down as Transport Minister, I had asked if there was anything else that he (Hipkins) should know and he said there was nothing,” Mr Hipkins said.
He said that Mr Wood’s management of his airport shares was not an isolated incident and hence it was not appropriate for Mr Wood to continue as a Minister.
“I have formed the view that the system that we have in New Zealand for managing potential conflicts of interest amongst Cabinet ministers also needs to change.
Disclosure regime tightened
He said that He said when he learned that Mr Wood had failed to sell his Auckland Airport shares despite 12 requests from the Cabinet Office to do so, he asked for advice on measures to ensure that such behaviour would not be repeated.
As a result, he has agreed to five changes to tighten up the disclosure regime for Ministers.
First, the Cabinet Office will move to quarterly reporting of conflicts of interest, directly to the Prime Minister. This changes from the Prime Minister only being advised of new interests as a part of the annual review, or on an ad-hoc basis if particular issues arise.
Second, an escalation process will be set up for situations where a minister is not engaging fully with the process or following advice on the management of a conflict.
Third, there would be in-person annual reviews with each minister to discuss their conflicts.
Fourth, all Ministers must nominate a dedicated person in their office to support them with conflict-of-interest processes.
Finally, conflict disclosures would become a standing item at the start of each Cabinet or Cabinet Committee meeting.
The Australian practice
“I have also sought advice on a full Restrictions Regime on shareholdings for Ministers. In Australia, the Code of Conduct for Ministers requires that they divest themselves of investments and other interests in any public or private company or business. That is, other than public superannuation funds or publicly listed managed funds or trust arrangements where the minister has no visibility or control of decision-making,” Mr Hipkins said.
Mr Hipkins said that while he believed Mr Wood acted with no intent of personal gain, his actions have let himself and the government down and that he has shown a serious lapse of judgement and has taken the appropriate action by resigning.
Carmel Sepuloni will become Minister for Workplace Relations and Safety and Minister for Auckland, Andrew Little will become Minister of Immigration, David Parker will become Minister of Transport and Kiri Allan will become Associate Finance Minister.
Frustrating experience
Mr Hipkins said that he found this episode deeply frustrating, like many others.
“While I have been in this job only for about five months, I have taken a number of steps to stop the kinds of behaviour that have not met acceptable standards. Ministers, for whom it is an honour to have such a role, need to ensure that they manage their affairs to the highest standards. These have been unnecessary distractions from the firm focus that I want to bring as Prime Minister to delivering on the issues that are most important to New Zealanders,” he said.
“These are conversations that I have had with Michael over several weeks and to only learn of these yesterday when repeatedly through numerous conversations I have asked him if there are other issues that I should be aware of and he has said no, that is beyond frustration,” he said.
He said he did not believe Wood had been able to adequately explain how he had found himself in this position.
“In these issues as Prime Minister, my first duty is to uphold the standards required of Ministers. That has been my primary consideration here. Michael has not met these standards,” he said.
Honesty not questioned
“I believe Michael to be an honest and decent person, who has been a conscientious and hardworking Minister and has been a very good Minister. I still do not understand how after all of this period of time over two years of the Cabinet Office asking him to attend to these matters we are in this position now. In the last few weeks even, the fact that more information has come to light as those weeks have unfolded is something that I still do not understand. I accept that human beings make mistakes but this is over two years and even in the last few weeks the amount of time he has taken to fully identify any other relevant issues is not acceptable,” he said.
Hipkins said some of the decisions – the banking ones – were only made in the last few weeks.
Wood apologises
In a statement, Mr Wood said that he was apologetic and was taking responsibility for the mistakes he had made in dealing with his conflicts of interest.
He said that he had spent the past two weeks reviewing all of his financial interests and found other shares he held through a family trust that should have been reported to the Cabinet office.
“Similar to my ownership of personal shares, these were historic holdings from before I was a trustee and I have paid limited attention to them. At all times I have provided information about shares in the trust to the Cabinet Office that I have believed was correct, but in this case, my understanding was incorrect.”
Mr Wood said he was a “true believer in politics” and is there to serve the public.
“There has not been a second of my political career where any of my financial interests have influenced my actions or even crossed my mind. In some respects, my de-prioritisation of my personal financial affairs has led to this situation. That being said, I acknowledge that the rules are in place for a reason and it is incumbent on Ministers to manage not just the reality, but also the perception of any conflicts. I have not managed this effectively, I take responsibility for it, and as such have submitted my resignation to the Prime Minister. I apologise to him and the public for this situation,” Mr Wood said.
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