Minister’s shares issue throws Hipkins further into the woods

Neither Chris Hipkins nor Michael Wood needed this (Newshub Photo)

Peter Dunne
Wellington, June 10, 2023

Chris Hipkins has demonstrated many skills since he became Prime Minister unexpectedly just over four months ago.

However, successfully managing his Ministers has not been one of them.

So far, he has had to sack one Minister for repeated breaches of the Cabinet rules on conflict of interest; censure one for an inappropriate speech to Radio New Zealand; watch another be summoned before the Privileges Committee on a charge of contempt of Parliament (which may yet involve him as well); and, have one Minister walk out on him altogether to join another party.

Now, he has had to stand down one of his closest lieutenants for failing to disclose a shareholding that he had previously acknowledged conflicted with his portfolio responsibilities and that he had promised to sell but had not yet done so.

Growing slackness

Together, they contribute to a growing air of slackness about the Hipkins government and the way it operates. Usually, when these types of circumstances occur, it is a sure sign of a government having run its course and is ripe for replacement at the next election. With just four months to go until that next election, it is going to become increasingly difficult for Hipkins to fend off the taint now entrenching, even if there are no further damaging incidents to emerge.

The situation surrounding Wood is especially dumbfounding, as he was regarded as one of the government’s less risky pairs of hands. His excuse was the same one both Nash and Tinetti fell back on when their lapses were made public – namely, personal oversight for which they were deeply sorry. It all looked a little contrived.

That is especially so in Wood’s case. After all, he was warned a staggering 12 times by the Cabinet Office that he needed to dispose of his Auckland Airport shares. His explanation that the shares were in a trust, and he thought they had been disposed of, but had been too busy to confirm, is weak and defies belief.

The compounding factor here is his wife’s situation. She is also in public life as an Auckland City Councillor and is facing similar allegations of conflict of interest over shares. Her initial explanation for her failure to disclose was even more unbelievable than her husband’s – she claimed she did not know she was a beneficiary of the trust bearing her name that held the shares.

Now, how Wood and his wife manage their personal financial affairs is their business.

However, their explanations so far for the potential conflicts of interest that have arisen are far from convincing. Taken together, they leave the suspicion that the full story may be yet to come, something that was exercising Hipkins’ mind when he stood Wood down from the Transport portfolio, pending further inquiries; and Wood selling his Auckland Airport shares.

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Competence under question

But National’s calls for Wood’s dismissal were premature, although more recent reports about decisions he made restricting expansion at North Shore Airport while still holding his Auckland Airport shares may change that. What has been revealed so far is a Minister basking in the reflection of being considered highly competent when he was anything but in the management of his personal affairs. Being caught out this way is certainly personally embarrassing.

His hitherto perceived competence is clearly overstated but is not by itself a sufficient reason for his dismissal altogether. Clear evidence the North Shore decision was influenced by his Auckland Airport shareholding would change that.

In any case, the issue is now much bigger for Hipkins than the circumstances of Wood’s failure to get rid of some shares. Given the previous Ministerial crises of the last four months, Hipkins’ own credibility is firmly on the line. After all, he appointed each one of them and initially backed them, only to be let down as their wider stories have unfolded.

The fact he has seemed blindsided in each case where a Minister’s shortcomings have been revealed compounds his problems. Each case has raised its own questions about his management style and the performance of his own office. In Wood’s case, the Prime Minister’s Office was aware of the situation for some days before informing the Prime Minister. As Prime Minister, he should be the first to know about such things, not the last.

Hipkins’ problem is that what momentum he has been able to establish has been slowed by these now regular Ministerial crises. He looks less and less like a determined Prime Minister leading his country through a cost-of-living crisis than one trying desperately to plaster over cracks in a disintegrating government.

From the public perspective, the precise details of each case are less relevant than the overall impression they create. Wood’s shares or Tinetti’s answers to questions in the House run second to the perception of incompetent Ministers ignoring the rules. Reversing that impression is now a far bigger challenge for Hipkins than correcting the failings of his errant Ministers.

Not terminal

But while a severe body blow, the Wood affair is not yet terminal for the government. Wood needs to dispose of his Auckland Airport shares immediately and without fuss. Any further delay or obfuscation will make his position as a Minister untenable, which should be incentive enough for him to now act swiftly.

However, although that would resolve Wood’s immediate situation, it will not remove the stain on his reputation, or more importantly, the taint now engulfing the whole government. The more Hipkins is forced to defend the lax conduct of Ministers who do not seem to know the rules of their jobs, the more he will be dragged down with them.

The last thing Hipkins will want is to spend the next four months fighting off allegations of incompetent Ministers who follow the rules only when it suits them. However, as things stand, that is looking more and more likely.

Not a good position from which to fight an election campaign.

Editor’s Note: Indian Newslink understands that Minister Michael Wood has since sold his shares in Auckland Airport and has donated the proceeds to charity.
Peter Dunne is a former Minister of the Crown under the Labour and National-led governments from December 1999 to September 2017. He lives in Wellington and writes a weekly Column.

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