Prime Minister Chris Hipkins has accepted the resignation of his Transport Minister Michael Wood after discovering his trust held shares in other companies that were conflicts of interest.
The Minister had previously been in hot water over an undisclosed shareholding in Auckland International Airport which saw him stand down from the transport portfolio. Wood's now gone from all his cabinet roles and off to the back benches.
Hipkins had left the door open for Wood to return to the transport role, but it was slammed shut on Wednesday after it was discovered Wood's JM Fairey Family Trust held shares in Chorus, Spark and BNZ's parent National Australia Bank.
As Minister of Immigration, Wood was responsible for including telecommunications technicians on the immigration green list. This was something Chorus and other industry players had lobbied for.
Wood’s shareholding in Chorus is understood to be less than $10,000, but still represents a conflict which needed to be disclosed and managed.
As a cabinet minister, Wood was also involved in the discussion and decision to conduct a market study into the banking sector in the past few weeks.
These meetings occurred without him disclosing a greater than $10,000 shareholding in National Australia Bank.
Hipkins said it had become evident that the mismanagement of the airport shares was not an isolated incident and therefore it was not appropriate for Wood to remain as a minister.
“I don’t believe he has in any way been motivated by personal interest in any of the decisions he has taken. But he has had a conflict that he has failed to manage, and therefore the appropriate thing to do is to offer his resignation,” he said.
David Parker will become the Minister of Transport, while Carmel Sepuloni will take over as Minister for Workplace Relations and Safety, Andrew Little will become Minister of Immigration, and Kiri Allan will become Associate Finance Minister.
Hipkins said he was unable to accept Wood’s explanation that he was simply unaware of the assets within the trust, of which he is both a trustee and beneficiary.
“This is still an issue I don’t quite understand. I believe Michael to be an honest and decent person who has been a conscientious and hardworking minister.”
'I have not managed this effectively'
In a written statement, Micheal Wood said he’d found the assets as part of a detailed review of the trust after the problem with Auckland Airport shares.
The shares which created the conflict had been acquired before he was a trustee of the JM Fairey Family Trust — Fairey is his wife’s surname.
“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,” Wood said.
"That being said, I acknowledge 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.”
Christopher Luxon, leader of the National Party, said Hipkins should've sacked the Minister on day one.
Act Party leader David Seymour said it was “mind-boggling” that someone had so many conflicts but did so little about it, for such a long time.
“I’m genuinely flummoxed because I’ve known Michael for almost 10 years, I think he is a decent and diligent person. I just can’t understand how he could be so reckless,” he said.
“[But] it is good that he’s gone because if decision-makers have a vested interest in the decisions they are making, it undermines all New Zealanders trust in public officials”.
Hipkins said he hadn’t given any thought as to whether replacing the Transport Minister would create an opportunity to reset priorities in the portfolio, such as Auckland light rail.
“I'm sure David Parker will be having discussions with Auckland, as Michael Wood was, about a way forward for Auckland. Clearly, it is a region with a lot of pressing transport issues”.
Parker said Wood had left the transport portfolio in good shape and he would progress based on “the solid foundations that he has left behind”.
“My focus in the coming months will be on urban issues in Auckland and Wellington, on cyclone recovery issues, and wider road maintenance issues we have in rural areas”.
New rules
In an effort to prevent similar conflict issues in the future, Hipkins has made five changes to the disclosure rules which apply to ministers.
The Cabinet Office will now report to the Prime Minister on ministerial conflicts every three months, instead of once a year, and any non-compliance will be escalated to the Prime Minister.
Annual conflict reviews will be held in person, instead of in writing, and ministers will nominate a staffer to help them manage and watch out for conflicts.
Finally, conflict disclosures will become a regular item at the start of each Cabinet or Cabinet Committee meeting.
“The Institute of Directors recommends maintaining an interests register as a standing board meeting agenda item but that has not been the past or current practice for Cabinet or Cabinet Committee meetings,” Hipkins said.
The Prime Minister has also asked for advice on implementing a full set of shareholding restrictions for ministers, like they have in Australia.
This could potentially limit ministers to owning only broad managed funds, or putting assets into a blind trust which they cannot see or control.
“Adopting this approach would be a significant change in the New Zealand position and requires further consultations, but it is my personal view it’s appropriate to take this step,” he said.
83 Comments
What's my allegiance? I haven't decided who to vote for this time, it'd be useful if you can fill me in.
There were similar slurs against the Nats and John Key, and even more against Jacinda. Maybe I'm being unfair, but I read them as 'I don't have any real arguments and haven't thought about the issue very deeply'.
Reminds me of the state of the National party at the last election. Took a couple of years to clean out the worst of the deadwood and driftwood (unfortunately not all).
This is one reason why I changed my mind about a 4 year term, the other being the antidemocratic results of Labour having unbridled power. They're currently desperately trying to kick the Overton Window as far left as possible before theyre booted out. The NZ electorates general habit of giving either major parties no more than 2 or 3 terms of Govt before changing riders is healthy.
Bill English though managed to lead them to the highest number of parliamentary seats attained. After that, true enough the rabble emerged. In my opinion this Labour lot here now as a government are more akin to the remnants and death throes of the Bolger/Shipley National government.
Good riddance to bad rubbish;.
how can this Wayne Kerr spout off the looney labour lefties " anti rich, shares, banks, property speculators" rhetoric and then be found out to be more Luxon than Luxon
he has properties, shareholding s, trusts. .. what a 2 faced deceitful lieing ass hole!
Yeah, I found that comment from Seymour a little funny too. Perhaps another pop at his coalition partner? Luxon quite obviously has a vested interest in the property sector. His interviews after the initial screw up were 'register the conflict, then manage it' - ha, if only it was that simple Christopher.
Sensible move;
This could potentially limit ministers to owning only broad managed funds, or putting assets into a blind trust which they cannot see or control.
“Adopting this approach would be a significant change in the New Zealand position and requires further consultations, but it is my personal view it’s appropriate to take this step,” he said.
The more Chris Hipkins makes these 'captains calls' the more pragmatic and fair he comes across as. I like it - nothing flashy or slogan-y about him.
The changes are quite reasonable but the reason this hasn’t been required is that some MPs were already doing this in the past, e.g. Key. I can’t help but feel our political class is getting dumber by the election. Wood was a nice guy, but clearly a moron. He would never have survived in previous Labour administrations as long as he has in this Government.
“the more pragmatic & fair?” Hipkins decision to release personal details of a NZ citizen, for his own political gain and contrary to proper process and the express advice of his department, was disgraceful and indefensible and nothing since convinces me that he wouldn’t revert to that type at the drop of a hat.
You’ve replied to the wrong person, but yes that was an egregious example of bureaucratic power being abused. Tudor Clee has been very loud on behalf of the many women he represented about Hipkins poor record and compassion on that subject, something the media (or the National party for that matter) hasn’t scrutinised him too much about to date.
That is hardly the point. This is an example of a senior minister in government flouting their own statutory obligations at the expense of the dignity and privacy of a New Zealand citizen, when actually, they are bound to do the opposite. That is protect such citizens from that type of abuse. Hipkins is sadly not alone. The Walker/Boag manipulation of covid personal data was equally odious. Our parliament has just too much of these sort of intrigues and foul deeds where an identity has scarcely any concern for the very serious responsibilities that are entrusted in them by the electorate. Yep New Zealand is certainly not unique in this regard, but it still sucks.
David Parker will become the Minister of Transport, while Carmel Sepuloni will take over as Minister for Workplace Relations and Safety, Andrew Little will become Minister of Immigration, and Kiri Allan will become Associate Finance Minister.
I'm always surprised how ministers get new "portfolios" so easily. Do ministers not need to have a thorough knowledge (and ideally some experience) in the field of the "portfolio" they're managing?
What happens is they attend an informal Wednesday night "book club", where they draw names from a hat. Doesn't really matter, 2/3rds of all MP's (aside from the ACT Party) are Bachelors of Arts graduates with little to no relevance to any portfolios they put their name to.
You have Simeon Brown in the National Party who is their spokesperson for Transport. He's 32 and worked at a bank. Nicola Willis has a journalism degree. I mean there are some good candidates, like Shane Reti, Matt Doocey and Andrew Bayly but otherwise it's just a whole load of worthless degrees that failed to make it in the real world. I loathe to think what the Labour party line up is like.
Of course they don't, that would be ridiculous, their role doesn't require them to have a thorough knowledge and definitely doesn't require them to have experience.
It's really interesting that you would think that. It shows you have a very poor understanding of how our democratic system works.
That is why it is super important to have a strong and stable bureaucracy. Of course if you are against democracy and stable government then your game plan will normally involve eviscerating the civil service and putting the power into the hands of consultants (and private interests).
Rubbish - their role does require them to have a a sound understanding of their portfolio. It also requires that they have the time to do the job properly. Adding major portfolio's to ministers workload's when they are already overloaded is a recipe for more lightweight policy processes
Being a doctor and understanding how to effectively manage a health system are two completely different skill and knowledge sets. Sometimes people can excel at both but just because you've been a doctor doesn't mean you will be better at managing a health system than someone who has no medical experience.
"Of course they don't, that would be ridiculous their role doesn't require them to have a thorough knowledge"
I guess you're being sarcastic, but something makes me think you're not. In case you are not, you do think that, to be the leader in a field does NOT require any special knowledge in that field ??? So the head chef of a fine restaurant, does not need to have much knowledge about cooking for example? I could make this example for just about any profession.
No, I'm not being sarcastic but I should have clarified that it is ridiculous to say that they should have a solid understanding before they get appointed as a minister. If this were the case we'd only ever appoint civil servants, policy wonks and academics to ministerial roles.
They are there for their leadership. Good leaders delegate details to those below them, seek and listen to advice from multiple perspectives and make calls.
The Minster of Education doesn't need to know how to manage a class of 6 year olds nor does the Minster of Health know the intricacies of knee surgery.
In your analogy, the Minister is not the head chef, they are the owner. If the business fails it's on the owner but the owner doesn't need to know anything about how to cook to have a thriving business.
The Head chef runs the kitchen, Ministers do not run their ministries, the civil service does that.
Again you're showing a complete lack of understanding of basic governance.
I would say the shares are a small part of the family trusts assets (when they say he has more than $ 10k of shares , is that his share , or the family trusts total holding?), the elephant in the room been property holdings.
And then what of tax ( income,capital gain , wealth tax) of trusts, isn't it in virtually every Politicans interest that these remain low or non existant.?
I still think this will end up burning NACT more than Labour.
https://www.scoop.co.nz/stories/PA0809/S00459.htm
John Key’s failure to tell the truth over his Tranz Rail shareholding shows that he knew he acted unethically and in breach of Parliament’s rules when speaking out against the government’s plan to rescue the rail service, Finance Minister Michael Cullen said.
Just to keep perspective here. They all have their snouts in the trough.
:)
-For what its worth ,i think he had to go. But lets remove the biggest vested interest of all. what difference does it make if they tell you about it , its still there. there was a good story about rugby refs and blind bias. imagine playing a game where the ref tells you he supports the other side at the beginning of the game, so its alright he refs , because you know..
Yeah that's the angle that National have focused on to date but if Labour are smart they will pivot to it being about the conflicts themselves as the National Party and Luxon in particular has more.
The general public will be more interested in actual conflicts rather than how they are managed. I suspect this will work out better for Labour. They have set a precedent where you resign if there is a perception of a conflict, now they will try to use that against National.
if that is the case why does not the minister of agriculture not have to sell his farm?
or the minister of forests have to relinguish his interest in the forest trust he belongs to?
these two examples are clear in that the minister can have a personal benefit to any decision they make but they are not seen in the same light as owning shares in a public company because they are about property.
when national take the benches the conflicts will be even larger in relation to all the property of all types that the front bench will own.
I can't see some shares in a trust worth not a lot being a strong enough reason for Noddy to give Micheal Wood the boot. Nor the holdings in the Trust and he being a trustee a biggie!
Wood has admitted he'd not seen a problem up till now but he's checked, revealed and then got the knife in the back.
What's the point. To give Noddy " I am in charge mantra."?
Time out on the back benches but seriously Labour hasn't enough serious talent to dish someone who was competent
I for one would have liked to see Muriwai and others have a Minister watching their backs and getting something done for the people over the winter months. But then as an ex Otago resident David Parker is someone I'd prefer depart Parliamental altogether.
Very careless, and correct that he should go. But this is all small beans compared to the average MPs property portfolio
Are we supposed to simultaneously believe that Wood is incapable of acting neutrally when he stands to profit by a few thousand dollars, but there is no conflict between an MP owning 7 houses and promoting policies designed to increase house prices?
I think that's the real question we should be asking. We cannot as a country expect meaningful social change until we have leaders who are willing to advocate for that change. So long as our leaders have vested interests in property in particular, there will be no change.
Ol' mate 7 houses Luxon is the prime target of this Woods saga, I reckon so much.
White sacrifices pawn - Check?
Could be - clever play if that's it.
But I doubt it - I think they're all too arrogant; too assuming of their superiority and right to be/to have. I think a good start would be to register lobbyists, lobbying contacts per incident, and money trails to same. Would weed out a lot of dross.
it seems to own shares in public companies is a no no to be a Minister BUT to own rental houses or farms is fine , so we seem to have running through our parliment that certain investments are ok over others and any conflict is easy to manage,.
that to me is why as a society we have so many problems , we know housing costs being high prices to rents is the feeder to a whole lot of issues we are facing
It seems that in New Zealand if you own a few thousand dollars in shares you are a rapacious capitalist only out for your own interest, but owning a multi-million dollar property portfolio just shows your a hard-working go-getter. Productive investments are strongly discouraged.
The problem isn’t that he owned shares. The problem is that he didn’t declare them. And the biggest problem is that when this was pointed out to him he wasn’t competent enough to deal with it in a timely way and too dumb to realise he had other problematic interests he should resolve at the same time.
I guess there’s another problem with a Prime Minister who appears not to be taken seriously by his team and is too dumb to realise with Nash and now Wood that where’s smoke there’s fire and you dump the corpse ASAP.
At the end of the day, you’re able to criticise MPs who own 7 houses because they declare them. And there is some merit to your criticism. But, personally, I’d much rather have MPs who are transparent than MPs who can’t follow straight forward rules.
"The problem isn’t that he owned shares. The problem is that he didn’t declare them"
You and I may know that but Joe Blogs just hears "he had shares and was making decisions that might improve the price of those shares"
Hipkins has set the standard. You have a conflict of interest you resign. That's what will stick in the public's mind. Doesn't bode well for Luxon. Then again I may be projecting what I hope happens. National need to get rid of Luxon asap.
You’re definitely projecting.
If National are serious about winning then Luxon should go. He isn’t electable. He can certainly contribute, but more in a Maharey, Cullen, Joyce, Ryall, way. He is clumsy like Brash or Goff, and lacks the chutzpah and charm needed to become Prime Minister in 2023.
the rules are that if the shares are held by a trust he must declare the trust not what the trust holds as assets or the value and he did declare his trust, he got caught on the auckland airport shares as they were in still in his name so should have been declared he did wrong and should be gone and is gone.
but i just find this whole conflict of interest area very problematic area when for certain classes of assets, they are saying that the conflict can be managed it is fine but for others it's not a problem when certain decisions taken could add real value example letting more buyers into the new zealand property market increasing demand.
Those aren’t the only rules. Wood breached the Cabinet Manual and Standing Orders too. The thing most political tragics don’t understand is why?
Unfortunately, eliminating perceived conflicts will be impossible. And probably unworkable unless we raise technocratic children for the sole purpose of ruling. This is impossible and unnecessary. I own different types of property - residential, commercial, bare land - and I am in favour of a broad CGT without exemptions. Should I be disqualified from Parliament?
The public do not give a shit about Cabinet Manual and Standing Orders they care about conflict of interests. This issue will bring renewed focus on Luxon's conflict of interests (property) regardless of whether he follows the rules and it will harm his chances. There is a general perception that the rules are there to protect the rich and powerful so abiding by the rules will be secondary to actual conflict of interests (regardless of how they are managed)
I don’t find it distasteful and I don’t think it would influence his decision making to be frank. But I find it dumb. He was apparently planning for years to be Prime Minister but did not consider the political ammunition he was providing the other side. For someone who has made so much money already, he had plenty of time and means to divest residential interests and shift it to other asset classes (commercial property would be an easy one). To me, this demonstrates poor judgment and good Prime Ministers need to be able to make good, quick judgments.
Like I said, he has poor judgment about optics. The rebate is $7k. If you’re in his position you shouldn’t be worrying about $7k and pay the full price then say you’re getting an EV because of climate concerns and paid the full price even though you could claim the subsidy. He needs a new chief of staff.
As for who gets targeted next? Look inside Labour. This is an inside job to hurt Wood.
This is the crux, his actions can be dismissed as poor optics and not really that important but being good at optics is incredibly important for a Prime Minister, it may even be the most important skill. How an idea/decision is presented is almost as important as the decision itself as you have to bring the country along with you. This is Luxon's big weakness and is common with people who come from business where the primary driver is profit.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.