Transport minister not out of hot water yet

Vernon Small previously reported on politics from the Press Gallery and is a former adviser to Labour Cabinet Minister David Parker.

OPINION: The transport minister has thrown himself under a bus.

Without doubt, Michael Wood has embarrassed himself, his leader and his party.

He is lucky – so far – that his administrative cluster failure has not brought anything worse down on his head than suspension from his transport portfolio.

His career must have flashed before him when a clearly miffed Prime Minister Chris Hipkins said he was “somewhat frustrated” that when he was doing his Cabinet reshuffle, the Cabinet Office “had not highlighted that as an issue for me.”

Given he has expressed confidence in Wood, Hipkins’ suppressed spleen seemed mainly aimed at the Cabinet Office process.

READ MORE:
* Michael Wood, the shares, and the taint of incompetence
* Michael Wood asked ‘about half a dozen times’ about his Auckland Airport shares, Hipkins says
* Auckland Council looking into potential conflicts of interest over airport shares

But perhaps he was signalling, too, that he would have thought twice – and was thinking twice now – about the wisdom of keeping Wood in the transport role.

Wood’s failure for years on end to keep his promise, and sell his Auckland Airport shares, puts him in the dock for several political crimes.

He has distracted from the important post-Budget sales job that should have been the Government’s bread and butter through this period.

Equally unforgivably, he has handed National more ammunition to paint the government as incompetent, flaky and error-prone after Stuart Nash was sacked, and Meka Whaitiri defected.

All that, at a time when National leader Christopher Luxon is struggling to get cut-through with the public and to escape criticism of his robotic responses to media enquiries.

Wood looked like a Tintin who had lost his Snowy, and shoulders were down around the Beehive this week, especially after Hipkins was forced stand in the House and list the 12 occasions Wood had been contacted by the Cabinet Office about his failure to sell his shares.

Add Education Minister Jan Tinetti’s parallel (but less serious) issue, that saw her in front of the Privileges Committee, and there was the unedifying sight of two chastened ministers expressing “deep regret” on the same day.

In the case of Wood’s error, everyone is agreed he had no intention to profit from his actions. The principle of full and accurate disclose is important, but his errors were serial omissions not intentional commission.

His consequential failure to declare the airport shares in the register of pecuniary interests is now the subject of an inquiry by registrar Sir Maarten Wevers – a meticulous and patrician bureaucrat.

Wood’s transgressions were clearly of a lower order than those that have historically brought ministers down. Think: drink-driving, attempting to influence Police decisions or misuse of Ministerial credit cards.

However, he could yet be in more hot water if inquiries find he intentionally misled.

Meanwhile he, and Tinetti, should spare us the “busy minister” defence. It doesn’t wash if ordinary folk fail to register their car or pay their taxes. It certainly doesn’t wash with the public when it comes from Cabinet ministers paid $296,000 a year.

However, the event that led to Wood’s current problems – his failure to act on the advice from the Cabinet Office to divest his shares – raises interesting public policy issues around how conflicts of interest, and perceptions of conflicts, are handled.

The Cabinet Office works on behalf of the prime minister to help ministers identify and manage conflicts of interest. It does not exist to make ministers’ lives difficult or try to trip them up. The management of any conflicts of interest are agreed between the prime minister and the minister.

The Office generally gives good advice, which ministers are wise to follow. But it is not Holy Writ. In the past, ministers have pushed back.

If a conflict is identified, there can be solutions other than divestment. However, all solutions are predicated on “managing the conflict, or perceived conflict”.

According to Cabinet Manual guidance, “where a conflict of interest is significant and pervasive, the Minister may need to divest themselves of the interest”.

The key words are “may need to” (not must) and “significant and pervasive”.

Options include transferring responsibility to another minister or shoving the shares into a blind trust.

So if Wood had wanted to keep those shares – perhaps out of nostalgia for a teenage purchase – he could have managed the conflict some other way.

Were his shares a significant investment? Very arguably not, if significant means large or influential. His $15,000 investment was about a ten thousandth of the airport’s $12.2 billion value.

Of course, irrespective of that, once he had undertaken to sell, then he was obliged to follow through. His troubles stemmed from that – not from somehow “defying” the Cabinet Office.

But beyond Wood’s immediate woes, other questions should be raised around ministerial conflicts and how the Cabinet Office views ministers’ assets.

RNZ asked Christopher Luxon about this, in relation to his investment properties if he became a minister, without really getting an answer. But it’s worth asking more broadly.

If a transport minister with a small direct holding in a publicly-listed airport is advised to sell, what of a prime minister, or finance minister, or revenue minister or housing minister or agriculture minister in relation to their property or farming investments?

Given the significant effects their decisions may have on the value of their assets, be they tax changes like the Brightline test, the interest deductibility of loan costs, or perhaps climate change emissions rules, are their private holdings really any different from Wood’s shares?

It may be no solace to him, but if Wood’s political fender-bender brings a tighter and more consistent focus on the management of all ministerial conflicts of interest, it would be no bad thing.