7. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: What damage, if any, has been done to staff confidence and retention by the change proposals for his Ministry announced on 23 February 2012, and does he intend to announce on 10 May 2012 a reversal of many of the proposals?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) on behalf of the Minister of Foreign Affairs: Not as much damage as Trevor Mallard caused David Shearer’s self-confidence yesterday.

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. I accept that the primary question does make an assertion of damage, and that it is risky to incorporate that kind of assertion into a primary question, but, still, it is a primary question, and I think it should be treated with some respect because of that. I accept that the answer was always going to have a few more nuances because of the wording of the primary question, but I think that was a bit over the top.

Hon CHRISTOPHER FINLAYSON: As I was going on to say, the Minister has made it clear to the chief executive that he expects the ministry’s leadership to ensure that any changes are carried out in a manner that retains an appropriate base of talent for New Zealand’s foreign policy interests. The chief executive will announce final decisions in due course.

Hon Phil Goff: What is the Minister’s assessment of the damage done to the vital trade negotiations division in light of this letter, which I am holding, from all of the staff of the trade negotiations division, which states that the change process has undermined confidence, has put real pressure on the retention of staff in their area, and has held up urgent priorities, such as the negotiation of the Trans-Pacific Partnership, which is vital for this country?

Hon CHRISTOPHER FINLAYSON: Any discussions taking place between the chief executive and ministry staff, including communications with the trade negotiations division, are a matter for the chief executive. However, I can go further and say it is no secret that there has been criticism of the change proposals, and the Minister expects that there will be revisions.

Hon Phil Goff: In this paper, which I am holding, from the Minister to the Cabinet committee on State sector reform and expenditure control on Monday, does he admit that “The Government has substantially revised the change proposals” because they have failed to get “the required amount of buy-in from staff”, especially senior staff, and there were too many “unachievable elements”—in other words, the original recommendations and the whole process were botched, and they are now having to do a total U-turn?

Hon CHRISTOPHER FINLAYSON: It is no secret that there has been criticism of the change proposals, and the Minister expects that there will be revisions. The Minister has emphasised the need for the ministry leadership to pay close attention to all feedback before any decisions are made. Those decisions will be for the chief executive to make.

Hon Phil Goff: Has the chief executive now told his staff that the total savings from this dramatic staff restructuring will be a mere $12 million, not the $24 million that the Minister told this House, and not the $40 million that he was told in his briefing paper; and was it worth the damage done to staff morale and retention, the $9.2 million he spent on consultants this year, and the $3.3 million he is now telling me he will be spending on specialist consultants in the next few months? Was it worth it?

Hon CHRISTOPHER FINLAYSON: I am not exactly aware of that figure—

Hon Annette King: You’re lost for words.

Hon CHRISTOPHER FINLAYSON: —because I am the acting Minister. I would say to the future Mayor of Wellington that I am not lost for words. [Interruption] I am praising her! These are matters that have been the cause of some concern and consternation, and, as I have said, the chief executive has been told by the Minister that changes will need to be made.

Hon Phil Goff: Why in this paper to his Cabinet this week is he recommending that New Zealand close its embassy in Stockholm by the end of next month, and then consider closing the embassies in the Netherlands and Spain, when he admits in the Cabinet paper that this has implications for, and I quote his own words, “our overarching goal of securing a comprehensive agreement with the European Union containing preferential trade provisions”?

Hon CHRISTOPHER FINLAYSON: As has been told to that member on a number of occasions, from time to time there will be changes to the places where, for example, consulates or embassies are located. For example, in the late 1980s, when that member was a junior Minister in the Lange-Palmer-Moore—and whoever else—administration, the Labour Government shut down the San Francisco consulate. And, as I explained to the member, embassies have been opened from time to time. Change needs to take place, and, as I have said before, one should not assume that because a consulate or an embassy has been opened it should be open forevermore.

Hon Phil Goff: In admitting in this Cabinet paper, which will, I think, go to Cabinet next Monday for final approval, that he will—I am helping out his colleagues who have not read it already—

Mr SPEAKER: Order!

Hon Phil Goff: Does he say in this paper that he will substantially revise the remuneration proposal that would have slashed allowances to staff with families who are deployed overseas, and does he now acknowledge that this was a particularly dumb and counter-productive proposal that has already caused the outflow of a huge number of talented staff, particularly when staff base salaries in the ministry have been frozen for 4 years, unlike the Minister’s own salary?

Hon CHRISTOPHER FINLAYSON: It is no secret that there has been some criticism of the change proposals, and the Minister expects that there will be revisions. The Minister has emphasised the need for the ministry leadership to pay close attention to all feedback before any decisions are made. Those decisions will be for the chief executive to make.