Hansard (debates)


Cunliffe, David: Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report


Hon DAVID CUNLIFFE (Minister of Health) : I agree with something the member Tony Ryall said. The New Zealand public wants to know why. But they do not want to know why he is impugning an independent review panel led by a man who has been appointed to boards by both the National Party and the Labour Party. They do not want to know about the process for appointing Mr Hausmann, because that went through the standard Cabinet process. Two years ago those papers were sent to the National Party and the Dominion Post. There is nothing new in that. The public do not want to know about the whistleblower, because that is old news. The whistleblower has taken a personal grievance and a settlement has been reached. That is done and dusted.

Mr Ryall wants it both ways but he cannot have it. The public do not want to know what sleazy tactics the National Party is using to undermine a hard-working, very popular former Minister of Health, Annette King, and to attack her family in the most disgusting way by circulating rumours around the Hawke’s Bay. That is not worthy of a Government-in-waiting and it proves the kind of people we are dealing with over there. I could say plenty about them—believe me, I am tempted—but I will not.

The public want to know why, but not in respect of allegations of a whitewash, because if this is a whitewash then it is a 200-page whitewash, put together at the cost of hundreds of thousands of dollars of taxpayers’ money, and with the best due diligence we could find. They do not want to know whether I set it up, because I clearly did not. I have not even met the members of the panel. They confirmed yesterday that they have never met me or spoken to me about it. Nor has the director-general briefed me. So let us clear that rubbish out of the way.

What does the public want to know “why” about? I think they want to know why, in the face of overwhelming evidence of potential malpractice and bad governance at the Hawke’s Bay District Health Board, the National Party is still defending it. I think they want to know why that member Mr Ryall is a lion roaring in the Chamber but will not even squeak like a mouse outside it. They want to know why Mr Foss and Mr Tremain have suddenly fallen silent. These members are unwilling now to risk what is left of their reputations on clutching at crooked straws.

Let me give members two theories of why. The first is that the National Party is playing partisan politics. They do not really care about the people of the Hawke’s Bay and their health services; they want to get at Annette King. Why? Because she is a tremendously successful former Minister of Health and they want to take her down with parliamentary crossfire. I do not think that is fair to the people we are here to help—the people of Hawke’s Bay. It does not even do justice to the National Party, which was once a serious party. More important—and I think here we are at the heart of the issue—what is going on here is that the scab has been lifted on a nasty little nest—[Interruption]

The ASSISTANT SPEAKER (Hon Marian Hobbs): Interjections must be short.

Hon DAVID CUNLIFFE: I raise a point of order, Madam Speaker. It would be nice to be heard on this matter. This is a serious point.

The ASSISTANT SPEAKER (Hon Marian Hobbs): I ask the member to keep the interjections short and brief, not a barrage. I ask for that of both sides.

Hon DAVID CUNLIFFE: This report has lifted the lid on a nasty little nest of self-perpetuating, provincial elites who have been propping each other up, and, either through ignorance or malpractice, slipping each other cosy contracts without proper governance protections and doing it time and time again. They do not like it; the elites of the bay do not like having the same standards applied to them as to anyone else or to any other Crown entity anywhere in New Zealand. But should these standards not be applied to the bay—is that what the board is saying? Is Hawke’s Bay special?

Close to $400 million a year of taxpayers’ scarce resources is going towards the health care of the people of Hawke’s Bay and the board does not expect the same standards of governance that anybody else has to stand by because it is special. Board members think they should not have to declare their conflicts on a transaction-by-transaction basis. The board thinks it should not have to update its conflicts register like everybody else. It thinks it should not have to have a governance manual or to follow it. It thinks its chairman should not have to manage conflicts when declared. Oh no—the board is above all that. It matters not that the board just happens to include a member who is the chairman of a national chain of pharmacies, who owned four pharmacies in the region, who just happened to stand to lose throughput because of the actions of the board, who just happened to participate in the discussion, and then who just happened to send emails to no fewer than three layers of management. Even if the board was going to try to tip the playing field, it should have been a bit more careful than that. The board member sent emails to three layers of management to remind them not to open any more pharmacies anywhere near the ones board members already owned.

How bad does it have to get before the National Party discovers some principles and says that enough is enough? Why does it take this sad state of affairs to call time out and for National members to realise that the game is up, that they cannot use this nasty little nest as a way of getting at Annette King and her husband, and that what is being applied here is the disinfectant of publicity to a very unseemly situation indeed?

Let me briefly remind the House that in taking the difficult decision to end this sorry mess I gave the board notice that I would take into account three key sets of issues. The first was the burgeoning and rapidly deteriorating financial deficit. This is a board that around a year ago said it thought it could balance its budget. Then the chairman was quoted in the Dominion Post as saying that it never really meant to but only said that to get the budget signed by the Minister. And it expects me to keep it on? Is that OK? This is a board that according to that august rag Hawke’s Bay Today tried to tell the people of Hawke’s Bay that when it sold Napier Hospital—and it is a very sensitive matter in the bay; I know that—it was going to have to use the proceeds to pay its operating deficits, even though the previous Minister had told it not to and even though it knows it is against ministry guidelines. How bad does it have to get before Tony Ryall discovers principles?

But if that was not enough, there was a second group of issues around normal governance practices about a dysfunctional relationship on the board between certain board members and between the board and management. Speaking of management, I ask what the independent report states. It does not matter what I say; it does not matter what Opposition members say. What do the independent experts—the jury of the board’s peers—say? They say on page 86: “a number of failings alleged against management are ultimately the responsibility of the Board.”

Here is a board that blames everybody else except itself. Members should have seen board members lined up there on the radio this morning and on the TV last night, like folks out of Jurassic Park, saying that nothing is wrong. Nothing is wrong? It is OK to spend capital on an operating deficit? It is OK to cut some deals with one’s mates without good governance? It is OK not to declare conflicts of interest? It is OK to have a cushy deal for the pharmacies owned by board members and then charge a surcharge to the people of Hawke’s Bay? That is OK?

The third set of issues we looked at was the bizarre relationship between this board and the Crown. This is a board that thinks the normal means of communication with its Minister is to issue a press release or leak to a journalist and that the normal means of communication is through the pages of Hawke’s Bay Today and the Dominion Post. I am sorry; that is not how we do business with every other board in the country. Just because these self-perpetuating elite of the good burghers of Hawke’s Bay think they are special, I am sorry but that does not mean they are.

Those were the three sets of reasons why I took advice on a very tough decision. I made it for good, principled reasons, not because I thought—as Tony Ryall suggests—that Peter Hausmann was a saint and everybody else was bad. I did not even try to establish who on that board was right and who was wrong. Why not? Because that is the job of the independent panel of peers of the board—the independent experts. That was the judgment that came down yesterday. What I said was: “Time out. It does not matter to the public who paid the $400 million, who is right and who is wrong. You’re all out, because the level of dysfunction and distrust is intolerable. If half or a tenth of the smoke that is swirling around you lot is right, then that is intolerable too.” I find it absolutely fascinating that despite the independence of the process, which, frankly, was the best independent process—oh good, there Mr Ryall goes. He is out of here; I would be too if I was in his shoes. How interesting there is not point of order on it. Here it comes.

Hon Bill English: I raise a point of order, Madam Speaker. You know what point of order I am going to make.

The ASSISTANT SPEAKER (Hon Marian Hobbs): Yes.

Hon DAVID CUNLIFFE: So do I and I apologise. We have heard a lot about his claims to date. We have heard that Mr Hausmann could indeed have done more to manage his conflicts. Yes, he declared conflicts of interest before he was appointed. He had to. Do members know why? Because in December 2004 he presented to the chairman, Kevin Atkinson, and the chief executive officer, Chris Clarke, and I am told that the next day he had dinner with them at Craggy Range Winery. I understand that at that meeting the chairman told the chief executive to “get on with it” and scope out the request for proposal. That is the same chairman, Kevin Atkinson, who then tried to take a High Court injunction to prevent this report seeing the light of day.

Sue Moroney: Why?

Hon DAVID CUNLIFFE: Because he failed to declare to the board what he knew at Craggy Range Winery. He failed to declare what he knew about Mr Hausmann. He put all the blame on Mr Hausmann and Mr Clarke and bore none of it on his own two shoulders. What sort of leadership was that? He was popular; at the previous election he was the second-highest-polling candidate. Do members know who the highest polling candidate was? It was Peter Dunkerley, the “fantastic pharmacist”. We have already heard about him, have we not? What does this prove? It proves that the good people of Hawke’s Bay can only react to the truth as they are told it.

Therefore, it cannot be the case that good governance is some kind of popularity contest. Someone has to make the tough calls, and fortunately or unfortunately the buck has now stopped on my desk. As Minister, I will not preside over a system of bad governance, poor stewardship of public funds, internecine warfare on a Crown entity board, and a septic, dysfunctional relationship with a chief executive that has resulted in stress leave and a management team that is at the point of walking. I say that is enough already; it is over.

Well, it is kind of over, because in the course of this process we have some recommendations to attend to. The commissioner will have to attend to some work on the Hawke’s Bay District Health Board, and I expect that to be done fully—I am sure he will do so. The Ministry of Health has work to do in making sure that we do not have a recurrence of this at any other district health board, and I will expect every district health board in the country to read this report and report to me through the ministry as to what they are doing about it. I will be checking up that they do—members had better believe that.

There is something else. When we make a decision like this, people write and tell us and our local colleagues things, and I think there is probably more to come out here—not necessarily of a different nature, but perhaps more evidence that what we have here is a self-perpetuating nest of cosy interests that are not used to the disinfectant of sunshine being shone on them, the same way it is in every other Crown entity board in the country.

I am sick and tired of Mr Ryall’s pomposity. I am sick and tired of him using privilege to leak drafts that are bound by confidentiality. I challenge Mr Ryall to tell us where he got them from, or I challenge him to use them outside the House. He will not and everybody knows that he will not, because he is not prepared to stand by this outside of privilege. Is that not interesting? That is what the National Party has come to: the defence of its mates and to hell with the consequences.

The Hawke’s Bay District Health Board was not a good board. I am very sad about that. I wish I had not had to make the decision I made. There was too much conflict and too much dysfunction. Yesterday’s report amply proves that. It is not for me to take a position on who was right and who was wrong, but I repeat that the level of dysfunction, bad practice, and cronyism was such that should not exist on this or any other board in New Zealand. I stand by the decision that I made.