Prime Minister Chris Hipkins battled through what is fast becoming one of the most difficult weeks of his leadership on Wednesday, losing yet another minister from his Government - his third since taking office in January.
Michael Wood resigned yesterday morning as a minister after it emerged he held thousands of dollars worth of additional shares in a trust, some of which raised potential conflicts of interest with decisions that went before him as a minister and Cabinet as a whole. Hipkins indicated that he would have sacked Wood if the embattled politician had not offered to resign.
The additional shareholdings were held in the JM Fairey Family Trust of which he is both a trustee and a beneficiary.
The trust holds “thousands” of dollars of shares, in particular, a stake in Chorus, Spark and the National Australia Bank. Those shareholdings raised problematic questions around potential conflicts, such as decisions made by Cabinet relating to the market study into banks announced on Tuesday, and immigration decisions regarding telecommunications workers.
There is no evidence Wood acted inappropriately in the conflict of interest.
In a statement, Wood said: “I am a true believer in politics and that we are all here to serve the public.
“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.”
The shareholdings came to light as a result of an investigation after the Herald revealed Wood had not properly declared shares in Auckland Airport and Contact Energy.
The Herald can reveal today Wood had 16 interactions with the Cabinet Office over his Auckland Airport shares, including one in March 2021 in which the Cabinet Office sent Wood a draft review of Ministers’ interests intended for then-Prime Minister Jacinda Ardern confirming the shares had been sold.
Neither the Cabinet Office nor Wood could confirm whether the minister or his office ever responded to that email confirming the statement or correcting the record to say the shares had not in fact been sold.
It appears the Cabinet Office continued to think the shares had been.
On June 30, 2021, Wood’s office told the Cabinet Office his sharebroker had been instructed to sell the shares. The Cabinet Office appeared to believe the shares had been sold because days later, on July 5, 2021, the office sent Wood a letter relating to its annual review including a line which read, “Mr Wood has divested himself of shares in Auckland Airport”.
Earlier this month, Wood said he only began the process of selling the shares “last year”. Wood and Hipkins did not respond to questions relating to that correspondence.
The timeline comes from an answer to more than 100 Written Parliamentary Questions to Hipkins lodged by the National Party. The sixteen interactions include the 12 times Wood was asked by the Cabinet Office to sell the shares, which was the figure given to the House earlier this month.
Wood’s Workplace Relations and Auckland portfolios were given to Deputy Prime Minister Carmel Sepuloni, Andrew Little was given Immigration, David Parker got Transport, and Kiri Allan was given Associate Finance. The Government will now limp to the election with 19 Cabinet ministers after Hipkins decided he would not elevate a new MP into Cabinet to replace Wood.
Wood’s salary now drops from $296,000 as a minister to $179,000 as an MP.
National and Act were quick to say the Government was falling apart.
National leader Christopher Luxon said the “wheels are falling off the bus”.
“This is a Government that is actually falling apart,” he said. “Stuart Nash, Kiri Allan, Jan Tinetti, Michael Wood - it goes on and on and on and it just doesn’t stop.”
Act leader David Seymour agreed, saying, “Labour is showing over and over again that it is not cut out for governing”.
“Stuart Nash, Michael Wood... and Meka Whaitiri have all resigned, been stood down, or been sacked in recent months. Labour’s ministers just aren’t up to their jobs,” he said.
Luxon said he was also ready to fight a snap election, in the exceedingly unlikely event Hipkins decides he has had enough and goes to the polls.
Wood, meanwhile left the capital for Auckland, where he will spend time with his family before returning to life as an electorate MP.
“I will now be taking some personal time before returning to my work as MP for Mt Roskill, and will not be making any further statement in the meantime,” he said.
Hipkins indicated there may possibly be a way back for Wood into Cabinet after the election, which Wood intends to stand in.
Wood is not completely in the clear - preparing for an inquiry currently being carried out by the Registrar of Pecuniary Interests Maarten Wevers into Wood’s tardy declaration of his interests to Parliament.
The Wevers investigation will continue despite Wood’s resignation, as it is being carried out by Parliament, as distinct from the executive government, of which Wood is no longer a member. The investigation could eventually see Wood hauled before Parliament’s Privileges Committee, where Education Minister Jan Tinetti is currently defending herself for her own failure to uphold the standards of Parliament.
Hipkins has taken action to ensure this never happens again, instituting a new five-point conflicts regime for Cabinet ministers.
Cabinet Office will now report to the prime minister on conflicts every quarter, there will be an escalation process if a minister does not engage with the conflict process; there will be in-person annual reviews with each minister to discuss conflicts; ministers will now have to nominate a person in their office to support them with conflicts, and ministers will now disclose conflicts at the start of Cabinet or Cabinet committee meetings.
Ministers will also be required to divest themselves of most shares they own, other than shares held in public superannuation funds or publicly listed managed funds, or trust arrangements where the minister has no visibility or control of decision-making.
It has been an exceedingly difficult week for the Government. On top of losing Wood, it was revealed yesterday that Oranga Tamariki had stood down two staff members from residences after “serious allegations” of “inappropriate sexual behaviour”.
Earlier in the week, the Government was struggling to work out whether Race Relations Commissioner Meng Foon had actually resigned from his post after his own conflict of interest scandal.
The same day the Government had to make adjustments to its flagship Budget policy - extending 20 hours of free Early Childhood Education to 2-year-olds, after an outcry from the sector that it was so poorly thought through it would have forced some centres to close.
On top of that, Hipkins had to order Health Minister Ayesha Verrall to review a wait-list prioritisation system in response to opposition criticism of the way it gave treatment to Māori and Pasifika.
An earlier version of this story included a quote from Act leader David Seymour saying Kiri Allan had lost her job, which was incorrect.
Thomas Coughlan is deputy political editor of the New Zealand Herald, which he joined in 2021. He previously worked for Stuff and Newsroom in their Press Gallery offices in Wellington. He started in the Press Gallery in 2018.
⋅ Stuart Nash - Sacked on March 28 after revelations he had given confidential Cabinet information to donors. On March 15 Nash had resigned as Police Minister after saying he called the Police Commissioner to discuss appealing a court case.
⋅ Meka Whaitiri - Sacked on May 3 after defecting to Te Pāti Māori. Whaitiri never told Hipkins personally she had quit.
⋅ Michael Wood - Resigned on June 21 after revealing he held multiple shares which had been inappropriately declared. On June 7 he was suspended from his transport portfolio after his shareholding in Auckland Airport was revealed by the Herald. Currently under investigation by Pecuniary Interests Registrar.
⋅ Jan Tinetti - Currently before the Privileges Committee after it was revealed she took weeks to correct an answer in the House.
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