Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
[Volume:646;Page:14976] 
Urgent Debates 
Hawke’s Bay District Health Board—Conflicts of Interest Report 
Madam SPEAKER 
: I have received a letter from the Hon Tony Ryall seeking to debate under Standing Order 380 the reports of conflicts of interest and other matters at the Hawke’s Bay District Health Board. This is a particular case of recent occurrence involving ministerial responsibility. The report relates to important aspects of health sector governance that are of considerable public interest. I accept that it requires the urgent attention of the House. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. That urgent business is the release of this report which says more about nothing than anything else that could be published through the Ministry of Health. This report is more noticeable for what it does not say than for what it does say. This report which has taken 8 months to produce has failed to answer some of the key questions that New Zealanders have about this whole sorry affair in Hawke’s Bay. There is absolutely no canvassing of the issues around the appointment of Mr Hausmann to the board. There is no canvassing around the issues of the whistleblower’s concerns. There is no canvassing of the issues about the involvement of management in making documents available to Mr Hausmann. This report is a whitewash. It is part of a diversion by the Labour Government to draw attention away from the involvement of its cronies in what has gone on in Hawke’s Bay. 
This report does not address the key issues that the inquiry team should have dealt with. When this report does go through the issues involving Mr Hausmann it mitigates every single one of them with an excuse. It talks about Mr Hausmann’s poor declarations of interest and then says it is because he received minimal induction and training when he joined the board. It talks about his failure to declare changes of interests but then it says that he was inexperienced; it was his first public sector role. It talks about his poorly managed conflicts of interests in communications with management but the report states that that just reflected the poor environment within the board. The report talks about his poor handling of situations but it goes on to say that the managing of conflicts of interest is difficult and it compares him with everybody else. 
Further Hausmann failed to declare his Wellcare Education Ltd contracts early and there were excuses—“Oh it’s just a new board member. He was inexperienced.” The board strongly protested Hausmann’s failure to declare the Wellcare contract early and said that well the contract was of a relatively small value. It was $1.2 million—and the report said that it was of relatively small value. Then it says that Hausmann broke his promise not to become involved in Wellcare price negotiations—wait for it—and the report says that he strictly did not because he was involved on the Healthcare New Zealand side and not the district health board side. The report goes on to talk about Hausmann’s inadequate management of the Wellcare contract and says further that other problems at the district health board were a lot worse. 
This report does not highlight the fact that Mr Hausmann was sent 2½ months before any other potential bidder a copy of the request for proposal documents apparently to remove intellectual property belonging to Healthcare New Zealand. But if we read those attachments it is clear that rather than removing anything quite a lot was added and what was added was to the advantage of Healthcare New Zealand. One of the key points added was the provision that whoever got that contract should have a strong infrastructure in Hawke’s Bay. Lo and behold how many companies had a strong infrastructure in Hawke’s Bay? That again is brushed over by this report. 
But what is worse about this report is the fact that it is so silent on the key issues of concern to New Zealanders. Why did Annette King appoint Peter Hausmann to the board of the Hawke’s Bay District Health Board when she knew that he was intending to bid for multimillion-dollar contracts with that company? Why did Annette King offer that job to him when she knew he was going to bid for multimillion-dollar contracts involving that company? What is worse the Government in the House today after this report said that it would probably reappoint him. That is what Minister Cunliffe said. I asked him whether he in the future would appoint to a district health board a chief executive of a large provider who wanted to bid for multimillion-dollar contracts with that district health board and he did not say no. He did not say no. 
Hon David Cunliffe 
: I raise a point of order Madam Speaker. I do not recall being asked whether I would reappoint Mr Hausmann. If I was asked I certainly would not have confirmed that I would have. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: That is a matter of debate. 
Hon TONY RYALL 
: Let us allow the question in the House to stand because that is what I asked him. I asked the Minister if he had the opportunity to appoint the chief executive of a large provider to the board of a district health board and that provider was to negotiate to get multimillion-dollar contracts whether the Minister would do it and why and he said that he would look at it. That tells us that this Government has learnt nothing. There is nothing in the report about why Annette King appointed Peter Hausmann to the district health board. Why on earth would a Minister do that? Why would a Minister insert Mr Hausmann into what was always going to be a difficult position? Why would the Minister do that? She has never answered that question. 
Secondly there is not a word about the appalling treatment of the whistleblower Deborah Houston throughout this whole affair. This brave woman who saw the emails and raised the matter with the board was subsequently bullied by senior staff at that district health board had her conversations taped without her knowledge and lost her job. There is not a word about that in this report—not a word. 
Hon Member 
: And she was taped. 
Hon TONY RYALL 
: She was taped she was bullied and she lost her job and not a word of it is in this report. She is the woman who started all this and the board turned away from her concerns even though the Prime Minister said that they could be looked at because they were part of the terms of reference—that third reference—that stated “any other relevant parts”. 
The third important feature that does not feature in this report is the involvement of management in the making available of documents to Mr Hausmann ahead of any other bidder. I will just remind members what happened. It has been revealed through emails that were recovered in London through forensic computer analysis that Mr Hausmann sought a copy of the request for proposal and then received it from the chief executive on the chief executive’s instruction. Mr Hausmann made changes to that request for proposal he sent those documents back to the district health board and on the instruction of the chief executive the board accepted virtually every one of those changes. Those changes subsequently made it into the final request for proposal that went out to tender. There is not a word in this report about the involvement of management in making those documents available. In fact in this report it is stated that dealing with the request for proposal was not Mr Hausmann’s responsibility. So instead of dealing with why management made those documents available to Mr Hausmann there is not one mention about that in this report. 
That is really surprising because if it were all open and above board about the sending of these documents to Mr Hausmann why did we not get the return emails in the Official Information Act request? Why did it take a forensic analysis in London to uncover those emails? I ask the Minister why if it were all open and above board the information was not released in the original Official Information Act request and why it took a forensic analysis in London to get that information. That tells us all about what was going on at the Hawke’s Bay District Health Board. 
So we end up with this report which is a whitewash. It is typical “Labour Party 101”—Labour shooting as many people as it can to divert attention from the real issues behind this Hawke’s Bay District Health Board report. First why did Annette King appoint someone to that district health board who was going to bid for multimillion-dollar contracts? Secondly why did the report not deal with the concerns of the whistleblower. Thirdly why did it not look at the involvement of management in this? In front of the Health Committee last week the Auditor-General’s representative confirmed that the management of conflicts of interest is also the responsibility of the management of a district health board. It is also the responsibility of a district health board yet we did not see any of that in this report. None of that is in this report. 
Why is there no investigation by that panel of what happened to Deborah Houston? Members will recall that this woman had her conversations taped without her knowledge. 
Hon David Cunliffe 
: By her—she signed the settlement. 
Hon TONY RYALL 
: The Minister says to look at what she signed. Well let us look at what she signed. Does that signature say that she was not bullied by senior management at the district health board? Does it say that she does not believe her job was done away with because of what she said? No it does not. That letter from Deborah Houston states that she accepted there was a restructure and that it was not related to her whistle-blowing. But does she state in that document that she did not lose her job because of her whistle-blowing? Not at all—and the Government has been misrepresenting what that woman has been saying and I think it is appalling that it has done that. 
The fact is that this report is a whitewash. It is a diversion away from the real issues. What this Government should have done and what it had the opportunity to do was to get into what has gone wrong here. Over the weeks ahead we will see that the problems at the Hawke’s Bay District Health Board are happening elsewhere around the country. This Government has appointed to district health boards people who have all sorts of conflicts of interests that the House will be interested in—all sorts of conflicts of interest—and the way they are being dealt with is not appropriate in the views of not only this panel but also the Auditor-General. If we look at the Auckland District Health Board and at the poor handling of conflicts of interest there and if we look at other issues at other district health boards around the country then we will see those issues there as well. 
So very serious issues are associated with this report but what worries me is that the Government on reading this report has not even learnt the lessons. When I asked the Minister whether he would appoint a chief executive of a large player to a district health board when he would be bidding for multimillion-dollar contracts I ask members whether he said no. 
Hon Members 
: No. 
Hon TONY RYALL 
: No; he said that it all depended on how it was all happening—da-de-da-de-da. He basically said that yes he would. That shows that despite the report of the Auditor-General on the Diagnostic Medlab case and despite the report of this panel—the chairman of which is a Labour appointee—panel members are raising concerns this Minister because he values this report has not taken any account of. 
Over the weeks ahead Parliament will want the Minister to explain why this version varies and is so different from what was originally thought. Who got to the members of the panel why did they change their minds what evidence was there and why will they not provide the arguments for what they changed? This Parliament and the public want the full story and there is no full story in this report. This report is more noticeable for what is not in it than for what is in it. The Minister has been giving instructions to that panel through his comments in the House over the last few weeks. He has been shouting out his views in the House over the last few weeks on what should and should not be covered in this report and members of that panel would have heard what he was saying. They knew that the Government would not want them to look at the appointment process. They knew that the Government would not want them to look at the Deborah Houston issue because it got too close to home. They knew that the Government would not want them to look at the behaviour of the management of the Hawke’s Bay District Health Board because of what was going on there. 
This Government has failed in its responsibility to answer any of the basic questions. It is “Labour 101”; it is like the Ingram report all over again. This report will be found to be wanting and not to have canvassed the issues that matter to New Zealanders but in 7 to 9 months’ time New Zealanders will have their opportunity to tell this Government that it has manufactured what it has put in this report. The Government has manufactured its activities in relation to the Hawke’s Bay District Health Board and New Zealanders want to know the full story. That is why we think the Auditor-General needs to step in and provide a truly independent report on this issue. 
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. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 The Minister David Cunliffe’s speech is an indictment on the whole district health board process if he wants it read that way. He has talked about how the board was open to cronyism conflicts of interest and poor governance. Who appointed the Government appointees to the Hawke’s Bay District Health Board? 
Chris Tremain 
: Annette. 
Hon BILL ENGLISH 
: It was Annette King in this case. Who has been running the show in such a way that the Minister feels he is compelled to sack the board? 
Hon David Cunliffe 
: Kevin Atkinson. 
Hon BILL ENGLISH 
: Well the Minister cannot have it both ways. This is a fundamental problem for the Government. It still cannot decide whether district health boards are accountable to the people or to the Government. Actually they are accountable to the Government when it wants good news and they are accountable to someone else when the Government does not want anything to do with them. I thought the Minister laid out a lot of the weaknesses of the model he is overseeing. I ask the Minister: if there are conflicts of interest on this board then what about all the other boards? 
Labour has a track record of being very weak about conflicts of interest and that is exactly what happened in this case. If the Minister and the Government are right why did the Hawke’s Bay District Health Board not proceed with the contract? Why was this multimillion-dollar contract cancelled? It was cancelled because it was tainted and this report shows how it was tainted. If the contract had been let any other tenderer who read this report would have had very strong legal grounds for overturning that contract. That is absolutely correct. 
The Minister is going on as if this report clears the Government the process and the participants. It does not. It confirms that a conflict of interest eventuated and that someone who was a tenderer acted in ways that compromised the tender process and that therefore the tender would not have stood up to legal scrutiny. 
Chris Tremain 
: And it confirms the board was right. 
Hon BILL ENGLISH 
: And it confirms the board was right to abandon the contract. That is absolutely right and I am very disappointed that the reviewers did not go over that. They did not cover the board’s decision to can the contract just as they did not cover all the other things that mattered that my colleague has talked about such as why the Minister appointed this guy Mr Hausmann in the first place—I will come back to that—and why the management and its behaviour was not covered. From what we know of the management’s behaviour there are indications that it tried to undermine the inquiry by for instance deleting emails. Is that the standard the Minister now accepts as appropriate? Is that the management that should continue to run the Hawke’s Bay District Health Board when in the face of an inquiry they deleted source material? Why did the Minister not answer that question? 
This report does not cover most of the substantial issues. It does what the Government wanted it to do—that is find out whether the board’s conflict of interest processes are up to scratch. It found that they are not. What does that tell us about every district health board in New Zealand? There is no sector where conflicts of interest matter more because of the intertwining of the public and private health system because of the hundreds of millions of dollars of public money involved in all sorts of contracts and because in many provincial cities this is by far the largest employer and everybody knows somebody who is involved in something with the district health board. 
The report concludes one thing the Minister did not refer to and that is that the district health board processes for managing conflicts of interest are not up to standard. We know that because this is not the first major contract that has been cancelled. The Government blames the boards when it is the Government’s process that makes it not work. I remind members of the Auckland Diagnostic Medlab contract—what a debacle that was. That was knocked over on exactly the same grounds as this one except in that case the Government decided to attack the board member and excuse the board. That was because it thought the board member was a National supporter. This time Government members have decided—as the Minister has made quite clear—that because they think the chairman is a National supporter they will attack the board and not the individual. Where is the principle in that? 
We have a district health board system where conflicts of interest are rife; every board will have on it people who are conflicted. The Government has appointed a lot of those people and some of them have been elected and this document tells us we have reason to believe none of them are managing it well. We also have a track record of contracts that have got into difficulty. The other example related to this is the role of Ken Douglas on the Capital and Coast District Health Board in its discussions about community health service contracts with the same company as the one involved in this. 
Let us step back just a bit and think about the common sense of the Government and the previous Minister of Health Annette King. Let us just think this through. Peter Hausmann who runs a large and successful health care provider in New Zealand starts a discussion with Hawke’s Bay District Health Board for what would be easily a $50 million contract—10 years of community health services in Hawke’s Bay must be worth hundreds of millions. He starts those discussions it is known to the Government that those discussions have started and what does it do? Annette King appoints Peter Hausmann to the board. That is the mistake that was made. Why would a Minister of Health appoint the chief executive of one of the largest private providers in New Zealand to the board he is beginning to negotiate with about a large-scale contract? That question has never been answered. Why would the Minister appoint Peter Hausmann to the Hawke’s Bay District Health Board when he had already started negotiations about a major multimillion-dollar contract for public money? Annette King has not answered that question David Cunliffe has not answered that question and the inquiry does not answer that question. In fact the inquiry outlines more reasons why Mr Hausmann should not have been appointed. For instance Peter Hausmann had never been on a public board and the report rightly says that people who have been chief executives in private companies operate differently. They act as if they own the company. Public sector boards are quite different. So why did Annette King appoint him? That has never been answered. Why did she appoint two directors of Healthcare New Zealand to two lower North Island boards—one to Capital and Coast and one to Hawke’s Bay? That question has never been answered. 
That is why National is going to persist in obtaining a broader independent inquiry into these circumstances: the involvement of the Minister’s husband the deal that was done with the whistleblower the activities of the management and the fact that no one has answered the question of why that person was appointed. It is in Annette King’s interest that that is all cleared up because everyone in Wellington knows that the little circle of Doug Catley Annette King and Ken Douglas have been mates for years—years. Imagine if a National Minister had done this. He or she would have had to resign because that man over there would have been absolutely outraged by it. 
Cronyism connections looking after one’s mates—this situation is dense with all of those things. Unfortunately for the people concerned this report does not deal with the issues and does not clear away all the questions. It answers one question only: do district health boards manage conflicts of interest well? The answer in this report is no and that is a huge problem for the Government. What is it doing about all the other conflicts that are being acted out every day as we speak in district health boards right across the country? 
The Minister is telling us that he has learnt nothing. All he cares about is whether Government members have nailed a chairman whom they think does not vote for them. That is the only conclusion that Labour has and that is the one its members seem to be very happy about. There is a lot more at stake than that and that is why the public regard the Government as past it—because its members are too arrogant to understand what this means to the public health of New Zealanders. The Minister has confirmed today that he will do nothing about it. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I am delighted to speak in this debate. The Hawke’s Bay District Health Board got a very unhealthy report—a report that we do not want to see repeated in any other district health board in the country. New Zealand First members do not think it is a whitewash; the problem has been explored and recommendations have actually arisen from this particular report. All in all the report did show that the Minister’s decision to sack the board was warranted. We know that that was very drastic action and we were all quite surprised at that action but such actions are never ever taken lightly. The board was obviously not functioning. Cronyism conflicts of interest and financial debt cannot be tolerated by any board and district health boards in particular cannot operate in that manner. It is a prescription for disaster and we all know that there is a huge challenge ahead to get this board back on track. 
The report found that the board had failed at a very basic level of management—its management of commercial contracts. It was so amazing that this basic element could not be carried out correctly by a board. I was shocked that it was not even totally explored. We know that the review panel found a culture of mistrust and dysfunction between the board and senior management and this is always a very significant road block to any performance of any board. There was also the fact that there were no basic procedures for the conflict-of-interest management we had all heard about and we heard that those conflicts had been wide-ranging. We all know even here in this Parliament that any conflicts of interest have to be disclosed. Why the members of this board thought they could get away without disclosing them will never cease to amaze most of us. 
We all know that if we have inadequate systems they need to be identified and some recommendations and actions taken to correct them. In New Zealand First we are very pleased to hear that some action will be taken to ensure that the recommendations are implemented district health board - wide right throughout New Zealand. There is no doubt as the Minister has pointed out that other district health boards can learn very valuable lessons from this debacle we have had. 
Of course there will need to be follow-up and the board will need to be monitored to ensure that the recommendations are followed through. When we consider it we realise that it shows the inadequate level of training that board members actually have when they come on to a board and that needs to be rectified. One cannot afford to have friends in this particular role; it has to be managed according to the rules and it has to be absolutely straight. These are very serious issues for a board to work through because basically this is not the way to do business. 
I think we have to be very aware that this entire fiasco will have had a significant cost to the public health system and the people of Hawke’s Bay. It is timely now as the Minister said today in question time to ensure that elections are held as soon as possible so that the people of Hawke’s Bay can have a properly appointed functional district health board that gets on with the job of looking after the region’s health. It is important too I believe to ensure that the people of Hawke’s Bay can have confidence in their district health board. At this particular level to have these types of allegations will result in a fair degree of mistrust. So New Zealand First believes that now that the report has come out into the open and that recommendations have been made it is timely to move on and to ensure that the recommendations are acted upon quite quickly. 
I was very interested to hear that the Opposition has promised that this questioning and debate will continue ad nauseam; we have already had an awful lot of time devoted to this particular issue. The Minister is leading from the front on this issue and I think it is important that he is. We hold him responsible for looking over the health system and it is important that he does lead on this issue. 
In New Zealand First we believe it is timely now for the people of Hawke’s Bay and their district health board to get on and do the job we expect them to do. Health dollars are scarce and they must be used according to the rules. There are no exceptions. If they are not being used appropriately then something needs to be done. It is a sorry state of affairs that needs correcting and it is only now after this report that there is an opportunity to do so. We hope that this whole fiasco is over and we do not want to see it repeated in other district health boards around the country. 
SUE KEDGLEY (Green) 
: 
 The revelations of systemic conflicts of interest in the Hawke’s Bay District Health Board undermine confidence not just in that district health board but in the operation of all district health boards in New Zealand. One cannot help but wonder. Actually I find the levels of conflict of interest that have been identified in this report and in other allegations in recent times to be frankly mind-boggling. One would have to ask whether some members seek to be appointed or elected to district health boards to advance their own business interests rather than to represent the local community and the public interest of New Zealand. 
I think that the Minister has spent a lot of time blaming the board in conflict. He has been blaming individuals and the chair and various people on the district health board of Hawke’s Bay. Tony Ryall has been blaming the problem on various other people. So we have a great war of words over who is to blame and allegations have been flying left right and centre. But it seems to me that the fundamental question is about why we are allowing board members to sit on a board and be able to enter into a business relationship with the district health board they sit on when they stand to gain a personal financial benefit. It is not just a matter of having a conflict of interest register or various procedures to identify the conflict of interest; if there were a simple rule that said that this was not allowed and that no board members shall be allowed to enter into a business relationship with a district health board they sit on where they stand to gain a personal financial benefit then that simple rule would have resolved most or many of the problems that have been identified in the report on conflicts of interest. I think that is the wonder: why do we not have any such rule? In relation to Local Government New Zealand people are not able to stand for their local regional councils if they are perceived to have a conflict of interest—if for example they are staff members. Why is it that we allow any number of persons to stand for or be appointed to district health boards when they have obvious manifest conflicts of interest? There should be a rule that prohibits that. 
I cannot understand why someone who was the managing director of one of the largest private health providers in New Zealand was appointed by the then Minister of Health Annette King to the Hawke’s Bay District Health Board. It is incomprehensible. Did the Minister have a private agenda to encourage the contracting out the privatisation of health services in New Zealand? Why otherwise would she have appointed such a person to the Hawke’s Bay District Health Board? Why would Ken Douglas be appointed to the Capital and Coast District Health Board when he is also a director of Healthcare New Zealand which I believe is the largest private health-care provider in New Zealand? There are manifest and obvious conflicts of interest and if a Minister is going to appoint such a person to a district health board then it is almost inevitable that these sorts of conflicts of interest and issues will arise. 
I believe that once we have got past the blame game that seems to be taking place in this House today we need to get to the heart of the matter and really it is up to the Minister. If he says he really wants to take decisive action and wants to learn from this horrific saga it is up to him to show leadership and to pass a rule that says that it will be illegal for any persons for any board members to ever enter into business relationships with district health boards they sit on where they stand to gain a personal financial benefit. Until such a rule is passed we will not know whether this is just the tip of the iceberg. Was this just one isolated incident? Actually we know that it was not because of what happened in Auckland. We had an appalling saga in Auckland with a laboratory contract which ended up under judicial review because somebody who was a board member had used his involvement his participation on the board to advance his own interests. In that case the person was trying to get a laboratory contract for his business. In this case a pharmacist was allegedly trying to gain benefit for his business and also in this case Mr Hausmann got on to the district health board and immediately started to bid for a substantial contract with that board. It is all well and good for the Minister to blame the chair or to blame this person and that but the Government who appointed Mr Hausmann to that situation is in large measure responsible. It also shows that in the absence of any of these rules such conflicts of interest are almost inevitable. 
It does seem odd to us that the report has acknowledged the serious conflict of interest Mr Hausmann had in the Wellcare contract but then has failed to condemn this behaviour more vigorously. Instead the report has just made some passing remarks to the effect that the conflict could have been declared earlier on in the piece. There seems to be no denial that Mr Hausmann sought to amend and influence the contract that he was then going to bid on and that seems to me to be profoundly unethical—well possibly more than simply unethical. It does surprise me that the report did not condemn that particular behaviour more vigorously. 
I do not believe that these two reports will bring a close to this sorry saga. I believe that too many questions are swirling around this whole incident. For that reason the Green Party will support calls for a further investigation of the whole issue by the Auditor-General because otherwise I think this incident will drag on and remain a source of conflict tension unhappiness and distress for the people of Hawke’s Bay and will stand in the way of restoring confidence in the Hawke’s Bay District Health Board. 
As I said this has not just undermined confidence in the Hawke’s Bay District Health Board; I believe that it has undermined confidence in the operation of all district health boards in New Zealand. I think that many people will be questioning the boards of their areas and wondering whether what happened in Auckland and Hawke’s Bay could be happening in their particular areas. As someone has alluded to there were concerns at the Capital and Coast District Health Board when there was a move to contract out some of the services and there was concern that a board member was somehow involved in or participating in or had a potential conflict of interest in that contract. So we see this happening around New Zealand not just in Hawke’s Bay. 
There is only one way to solve this problem and that is to tighten the rules surrounding conflict of interest; they are woefully inadequate. It is simply not good enough just to declare a conflict of interest at the beginning of a board meeting or to have a register of conflict of interest and then basically to leave it up to individual boards to monitor it as they will. That is not good enough. There needs to be tight rules and above all as I have said there needs to be a specific rule that says one cannot be a board member and seek to gain a personal benefit through a business relationship with the district health board one sits on. If this rule were in place maybe many of these people—like Mr Hausmann—would not want to put themselves on to a district health board. I think that would be a good thing because we cannot allow this rather horrific saga to be repeated. Thank you. 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. It is a matter of considerable concern to all of us in this House that a report into the capacity of the Hawke’s Bay District Health Board has revealed a culture of mistrust and dysfunction between the board and management. We have learnt from the Director-General of Health Stephen McKernan that if the chair had applied common sense and good practice the matters at the heart of this whole issue might well have been avoided. Well frankly that remains to be seen. 
Major questions that must be asked arise from this whole report. One of them has to be why Peter Hausmann was appointed by this Government to the Hawke’s Bay District Health Board. People in the community have asked that question given that there was knowledge of his business interests and of the likelihood of a conflict of interests and in particular it was known that he was a potential contractor for services from the board. To say that he was appointed because of the skills and expertise that he would bring to it simply does not make sense. Other business people who are not as implicated in the business of health as he is might also have been excellent in that role. So what was the role of the management in the contractual agreements in light of the allegations that are being made? 
Five years ago all sorts of crisis and scandal were directed at another body in the Hawke’s Bay a Maori health provider. The Hawke’s Bay District Health Board ordered an urgent investigation into the trust after claims of mismanagement. The headlines screamed accusations of nepotism and the wolves were quick to call for immediate statutory management for the future of the Maori health provider—a provider that had been running successfully for more than a decade. The audit looked into allegations of the employment of family members—this was a hapu provider—the use of trust vehicles and a range of other practices considered outside the organisation’s contract. Yet a couple of years later when these conflicts of interest arise between two commercial initiatives—between the Hawke’s Bay District Health Board and a board member—suddenly it appears that conflict of interest is not such a biggie at all. A double standard is operating here. The simplest test of governance that we would have expected to operate at the level of the district health board has failed yet the same board had been quick to judge a Maori health provider caught under the same slur of judgment. 
We know that for far too many of these appointments cronyism has been seen as part and parcel of their practice. Cronyism is in fact the norm. We know that Ministers also alter reports. Ministers cannot deny that. They can deny all they want that they do not interfere in these so-called independent reports but it is simply part of the convention of this place. So the comments made by the board chair Kevin Atkinson that the final report reeks of political interference or that irrelevant matters are being submerged under a smokescreen are actually not too far— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I ask you to consider that an implication has been made to which I take personal exception and it is contrary to what I have said publicly and in this House. I confirm again that I had no input into the report. I did not see either the draft or the final report before the day it was released and I was not briefed on its contents. I ask the member to accept that assurance. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the Minister. That is not actually a point of order but the point is made. 
Hon TARIANA TURIA 
: The comments made by board chair Kevin Atkinson that the final report reeks of political interference or that irrelevant matters have been submerged under a smokescreen are probably not too far from the truth. 
I want to make some comments about that person. It is far too common a practice for people to come to this House to denigrate and insult individuals: to name and blame them for various issues that need to be attended to. Mr Atkinson has been the latest victim of this approach yet he is in fact the very same man who was appointed not very long ago by this same Government to be the chair of this board after being elected by his community. So is the Government admitting its error in appointing him—its misjudgment? The House exists in the dubious privilege of being able to slam individuals who are unable to defend their honour in the debating chamber. 
The fundamental issue for this House and the Minister of Health to deal with is that if the relationship was as dysfunctional as the report lays out why were the issues not identified earlier? Why were the checks and balances not in place to ensure that the competing business priorities of two of the members of the board came to attention earlier? The competition between Mr Hausmann and the pharmacy interests should have come to the attention of the board long before it came to the attention of the Ministry of Health. What this matter really highlights is the issue of the appropriateness of people involved in health sector business also being involved at the governance and management levels. 
We know that Maori are pilloried over and over again with spurious claims being made of nepotism and conflict of interest. We in the Maori Party actually know that the strengths of whanaungatanga can work really well to provide a solid foundation for business success. We have only to cast our memories back to the crisis hyped up around Te Wananga o Aotearoa to know that Maori organisations often come under a great deal of scrutiny when family members are involved—and particularly scrutiny by this House. In actual fact whanaungatanga or kinship—the extended family linkages in Maori society—is not a point of conflict; it is a point of difference. If we look at family relationships more broadly in many ways we see that keeping business within the family has been so successful that it places families on the  
National Business Review 
 rich list. Of the 187 entries in the 2004 list 47 were in fact family affairs. There is the Goodman family the Fletchers and of course many others. 
The point is all about being transparent coming up clean and ensuring that mandated checks and balances can be adequately enforced. We are the last party to claim that relationships and connections cannot be used to the benefit of a business. The key issue must be the way that they are managed and the way that the technical and ethical issues and the public perception are organised. The general feeling is that in this case it was not good practice. The Maori Party agrees with the Greens that anyone with business interests should not be allowed to be on any district health board. This is a sector in which the nation needs to be able to trust for the good health of the people that we have standards and practices that are transparent and prevent people from getting a competitive advantage. The Maori Party also supports an inquiry being made into the Hawke’s Bay District Health Board by the Auditor-General. Kia ora. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I advise the House that the next speaker will have 5 minutes. For the benefit of the speaker I will ring the bell with 1 minute remaining. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to talk about the report from the independent review of the Hawke’s Bay District Health Board following the Minister’s decision to remove the board from office some weeks ago. Although we would all love to know who was right and who was wrong in the many conflicts the board was needing to give leadership on the question that this review panel needed to answer was whether the board was able to chart a course through those conflicts and challenges before it or whether it was so dysfunctional that the Minister David Cunliffe had no choice but to take the action he did. 
Since the report there have been questions about the integrity of the panel conducting the review. That is now a line that the Opposition is running—so much so that the panel has felt the need to refer to its independence and impartiality at the end of its report. Early drafts of any report can look very different from the final wording. One does not need to spend very long on a select committee to know that. The sinister innuendo now floating around this parliamentary ether is that pressure from Government quarters has been brought to bear on the panel. Those inferences are not just an attack on the Government but more important an attack on the integrity of some very credible experts who made up the review panel. 
The conflicts and financial challenges facing this district health board are currently and remain the concern of a commissioner. Beyond resolving those conflicts and challenges the greater need is for the tone that underpins the working environment existing between staff management and governance at Hawke’s Bay District Health Board to be seriously considered. When an essential community provider is characterised by suspicion manipulation cronyism gossip and a complete disregard for good process and practice then systemic collapse is inevitable. 
United Future sees that the way forward needs to involve establishing a measurable list of criteria outlining those ingredients needing to be in place before an election can be held to ensure that any future board inherits a workable proposition. It is not necessarily about resolving every challenge that faces the current district health board; it is actually about establishing a sustainable and positive working relationship so that Hawke’s Bay people can be confident that this disruption both to the day-to-day work of their health authority and to democratic outcomes can have no part in the future of their health services. United Future urges the Government to move forward from this report and to make sure that every support is given to the commissioner to put in place all that needs to be put in place so that a democratic election can be held and Hawke’s Bay can enjoy being led by a proper health board that is democratically elected. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 The review panel’s report into the conflict of interest allegations at Hawke’s Bay District Health Board was exactly as predicted and expected. The report—strangely enough—contains absolutely no mention whatsoever of the then Minister of Health Annette King when Peter Hausmann was appointed to the board. That was an integral part of the problem making it surprising that no reference was made to it at all. The report is also surprisingly short on mention of the role of the Hawke’s Bay District Health Board management because we know that it played quite a part in this conflict of interest situation. The report strongly and sweepingly criticises other board members; it strongly criticises Peter Hausmann’s involvement. What the report does not mention is whether the appointment process that Mr Hausmann underwent when Ms King appointed him to the board was adequate or inadequate or whether it was done appropriately. 
The review panel was in many ways hamstrung from commenting properly on this issue and we have no idea whether we have got to the bottom of this situation. The panel was prevented from looking into every area that should have been looked into because of the narrowness of its brief. The report itself actually raises many more questions—questions that have been asked in this Parliament but not answered—than it answers. The only fair way to deal with the conflict of interest allegations levelled at the board is to immediately hand the entire process over to the Auditor-General for a truly independent review—and by truly independent I mean that no stone should be left unturned. The independent review should go back to early 2005 when Annette King first approached Peter Hausmann to join the board and it should go right through to when the current Minister of Health prematurely sacked the board before the review had any hope of getting out. 
Good people’s reputations are at risk here. In fact it may already be too late—they have already been besmirched I think. The truth must be brought to light. That in itself is reason enough for an independent review to be done by the Auditor-General. If the Minister of Health were really at all interested in not just taking his information from Rick Barker—who is whispering across to him now—from Peter Hausmann or from Chris Clarke but were interested in taking his information across the board then we might actually get a glimmer of the true situation here. 
When did this Minister of Health—who launched in this Parliament such vicious attacks on the board and said what a terrible job it was doing saying that it was not managing the financial constraints properly and not doing this and not doing that—make any attempt to go to Hawke’s Bay to see the board? I asked that question in Parliament and what was the answer? Never; he made no attempt at all. He is an “I’m running the show.” hands-off Minister. Why is that? It is because it is actually much easier to sit in one’s chair or to stand over there on that side of the House and launch attacks on people than to go and find out the truth for oneself. The Minister does not bother about talking to the board. He thinks it is much easier to sit here in Wellington stab people in the back from a distance and not look them in the eye or be interested in hearing their side of the argument and that is reprehensible. The Minister is guilty of ministerial misconduct and should be held responsible for that. 
The Minister’s one-eyed comments today in this House just show where he truly lies. He is pleased that this report has been released now because he can stand up and launch a vitriolic attack unheeded on the board. He will not mention the management—it was not part of this inquiry; the management has been left alone. He can now launch as vitriolic an attack as he wants to on the board without having to worry about the constraints of what the review panel might have or might not have looked into. If the Minister were truly interested in the truth he would pass this on to be reviewed by the Auditor-General. 
In closing the sad thing is that this whole fiasco has diverted the public’s attention away from the real issue: the access the public has to health care in New Zealand. The three deaths that the Hawke’s Bay District Health Board was happy to talk about because those people were not getting proper access to tertiary care at Capital and Coast District Health Board have been lost in this whole mix. I raised those issues in this House and they have now been lost in the whole mix. The Minister is so pleased that this inquiry has gone on and on and has been raised in Parliament because he does not have to deal with the real issue facing New Zealand’s health sector: the lack of access to proper care. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 The report of the Director-General of Health on the subject of conflicts of interest and other matters of the Hawke’s Bay District Health Board shines a torch into the gloom of the district health board. The report is enlightening; it says succinctly and clearly that the board had substantial problems—and I agree with Tony Ryall when he says there is much more that could have been said—but the torch beam we see shows something that is seriously concerning. The report without saying who was right or who was wrong says the board was seriously eroded that dysfunctional relationships had existed for some time between the board and management and that these would not have been resolved without external input. This debate about the Hawke’s Bay District Health Board is not about democracy; it is about competence. This debate is about the competence of the board to serve the people of Hawke’s Bay—the patients who seek its care—and the board failed them in a number of areas. It failed in managing its relationship with staff. It failed in managing conflicts of interest. It failed in managing its governance responsibility. It failed in managing its relationship with the ministry and the Minister. 
The report notes with great particularity that the board had no clear consistent policy of managing conflicts of interest. Instead the board applied varying standards in how it dealt with these conflicts of interest and these standards were applied differently depending on the board member. The report clearly sets out the three components in managing conflicts of interest—that is legal requirements ethical requirements and good practice requirements. The board failed to induct adequately its members; the members did not know what was expected of them. Where conflicts of interest were known the board thought that simply declaring the interest was sufficient. The report makes very clear that declaration of a conflict of interest is not sufficient; it is but a start. There had to be then a process of managing that conflict of interest that is legal ethical and subject to good practice. This board failed to manage known conflicts of interest. 
Mr Atkinson has made much of the fact that he did not know the extent of Mr Hausmann’s supposed conflict of interest. I think that is simply not true. I have information from notes written by Ken Douglas who attended a meeting on 16 December 2004. Ken Douglas attended a meeting at Craggy Range Winery which is well known in Hawke’s Bay. At that meeting were Doug Catley Peter Hausmann and himself as well as Kevin Atkinson and Chris Clarke. The meeting discussed the possibility of working with the Hawke’s Bay District Health Board on a private-public partnership. The board had for some time been considering such an approach to create transparency and so on. Both Atkinson and Clarke according to Douglas were effusive in their response to the concept and mentioned the significance of the savings and benefits that were possible. 
Ken Douglas remembers specifically that he raised concerns about Healthcare New Zealand’s intellectual property—for example innovative ideas and solutions—being protected by a request for proposal process due to what had happened to Healthcare New Zealand when it was working with Capital and Coast District Health Board. Capital and Coast District Health Board has set out now for we have the document what was happening and its intellectual ideas were stolen. So in December 2004 the chairman of the Hawke’s Bay District Health Board Kevin Atkinson knew of the proposal. It required the chief executives of both of them to work on the request for proposal process and required them to bring it to fruition. The board chair has latterly said he knew nothing about it. But this report clearly shows that at a meeting at Craggy Range Winery he knew exactly what it was. The report correctly identifies that Kevin Atkinson knowing that had a responsibility to ensure that the conflicts of interest were correctly managed. 
But there are other conflicts of interest that were referred to in the report which the National Party has not mentioned at all. The first is to do with Mr Peter Dunkerley who owned pharmacies in Hawke’s Bay but continued to participate in discussions with the board about decisions where his interests and his family’s interests were directly affected. He chose not to exclude himself from the meetings and the chair did not require him to leave the meeting. That is contrary to legislative requirements and he failed to meet all of the other tests of ethical requirements and good practice requirements. A board member with a conflict of interest should have disclosed if that is what the law requires; and if the person was going to participate the law requires that that be subject to a decision of the board. The board’s minutes require it. It must outline the reasons for giving such a waiver. On no occasion was that done. The board failed its legal requirements. The chair failed to make sure they were employed and everybody knows that that is wrong. It is plain wrong to continue to participate in those decisions when one’s personal interests and family interests are at stake. 
It was not just on one issue; it was on community pharmacy interests which involved millions of dollars. It was in the interests of opening up pharmacies to competition. Again that was contrary to the interests of Peter Dunkerley and his family’s interest and his financial interests but he still participated in that decision as well. Peter Dunkerley’s participation has been discussed as a potential involvement for the benefit of the companies in which he had interests. The report states he did not disclose the full nature of his interest so as to enable the board to assess the position with adequate information. He did not manage his interests sufficiently. The panel states that on a number of occasions the minutes record where Peter Dunkerley had disclosable interests but they were not disclosed. That is a complete failure. I would like to know how many other examples are going to come to light. The panel notes that Mr Dunkerley is but one example. 
But let us turn to another area where there are conflicts of interest. There was the recent decision by the Hawke’s Bay District Health Board to award $600000 uncontested to Royston Hospital. Again this is instructive because this is a board that has lodged complaints against a member for failing to disclose his conflicts of interest and failing to manage them. This is how this board did it. The minutes of the audit finance committee meeting on 19 December 2007 demonstrate the board’s cavalier approach to managing conflicts of interest. 
The House needs to remember that these were people who were very sensitive to this. The board itself chose not to endorse the minutes of the independent people there; it chose to doctor the minutes. But even the doctored minutes show that things were wrong. At that meeting Peter Dunkerley declared he had some shares in Wakefield and that it might be appropriate for him not to sit in on the discussion. Does the register show these interests I ask the Opposition? The audit and finance committee then decided that Peter Dunkerley’s shares were not material contrary to the advice of the probity people. The chair of the district health board— 
Dr the Hon Lockwood Smith 
: Who wrote this? 
Hon RICK BARKER 
: —it is in the minutes. I will table them shortly. The board advised Kevin Atkinson that he had a conflict of interest because his brother worked at Royston Hospital. That was overlooked. The board knew that Diana Kirton another member of the committee had a conflict of interest because her brother had shares and worked at Royston Hospital. Three board members had a conflict of interest because of their connections with Royston Hospital. None of those three members left the meeting. All three participated in the debate. In fact the chair of the district health board shaped the debate and said contrary to management advice that the $2.4 million should be contracted out $600000 of this a quarter of the contract should be given to Royston Hospital uncontested. That was contrary to the advice of the staff contrary to the probity advice but these conflicted people still participated in the decision. They did not put this money up for tender to ensure that the public of Hawke’s Bay can be guaranteed that it received best value for money. That was the appropriate process to follow. That was the advice of management and the board discarded it. 
The chair of the committee a man who sent an email saying he would not sign a confidentiality agreement because it would constrain his ability to leak to the National Party said latterly that the work had to go to Royston Hospital or else the money made available from the Ministry of Health would be lost and the operation capacity would not be available. That is simply not true. That is justification after the fact. The fact is there are lots of seedy things around this. 
The report goes on to other issues about Royston Hospital. I have been told that there are long waiting lists around failure that in fact people are being funnelled into Royston Hospital despite the fact there is capacity at the district health board. I have also heard murmurings that clinicians have been given priority in performing private operations at Royston Hospital in preference to their responsibilities to the district health board. I do not know whether this is true but I look forward to the new independent commissioner who has no personal or family interest in Royston Hospital looking into the interests and the relationship between Royston Hospital and the board. 
But there is another small matter. It concerns a protected disclosure that the National Party knows about but will not mention and that relates to Diana Kirton who was said to have been conflicted in her dealing with a contract concerning the Spring Hill trust. This has been investigated by PricewaterhouseCoopers. Its report clearly states that the handling of the conflict of interest was not in accordance with the committee’s standing orders. It stated that the recommendations agreed to by the committee had been pre-prepared by the conflicted member in advance of the meeting. It stated there was clear evidence showing procedural errors by the conflicted member but it fell short of the high threshold of serious wrongdoing under the Protected Disclosures Act. 
So we have conflicts of interest around the Spring Hill trust conflicts of interest around the Royston Hospital conflicts of interest around pharmacies. There is a hugely conflicted board involved. This board has to go—of that there is no doubt. The interests of the people of Hawke’s Bay have to come first not the interests of conflicted members their families and their personal and private interests. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I seek leave of the House to table the minutes of the audit and finance committee meeting on 15 December showing that none of those members voted. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is. 
Hon RICK BARKER (Minister of Internal Affairs) 
: 
 I seek leave to table the minutes of the audit and finance committee meeting on 19 December 2007 of the Hawke’s Bay District Health Board. 
Document by leave laid on the Table of the House. 
The debate having concluded the motion lapsed.