Urgent Debates — Setchell Inquiry—Report to State Services Commissioner 
Urgent Debates — Setchell Inquiry—Report to State Services Commissioner 
[Volume:643;Page:13080] 
Urgent Debates 
Setchell Inquiry—Report to State Services Commissioner 
Madam SPEAKER 
: I accept that Mr Brownlee’s application does require the immediate attention of the House. I call upon the member to move that the House take note of a particular matter of urgent public importance. 
GERRY BROWNLEE (National—Ilam) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. This is a matter that requires urgent public attention. New Zealand and New Zealanders rely very heavily on a neutral Public Service. One of the things that New Zealand is able to tout about itself around the world is that we are a country free of corruption a country where officials will deal with people in a fair and reasonable manner and a country where the politics are stable because the bureaucracy that backs up all the political activity or the policy delivery is free from the sort of encumbrance that many countries put over the top of those who serve them in their Civil Services. I think that both the report generated by Don Hunn and the response to it from Dr Prebble are important for us to consider at some length. Therefore I thank the Speaker for giving the country the opportunity to hear all the points in an extended debate on this particular issue. 
The first point is that the issue arose out of the decision by the chief executive of the Ministry for the Environment to effectively sack a communications manager because she was in a relationship with a press secretary who worked for the Leader of the Opposition. There was never a question asked about anyone’s political persuasion. A whole lot of assumptions were behind the decision. What is interesting about Mr Hunn’s report—which I hasten to say is not a report that reaches any conclusions or makes any recommendations but is simply a chronology of how events that relate to this issue unfolded over a period of some months—is that it is apparent that the Ministry for the Environment effectively headhunted Madeleine Setchell to come and take on the job of communications manager. This is something that was unknown to me before it was released today. The ministry went through a process of advertising for people and it went through interviews but it made no appointment. The ministry went out and looked to see whom it could get to do the job and it identified Madeleine Setchell because of her professionalism and the capability she had demonstrated over a long number of years in the communications industry. 
Taking an aside it is interesting that the only person who comes out of this report with any credit at all is Madeleine Setchell. The Ministry for the Environment invited her to come and discuss a job with it. During the interview process she made it abundantly clear that she was in a relationship with a press secretary in the Leader of the Opposition’s office. She discussed the fact that on previous occasions her partner had had jobs in the New Zealand media where there could have been an equal conflict of interest perceived and she discussed how the pair of them managed that issue. The people on the interview panel—remembering that there was not just one person on the interview panel but three people—accepted that in her mind there was an understanding of potential conflict and a willingness to engage in managing that conflict. They were convinced that no issue would arise from her employment. 
However some days later someone in the then Minister for the Environment’s office a Mr Hurring heard that Madeleine Setchell had been appointed. Interestingly Mr Hurring works for the Minister’s office but has a long long background as a political activist. He is paid for by the State and was working in the then Minister for the Environment’s office. He phoned up the chief executive of the Ministry for the Environment and asked whether it was true about the relationship between Ms Setchell and the press secretary in Mr Key’s office. Mr Logan said he did not know of that but that he would investigate. That was Mr Logan’s first mistake. I will return to it in a few moments. 
Mr Logan made those investigations and found that it was true and he reported that to the then Minister. He appears to have gone into some sort of a blind panic. We assume that that was because he knew what sort of Minister he was dealing with. He knew he was dealing with a ruffian and with someone who was overtly political in the exercise of his ministry. I suspect that he was terrified to go and tell the Minister that the ministry had someone working on its communications who was connected to the National Party is this particular way—albeit at quite a long arm’s length distance. 
When Mr Logan had his discussion with Mr Benson-Pope the then Minister we are led to believe that Mr Benson-Pope rather calmly said that that might make it difficult for him to be free and frank. With that rather gentle piece of advice Mr Logan trekked back from the location of the meeting to his office summonsed Madeleine Setchell and told her that it was over and that she was going. In the Hunn report it states that Ms Setchell was shocked to get this news. She asked the chief executive why she was being asked to leave. In the Hunn report it is clear that the response from Mr Logan when she asked whether it was because the Minister did not want her in the job was yes. So here it is: there was Mr Logan firstly being cowered by the phone call from the political activist in David Benson-Pope’s office then having to front to the Minister with we assume trembling knees and finally having to go to Ms Setchell and say: “I’m sorry; I am not as frightened of you as I am of the Minister so you’re gone.” 
In the New Zealand system the chief executive is responsible for the employment of staff in the ministries. The chief executive should not cave in to that sort of pressure. The chief executive should not give away to the bullying tactics of any Minister. The chief executive most important should not give away to the hectoring of some party official who has located himself inside a Minister’s office. 
All this should not come as any particular surprise to us because the Ministry for the Environment has had a problem for a wee while. I refer to the Hunn report where it states that the Ministry for the Environment had decided to engage in an exercise of “realignment” and recognised that it would be the delivery arm for the “fourth plank in the Government’s three point strategic agenda of economic transformation”. I must say that wonderful line “the fourth plank in the Government’s three point strategic agenda of economic transformation” is absolutely typical of what one would expect from the left in this country. It means nothing and tells us nothing. The subtext is that the Ministry for the Environment will become a political arm of the Government. It is as simple as that. In the process of the ministry’s realigning itself to be a sort of Government-paid agency of the Labour Party staff and other resources had to be realigned to meet the new challenge. So it was no surprise that the moment that the Minister was made aware of Ms Setchell’s relationship she was gone. 
If anyone wants confirmation of just how political that particular ministry has become then he or she has to think back only a few months to when the Ministry for the Environment was running adverts in New Zealand newspapers stating: “Do you want to work on issues that are at the forefront of New Zealand’s political agenda?”. The adverts went on to state: “We will be looking for people to be part of a ministry that is at the forefront of New Zealand’s political agenda.” This is not some sort of non-governmental organisation; it is a Government department. It is a Government department that is setting itself up to be another vehicle another part of the Labour Party. 
And the worst thing is that Mr Logan seems to have been singularly unaware of what he was doing. When he finally had to face the music over the dismissal of Madeleine Setchell he simply said to the public by way of a press release: “This is how I saw it. I was not aware when Madeleine Setchell was appointed to the position of communications manager that her partner was the Leader of the Opposition’s chief media adviser. This is something I should have been told. If I had been told I would have recognised before she was employed that I had a potential conflict of interest to consider.” That tells us that in Government departments now if someone is the best person and is the most capable of doing the job but has a relationship with someone in an Opposition political party then that person is out. That person is gone and has no place. Then Mr Logan stated: “I first knew of it through a phone call requesting information from the Minister’s adviser.” So he admits it was the paid party hack sitting in David Benson-Pope’s office watching these things for the Minister who got him on to the case of sacking Madeleine Setchell. 
As to the rest of what I would say about this matter I made the point before that it was the Minister who said to Mr Logan: “Get rid of her.” The interesting thing is that for nearly 4 weeks the Minister came into this House day after day saying that he knew nothing of this matter. He said that he was innocent that it was all a matter for the chief executive and that it was nothing to do with him. Well we know what happened to him in the end. He got found out. 
But the worst thing is that Mr Logan was talking through all of this time to the State Services Commissioner. The State Services Commissioner would have us believe that he gave the advice that it was wrong to get rid of Madeleine Setchell and that the proper thing to do would have been to manage the issue but that at the end of the day it was the chief executive’s decision. So when the chief executive caved and gave in the poor old State Services Commissioner was apparently powerless to do anything. I say in the House this afternoon that I do not believe that because there were 3 weeks—3 weeks—when the Minister as I said before was denying in the House that he knew anything about the matter. Conveniently during that period the State Services Commissioner wrote an article that was published in the  
Dominion Post 
 in which he stated that he believed that David Benson-Pope knew nothing of this matter. He put that in the newspaper and into the public arena when he knew it was wrong. 
How do we know that he knew it was wrong? Because when we look at the chronology put together by Mr Hunn we note that as early as the first week in July while Dr Prebble was on sabbatical in Britain the Deputy State Services Commissioner phoned him up to tell him what had happened and to tell him that this was becoming a bigger public issue. We are expected to believe that even through these conversations and through his sitting at his word processor writing out the article to be published in the  
Dominion Post 
 he did not remember that he knew that David Benson-Pope and his office had intervened directly to see Ms Setchell dismissed. That is not credible. That is not believable. If that is not a cover-up then it is bordering on a cover-up. 
This man now says that he has received Mr Hunn’s report and he has to decide what to do with it. He said to the Government Administration Committee today that he will do all sorts of things to put things back together. Well what is broken here? The only things that are broken here are the longstanding conventions that public servants do not act in an overtly political way and that Ministers do not dive into departments and start telling them how to act in an overtly political way. We are fortunate that only two departments are fingered in this report. We are worried about others but only two are fingered here. It seems to me that the man who has presided over that attack on our Public Service and on the credibility of public servants is the man who now says that even though he has not been totally straight with us he wants the opportunity to continue to see what can be done to tidy things up. Well that also is not credible and I have to say it is barely tenable. 
I think that New Zealanders need to ask themselves a serious question: if Government members are so willing to politicise the Public Service for their own ends why should New Zealanders not believe that the Electoral Finance Bill that members have in front of them at the moment is an attempt to simply say that because Government members are so good and so capable and because they are so out of step with the rest of the country the best thing is that they should be allowed to dip into the taxpayer dollar legally to ensure their re-election next year? These two items are not disconnected and they have an awfully large “c” word—corruption—that sits right over the top of them. 
This report from Mr Hunn is a good one because it tells us what really happened. The report from Dr Prebble is an excuse. 
Hon DAVID PARKER (Minister of State Services) 
: 
 The Hunn report discloses the series of mistakes that were made within the State Service in dealing with this issue. The first thing I would emphasise is that this Government accepts that the impartiality of the Public Service is an important plank of the constitutional settings we have in New Zealand. For that reason the Government was of the view that there should be an inquiry and that it should be carried out by someone whose integrity was beyond being impugned: Mr Hunn. I thank Mr Brownlee for his acknowledgment that he holds Mr Hunn in that regard because there is at least agreement that the Government appointed an appropriate person to look at these events. 
The second point I would like to put on the record and would emphasise is a point that has been made previously by the Prime Minister when these issues arose—that is the person who comes out of this matter with a clean bill of health and as not having made any mistakes is Madeleine Setchell. She was a person caught up in events here that do not reflect poorly upon her at all. She conducted herself properly throughout these events and she should feel well respected in the community as a consequence of her integrity being upheld in this report. 
Madeleine Setchell was interviewed by staff at the Ministry for the Environment for the position of manager of communications. It was a senior role as is evidenced by the fact that she was being paid effectively the same as most members of Parliament here are paid. This was not a junior role; it was a senior role within the ministry. It is clear that at the interview she properly disclosed her relationship with the senior press adviser in the Leader of the Opposition’s office. 
The first adverse comment Mr Hunn makes is that he fails to understand why that disclosure was not passed on by the staff in the Ministry for the Environment to Mr Logan. In that regard I think that Mr Logan can feel let down by his own staff. They obviously made a mistake in not making that disclosure and I have a suspicion on reading the report that they did not really become fulsome in their proper disclosure of that even when the issue of Madeleine Setchell’s potential conflict of interest became known to Mr Logan. 
Mr Logan was not told of that and then a rumour circulated. I do not know where that rumour started but we know that the rumour was passed on to a staff member in Mr Benson-Pope’s office. David Benson-Pope’s staff member quite properly—and Mr Hunn acknowledges that it was proper for him to do so—asked the chief executive of the Ministry for the Environment whether the rumour was true. Mr Hunn said there was nothing wrong with that: it was quite a proper inquiry to make and it was not out of the ordinary. It has no doubt happened in the past and it will no doubt happen in the future and it would be a sad day if there could not be such a level of openness that if people heard that sort of rumour they could not inquire of the chief executive as to whether it was true. 
The chief executive then quite properly consulted with the State Services Commissioner Dr Prebble. Dr Prebble—and this again is not contested by anyone; this is accepted by Mr Logan and by Mr Hunn—told him that he thought the conflict of interest could be managed without a requirement that Madeleine Setchell have a different role notwithstanding the difficulties that might have been seen in the Minister’s office. The State Services Commissioner was quite clear in his advice to Mr Logan that the potential conflict of interest should not be problematic and could be managed. 
However in that same advice it was also emphasised to Mr Logan that at law decisions relating to the employment of public servants in the Ministry for the Environment were decisions for Mr Logan to make not for the State Services Commission. So although Dr Prebble gave that advice and expected Mr Logan to take that advice into account—which he no doubt did—it was also within the power of and indeed the duty of Mr Logan to make his own decision. 
Mr Logan then raised the issue of Ms Setchell’s potential conflict of interest with her. I think one of the mistakes that Mr Logan should regret most in this matter was that when he dealt with Ms Setchell he was less than sensitive as to her position. It appears to be likely that even then he was being told by his own staff members that Ms Setchell had made a disclosure of some conflict of interest rather than a fulsome disclosure of the nature of that conflict of interest. We now know that that was not correct. Ms Setchell had made a full disclosure and Mr Logan in presenting his view—having no doubt been told this by his staff members—that there had been only a less than adequate disclosure of that interest was incorrect. 
I can understand Ms Setchell feeling aggrieved that her integrity from her point of view was being questioned. She made it quite clear that she wanted her reputation within the Ministry for the Environment protected by it being made clear and properly acknowledged that she had fully and properly disclosed her potential conflict of interest. One of the findings of Mr Hunn was that that was not the way in which these issues were approached with her indeed not just verbally but also in the written documents that came forward to Ms Setchell when she was offered an alternative position within the ministry. The wording surrounding that offer I think was insulting to her and questioned her integrity and viewpoint because it seemed to suggest that she had been less than fulsome in her disclosures which plainly was not the case. 
It subsequently transpired that an agreement was reached with Ms Setchell. That was another cause of criticism by Mr Hunn and the State Services Commission in that it led to a confidential settlement with Ms Setchell. I agree with those criticisms; I do not like these sorts of settlements to be confidential. Occasionally the need to reach a settlement with someone who is rightly aggrieved is inevitable somewhere in the Public Service but these issues ought not to be done on the basis of confidentiality. The ministry has subsequently said that it would be willing to waive that confidentiality but of course it cannot do that off its own bat. It is no criticism of Madeleine Setchell that she does not want that confidentiality raised; that is her right. That confidentiality was offered to her albeit wrongly by the Ministry for the Environment and it is her right to have the confidentiality of that settlement now upheld. I do not know the amount of the settlement. The former State Services Commissioner Mr Hunn said he thought it was within the range of what would be an acceptable outcome but of course we do not know what it was. 
The next stage in this catalogue of errors was of course the failure of the State Services Commissioner to remember that Mr Logan had told him about his conversation with David Benson-Pope. That is something that Mr Brownlee has just characterised as some evidence of collusion between the Government and the State Services Commission and/or Mr Logan. It is very clear from the report that in actual fact amongst those who were misled as a consequence of that forgetfulness on the part of Dr Prebble was the Government. The reports that came from the Deputy State Services Commissioner Mr Rennie while Dr Prebble was overseas to the then Minister Annette King were from the point of view of the Government fulsome. But they contained no reference to the discussion that Mr Logan had had with David Benson-Pope. That was to the disadvantage of the Government rather than to its advantage and the issue was not well handled by the State Services Commission. So the Government can feel a little let down as a consequence of what occurred here. 
Subsequent to that there were issues relating to the Ministry of Agriculture and Forestry where Madeleine Setchell made inquiries as to whether she might find employment there. I would make the point that the suggestion that she has been blacklisted throughout the Public Service is incorrect; there has been no such blacklisting. As I understand it she is obviously a very skilled person and got employment within a short period of weeks with Victoria University as it happens and I hope she is happy in that position. I think the comments that Mr Anderton made to— 
Hon Trevor Mallard 
: A Crown entity. 
Hon DAVID PARKER 
: Victoria University is a Crown entity albeit more independent than a Government department. 
I also refer to the parts of the report on about page 37 from memory for the benefit of those who have a copy of the report that deal with Mr Anderton’s comments in this matter. I thought Mr Anderton’s comments were very mature very considered and consistent at the time and later. They obviously struck a chord with Mr Hunn because he reported them in full and I think commented on them reasonably positively or cast them in a positive light. He made the point that it is very difficult in some of these situations where the conflict arises from a family relationship—with one’s spouse or partner—and where the other person is working in a highly politicised position. These events only occur rarely but he made the point that it makes the person who is put into that position the possible butt of suspicion when things go wrong. That would have been a difficult position for Madeleine Setchell to be put in and it shows that this issue was difficult for all concerned albeit it was not handled well. 
Now what should the consequences be? Obviously there have been mistakes here and the question is: what consequences are proportionate? The first point to make here is that people’s future livelihoods and careers are at stake. We have to act wisely and justly and not overreact. Dr Prebble’s mistake for example did not change the outcome for Madeleine Setchell—that has been made clear by Mr Hunn. His mistakes all really ran from his forgetfulness in respect of the conversation that he had had with Mr Logan but they did not change the outcome for Madeleine Setchell. They did cause embarrassment for the Government. How do we rate that? 
Dr Prebble has been a senior public servant for many many years not just for this Government but for prior Governments. He has been the head of two of the most important Government departments: the State Services Commission and before that the Department of the Prime Minister and Cabinet— 
Hon Trevor Mallard 
: Deputy Secretary of the Treasury. 
Hon DAVID PARKER 
: It is hard to find a person who has had a more senior career. If the Government was to overreact here we would bring that career to an end. 
Dr Prebble has made it clear that if the Government has lost confidence in him he would go quietly—he would merely resign. The view of the Government and my view is that that would be an overreaction and disproportionate to what has happened. There is no suggestion of dishonesty on the part of Dr Prebble. His was a sin of omission. It was not deliberate; he forgot. As Mr Hunn said in his report Murphy’s Law was rife. When these things started to go wrong they went wrong when people were in different parts of the world at times where cellphone coverage was poor. The events multiplied because different mistakes were made by different people. The situation does not reflect well on Dr Prebble and he knows that. He has had to face up to public scrutiny and public criticism. I for one think it would be wrong to let his career end on that note. I have confidence in his ability to continue to serve his country as he has done for decades to date. 
In terms of the outcome for Mr Logan that is of course not a matter for Ministers; it is for the State Services Commissioner—and I am sure he has decided on that after taking advice from senior colleagues within the commission. 
I think that this inquiry shows that New Zealand has an open and a transparent attitude towards the Public Service. Both the Government and the Opposition which I think is sincere believe that the Public Service should be beyond reproach and not politicised. It is clear that the Hunn report quite explicitly says nothing that any of the Ministers or Ministers’ offices did went beyond what has been an historical norm. They did nothing wrong. Mistakes were made within the State sector and various steps have been laid out by the State Services Commission to make sure that those errors are not repeated. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 It is not my intention to take a long call because the Minister in particular has outlined the details behind this issue which has become known as the Madeleine Setchell case. Let me say from the outset that Madeleine Setchell has committed no offence whatsoever in our view at all. She is totally innocent. She was upfront at the very beginning apparently and she behaved impeccably. I have no doubt that she offered the Minister at that particular time all the competencies she possessed. 
New Zealand First does not have the view at all that she is in any way in error. But having said that our general view is that we can understand why a Minister—particularly the one involved—would not want to employ somebody or see somebody engaged in his or her office who had a relationship with somebody in the office of the Leader of the Opposition. We can understand that. So the mistakes in our view are twofold. The first is around the employment of Madeleine Setchell. We believe that that could have and should have been handled a lot better. The second is the way in which she was dispensed with. That could have and should have been handled a lot better. 
There have been a lot of losers in this case. The Minister has resigned. He has lost his ministerial warrant and he is likely to lose his career as an MP. Madeleine Setchell herself lost her job. I have no doubt that it reflects very hard on her. New Zealand First would like to wish her well and in the fullness of time I am hopeful that she will put this whole thing behind her. 
Hugh Logan has been found wanting to put it in a nutshell. Apparently he is to lose his performance bonus which represents something like 15 percent of his salary. Dr Prebble the State Services Commissioner also feels as though he has let the side down. I believe he has intimated that if the Government were so inclined he would resign completely. I agree with the Minister David Parker that that would be unnecessary and unfair. But unquestionably Dr Prebble is feeling as though he has let the side down a little bit. The aim of the game must be for the Government and those who represent it who employ people to do it properly—to do it professionally fairly and in a reasonable manner. If they are to dispense with people they should equally do that reasonably fairly and compassionately. 
I do not think there is anything more that New Zealand First wants to add to this debate. We wish that the matter had not occurred but we are hopeful that the Government and the Public Service people— 
Gerry Brownlee 
: What do you think about Dr Prebble? 
PETER BROWN 
: I have already addressed that issue. The member should stay awake from time to time. We think that this whole issue is a sorry state of affairs. We hope that the Government has learnt the lessons when it comes to employing people and more important dispensing with them. 
METIRIA TUREI (Green) 
: 
 I raise a point of order Madam Speaker. The Green Party certainly intends to make a contribution to this debate but as often happens with debates such as this our contributor is running just a few minutes late. We are quite happy if another speaker wants to take the opportunity to speak in the meantime and we will take our time as we can. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The speaking slots are pre-allocated but there is no reason why members cannot change position. [ 
Interruption 
] There is no reason why not; it often happens. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 It is a question of following the right process here Madam Assistant Speaker. There is a pre-allocated order that we stick to. It has the effect that those members who are at number 10 on the list have to wait around for an hour and a half listening to excellent speeches before they can give theirs. There are two ways of changing that. One is by arrangement between the whips and that has not happened as far as I am aware. The second way is by leave and that has not been sought as far as I am aware. So we will either stick to the processes around these allocated spots or have a free-for-all again in the general debate—one way or another. 
The ASSISTANT SPEAKER (Ann Hartley) 
: It is usually a fairly amicable negotiation Mr English. It is often signalled by the whips. 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 I just inform the House that the Maori Party will not be taking a call in this debate. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Thank you for that. Obviously all parties are entitled to speak. New Zealand First has spoken. The Maori Party is not going to speak. United Future and ACT are not here. The Greens have indicated that they wish to speak and National and Labour have one more speech each. 
Hon MURRAY McCULLY (National—East Coast Bays) 
: 
 I raise a point of order Madam Speaker. My point of order follows the ruling that you have just given. I have the sheet in front of me. We have just heard from New Zealand First. The arrangement according to the schedule is that the Greens should have 10 minutes followed by the Maori Party for 10 minutes United Future for 5 minutes and ACT for 5 minutes before we get back to National and Labour which have 10 minutes each. I seek your clarification on whether it is open to another party to seek the call and have that speaking slot should the Maori Party as has been indicated not wish to take its speaking slot. For example although I am not allowed to refer to members not being in the Chamber I will say that I cannot see any ACT members right now. I seek your clarification as to whether members from other parties can seek to take up that slot notwithstanding the arrangement that is on the schedule. 
The ASSISTANT SPEAKER (Ann Hartley) 
: We will just check that out Mr McCully. I will read from Appendix A of the Standing Orders “Debate on motion to take note of matter of urgent public importance”. The mover and the next speaker have 15 minutes each and the subsequent six speakers have 10 minutes each. So it is down to the members. I just need to check on whether those speaking slots can be transferred as the member asked. I have been advised that the allocation is a guideline so in that circumstance I cannot see any reason why another speaker cannot take a call. Did the member wish to speak? 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 I will take the call. It does seem odd to be spending time in Parliament avoiding the opportunity to speak although I would recommend it to some members.  
The question that the Government needs to ask itself today is why no one believes what the Government says about the Setchell affair. What has the Government said? Well the Minister of State Services showed himself to be totally unsuitable for the job that he has which is to develop the capacity of the State sector and to protect it from misguided political influence when he said today in the House that nothing that any of the Ministers did was wrong. If that is the case why did one of them get sacked? He said that nothing that any of the Ministers did was wrong. The politician in this House whom we are all meant to rely on as the guardian of the Public Service picked up the reports—there are two of them—read them through and came to the conclusion that nothing that any of Ministers did was wrong. That is absolutely unbelievable. Not only did Ministers do something wrong once but the reports reveal that two different Ministers did it; it happened twice. 
Then the Minister moved on to the perfect excuse that the Labour Party has dreamt up: it was the officials. We had a discussion in the select committee this morning with the Department of the Prime Minister and Cabinet. My colleague Lockwood Smith mused over the rather startling fact that the Government believes that all its major political problems and there have been many through this term occurred because of officials. 
Hon Trevor Mallard 
: Not all of them. 
Hon BILL ENGLISH 
: Yes that is right. But the rest of them with the exception of Mr Mallard’s problem occurred because of the officials and again that is what has happened today. The Minister of State Services said that nothing that any of the Ministers did was wrong that mistakes were made in the State sector and that the State Services Commission would make sure that those mistakes would not happen again. 
Let us look at what did go wrong because there is a larger question of culture that the Government has to answer. It is summed up in this question: why did the chief executive of the Ministry of Agriculture and Forestry a very experienced public servant consult his Minister before he appointed Ms Setchell? Why did he do it? The Minister of State Services should have explained that to us today. I will tell members why he did it. 
Hon Member 
: He made a mistake. 
Hon BILL ENGLISH 
: Oh it is because he made a mistake! No actually he did not. He acted in a way that was totally consistent with the culture that Labour has created around the Public Service which is “Don’t do something a Minister doesn’t want or you’ll get dealt to.” It is not just a no-surprises policy; it is a “guarantee of retribution” policy. 
So a senior public servant Murray Sherwin who has served in a range of public agencies over many years would know better than almost anyone else in the Public Service about what happens in a Public Service under pressure and he decided that he would go to his Minister before he made a staff appointment. What is even worse is that that Minister who said: “No don’t employ that person.” for purely political reasons was one of the most vigorous defenders of David Benson-Pope in this House. He knew that he had done worse than David Benson-Pope because he was consulted in such a clear manner and the email record shows he gave an unequivocal response which was then acted on in a way that was even sneakier than trying to sack an existing public servant. He is the Minister Jim Anderton who got up in this House and defended David Benson-Pope most strongly. 
Two other Ministers did things that were wrong: the Prime Minister and the Minister of Finance. They should have been here today apologising to Ms Setchell. It was they who said in public that she did not properly reveal her conflict of interest. This report shows absolutely without doubt that she did. The Minister of State Services has confirmed that. He said that she had acted properly. Don Hunn said it and Mr Prebble said it. Dr Cullen and Helen Clark are on record in public as accusing this innocent member of the New Zealand public of having a lack of integrity. They should apologise for it. 
In fact the integrity of this person is at the nub of the problems in the State sector. She made the mistake of insisting on her integrity. Is that not a big problem? That is the biggest mistake that was made. She said to her employer to the Public Service: “You must record that I acted with integrity.” The Public Service under Labour would not do it and still has not done it. It refuses to. It said: “No here’s the money. Go away.” That is the consistency—Michael Cullen and Helen Clark in public nailing an innocent public servant for not having the integrity to declare her conflict of interest. Public servants felt so compelled by this rotten atmosphere that Labour has created in the Public Service that they would not concede Ms Setchell the one thing she was left with: her integrity. She lost her job. She lost her opportunity to ever be employed in the Public Service. She wanted to walk away with something that does not cost a politician to recognise and they would not do it. There has been no apology from the leaders of the Labour Government who impugned her and no recognition from the Public Service which would not even bring itself to record it on a piece of paper as requested. 
This is all part of a culture that led to another public servant Hugh Logan realising just what challenges he had ahead of him. He discovered after Ms Setchell had been appointed that his department was going to be catapulted into the political front line. It is no wonder he was concerned. He knew that that meant he and his department were going to get the continuous attention of the biggest political bully in Cabinet apart from Trevor Mallard and that is David Benson-Pope—and both of them have suffered the consequences of this—as well as the Prime Minister’s office. He was going to be expected to run right through election year on the most political issue the Government had and that was sustainability. In my view he panicked. He knew he would get a bollocking from the top of the Government to the bottom if he did not get rid of Ms Setchell. Did the Prime Minister’s office ring and tell him to do it? No. It is worse than that. He knew he had to do it. That is what I mean by the culture. 
It is not the actual events on which Mr Prebble tries to hang his hat; it is the culture within which he and other Ministers are operating where they do not understand how off-track they have become. They do not understand it as was summed up by the Minister of State Services the person who should know best when he said that no Ministers had done anything wrong. 
Hon David Cunliffe 
: There was no crime committed. 
Hon BILL ENGLISH 
: Oh that is the standard—fantastic; another Cunliffean moment! They did nothing wrong because no crime was committed! Have we not heard that before from Helen Clark? Her standard is whether an action is criminal—not whether it is right not whether it is respectful not whether it values people’s integrity and not whether it reflects the conventions of the constitution of New Zealand but whether it is criminal. And who better to articulate it than “Wonder Boy” on the front bench newly finding his straps in another Cunliffean moment? Well that sums it up: one of the bright stars said that nothing wrong had happened and the other bright star said that it was not criminal. That beautifully sums up the Labour attitude; it beautifully sums up why these simple events spiralled out of control and they will dog Labour to its grave. 
KEITH LOCKE (Green) 
: 
 I will take a relatively brief call on behalf of the Green Party because I think this issue is fairly simple in its essence. We congratulate Mr Hunn on the report. I think that it has re-established the principle of a politically neutral Civil Service. That is particularly important on all sorts of levels. 
On the first level we do not want people discriminated against because of their political views. We have a politically diverse society one that is reflected in this House under MMP and we want to maintain that. We do not want anyone to feel that his or her career opportunities are in any way hindered by his or her political views. Our Government should encompass the range of political views that exists in this society. It makes it a more efficient Civil Service too because it means that the Government can draw on the full range of expertise in the community and not exclude a section of the community whose expertise because of those people’s political views would otherwise not be acceptable. Our Civil Service would be weaker if that were to be the case. 
A further element is that in any good Government situation it is actually an advantage to have a range of political advice. In some ways although people’s advice might be politically coloured to some extent however much they try to take it out different ways of looking at things within our Civil Service lead to better decision-making. The Government of the day can take the political advice or leave it and having a certain range there is important. 
Although political advice might be politically coloured to some extent I think we have to accept that people can be very professional in separating their obvious political bias and even their actual political bias from the expert advice they give to Ministers and from the role they play in the Civil Service. We have all sorts of examples of that and some Ministers have said that after several years they still do not quite know the political leanings of the people giving them advice. I think it shows the effectiveness of a professional Civil Service that one can read a report or listen to advice but say that the adviser is very professional has taken the criteria that have been laid down and has given the best advice under those criteria. 
The other reason why the Green Party is supportive of re-establishing a politically neutral Civil Service is that to not have such a service is disruptive of community and personal relations. This is particularly true in a relatively small city like Wellington where people tend to know other people and where the career paths of people in a particular family or within a particular bed are often quite disparate. One member of the family or one partner cannot be damned with the politics or the career path of another. We have to trust people. If we do not have that basic trust then we are going down a very difficult track. 
One of the things that makes our political system quite good and quite healthy—and I have noticed that in some ways it is true of smaller nations smaller societies be it New Zealand Ireland Norway or other Scandinavian countries—is the small scale of our country our society our political system and our cities. In some ways there is an advantage as there is a social and political mixing that helps us to reach a sort of consensus as a society and helps us to move forward politically. Having those clear rules about having a politically neutral Civil Service actually assists that because even the most dyed-in-the-wool conservative often comes up in his or her social life against people with quite radical views of the left against radical Greens or against whomever else. 
That debate is not only in this Parliament but also outside Parliament in every party in every sports club and so on and that is good. We do not want people saying they do not want to go to a particular party because that will affect their career path or that they do not want to mix with a particular sort of person because that will affect their career path. They may say that they do not want to go out on a date with a particular man or woman because that might affect their career path. So if we do not have a politically neutral Civil Service it is disruptive of our society and disruptive of people’s lives in general. 
This issue does relate to the current events around the alleged terrorism raids etc. but I have great confidence that we can move through this because we have social networks and we have ways of engaging between communities. I saw some of the younger Tuhoe people outside here today and clearly they were quite angry. That matter is related to the topic at hand; we have a society in which political views can engage where the community has goodwill. Within that framework of goodwill we can allow people with a whole range of political views to take up a whole range of Government positions in a politically neutral way and we can accept their professionalism. 
The Green Party is very pleased that the Hunn report has established that the State Services Commissioner and the chief executive of the Ministry for the Environment have both accepted some fault in this matter. We have been put back on the right track with the assistance of Mr Hunn. Thank you. 
Hon TREVOR MALLARD (Minister for the Environment) 
: 
 I do not think I need to take the full 10 minutes but there are some things that need rehearsing. I regret deeply the comments made by Gerry Brownlee in particular in regard to the State Services Commissioner. There has been a tradition in this House of working with the commissioner and of not politicising that role in the way that Mr Brownlee did. I will get back to that later on. 
I join with the Prime Minister at question time and the Minister of State Services earlier in this debate in putting on the record of this House that Madeleine Setchell acted appropriately. It is now shown by these reports that she acted with integrity; she made the declaration that was appropriate. There was a very bad failure within the Ministry for the Environment of that declaration not being escalated to the notice of the chief executive at the beginning of the process. That is one of a series of errors that occurred which led to what I think is a very unfortunate situation indeed. 
That was then followed by a questionable decision—in fact an incorrect decision—on the part of the chief executive of the Ministry for the Environment in not giving serious enough consideration to the views expressed to him by the State Services Commissioner. I have no doubt that there was an ability to manage that relationship within the original position. Such situations happen regularly within the Public Service and within the broader State sector within New Zealand. One of the results of being a relatively small society is that we develop methods of handling this sort of issue. A lot of it relies on the integrity of the individuals and my view on this is that in a New Zealand situation one trusts people until there is evidence that they have acted inappropriately. That with the proper systems set up would have been the proper approach to have taken originally with Madeleine Setchell in this process. So I think that was unfortunate. 
I think the decision not to give to her the written assurance and the comments to her team that she sought was a further mistake because she had acted properly. Probably excessive regard was being given to legal advice around Employment Court consequences. I think it is proper to treat people well to start with even if that might mean a disadvantage later in the process. Even when the process was over the Hunn report shows that a written declaration that should have been made was not made and I think that was wrong. 
I want to place on the record of the House that I was the person who chaired the panel that appointed Dr Prebble as State Services Commissioner. Dr Prebble is someone who has had a long-term career within the Public Service. He has been in all three senior roles in all three of the central agencies. He is someone who knows probably better than anyone how to manage relationships where there is a political aspect to them. We should remember the fact that his brother was a high-profile Cabinet Minister member of Parliament and party leader for a period of time. If anyone knows how to give advice on managing this sort of conflict then Dr Prebble is that person. 
I also want to place on record that there are a lot of views Dr Prebble has that I disagree with. He is a person who is not afraid to test Ministers—and I was his Minister—and to argue to push and to discuss things. But in the end when a decision is made Dr Prebble is someone who implements it and he does so in a proper and very professional way. He made a mistake. It is a mistake that is part of a chain that had no effect on Madeleine Setchell and that is clear. His forgetting the conversation actually ended up having no effect on the decision that Hugh Logan made with regard to Madeleine Setchell. It might have had some effect on reputation and the way the thing was handled afterwards and I accept that but the core decision—Dr Prebble’s memory lapse—did not. 
I ask members opposite whether they have ever had a memory lapse. Have they ever made a mistake? Have they ever not done something they should have done? Of course we all make mistakes. We all do. Generally they are not quite as public as the mistake Dr Prebble made on this occasion. He has effectively fined himself; he has given some money back. He cannot cut his own salary because that is something that the Remuneration Authority decides and that is something he will face up to next time he comes in front of the authority I am sure in terms of changing the curve. But he has done what I think is an honourable thing: he has written out a cheque—my guess on the maths makes it somewhere around $10000—and paid it back. If members opposite were fined $10000 every time they made a mistake then the Government coffers would be well filled. The surplus would be doubled probably. 
The next point I make which I think is an important one is to acknowledge the fact that Don Hunn has done a very thorough job in this process. I want to make it clear that the decision to involve Don Hunn in the report was the decision of Dr Prebble. 
Hon Murray McCully 
: It was the Prime Minister twisting his arm. 
Hon TREVOR MALLARD 
: Well there is no doubt the Government’s view was that it was important there be an independent look at Dr Prebble’s action and that has occurred. Don Hunn is someone who also has had a very good reputation long term. He was the first of what we might call the modern State Services Commissioners in the middle 1980s and I think he has done a very thorough job. 
I finish as I started by saying that it is very unfortunate that Madeleine Setchell has been caught up in a series of errors. It is my view that her employment could have been managed in a way that was appropriate and that her reputation has not been enhanced by this performance and I regret that very much. 
Hon MURRAY McCULLY (National—East Coast Bays) 
: 
 I will start by agreeing with a couple of things that have been said by members opposite in this debate. First of all I agree in large measure with Mr Mallard’s analysis about what should have happened in the management of Ms Setchell’s employment relationship. His was a constructive analysis of the situation. I also agree with the Minister of State Services who asserted to the House that one does not go lightly trashing careers of considerable length and distinction in the Public Service. The further thing I agree with is the positive comments that have been made about Don Hunn. I have a longstanding relationship with him in terms of working with him and I certainly respect him. I think his factual analysis provided as part of this report is useful. 
But it is at about that point that I part company with members opposite. I do so because I sat in on the Government Administration Committee this morning without having had the opportunity to read either the Prebble report or the Hunn report but having had the opportunity only to skim both. I want to share with Mr Mallard and other members of the House the problem that members on this side genuinely have—and I emphasise the word “genuinely”—in dealing with our view of Dr Prebble in these circumstances. I think I could best summarise it by saying that I welcome the Hunn report but that my first beef with the Prebble report is that it does not start off with the words “Once upon a time”. The reason is that finding any relationship between the report drafted by Dr Prebble and the facts as they are known to members on this side of the House is not easy. 
Let me start by taking members through the key features of Dr Prebble’s findings. First Dr Prebble asks us to believe that Mr Logan chief executive of the Ministry for the Environment despite having been told in words of one syllable by his Minister Mr Benson-Pope that he would not accept Ms Setchell in his office and would not be able to work with her had no regard for that exchange when he decided completely independently to disengage her from her employment with the Ministry for the Environment. We are asked to believe that somehow what Mr Benson-Pope did had no bearing on Mr Logan’s independent decision and that is a stretch. Then we are supposed to believe that Mr Hurring who was employed in the office of Mr Benson-Pope and who is an associate of Mr Mallard’s—he has been to the “Trevor Mallard School of Charm and Etiquette”—in his dealings with the Ministry for the Environment had no influence over the decision that Mr Logan made. That is an even bigger stretch. 
Then we find out that there had been an application by Ms Setchell—and I did not know this until I read the report—for a job at the Ministry of Agriculture and Forestry. We are told that the chief executive of the Ministry of Agriculture and Forestry independently and quite unrelated to any exchange he had with Mr Anderton as Minister decided not to employ Ms Setchell in that ministry. That is a bit of a stretch. Then we find that the Ministry of Education did not even bother to reply to her application. So it is a coincidence that Mr Benson-Pope had some stern conversations with Mr Logan and then Mr Logan decided to disengage Ms Setchell. It is a coincidence that Mr Hurring has some Mallard-like exchanges with Mr Logan and then Mr Logan dispenses with Ms Setchell’s services. It is another coincidence that Mr Anderton has an exchange with his chief executive and then that chief executive coincidentally decides not to employ Ms Setchell. Then we find that all of these coincidences come together in a form called the Prebble report. Members on this side of the House have very great difficulty in accepting that at face value. 
I sat on the select committee this morning and I asked Dr Prebble this question point blank. I said to him: “Can you assure me that you believe that if Ms Setchell applies today for a senior communications role in a Government department she has as good a chance as any other similarly qualified person of landing that job?”. He assured me that he believed that. I do not know anybody else from the National side who believed that. I did not see anybody from in the assembled press gallery who believed it. 
That is the fundamental problem we have—that Dr Prebble is telling us that Mr Logan made a decision without any influence from Mr Benson-Pope and we do not believe that. Dr Prebble is telling us that the persuasion exerted by Mr Hurring did not have any influence over the decision to disengage Ms Setchell. We do not believe that. Dr Prebble is asking us to believe that the role at the Ministry of Agriculture and Forestry was denied Ms Setchell for reasons that have nothing to do with Mr Anderton’s discussion with the chief executive of that ministry and we do not believe that. We have been asked to believe that the application for a job at the Ministry of Education was unsuccessful for no reason related to Ms Setchell’s relationships with people connected to this side of the House and we do not believe that either. 
Neither do we believe that when Dr Prebble wrote an article telling New Zealanders that Mr Benson-Pope had nothing to do with the decision of Mr Logan to disengage Ms Setchell that was anything other than an attempt to mislead New Zealanders. When I put it to Dr Prebble this morning that New Zealanders would have felt misled by that statement more misled by his failure to correct it and even more misled when it occurred to people that it was an enormously convenient thing for the Government that had happened here Dr Prebble had no adequate response other than to point to the amnesia that seems to be increasingly afflicting his work. I say to members opposite that that will cause members on this side of the House to read both reports very carefully and to have some very careful discussions. We are mindful of the statement made by the Minister of State Services today that one does not lightly go around trashing longstanding and distinguished careers. But we have these profound problems and having listened to the explanations and finding ourselves unable to accept them we then have to ask ourselves whether we can have confidence in this man as the chief executive of the State Services Commission and the most senior public servant in our land. 
We are not impressed to find that Dr Prebble is then to mete out his punishment to himself having acted as his own judge and jury. He invited in a few of his chief executives and said: “Guys I want you to ignore for a minute the fact that I’m your boss. I want you to put aside the fact that I’m going to do your performance review. I want you to put aside the fact that I’m going to decide whether you’re going to get a bonus this year and I want you to ignore the fact that I’m going to decide whether you get reappointed. And I want you to tell me what sort of punishment you think I should give myself in these circumstances.” They said 2.5 percent of his salary. On his salary that is somewhat more than members on this side of the House would regard as adequate! 
I say that in these circumstances we will reflect carefully on these reports. We will read them carefully and ask ourselves in a deliberate way whether we have confidence in Dr Prebble as a result of these two reports today. I say to members opposite that Dr Prebble has made it enormously difficult for members on this side of the House to be able to answer that question in the affirmative. 
The debate having concluded the motion lapsed.