English Bill: Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
English Bill: Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
[Volume:646;Page:14983] 
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.