Ryall Tony: Questions for Oral Answer — Questions to Ministers 
Ryall Tony: Questions for Oral Answer — Questions to Ministers 
[Volume:640;Page:10457] 
3.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: Why did he say regarding the conflict of interest allegations at the Hawke’s Bay District Health Board that “I feel anxious about troubling the Auditor-General over something which is almost nothing.” and is he confident that the investigation headed by Syd Bradley who was appointed to chair the Canterbury District Health Board by the Hon Annette King with whom he reportedly has a “strong relationship” has the powers to appropriately investigate these matters? 
Hon PETE HODGSON (Minister of Health) 
: 
 The Auditor-General can decide whether to investigate something when invited to by me by any member of this House or by any other person or he can decide to do so on his own volition. As I said yesterday the audit committee of the Hawke’s Bay District Health Board has already investigated conflict of interest issues surrounding Mr Hausmann. But at Mr Hausmann’s request to me I asked the Director-General of Health to arrange a further review of the same issues. My best guess is that the review will come to similar findings as did the audit committee. But the terms of reference are wide so that any stone that might need turning can be turned. If the Auditor-General wants to involve himself he will. So far he has chosen not to beyond the usual audit cycle. 
Hon Tony Ryall 
: How can the public have any confidence that an inquiry headed by Mr Syd Bradley who was appointed by Annette King who appears to be involved in some of the complaints that have been made publicly about this matter can provide a full and fair inquiry? 
Hon PETE HODGSON 
: If my memory serves me correctly I can say that Mr Bradley was first appointed to health positions by a National Government. However matters have shifted and Mr Bradley has written to the director-general earlier this week to say that because of changed personal circumstances he is obliged to withdraw. The director-general has appointed Mr Ian Wilson chair of the MidCentral District Health Board as the new chair of the review and a press statement to this effect either has been released or soon will be. I can say that the review team has or is about to have today its first meeting. 
Maryan Street 
: Are the conflict of interest provisions in the law sufficient or is the Minister considering an upgrade? 
Hon PETE HODGSON 
: The ministry advice is rather strong and it is that the law as it stands is robust. However it has one obvious weak link which is that it requires honesty on behalf of board members. Mr Hausmann’s declaration of interest is to my knowledge complete. Dr Bierre’s was not and as a result a contract worth many many hundreds of millions of dollars came tumbling down. 
Hon Tony Ryall 
: So is the Minister confirming in the House today that the Government’s hand-picked appointee Syd Bradley has thrown in the towel on this inquiry and that the public will be expected to rely on an inquiry of another appointee of the Minister of Health; and is he actually admitting that even one of the Government’s favourites can smell the stench of cronyism around the sham inquiry that this Government has set up? 
Hon PETE HODGSON 
: The facts of the matter are a little more tame. Mr Bradley was not chosen by me. He agreed to head this inquiry when approached by the director-general—not by me nor on my advice—last week. 
Hon Bill English 
: He was in your office that day. 
Hon PETE HODGSON 
: Last week— 
Hon Bill English 
: Yes he went to your office. 
Hon PETE HODGSON 
: He did not— 
Madam SPEAKER 
: Please be seated. The Minister was asked a question; he is attempting to answer it. If there are to be other questions they can be asked when there is a supplementary question not during the answer to a question. 
Hon PETE HODGSON 
: Last week the director-general announced that Mr Bradley would head the review team. This week Mr Bradley advised the director-general that because of changed circumstances to do with overseas travel he was unable to. Therefore the director-general approached Mr Wilson. Mr Wilson agreed and his appointment has been or will be announced and the first meeting of the review team has been under way earlier today or will be under way later today—I am not sure. 
Hon Bill English 
: Without a chairman. 
Hon PETE HODGSON 
: No with a chairman. 
Hon Bill English 
: Which one? 
Hon PETE HODGSON 
: Ian Wilson. 
Madam SPEAKER 
: Is that a supplementary question? I want the House to settle before I call the next supplementary question. 
Hon Tony Ryall 
: How can the Minister say there is nothing wrong here when these emails show that the chief executive of the Hawke’s Bay’s District Health Board asked for a confidential copy of a $50 million tender proposal to be sent to Mr Hausmann 2½ months before any other tenderer got to see the documents and while Mr Hausmann’s appointment to the district health board was being fast-tracked by the Government? 
Hon PETE HODGSON 
: The issues that the member raises—and he scrapes with all the conspiratorial intentions that we would expect of a hollow man—were looked at in the first instance by the audit committee of the very board that Mr Hausmann— 
Hon Bill English 
: They abandoned the contract. 
Hon PETE HODGSON 
: They did dump the contract and they did find also that Mr Hausmann had not been particularly advantaged by it. However Mr Hausmann concerned that the allegations continued to simmer wrote to me saying that he would like a further review and I decided that he should have one. 
Hon Tony Ryall 
: Will the Minister explain this email of 10 May 2005 from the executive assistant of the district health board’s chief executive Chris Clarke sent to a senior manager at the district health board: “Chris has asked if you could send Peter Hausmann a copy of the RFP for community services pointing out that it is confidential.”; why would the chief executive officer be sending an advance copy of a commercially sensitive document to a bidder 2½ months before the tender was publicly notified and when that chief executive knew that that contractor was about to be appointed to his board? 
Hon PETE HODGSON 
: That is precisely the reason I presume that Mr Hausmann wrote to me asking that these matters be investigated afresh. Those are the sorts of simmering allegations that continue despite the fact that the audit committee of the Hawke’s Bay District Health Board looked at it around February-March 2006. It found that no particular advantage had accrued to Mr Hausmann and the contract was stopped. That is what a board does. That is its job if it thinks that there is anything unsafe about process. What has happened since is that the allegations against Mr Hausmann continue to simmer. He wants them cleared up. He asked me for a review. I asked the director-general whether he would arrange such a review and the review is under way. 
Heather Roy 
: Are there not strong parallels in process between Hawke’s Bay District Health Board’s conflict of interest situation with board member Peter Hausmann and that at Capital and Coast District Health Board where deputy chair Ken Douglas stood aside in March citing a conflict of interest; and is he confident that the process used by the previous Minister of Health to appoint Mr Hausmann was appropriate and that best practice was followed? 
Hon PETE HODGSON 
: In respect of the second part of the question yes and I explained why in some detail in the House. All of the papers concerning that gentleman’s appointment were released to the National Party 20 months ago. If National members opposite have lost them in the meantime I am happy to give them another copy but they should stay on top of the job. That is how long they have had them. In respect of the first part of the question the whole point of the conflict of interest legislation in this country is not so that people with a conflict of interest are never appointed to a board. By way of example nearly all of the members of the Auckland District Health Board have a conflict of interest. That is not the issue. The issue is how it is managed. Mr Hausmann’s conflict of interest formed part of the original Cabinet paper so the whole Cabinet knew that he was conflicted as indeed— 
Hon Dr Nick Smith 
: So the whole Cabinet knew? 
Hon PETE HODGSON 
: Well since we are saying that let me just say some more. Many if not most district health board appointees have a conflict of interest or a potential one including for example a member in National’s own ranks Jackie Blue when she was a member of the Auckland District Health Board. It is not the conflict that matters; it is being honest about it. 
Hon Tony Ryall 
: Is the Minister of Health telling Parliament today that Cabinet was aware that Mr Hausmann was commenting on the confidential draft tender documents for the $50 million community services that he declared that in his interview with the Ministry of Health and that it was advised to Cabinet that he was commenting on these commercially sensitive tender documents—is the Minister saying he knew? 
Hon PETE HODGSON 
: What Cabinet was advised of was that Mr Hausmann holds a position with a health provider—a significant health provider—and that that is an obvious conflict of interest. Cabinet was also advised that Mr Hausmann understood his obligations to manage that conflict of interest. 
Hon Tony Ryall 
: Is the Minister endorsing as acceptable that some 2½ months before the opening of a $50 million tender and at the same time as Annette King was fast-tracking Mr Hausmann’s appointment to the Hawke’s Bay District Health Board the Hawke’s Bay District Health Board boss a former personal assistant to Helen Clark was wanting to send an advance copy of the $50 million tender documents to Mr Hausmann and telling him to keep them confidential—can he not smell the stench of cronyism around this? 
Hon PETE HODGSON 
: As to the issue of the appointment can I just assure the House once more that Mr Hausmann’s appointment to the Hawke’s Bay District Health Board was unexceptional in every respect. In respect of the issue of the request for proposal that was disallowed by the audit committee in I think February or March of 2006 that is what a board’s job is—to look at any issues that might be unsafe and to come to a view about them. In respect of the last matter of why it is that these issues continue to recur Mr Hausmann wants to know the answer to that question which is why he asked me to put forward a review. The review by the way has terms of reference that are sufficiently broad that any matter can be investigated. 
Dr Jonathan Coleman 
: What do you think the public makes of all this cronyism when the district health board chief executive who just happens to be Helen Clark’s former assistant rorts a $50 million contract by giving his mate a copy of the documents— 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. The member has been here for some time and I think he should know by now that he should not ask you questions as he did. 
Madam SPEAKER 
: Yes I do remind the member who has been here a while that when he has plenty of time to think about his question he puts it—[ 
Interruption 
] Be seated while I am on my feet. That is also a rule in this House. When the Speaker stands members sit. I just ask the member please to rephrase his question consistent with the normal rules. 
Dr Jonathan Coleman 
: What does the Minister think the public would make of all this cronyism when the district health board chief executive who just happens to be Helen Clark’s former assistant rorts a $50 million contract by giving his mate a copy of the documents months before anyone else at the same time as the Minister of Health is fast-tracking the same mate on to the same district health board that is about to award the $50 million contract? 
Hon PETE HODGSON 
: The member has now in my view crossed a line and has started to impugn the integrity of very good servants of the New Zealand health system without a lot of evidence. There was no $50 million contract. This was a precursor to a request for proposals. The issue will be further examined by a quality review team. The results will be made available to the director-general; he will make them available to me and I will make them available to this House. We will wait for that; why do we not? 
Hon Tony Ryall 
: Does the Minister think it appropriate that a chief executive of a district health board should make available to one preferred bidder a copy of that request for proposal some 2½ months before it was made available to any other bidder and ask for comment on it; is that appropriate behaviour? 
Hon PETE HODGSON 
: I am sorry if I am sounding repetitive but these are the issues that will be or might well be subject to discussion by the review team. That is why we have the review team; they have been set up to look at the review. These things are usually managed by the Hawke’s Bay District Health Board or the district health board in question itself. In this instance however the district health board has looked at it and found no material advantage—or words to that effect—to Mr Hausmann but the rumours continue so we will have a fresh look. Members opposite can continue to rumour-monger and quote emails out of context for as long as they like but the fact of the matter is that it was a member of their own party in another district health board who was not honest and who brought down a multimillion-dollar contract. That is serious indeed. That is the worst thing that has happened in the history of the New Zealand health system as far as conflict of interest is concerned. 
Hon Tony Ryall 
: I seek leave to table three emails released under the Official Information Act relating to the chief executive’s instruction that a copy of the confidential request for proposal for— 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Hon Tony Ryall 
: I seek leave to table the media release from the Hawke’s Bay District Health Board advising the request for proposals called on 28 July 2½ months before— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Hon Dr Michael Cullen 
: Can I ask the Minister to confirm that the relationship between the chief executive of the district health board and the Prime Minister was when Mr Chris Clarke was I think a Treasury official working on secondment for Helen Clark in the 1980s? 
Hon PETE HODGSON 
: My memory is stretched but I do believe that it was around 1988 or 1989. It is also a matter of fact that Chris Clarke is not appointed by this Government. Chris Clarke is appointed by the board. Trying to get a linkage when there is as much distance as that between one set of people and another— 
Hon Tony Ryall 
: You are sensitive. 
Hon PETE HODGSON 
: I am not sensitive at all. I am very very open to the idea of a full inquiry and it was I who asked that the terms of reference be broad enough to cover all matters. They can cover all matters and the member needs to be just a little patient.