English Bill: Urgent Debates — Te Wananga o Aotearoa—Auditor-General’s Report 
English Bill: Urgent Debates — Te Wananga o Aotearoa—Auditor-General’s Report 
[Volume:628;Page:543] 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. Today the Government backed down on its decision to sack the council of the wananga. There can be no other interpretation of Dr Cullen’s public statement. I might just give the House a little bit of history so it understands just how far Dr Cullen has backed down. As early as April 2002 the Government was aware of significant issues at the wananga. There was a long difficult and sad history of officials knowing exactly what was going on at the wananga but doing nothing about it. Then it came to election year. But back in 2002 the Government had appointed a development adviser to the wananga. That person was Mr Graeme McNally. He earned $127000 in fees and was meant to be overseeing improvements in governance and financial management at the wananga. 
John Key 
: Over what period? 
Hon BILL ENGLISH 
: Over a long period because there was plenty to do. Of course he became frustrated. No one particularly Ministers seemed to be taking any notice of him and therefore a box of incriminating material turned up in Ken Shirley’s office—a member who has now left Parliament.  
Hon Trevor Mallard 
: Are you accusing him of doing that? Go and do that outside Parliament! 
Hon BILL ENGLISH 
: A box of material turned up—[ 
Interruption 
] Well the Minister feels very anxious about the issue. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I ask the member interjecting to stand withdraw and apologise. He cannot insinuate that the member is a liar. 
Hon Trevor Mallard 
: I withdraw and apologise. 
Hon BILL ENGLISH 
: Trevor Mallard feels very sensitive about this issue because he was the Minister of Education for 6 years and in that time he oversaw the growth of the wananga from fewer than 1000 equivalent full-time students when National left office to 35000 at its peak. Trevor Mallard wrote out every cheque. He ticked off every Cabinet decision every year. He was chief banker for the wananga.  
John Key 
: How much was involved? 
Hon BILL ENGLISH 
: Over that 5-year period I am guessing well over $600 million was paid to the wananga by Dr Cullen and Trevor Mallard.  
John Key 
: What a disgrace! 
Hon BILL ENGLISH 
: It was a disgrace. What did he do about it? Well he did nothing until February 2005. [ 
Interruption 
] I would laugh at the member’s efforts too if I were him. 
In 2005 this Parliament saw that box of incriminating material from the wananga and Mr Mallard decided he should do something. He figured out that in election year he had better look like he was kicking the wananga pretty hard. The Government’s strategy was to make as much noise as possible in the run-up to the election then after the election back off. That is what has happened today. I can tell the public of New Zealand that if there were to be an election in a month’s time the wananga council would have been sacked today on the basis of this damning report from the Auditor-General. 
In June 2005 Mr Mallard wrote to the chair of the council: “Notice of preliminary decision to appoint a commissioner”. The letter stated that he had “formed the preliminary view that the council should be dissolved and a commissioner appointed in its place”. So he had decided to sack the council. It was a preliminary view whereby the council was given a bit of time to come back and plead its case—by Monday 11 July a couple of weeks after he wrote the letter. As I recall that letter received quite a lot of publicity. In fact it got the Minister off the hook; he had been under a fair bit of pressure over what was going on with the wananga. 
He was thorough: there were six criteria in the statute that had to be met in order for the council to be sacked. It is my guess that because the Minister is reasonably thorough—about some things but not about the wananga—he sought legal advice. He went through and made sure the council met all the criteria and it turned out it did. He made it clear that the viability of the institution as a going concern was the main serious risk. So there we were—the wananga council had a decision from the Minister that it was going to be sacked and it had 2 weeks to respond. Well after 2 weeks it was given an extension because by that time Labour had figured out how much damage that was doing to its Maori support and all the people who supported the wananga were going to support the Maori Party. So Trevor Mallard decided he needed to back off. 
What excuse did he come up with? Well here it is! Mr Mallard on 21 September about 7 weeks after the deadline was meant to have expired said: “I am waiting for the report from the Auditor-General.” He had not moved to sack the council because he did not have the report of the Auditor-General’s investigation. He said: “I am still waiting for information. I have said it was my intention to decide before the election.” Well he did not do that because he knew that the Maori Party would have won seven seats if he had fired the council. So it was a pretty delicate balancing act. He had to get the Pakeha electorate assured that he was going to kick the Maoris hard enough but not kick them so hard that they would all go and vote for the Maori Party. He was kind of half right. But he has left the Government with a very difficult problem today. Of course he thinks it does not matter because in his own cynical way it does not matter. He did say he was going to sack the council. He said he was going to wait for the Auditor-General’s report. Well ladies and gentlemen today we have the Auditor-General’s report.  
It states that the wananga is “operating according to procedures that are not fit for a public entity.” It outlines unidentified and badly managed conflicts of interest; lack of procedure around large-scale financial decisions such as multimillion dollar purchases of assets; and problems with the credit cards of senior management which go into tens of thousands of dollars. I have had a look through that report to see whether there is anything at all that means there is less reason to sack the council. 
John Key 
: Is there? 
Hon BILL ENGLISH 
: No there are a great deal many more reasons to sack the council and put in a commissioner. 
So what is the hold-up? That is the question Dr Cullen has to answer today. Why has the Government backed down on a well-documented process where it said it would sack the council; where it also said— 
Hon Trevor Mallard 
: You’re just thick. 
Hon BILL ENGLISH 
: Ah so we are thick! We do not understand! That is a bit like David Benson-Pope’s staff member—he did not understand that if he did what the Minister told him he would get sacked. He did not understand that. Well I tell Dr Cullen that we do understand and we want him to tell the House why he has backed down. I suspect there is some deal in the background and it probably goes like this: if the new council sacks Rongo Wetere then the Minister will leave the council in place. I think that is probably the deal. 
When the Minister gets a chance to speak I want him to tell the House which of six criteria do not now apply. The wananga met six criteria—it met every one of them—for getting the council sacked. If we believe Dr Cullen today the Auditor-General’s report tells us that that is no longer the case that somehow the wananga is in a better condition than it was. 
Well if that is the case then the Auditor-General’s report is I suppose Dr Cullen would say completely out of date. Is that what he will tell the House—that the Auditor-General’s report has nothing to do with what is happening in the wananga? Yes I think that is what he will get up and say. He will say that 5 years of massive growth financial mismanagement and deals for family members have all been cleaned up in the last couple of months that they have all gone—there are now no concerns at all. Well it is possible he might believe that because he has believed everything that officials told him over the last 5 years when they kept saying: “We have to tread softly here. We have to take our time. We have to take it easy.” What did happen over that time is that Trevor Mallard and Steve Maharey had over 50 briefings on the problems at Te Wananga o Aotearoa including 2003 weekly briefings in 2003. 
John Key 
: What did they learn? 
Hon BILL ENGLISH 
: That is a question Dr Cullen could give us the answer to. When we read the Auditor-General’s report we see it says a whole lot of things that are in a report that was given to the Government in 2002. 
John Key 
: That can’t be right. 
Hon BILL ENGLISH 
: It can’t be right? Well it is right. The same statements about arrangements with family members financial mismanagement and difficulties with governance are in a report dated April 2002. It was not in late 2002 but in April 2002. 
This is where we come to the issue of accountability. Who is going to be accountable for the 6 years during which the Labour Government poured hundreds of millions of dollars into this institution knowing that that public money was being badly managed? They knew in April 2002. There is nothing new in the Auditor-General’s report. All the same things that are being said now were said then. Hundreds of public officials saw the arrangements among the family members. 
John Key 
: Didn’t like it. 
Hon BILL ENGLISH 
: I do not know whether they liked it. Maybe they reported to Ministers; maybe they did not. If they did report to Ministers what did the Ministers do about it? If as recently as June 2005 the Auditor-General was still able to report one of those spaghetti diagrams that shows everyone in business with everyone else and they are all related then Dr Cullen when he gets up in this House should tell us who will be held accountable. Is it the Ministers? Is it the officials? Is it him? Is it Shane Jones who sat on the audit and finance committee of the wananga for a couple of years? Mr Shane Jones is the man they brought in to tidy it up. He knows all about it. So why do they not let him get up and speak? Why does he not explain the fees that he collected to oversee what the Auditor-General has described as “an organisation with procedures not fit to be a public entity.”? So the burden of accountability falls heavily on the front row today: Dr Cullen who has backed down today by not sacking the council; Trevor Mallard who wrote out every cheque for hundreds of millions of dollars knowing where that taxpayers’ money was going; and Shane Jones who was brought in to clean it up and by all accounts probably made it worse according to the Auditor-General’s report. I look forward to hearing three fine speeches from them saying: “We were responsible.” because it is the Labour Cabinet that is responsible.