King Annette: Urgent Debates — Health Ministry—Financial Management of Building ProjectText is incorporated into the Bound VolumeKing Annette: Urgent Debates — Health Ministry—Financial Management of Building Project[Sitting date: 08 March 2016. Volume:711;Page:9443. Text is incorporated into the Bound Volume.]Hon ANNETTE KING (Deputy Leader—Labour): What a disappointment. We have an urgent debate on a serious issue in this Parliament and we have a Minister of Health who would not front up to the issue who did not apologise for what has been called a serious financial mismanagement by his ministry. He used abuse he accused people he smeared people and he insulted them. I have to say that it was one of the most pathetic performances that I have seen from a Minister in a long time. Maybe the chair of the Health Committee might like to teach the Minister something about contrition because that is what was needed today—it was contrition.Grant Robertson: Absolute idiot.Hon ANNETTE KING: Well maybe even absolution but he is not going to get it until he faces up to the problems that were of his making at the end of the day. All the Minister could say was: “They made a mistake.” Well that is not how this story unfolds. I just say to the Associate Minister of Health who has just sat down that he made a better speech than his Minister. He would probably make a better Minister but he was not informed on this issue because it was not PricewaterhouseCoopers that found out about the mistakes; it was Treasury that found the mistakes and it was Treasury that said that there must be an independent inquiry into what went wrong in the ministry. I have to say that when I heard the Director-General of Health on the radio this morning saying that he had asked for an inquiry he was not telling the truth. I have the documents here to show that it was Treasury; it was the Secretary to the Treasury who went to the Ministry of Health and the director-general and said: “There must be an independent inquiry.”I want to ask this: why did they not go to the Auditor-General? The Auditor-General is the person who carries out the investigations into our Government agencies. Each year they provide the Health Committee with a report into the financial management. Why did they not go to the Auditor-General? I know the answer. Because from the very beginning this has been a terrible cover-up—a cover-up of what they called a mistake.Let us look at the facts. The sum of $24 million is what it was going to cost to do a fit-out within the Ministry of Health. In 2014 the then acting director-general who is now the director-general came to the Ministers and said: “The $24 million”—this is 2014—“for the fit-out we can do from our own reserves from the cash reserves we have and our forecast cash reserves. We don’t need any money.” So the Ministers said: “Go ahead.” And then we come to 2015. In February 2015 the director-general told the new Minister of Health: “Oops. We made a mistake. We actually haven’t got the reserves. We’re going to need to put in a bid for $18 million of money to cover it.”The Minister said today that he has known since February. Treasury in its papers released said it was not told until March. What sort of Government management is this? The Government agency that has oversight over money was not told until March that there was no money in the cash reserves to pay for this fit-out. So I do not know what was going on in their minds.But what happened next is interesting. Treasury then sent a very strongly worded memo to the Minister of Finance the Minister of Health and the Associate Minister of Finance and said that it was very worried. Treasury said that it would never have supported this bid had it known that the ministry did not have the cash reserves to pay for it. What Treasury said is that it would not have been supported by Treasury and have exposed—this is the words they used—a “serious failure of financial management within the ministry that is being investigated and needs to be addressed.”—exposed a serious financial mismanagement. Mr Speaker would you call that a mistake?Mr DEPUTY SPEAKER: Don’t bring me into it.Hon ANNETTE KING: Well I am sure if you could you would know that it was not a little mistake; it was a serious failure by a ministry. So what happened then? We have the Minister of Health who is now aware of the problem. There is then a report that is commissioned because Treasury said there must be an investigation. We have the ministry get PricewaterhouseCoopers to do it and then you hear from Treasury a little later on saying it is very worried about it. Treasury does not think the report when it sees it is going to actually fix the problem. It has grave doubts that it is going to fix the problem. Treasury says the report outlines that there were failures in governance capital planning documentation reporting and engagement particularly with key stakeholders like Treasury. So the Secretary to the Treasury said: “We’re very concerned about this PwC report in its final form because we don’t think it addresses the issue.”Well that report was put out in June last year. Was the select committee when we did our annual review told there had been a problem within the Ministry of Health with financial management? No we were not. We were not told and I believe that is a cover-up. We ought to have been told there had been an issue this is how the ministry had addressed it these were the recommendations and this is what it was doing. No we were not told. The Minister had that report from June from the beginning of June.Do you know how we know about it today and why we are having a debate? One line in a Treasury report seen by a Labour researcher said: “A report from Treasury on financial management in the Ministry of Health.” We put in an Official Information Act request. What came out was all this stuff. I have to say Treasury released it with alacrity—with alacrity. In fact people are really surprised that the information provided was even provided—budget-sensitive budget secrets advice to Ministers. It was provided because Treasury was so angry about what happened.So that report—the Minister knew about it Treasury knew about it the Ministry of Health knew about it and the Minister of Finance knew about it. The Minister of Health if he was a good Minister would have fronted up and said: “There’s been a problem. I have made sure they address this problem. I have had a report. I’m making sure all the recommendations are addressed. Here it is.” So through an Official Information Act request it was released a couple of days ago—actually at the end of last week. Why did the Minister not front up? I believe this is a cover-up. They did not believe we would ever find out about this mismanagement. PricewaterhouseCoopers—we did not know they had even had an inquiry. We did not even know there was a report. This House has been treated appallingly. The select committee has been treated appallingly.Ron Mark: It should have been in the annual report.Hon ANNETTE KING: It should have been in the annual report—you are quite right; it should have been the financial investigation into the financial statements from the ministry. They sat there and said nothing to us and treated us like fools. That was with the backing of the Minister of Health. A Minister who was really on top of his game—and I will not say the word—would have come forward and fronted up to the issue and he would have had our respect. He did not. I have said that the director-general ought to offer his resignation.I do believe the Auditor-General should now look at this whole issue. In fact I am going to send it to the Auditor-General. Treasury does not believe that what was said in the PricewaterhouseCoopers report will be implemented—that it is going to work. So let us have the Auditor-General have a look at this whole issue and report back to this Parliament because it will be transparent it will be open and the public will know. This is a black day for this Government and for this Minister of Health who spent most of his time talking about when I was Minister of Health 11 long years ago. I have to say that it was most disappointing. They have not fronted up to this debate in any serious way at all.