Kedgley Sue: Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
Kedgley Sue: Urgent Debates — Hawke’s Bay District Health Board—Conflicts of Interest Report 
[Volume:646;Page:14986] 
SUE KEDGLEY (Green) 
: 
 The revelations of systemic conflicts of interest in the Hawke’s Bay District Health Board undermine confidence not just in that district health board but in the operation of all district health boards in New Zealand. One cannot help but wonder. Actually I find the levels of conflict of interest that have been identified in this report and in other allegations in recent times to be frankly mind-boggling. One would have to ask whether some members seek to be appointed or elected to district health boards to advance their own business interests rather than to represent the local community and the public interest of New Zealand. 
I think that the Minister has spent a lot of time blaming the board in conflict. He has been blaming individuals and the chair and various people on the district health board of Hawke’s Bay. Tony Ryall has been blaming the problem on various other people. So we have a great war of words over who is to blame and allegations have been flying left right and centre. But it seems to me that the fundamental question is about why we are allowing board members to sit on a board and be able to enter into a business relationship with the district health board they sit on when they stand to gain a personal financial benefit. It is not just a matter of having a conflict of interest register or various procedures to identify the conflict of interest; if there were a simple rule that said that this was not allowed and that no board members shall be allowed to enter into a business relationship with a district health board they sit on where they stand to gain a personal financial benefit then that simple rule would have resolved most or many of the problems that have been identified in the report on conflicts of interest. I think that is the wonder: why do we not have any such rule? In relation to Local Government New Zealand people are not able to stand for their local regional councils if they are perceived to have a conflict of interest—if for example they are staff members. Why is it that we allow any number of persons to stand for or be appointed to district health boards when they have obvious manifest conflicts of interest? There should be a rule that prohibits that. 
I cannot understand why someone who was the managing director of one of the largest private health providers in New Zealand was appointed by the then Minister of Health Annette King to the Hawke’s Bay District Health Board. It is incomprehensible. Did the Minister have a private agenda to encourage the contracting out the privatisation of health services in New Zealand? Why otherwise would she have appointed such a person to the Hawke’s Bay District Health Board? Why would Ken Douglas be appointed to the Capital and Coast District Health Board when he is also a director of Healthcare New Zealand which I believe is the largest private health-care provider in New Zealand? There are manifest and obvious conflicts of interest and if a Minister is going to appoint such a person to a district health board then it is almost inevitable that these sorts of conflicts of interest and issues will arise. 
I believe that once we have got past the blame game that seems to be taking place in this House today we need to get to the heart of the matter and really it is up to the Minister. If he says he really wants to take decisive action and wants to learn from this horrific saga it is up to him to show leadership and to pass a rule that says that it will be illegal for any persons for any board members to ever enter into business relationships with district health boards they sit on where they stand to gain a personal financial benefit. Until such a rule is passed we will not know whether this is just the tip of the iceberg. Was this just one isolated incident? Actually we know that it was not because of what happened in Auckland. We had an appalling saga in Auckland with a laboratory contract which ended up under judicial review because somebody who was a board member had used his involvement his participation on the board to advance his own interests. In that case the person was trying to get a laboratory contract for his business. In this case a pharmacist was allegedly trying to gain benefit for his business and also in this case Mr Hausmann got on to the district health board and immediately started to bid for a substantial contract with that board. It is all well and good for the Minister to blame the chair or to blame this person and that but the Government who appointed Mr Hausmann to that situation is in large measure responsible. It also shows that in the absence of any of these rules such conflicts of interest are almost inevitable. 
It does seem odd to us that the report has acknowledged the serious conflict of interest Mr Hausmann had in the Wellcare contract but then has failed to condemn this behaviour more vigorously. Instead the report has just made some passing remarks to the effect that the conflict could have been declared earlier on in the piece. There seems to be no denial that Mr Hausmann sought to amend and influence the contract that he was then going to bid on and that seems to me to be profoundly unethical—well possibly more than simply unethical. It does surprise me that the report did not condemn that particular behaviour more vigorously. 
I do not believe that these two reports will bring a close to this sorry saga. I believe that too many questions are swirling around this whole incident. For that reason the Green Party will support calls for a further investigation of the whole issue by the Auditor-General because otherwise I think this incident will drag on and remain a source of conflict tension unhappiness and distress for the people of Hawke’s Bay and will stand in the way of restoring confidence in the Hawke’s Bay District Health Board. 
As I said this has not just undermined confidence in the Hawke’s Bay District Health Board; I believe that it has undermined confidence in the operation of all district health boards in New Zealand. I think that many people will be questioning the boards of their areas and wondering whether what happened in Auckland and Hawke’s Bay could be happening in their particular areas. As someone has alluded to there were concerns at the Capital and Coast District Health Board when there was a move to contract out some of the services and there was concern that a board member was somehow involved in or participating in or had a potential conflict of interest in that contract. So we see this happening around New Zealand not just in Hawke’s Bay. 
There is only one way to solve this problem and that is to tighten the rules surrounding conflict of interest; they are woefully inadequate. It is simply not good enough just to declare a conflict of interest at the beginning of a board meeting or to have a register of conflict of interest and then basically to leave it up to individual boards to monitor it as they will. That is not good enough. There needs to be tight rules and above all as I have said there needs to be a specific rule that says one cannot be a board member and seek to gain a personal benefit through a business relationship with the district health board one sits on. If this rule were in place maybe many of these people—like Mr Hausmann—would not want to put themselves on to a district health board. I think that would be a good thing because we cannot allow this rather horrific saga to be repeated. Thank you.