Ministers' interests in commercial assest challenged
Questions over Building and Housing Minister Maurice Williamson's interest in an air-conditioning business have put the spotlight on how ministers handle potential conflicts of interest.
The annual Pecuniary Interests Registrar shows many continue to juggle company directorships with ministerial responsibilities.
The Cabinet manual leaves it open to ministers to judge whether there is a potential conflict of interest.
Over the years some, including former Consumer Affairs Minister John Boscawen, have removed any room for doubt by divesting themselves of all such interests.
But Prime Minister John Key thinks there is no reason why ministers should have to give up their private interests - though Key himself keeps his investments at arms length through a blind trust, and hold no directorships.
Williamson faced calls from Labour to either stand down from Holyoake Industries, of which he is a director, or quit the building portfolio. He has dismissed the calls, saying he declared the position and would withdraw from decision making if a conflict arose. He refuses to be interviewed on the subject.
Key said the situation was no more a conflict than the agriculture minister owning a farm.
The investments of David Carter, who stood down as primary industries minister to become the Speaker last month, go deeper into agriculture than farms in Banks Peninsula and North Canterbury.
Carter's "interests" include co-operatives Silver Fern Farms and CRT, as well as listed companies Heartland and Guiness Peat Group.
The Cabinet manual says of conflicts: "Appearances and propriety can be as important as an actual conflict of interest."
But Jonathan Boston, Professor of Public Policy at Victoria University's School of Government, said the risk of actual conflict was insignificant unless Williamson was making decisions directly on air conditioning.
Boston said the basic rule for ministers was to declare the interest, then withdraw from decision making if a potential conflict arose. Ministers could avoid perceptions of a conflict in their investments by putting assets in a blind trust.
Others say they have felt obliged to sell shares and resign positions.
On becoming a minister, Boscawen sold virtually his entire share portfolio, after being warned by the Cabinet secretary that doing otherwise would be conflict.
"About the only thing I kept was a membership of the local Rotary Club," he said, although with responsibility for the Commerce Commission, he knew his outside interests would be scrutinised.
Richard Prebble, who joined the Cabinet in 1984, said he had stepped down from outside roles, but then admitted at age 36 his list of commercial investments and roles "wasn't very long".
Prebble believed Williamson's conflict was "marginal at best", and if Labour believed there was a conflict, it was negligent for not raising it sooner.
He said all ministers needed to ask themselves if they should have any role outside their portfolios.
- © Fairfax NZ News
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