Michael Wood resigns as minister after more shares emerge, Prime Minister Chris Hipkins 'angry, incredibly frustrated'

Prime Minister Chris Hipkins has announced Michael Wood has resigned as a minister.

Hipkins told reporters at a last-minute press conference on Wednesday afternoon that he was alerted on Tuesday there were additional shareholdings Wood held in a trust he is a trustee and beneficiary of, beyond the Auckland Airport shares that came to light earlier this month.

"These new shareholdings raise significant concerns around Michael not identifying and managing potential and real conflicts of interest," the Prime Minister said.

The trust holds shares in Chorus, Spark, and the National Australia Bank.

Hipkins said Wood made the decision as Immigration Minister to include telecommunications technicians on the immigration Green List after representations from the industry, including Chorus.

Wood also never disclosed his shares in NAB, the parent company of BNZ, during conversations Cabinet had on a market study into banking, the Prime Minister said.

"Despite repeated requests from the Cabinet Office and myself for Michael to manage his shareholdings, he has repeatedly failed to identify, disclose and appropriately manage conflicts of interest," Hipkins said.

"When I stood Michael down as Transport Minister, I asked him if there was any other relevant information I should know about and he indicated there was not."   

Hipkins said it has become evident that Wood not adequately managing his airport shares was not an isolated incident and he cannot remain as a minister.

The explanation provided by Wood to Hipkins was that the shares had been in the trust for a long time and he wasn't aware of them.

"I don't accept that," said Hipkins.

The Prime Minister said he didn't believe Wood has worked with any intent of personal gain, but he has let himself and the Government down. This is a serious lapse of judgement, said Hipkins.

Deputy Prime Minister Carmel Sepuloni will become the Workplace Relations and Safety Minister and the Minister for Auckland, Andrew Little will become the Immigration Minister, David Parker will become the Transport Minister and Kiri Allan will be the associate Minister of Finance.

In a statement, Michael Wood said there has not been a  "second of my political career where any of my financial interests have influenced my actions or even crossed my mind".

"In some respects my de-prioritisation of my personal financial affairs has led to this situation.

"That being said I acknowledge the rules are in place for a reason and it is incumbent on Ministers to manage not just the reality, but also the perception of any conflicts. I have not managed this effectively, I take responsibility for it, and as such have submitted my resignation to the Prime Minister. I apologise to him and the public for this situation."

Hipkins said this incident has been "deeply frustrating". He said these have been "unnecessary distractions" to the issues facing New Zealanders.

"Ministers, for whom it is an honour to have such a role, need to ensure they manage their affairs to the highest standards."   

Hipkins said he had numerous conversations with Wood about his shares and these shares didn't come up. He couldn't understand how this situation has come about.

"I was both angry and also incredibly frustrated," Hipkins said.

The Prime Minister is also making a number of changes around conflict of interest management. 

  • First, Cabinet Office will move to Quarterly reporting of conflicts of interest to the Prime Minister. Currently Prime Ministers are only advised of new interests as part of the annual review or on an ad hoc basis as particular issues arise.
  • Second, there will be an escalation process if a Minister is not engaging fully with the process or following advice on the management of a conflict. Cabinet Office will now escalate the matter rapidly and directly to me, to avoid the situation where a Minister can repeatedly ignore their guidance. 
  • Third, there will now be in-person annual reviews with each Minister to discuss their conflicts. At the moment the annual review of Ministers’ interests is conducted by way of a letter at the end of the financial year. An in-person meeting will ensure that any issues can be more directly addressed and resolved.
  • Fourth, each Minister will have to nominate a dedicated person in their office to support them with conflict-of-interest processes. This means another person in their office is aware of their conflicts and can act as a second pair of eyes to assist them in the appropriate management of them.
  • Fifth, conflict disclosures will become a standing item at the start of each Cabinet or Cabinet Committee meeting. The Institute of Directors recommends maintaining an interests register as a standing board meeting agenda item but that has not been the past or current practice for Cabinet or Cabinet Committee meetings.

He has also sought advice on a full restrictions regime for shareholdings by ministers.

"In Australia, the Code of Conduct for Ministers requires that they divest themselves of investments and other interests in any public or private company or business," said Hipkins.

"That is, other than public superannuation funds or publicly listed managed funds or trust arrangements where the Minister has no visibility or control of decision-making.

"Adopting this approach would be a significant change in the New Zealand position and requires further consultations, but it is my personal view it’s appropriate to take this step."

National leader Christopher Luxon said the Labour Government is "falling apart".

"Instead of focusing on how we fix the economy and restore law and order, it is incredibly frustrating to again be talking about Labour's personnel issues. It's time for change. And it can't come soon enough.

"This election you have the choice between continuing chaos under Labour, or a National government that will get our country back on track."

Luxon said Hipkins should have sacked Wood earlier.

ACT leader David Seymour said at this rate, the Government will run out of ministers before October.

"If Hipkins doesn’t have the talent to keep a Government running he should bring the election forward and let New Zealanders pick a Government that is up to the job," said Seymour.

"Wood might just be the last capitalist the Labour Party had. There’s nothing wrong with investing to grow wealth, but there is something wrong with remaining invested in areas that you have direct influence over as a Cabinet Minister. He might just find that this is a blessing in disguise for him and that he has a more lucrative career as a stock broker ahead of him."

Seymour said it was "mind boggling" someone could have so many conflicts and do little about them.

"Being unable to keep up with life admin might be acceptable in a student flat but it’s not when you’re a well-paid Minister of the Crown responsible for major decisions that impact Kiwis' lives."

Wood was previously removed from the Transport Minister role earlier this month while he sorted out a conflict of interest. He has continued to hold other portfolios, including Immigration.

Sir Maarten Wevers, the Registrar of Pecuniary and Other Specified Interests, has been conducting a review into whether Wood has complied with his obligations to declare his interests.

That came after it emerged Wood didn't initially declare with Parliament's pecuniary interest register that he held about $16,000 worth of shares in Auckland Airport. 

He eventually declared these appropriately last year, but didn't correct previous registers.

Wood said he did inform the Cabinet Office of the shares when he became a minister.

But the Cabinet Office was also told Wood was going to sell the shares, which hasn't happened, something the Prime Minister has said should have happened.

Wood was reminded 12 times about his shares by the Cabinet office, but didn't sell them until earlier this month when the shares came to light. 

The minister previously said he didn't feel good about the situation with the shares.

"It's been a very difficult exercise for me, but I take responsibility for it."

Wood has said he previously had a "hitch" with selling the shares. While in the process of doing so, which he began in February last year, he was meant to get information back from the share register but that didn't arrive because they had an old email address.

"I acknowledge the faults. I should have followed up on that and I didn't. That is why I am in this situation," he told reporters.

"This is something I lost sight of. I have a very large job. I work 80 to 90-hour weeks. Some of these things in my life administration, I have let slip. I shouldn't have."

He denied that him holding shares had any impact on any decisions he has made as a minister.