4 – A formula failure

June 28, 2019

State Services Commissioner Peter Hughes announced the findings of an investigation into  Gabriel Makhlouf and the Budget debacle:

. . . • Mr Makhlouf acted in good faith, reasonably and without political bias in relation to the advice he gave the Minister of Finance

• Mr Makhlouf’s decision to refer the matter to Police was made in good faith, was reasonable and showed no evidence of political influence

• Mr Makhlouf did not act reasonably in relation to:

o his use of the phrase “deliberate and systematically hacked” in his media statement issued at 8:02pm on Tuesday 28 May

o his use of the bolt analogy in media interviews on the morning of Wednesday, 29 May

o in his media statement on the morning of Thursday, 30 May, continuing to focus on the conduct of those searching the Treasury website rather than the Treasury failure to keep Budget material confidential.

• In relation to Mr Makhlouf’s other written and oral media statements, Mr Ombler found Mr Makhlouf acted in good faith, reasonably and in a politically neutral manner.

The Commissioner said he accepts Mr Ombler’s investigation report and all his findings, which were reviewed by former Solicitor-General Mr Michael Heron QC.

Mr Hughes said his expectations of chief executives when things go wrong is very clear: they need to own it, fix it and learn from it. And stand up and be accountable. He was disappointed Mr Makhlouf’s actions on this occasion fell short of those expectations given the fact there was a breach of the Treasury’s information security, which was his responsibility.

“The breach of security around the Budget documents should never have happened, under any circumstances,” said Mr Hughes.

“The right thing to do here was to take personal responsibility for the failure irrespective of the actions of others and to do so publicly. He did not do that.

“As the investigation found, Mr Makhlouf focused more on the actions of the searchers of the Treasury website rather than his own personal responsibility as Chief Executive for the failure of the Treasury systems.”

The investigation found Mr Makhlouf’s decision to refer the matter to the Police was in good faith, reasonable and was not politically influenced. But Mr Hughes said Mr Makhlouf should have sought more advice before issuing a media statement about the referral.

“In my view it was not managed well by Mr Makhlouf,” said Mr Hughes. “It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive.

“I have concluded that Mr Makhlouf failed to take personal responsibility for the Treasury security failure and his subsequent handling of the situation fell well short of my expectations. Mr Makhlouf is accountable for that and I’m calling it out.”

The Commissioner said the investigation report is very clear that there are no grounds to support allegations that Mr Makhlouf’s public statements or actions were politically biased. . . 

The correct response to mismanagement of this magnitude is the 4-A formula: Admit the mistake, Accept responsibility, Apologise and if appropriate and possible, make Amends, none of which was evident in  Makhlouf’s reply:

Mr Ombler’s investigation was conducted thoroughly and fairly. I have read the report carefully and encourage others to do so. I apologise that Budget information was not kept secure. The inquiry that I asked the SSC Commissioner to undertake will help us understand exactly how that happened and how to stop it happening again.

The report confirms I acted at all times in good faith and with political neutrality. It also confirms that I acted reasonably, other than in my descriptions of the incident. I am pleased that my honesty and integrity are not in question.

It has been my privilege to have had the opportunity to serve New Zealanders and I’m very proud of what my Treasury team has achieved over the last 8 years.

This is a 4-A formula failure and theTaxpayers’ Union is understandably unimpressed:

Responding to the release of the State Services Commission’s findings into Treasury Secretary Gabriel Makhlouf, New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says:

“The State Services Commissioner deserves credit for an investigation that made clear and damning findings. The report finds that the ‘deliberately and systematically hacked’ statement, plus the bolt analogy, were not accurate, and that Mr Makhlouf failed to take personal responsibility for the security failure. In other words, Mr Makhlouf has failed in his first responsibility: to the taxpayers who fund his salary, and who deserve accuracy in the public statements of one of the country’s most highly-paid bureaucrats.”

“Mr Makhlouf’s complete lack of repentance in the face of these findings insults the public, and it is a stunning failure of process that his departure from the job today is allowing him to escape the full wrath of accountability. The Government must order him to face up to the media and public in the next few hours. If he doesn’t have to do this, he’ll be laughing all the way to Dublin.”

“The timing of the announcement of these findings looks cynical; it’s the same day and Makhlouf leaves his job and the Government announces a high profile reshuffle. If he plans on going into hiding for his final few hours, it is the job this Government and the media to flush him out of the woodwork, lest we see a bitter failure in accountability. The public are entitled to expect more accountability than Mr Makhlouf reading the report as he jets off to Ireland.”

The damage done by the initial unreasonable response has been compounded by the lack of repentance by Mackhlouf and the inability for Hughes to do anything about it.


Budget inquiry must be widened

June 4, 2019

The National Party is calling for the Budget inquiry to be widened:

The Prime Minister must be open and transparent about what questions she has asked her Finance Minister since spurious allegations were made that National acquired Budget documents through criminal activity, Deputy Leader of the Opposition Paula Bennett says.

National has written to State Services Commissioner Peter Hughes requesting the SSC widen its Budget investigation into Treasury and its Secretary to address a number of serious questions about the behaviour of both the department and the Finance Minister.

“The GCSB’s National Cyber Security Centre has said publically that it told Treasury its computer system was not compromised, yet both Gabriel Makhlouf and Grant Robertson chose to issue statements implying National carried out a ‘systematic hack’,” Ms Bennett says.

“Among the many questions that still need answering is what information Treasury and the Finance Minister had at their disposal before they issued those statements.

“The SSC inquiry should also include a complete review of all communications between the Finance Minister’s office and the Prime Minister’s office under the ‘no surprises’ approach.

“It took 36 hours for Treasury to come clean that it was sitting on a lie, and the Prime Minister needs to explain why she allowed her Government to mislead the public for so long.

“Did she and Grant Robertson ask the right questions of Gabriel Makhlouf, or did they take a ‘see no evil, speak no evil’ approach to all of this?

“It is concerning that even after Treasury admitted the Budget information was obtained without any hacking, its statement failed to offer an apology or take responsibility, and continued to disparage the Opposition in an entirely inappropriate way. . . 

John Armstrong isn’t waiting for an investigation he’s calling for resignations:

The chief executive of the Treasury, Gabriel Makhlouf, must resign.

It might have been Budget Day, thereby making his departure hugely inopportune for the Labour-led Government. That’s just tough. Makhlouf has to go. And forthwith. His exit on the most important date in the Treasury’s calendar may have piled humiliation on embarrassment.

It left Grant Robertson’s shiny new wellbeing budget feeling somewhat sick on its first public appearance. That’s just too bad. Makhlouf has to go. He has no choice in the matter. . .

He has to go — and for two simple reasons. Budget secrecy is sacrosanct; Budget secrecy is paramount. That is the bottom-line. It is non-negotiable. Any breach is sufficient grounds alone for heads to roll.

In Makhlouf’s case, there is another factor which should have sealed his fate — competence.

The ease with which National extracted Budget-connected information from the very heart of the (usually) most infallible branch of the Wellington bureaucracy demonstrated the shocking inadequacy of the Treasury’s cyber security.

It seems it is no exaggeration to say that the protections currently in place to guard that information have been at best lax and at worst non-existent. . . .

On top of that, the department’s handling of the aftermath of the breach of security raised further questions of competence.

The rapidity with which Makhlouf referred matters to the police following the hacking which soon enough turned out not to be hacking conveyed the impression that he believed National was responsible.

Although he endeavoured to avoid making that insinuation, in process, he veered dangerously close to soiling the Treasury’s neutrality.
While he might well be as neutral as he ever was, he is no longer seen as neutral. That is unacceptable. . . .

But this isn’t the only resignation Armstrong thinks should happen:

Should Robertson also be tending his resignation as a Cabinet minister or be sacked by the Prime Minister? The answer is an emphatic “yes”.

A breach of Budget secrecy — especially one of this week’s magnitude — is something so serious that resignation is mandatory.The applicability of ministerial responsibility demands nothing less. But it ain’t going to happen.

Robertson is exempt from having to fall on his sword. That exemption is by Labour Party decree. He is just too darned valuable.

Both he and the Prime Minister have made it very clear that they will move mountains to ensure Robertson emerges from this episode as untarnished as possible by placing responsibility for the breach fairly and squarely in the Treasury’s lap. . .

It’s been fascinating following commentary from the left which is trying to paint Simon Bridges as the wrong-doer in the botched Budget saga.

While we are mentioning Bridges, let’s deal with the bogus claims of his critics that his accessing of Budget documents was unethical, even if it was not unlawful. That is nonsense. Since the dawn of time, it has been incumbent on Opposition parties that they expose faults and failings in the policies and procedures adopted by the government of the day.

In revealing that the Treasury’s notion of what passes for Budget secrecy is screamingly flawed, Bridges has acted in the public interest.

Can his critics in Labour’s ranks put their hands on their hearts and affirm they would do things differently if they faced the same circumstances in Opposition? Of course not.

Bridges has simply been doing his job. On this week’s form, it is conceivable that he is going to be doing it a lot longer than both friend and foe have been predicting.

The machinations may be of little interest to any but political tragics but the botched Budget provided the Leader of the Opposition with an opportunity to shine in a week when the spotlight ought to have been on the Finance Minister and his leader, and shine he did.


Timing deliberate

June 12, 2018

Soon to-be acting Prime Minister Winston Peters is suing the Government.

Peters is suing the Ministry of Social Development, plus it its chief executive, Brendan Boyle, and State Services Commissioner Peter Hughes for $450,000 for breach of privacy – relating to his belief over how details of his pension overpayment were leaked to journalists.

He is also suing former ministers Paula Bennett and Anne Tolley but that is no surprise. They have always been targets.

The really stunning aspect of the new action is its timing so close to the date he is due to become Acting Prime Minister for six weeks.

Even if he had a water-tight case – and there is no evidence that he has – wouldn’t he delay it for the sake of a peaceful transition? . . 

Quite what Peters expects to achieve by wasting taxpayers’ money on this at all let alone on the eve of his taking over as acting PM is hard to fathom.

But the timing must be deliberate and it comes with his waiting until the last minute to pull support for repealing the three-strikes legislation.

Anyone willing to bet that all will be calm and stable while Peters is acting PM?

 


Benefits not best for kids

October 5, 2011

Children do better in families which aren’t dependent on benefits.

This is the view of  Peter Hughes, outgoing chief executive of the Ministry of Social Development, who said::

“We know that for the same level of income, kids do better where that income’s derived from paid work.”

Commenting on this Lindsay Mitchell says:

It is a great shame that the outgoing CE has waited until now to make these observations. And that senior public servants seem unable to draw public attention to matters of considerable national importance to the country within the boundaries of an apolitical civil service.

Quite.

There is a place for benefits for those cannot work, most of whom require only temporary assistance.

But  paying benefits to people who don’t need them and long term benefit dependency by people who could work aren’t good for the recipients, their families or society.

This reinforces the wisdom of initiatives introduced by the government to work-test beneficiaries and help them become work-ready.


Can’t count can’t cope

September 9, 2009

Maths lecturer Peter Hughes is right to be concerned that secondary school pupils are innumerate.

If you can’t count you  can’t cope properly with many functions in every day life.

I’ve often quoted the witticism that there are three kinds of people in the world, those who can count and those who can’t and then said I’m one of the latter.

But I was always joking because although I wouldn’t even attempt complicated maths I’m of the generation where the basics were taught and I can still cope with them.

That means I can add, subtract, multiply and divide, understand rounding,  compound interest, fractions and percentages and the other concepts which we need every day.

It doesn’t mean I always get the sums right, but it means I usually realise when I’ve got them wrong and can work out why.

It’s no use saying we don’t need the basics when we have calculators, unless you have a general idea of what the answer is you can have no idea if you’ve made a mistake.

If you can’t do the basics you’re at sea when you shop because you can’t compare prices properly and have no idea if there’s a gross error in the total you’re charged.

If you can’t do the basics of maths you’ll never cope with finance and as Huges says you’re then at risk of getting “bluechipped” .

If you can’t do the basics of maths you’re worse off than if you can’t spell. If you get the odd letter wrong when writing you can still get your message across. But a minor error with a number can be a major mistake.

If you follow the link above you can try your mental maths skills. I ‘ll confess I got only 4/5 – because I made a silly mistake which goes to show even when you know the basics, it pays to check your calculations.

P.S. Kathryn Ryan  interviewed Hughes on Nine to Noon this morning.


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