John Armstrong's opinion: Grant Robertson and Treasury boss should resign over Budget data leak

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

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Gabriel Makhlouf is under fire after complaining to police over a claimed hack of information from its website, something that has a much simpler explanation. Source: 1 NEWS

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.

True, there are barely four weeks left until Makhlouf’s last day at theTreasury and his subsequent departure for Dublin to take up a new post as the governor of the Central Bank of Ireland.

That appointment was announced earlier this month — and well before the eruption of the current furore. How much time he has left in his present incarnation is irrelevant.

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.

So much for taxpayers shelling out millions of dollars each year to fund the efforts of the Government Communications Security Bureau to combat cyber crime.

Part of that agency’s purview is to help government departments beef up their cyber security. The big question is whether the Treasury sought advice from the GCSB and whether it acted on that advice.

Whatever, the Treasury has set a dreadful example.

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.

Robertson has made that very point. The Minister of Finance is saying as little as he can get away with in respect to this fiasco in his portfolio.

But he professed to be "very disappointed" at the manner in which confidential Budget information was able to be accessed by National. For "manner" instead read "ease".

He was also "very disappointed" that the Treasury did not make more effort to find out how the department had become victim to such "hacking" before calling in the police.

Robertson’s double-barrelled burst of disappointment amounts to a vote of no confidence by the Finance Minister in his chief executive.

It was a pretty big hint to Makhlouf that he step down, although not on Budget Day, thank you very much.

Robertson says he is now awaiting the inquiry to be conducted by the State Services Commissioner Peter Hughes — at Makhlouf’s sudden request — into "the adequacy of Treasury policies, systems and processes for managing Budget security."

That is just not good enough. There should be such an inquiry. No question. There needs to be one to restore the public’s confidence in the public service.

But such an inquiry must not be used as a mechanism to shift the public's attention from this sorry state of affairs.

To restore the Treasury’s reputation requires Makhlouf’s letter of resignation with immediate effect.

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Mr Bridges has expressed a dismal view of today’s wellbeing budget announcement. Source: 1 NEWS

If he won’t tender such a document, then Hughes — the person to whom the country’s top bureaucrats are required to answer — should write that letter for him.

There is another very pertinent question lingering in the background. 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.

There is an unwelcome precedent which the pair will do their utmost to ignore.

In 1986, Sir Roger Douglas, then Minister of Finance in the David Lange-led Labour Government, offered his resignation after it became apparent that copies of that year's Budget had been circulating in Auckland business circles prior to the document’s delivery in Parliament.

Lange refused to accept Douglas's resignation. He took the view that the dispatching of Budget material — the not-so-handy handiwork of staff in Douglas's office in the Beehive —had been "entirely accidental".

Were Robertson to make a similar offer to Jacinda Ardern, she would likewise reject it out of hand.

Such an offer — even if not accepted — could serve as a useful gesture acknowledging the shambles and displaying some contrition.

Ardern, however, seems steadfast in refusing to give Bridges what would amount to the final seal on the satisfaction that National’s leader has enjoyed in out-thinking, out-manoeuvring and generally out-smarting Labour.

It is hard to think what Bridges could have done better. His leadership of his party has accordingly been reinforced to a degree that both his doubters and apologists could have imagined.

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.