A report into Stuart Nash’s communications with his political patrons shows a friend and donor lobbied him unsuccessfully – to be excluded from an Inland Revenue study on whether wealthy Kiwis were paying their fair share of tax
A political donor to sacked Cabinet minister Stuart Nash lobbied him for an exemption from government research into the tax affairs of wealthy Kiwis in order to take a leadership role on an advisory council, newly-released emails show.
While the request was ultimately knocked back by Nash’s office, the Napier MP has been criticised for his failure to fully manage a conflict of interest in relation to the appointment of Phil McCaw as chair of the Start-Up Advisors’ Council.
Nash was stripped of his ministerial warrant by Prime Minister Chris Hipkins in March after Stuff revealed he had sent details of confidential Cabinet meetings to two political donors.
Hipkins subsequently asked Cabinet Secretary Rachel Hayward to review Nash’s communications with other donors to determine whether there had been similar breaches of the Cabinet Manual.
Among the donors to have their emails and text messages reviewed and released as part of the inquiry was Phil McCaw, the managing partner of venture capital firm Movac which gave $6,500 to Nash’s 2020 reelection campaign.
In May 2022, McCaw was appointed chair of the Government’s Start-Up Advisors’ Council, set up to help identify and address the opportunities and challenges facing high-growth start-up businesses.
McCaw, who has assets worth roughly $180 million according to the National Business Review, was also among 350 “high-wealth individuals” asked to provide information about their income and tax as part of an Inland Revenue study into the effective tax rate paid by the wealthy.
“In order for your project to have my full attention, I kindly request that you arrange for me to be removed from [the Inland Revenue High-Wealth Individuals Research Project].”
– Phil McCaw
In an August 2022 email, sent to Nash’s ministerial rather than personal address, McCaw said the start-up council role would require “a reasonably significant commitment of time for me over the next six to 12 months; time I’m prepared to give willingly”.
“Unfortunately, though I am also caught in another government related programme that is also costing me significant time, expense and distraction. This is the Inland Revenue High-Wealth Individuals Research Project.
“In order for your project to have my full attention, I kindly request that you arrange for me to be removed from this project.”
A response the following day from Nash’s senior ministerial advisor Andrea Black thanked McCaw for a conversation earlier in the day – whether in person or over the phone was not stated – and said the minister “greatly appreciates your involvement and commitment to the Start-Up Council”.
Black said McCaw’s concerns with the high-wealth individuals project had been noted and would be passed on to Parker’s office.
“However, your inclusion – or not – is a matter for Inland Revenue and not one that the minister has any discretion over,” she added.
Hayward’s report did not address this exchange between McCaw and Nash’s office, as the actions of donors were out of scope.
However, the Cabinet Secretary did find separate shortcomings in how Nash had managed his conflict of interest regarding McCaw’s appointment to the start-up council, which supported him in his role as regional and economic development minister.
“Stuart Nash has already paid the ultimate price for his actions by being removed as a minister. He is also retiring from politics at the upcoming election.”
– Prime Minister Chris Hipkins
While Nash had identified a conflict of interest due to his close relationship with McCaw and had left it to another minister to make a decision on the appointment, “in these circumstances it was not the end of the management required”.
“The relationship between [McCaw] and Nash as minister was an ongoing one, and the terms of reference stated that Nash continued to have responsibility for further decisions around Mr McCaw’s reappointment or dismissal. Nash’s friendship with, and the donation from, Mr McCaw conflicted with this ongoing responsibility.”
As part of good practice, Nash should have formally transferred responsibility for the appointment to another minister in writing, given thorough consideration to how any ongoing conflicts would be managed, and not participated in the announcement of McCaw’s appointment, Hayward said.
She said she had not found any breaches of Cabinet Manual principles, other than the ones that had led to his dismissal as a minister.
Commenting on the report, Hipkins said he was pleased to know there were no other cases where confidential Cabinet information was shared with donors.
“Stuart Nash has already paid the ultimate price for his actions by being removed as a minister. He is also retiring from politics at the upcoming election.”
Speaking generally about the release of communications between Nash and his donors, Hipkins said: “First, as the Cabinet Manual says, everyone has the right to make representations to ministers on matters that concern them, and second, ministers cannot control the communications others send to them.”
In his own statement, Nash said he had not shied away from responsibility for his actions but hoped the report would now “draw a line under this issue”.
“I am now looking forward to building a post-political career and contributing to our wonderful country in other ways. I wish the Prime Minister and the Labour Party all the best in the upcoming election,” Nash said.
Newsroom has approached McCaw for comment.
