National says if Kāinga Ora was a private business "somebody would have been sacked" after a scathing review found it had not only failed to act politically neutral in an advertising campaign but even discussed how to cover it up.
The Public Services Commission launched an investigation after it emerged the agency had paid for an advertorial that ran in June 2020, featuring Labour MP Arena Williams, who was then a candidate for the party.
Williams had disclosed this fact to the agency and herself raised concerns about her involvement, yet the agency went ahead and ran the advertorial, which featured on OneRoof, a website run by NZME, also publisher of the Herald.
Documents released under the Official Information Act in November revealed staff had not only become aware she would run as a candidate, but discussed how to handle the matter politically.
"I assured her it wasn't a problem in my view and we could proceed as though we didn't know about her impending announcement," said one email.
Public Service Commissioner Peter Huges. Photo / Mark Mitchell
Other emails included comments such as "we can just act as though we don't know anything", and discussing removing mention of Williams' candidacy, saying it "keeps Kāinga Ora's powder dry too!".
Public Service Commissioner Peter Hughes said the agency should not have published the article in the first place, and the moment Williams announced her candidacy Kāinga Ora should have taken it down.
"This did not happen. It remained online throughout the 2020 election campaign."
The review found Kāinga Ora's actions had the "effect of providing positive publicity for a political candidate, just before and during an election period".
Kāinga Ora failed to acknowledge its mistake, instead "maintaining a position that minimised the issues and contained some factual errors".
"Kāinga Ora failed to do the right thing when it became aware the person it was to feature in a Kāinga Ora-sponsored article was a candidate," Hughes said.
"The email suggesting the agency pretend it did not know about Williams' candidacy was unacceptable."
National deputy leader and housing spokeswoman Nicola Willis. Photo / Mark Mitchell
Hughes said Kāinga Ora's chief executive had since assured him he had taken appropriate action to ensure there would not be a repeat of the incident.
"I'm satisfied the chief executive has owned it, fixed it and learned from it. That is what I expect."
But National Party deputy leader and housing spokeswoman Nicola Willis said this was not good enough.
"I am astonished that despite this damning report, no one at Kāinga Ora has been held accountable for its failure to meet its duties as a custodian of taxpayer money.
"If a private business had failed so badly in its core duties you would expect the board to have fired someone. The fact nobody has been suggests a lower set of standards for an agency that is publicly accountable."
Willis, who called for an investigation last year, said the review confirmed her "grave concerns".
"Stating these events 'demonstrated a misunderstanding of the principle of political neutrality at all levels within the organisation', with their response to the airing of these issues showing a 'pattern of minimisation' and was below the standards expected of a public service agency.
"It will be of serious concern to all taxpayers that despite these massive responsibilities Kāinga Ora failed to meet standards of political neutrality, and then when these failings were revealed did not front up but instead sought to cover up."
Willis called for Housing Minister Megan Woods, responsible for the agency, to take strong action to restore public confidence.
While Woods could not direct the board in what to do, Willis said she needed to seek assurances about its performance.
"These are failings of judgment at very senior levels, and yet it appears no individual has had any employment ramifications.
"Minister Woods must explain why she continues to have confidence in the leadership of Kāinga Ora when not one person has been held accountable for these extraordinary failings.
"New Zealanders deserve much better from an agency that employs more than a dozen people on salaries in excess of $300,000 a year."
Housing Minister Megan Woods. Photo / Mark Mitchell
In a letter to Kāinga Ora board chair Vui Mark Gosche, Woods, who had requested the investigation herself in August last year, reiterated her concerns, saying the agency's conduct "fell well below my expectations" both in its judgment over the article and how it handled the shortcomings afterwards.
"The pattern of minimisation and devolved management of these decisions as described by the Commissioner's report is something that I expect the board to actively monitor and hold senior management to account to ensure this does not occur again."
Woods told the Herald she "took stock" in the commissioner's findings that Kāinga Ora had now accepted it should have done better and provided evidence around changes that had been made.
"Since I raised concerns in August last year there have been eight communications to staff around expectations, and I will be looking for changes and will have conversations around the practical work plan.
"I am not defending the agency, I called for the investigation, but the important thing is changes have been made, problems have been fixed and more broadly people in the organisation have learned their lessons.
"I've written to the board chair and made it clear my expectations going forward."
A spokeswoman for NZME said commercial content was primarily the responsibility of the advertiser.
"While NZME undertakes some compliance and legal checks, we would not review commercial content to ensure it meets the standards expected of a government organisation – that is the responsibility of the advertiser."
