The Minister for Foreign Affairs and Trade had, with the explicit goals of reshaping the ministry and - in line with the Government's general strategy of saving up to $40 million, appointed a chief executive who knew literally nothing about diplomacy. The minister had declared his intention to replace diplomats with businessmen and proposed to remove from those who remained the job security that would be essential if their services were to be retained.
And he had authorised the spending of $9.2 million on a "cost-saving" plan - money spent mainly on outside consultants, reflecting his apparent belief that expertise in diplomacy counted for little and that his ministry was incapable of reforming itself. But when the disastrous nature of the plan became apparent, and the threat to New Zealand's trade and foreign relations too serious to be ignored, the minister ran for cover. It was only then that we were assured that the plan had all along been chief executive John Allen's idea, and that the minister had been so disengaged that he had barely noticed what was going on.
He was no doubt helped to adopt this unconvincing stance by the intervention of the Prime Minister, who had quickly scented an impending disaster. But McCully is not lacking in chutzpah. He not only persisted in lumbering Allen with the blame. He elevated the doctrine of what we must now call "ministerial irresponsibility" to new heights - or depths.
In an interview last Thursday on Morning Report, he solemnly proclaimed that - as minister - he was no more than "the purchaser of the ministry's services." This is free-market ideology gone mad. It is an astonishing new take on what the role of a minister is and should be, and betrays a shocking ignorance of what parliamentary government is about.
On this view, ministers in this Government, it seems, no longer decide policy or frame strategy. The actions of the ministries and departments they are appointed to lead have nothing to do with them, and they are no longer accountable to Parliament or to anyone else.
The doctrine of parliamentary government - under which the executive arm of government is answerable to the elected representatives of the people - would be swept aside. Ministers would be merely shoppers in the market place - looking for the best bargain, weighing up where they can get the best deal.
Their departments would be simply just another possible provider, no longer part of government or of what might reasonably be called the public service; they would be autonomous bodies - free agents, not subject to ministerial direction - competing, like any other provider, for the minister's attention and custom.
New Zealand enjoys an enviable reputation as one of the most effective democracies in the world. In surveys of the total international community, we regularly find a place in the top three of those countries that offer a truly functioning democracy to their citizens. If the McCully doctrine that ministers are merely "purchasers" who are not accountable to Parliament for the actions and policies of their ministries were to be adopted, there would be little left of the democratic safeguards we have come to take for granted.
John Key has already lost one member of his new Cabinet, and - as controversy swirls around the heads of others - there may be more to come. He cannot afford to see his Government weakened in this way.
Can he, in these circumstances, continue to have confidence in a senior minister who has made an almighty hash of his brief, has had to resort to blaming those he appointed for doing what he had required them to do, and has revealed a complete ignorance of one of the basic constitutional principles of effective parliamentary democracy?
* Bryan Gould acts as a consultant to the Labour Party on its organisational review.