State Services Commissioner Peter Hughes defends his praise of under-fire Treasury boss

State Services Commissioner Peter Hughes heaped praise on Treasury boss Gabriel Makhlouf in a farewell function at the Beehive last week. Photo / Mark Mitchell

The head of the public service is defending his speech praising embattled Treasury boss Gabriel Makhlouf and says it will not prejudice the current investigation into Makhlouf and the Budget "hack".

State Services Commissioner Peter Hughes appeared at a parliamentary select committee today and was grilled by his former boss Paula Bennett, National Party deputy leader and former State Services Minister.

Hughes has ordered an investigation into whether Makhlouf misled the Government in the days leading up to last month's Budget, when he called in the police to investigate what he said was a systematic hack of the Treasury's website.

It turned out that National Party staffers had used the website's search function to access confidential Budget information, which police said did not appear to be illegal.

Makhlouf is leaving on June 27 to take up a position as head of the Irish Central Bank, and Hughes spoke at a farewell function for Makhlouf at the Beehive's banquet hall last week, saying he had brought "strong leadership and a great deal of personal integrity" to the Treasury.

Bennett has previously criticised Hughes' speech, but today had the chance to question him face to face.

She said that heaping praise on Makhlouf could improperly influence the inquiry.

Hughes replied that it was a farewell speech, not a performance review, and his words were about Makhlouf's years of public service.

"This was a written speech. I had it checked and double-checked in the commission. I read the speech - that's not normally my practice," Hughes said.

"This man has given eight years' loyal service ... has worked across administrations, and delivered loyal service to the nation and governments.

"I felt it would be churlish and dishonest for me to discount that in any way."

But Bennett said that Hughes, as head of the public service, held a lot of sway.

"You chose to use words that contribute attributes to him that are under question in a current investigation that your own department is running, and I'm sorry - that does have influence," Bennett said.

"You could have given him all of that respect ... but you needn't do it in a way that could possibly influence an inquiry that you are responsible for."

Bennett pressed Hughes, who at one point responded: "You've had a fair go, can I please respond?"

He assured Bennett that he would be fair and rigorous once he received the report into Makhlouf, which he said would likely be at the end of this week or the start of next week.

"I do not have a reputation of being soft on integrity lapses or those sorts of things, and I will not be here."

Bennett also challenged Hughes about not revealing advice that nothing illegal had happened for 12 and a half hours before the Treasury released a statement at 5am on Thursday, May 30.

That had allowed the false impression that National had illegally hacked the Treasury to simmer, she said, and staying silent brought into question the image of a neutral public service.

But Hughes rejected that, saying it was up to the Treasury to release a statement.

What had happened was not "definitively" clear until 4.30pm on May 29, he said, and five hours later the Treasury had finalised its statement, which was released the following morning.

He added that he did not know National had accessed the Budget 2019 information until party leader Simon Bridges held a press conference on the morning of May 30.