NZ minister quits in cronyism row

2012-03-21 10:00
Wellington - A New Zealand cabinet minister resigned Wednesday amid accusations of cronyism, in the first political setback for Prime Minister John Key since he won a second term last year.

Local Government Minister Nick Smith announced he was stepping down after failing to declare his conflict of interest when he wrote two letters last year supporting a female friend's compensation claim against his then ministry.

In an emotional speech to parliament, Smith acknowledged he had made "not one error of judgement but two in dealing with a conflict of interest in respect of a friend".

"I messed up and I just apologise to all those people that I let down," he later told reporters.

Key, whose conservative National Party-led government was returned to power with an increased vote in November, resisted calls for Smith's departure earlier this week, saying he had not breached cabinet rules.

But he said on Wednesday that he had regretfully accepted Smith's resignation, adding that he expected his ministers to meet high standards.

"Dr Smith has been a hard-working and diligent minister, but perceptions do matter and he knows he has let himself down," Key said in a statement.

The case centres on an attempt by Bronwyn Pullar, a National Party activist, to seek payment from a government compensation scheme following an accident in 2002.

As the long-running dispute dragged on, Smith, whose portfolio at the time included the compensation scheme, wrote letters on his ministerial letterhead containing medical advice which supported Pullar's claim.

The leader of the New Zealand First Party, Winston Peters, said the case reeked of "cronyism" and "sleaze", while the main opposition Labour Party said Smith had tried to use his position to gain preferential treatment for a friend.

"He was trying to use his ministerial influence to get a decision in favour of someone who was a friend of his, you just don't do that as a minister and he knows that," Labour spokesperson Andrew Little told TV3.

Read more on:    john key  |  new zealand

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