Business Irish

Thursday 17 October 2019

Finance Minister urged to pause appointment of next Central Bank governor due to New Zealand probe

Gabriel Makhlouf. Photo: Bloomberg
Gabriel Makhlouf. Photo: Bloomberg
Kevin Doyle

Kevin Doyle

FINANCE Minister Paschal Donohoe is under pressure to pause the appointment of the next Central Bank governor because of an investigation in New Zealand.

The process need to be stalled until the controversy around Gabriel Makhlouf's handling of a high-profile budget leak, according to former Tánaiste Joan Burton.

The Labour Party TD said it is “not good enough” that the Irish government has maintained a stoic silence since Mr Makhlouf was placed under investigation.

He is due to leave his role at the New Zealand Treasury at the end of this month and move to Ireland later in the year to head up the Central Bank.

Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins
Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins

But his final weeks will be spent dealing with an inquiry into whether he misled the government about alleged hacking of the country's budget last month.

Parts of the budget his department was working on leaked, and Mr Makhlouf blamed a cyber attack that now seems not to have happened.

The information had in fact been available on the department website, and there had not been a hack.

Ms Burton said the role of Central Bank governor was “one of the most important” jobs in Irealnd.

“I think it’s not good enough that what we’re told has happened in New Zealand has simply not given rise to any commentary or explanation by the Minister for Finance.

“I’m sure the person who has been selected is absolutely excellent. But the fact is that this is a situation where it appears that the head of the finance department in New Zealand is in a spat with the opposition,” the Dublin West TD said.

She added “the minimum” response from the Government should be to “pause the process” until the New Zealand probe is concluded.

This would create a difficulty for Mr Donohoe has he personally recommended the appointment at a Cabinet meeting.

But Ms Burton said: “He’s going to have to find a mechanism to pause it until we know the outcome in full of proceedings in New Zealand.”

Responding this afternoon, Mr Donohoe indicated that under legislation Mr Makhlouf has already been appointed to the Central Bank.

He said this happened at the end of “a very rigorous” process.

The State Services Commissioner in New Zealand, Peter Hughes, has said the investigation will establish the facts in relation to Mr Makhlouf’s public statements about the causes of the unauthorised access.

"Mr Makhlouf believes that at all times he acted in good faith."

"Nonetheless, he and I agree that it is in everyone’s interests that the facts are established before he leaves his role on 27 June if possible,” Mr Hughes has said.

Online Editors

Also in Business