Watch: PM Chris Hipkins announces Michael Wood has resigned

Prime Minister Chris Hipkins has announced Immigration Minister Michael Wood's resignation.

Wood was stood down as Transport Minister and investigated by a Parliamentary inquiry earlier this month after it emerged he had not declared shares in Auckland Airport worth about $13,000.

He had purchased the shares as a teenager in the 1990s, and was stood down after failing to declare them in the public register of MPs' assets and other interests until 2022.

He sold them shortly after being stood down from the role, but had retained other portfolios including Immigration.

Hipkins said newly unveiled additional shareholdings held by a trust for which Wood was a trustee and beneficiary raised concerns about him not identifying and managing potential conflicts of interest.

These included shares in Chorus, Spark, and National Australia Bank (NAB).

Hipkins said in particular Wood as immigration minister made the decision to include telecommunications technicians on the immigration green list, after "representations from the telecommunications industry including Chorus, seeking those changes".

NAB is the parent company of the Bank of New Zealand. Hipkins says the shareholding was not disclosed in conversations at Cabinet about a market study into banking or other recent relevant conversations.

"Despite repeated requests from the Cabinet Office and myself for Michael to manage his shareholdings, he's repeatedly failed to identify, disclose and appropriately manage conflicts of interest."

He said when he stood Wood down as transport minister, he had asked if there was anything else he should know and was told there was not.

Hipkins said not managing his airport shares was not an isolated incident, and it "was therefore not appropriate for Michael to continue as a minister".

"I've also formed the view that the system that we have in New Zealand for managing potential conflicts of interest amongst Cabinet ministers also needs to change."

He said when he learned Wood had failed to sell his Auckland Airport shares despite 12 requests from the Cabinet Office to do so, he asked for advice on measures to ensure this kind of behaviour would not be repeated.

As a result, he had agreed to five changes to tighten up the disclosure regime for ministers.

First, Cabinet Office will move to quarterly reporting of conflicts of interest, directly to the prime minister. This changes from prime ministers only being advised of new interests as part of the annual review, or on an "ad-hoc" basis if particular issues arise.

Second, an escalation process will be set up for situations where a minister is not engaging fully with the process or following advice on the management of a conflict.

Third, Hipkins said there would be in-person annual reviews with each minister to discuss their conflicts.

Each minister would also have to nominate a dedicated person in their office to support them with conflict-of-interest processes.

And the fifth change, Hipkins said, was conflict disclosures would become a standing item at the start of each Cabinet or Cabinet Committee meeting.

"I have also sought advice on a full Restrictions Regime on shareholdings for ministers," Hipkins said.

Hipkins also sought advice on a full restrictions regime for shareholdings for ministers.

"In Australia, the Code of Conduct for ministers requires that they divest themselves of investments and other interests in any public or private company or business. That is, other than public superannuation funds or publicly listed managed funds or trust arrangements where the minister has no visibility or control of decision-making."

Hipkins said while he believed Wood acted with no intent of personal gain, "his actions have let himself and the government down" and "he has shown a serious lapse of judgement and has taken the appropriate action by resigning".

Carmel Sepuloni will become minister for workplace relations and safety and minister for Auckland, Andrew Little will become minister of immigration and David Parker will become minister of transport. Kiri Allan will become associate finance minister.

"Like many others, I have found this episode deeply frustrating," Hipkins said.

"While I've only been in this job for about five months, I've taken a number of steps to stop the kinds of behaviour that have not met acceptable standards. Minister(s), for whom it is an honour to have such a role, need to ensure they manage their affairs to the highest standards.

"These have been unnecessary distractions from the firm focus that I want to bring (as) prime minister to delivering on the issues that are most important to New Zealanders."

"These are conversations that I've been having with Michael over several weeks, and to only learn of these yesterday when repeatedly through numerous conversations I've asked him if there are other issues that I should be aware of and he's said no, that's beyond frustrating."

He said he did not believe Wood had been able to adequately explain how he had found himself in this position.

"In these issues as prime minister, my first duty is to uphold the standards required of ministers. That's been my primary consideration here. Michael Wood hasn't met these standards."

He said he liked to think he had treated ministers fairly and with respect but had taken appropriate action when those ministers failed to uphold the standards expected of them.

Hipkins did not have a breakdown of the worth of the shares, but the bank shares were believed to be in the tens of thousands.

Hipkins said the matter was disclosed to his office yesterday morning, he was informed about lunchtime, he went through the information and sought answers from Wood.

"Those answers came back last night, I met with him this morning at the first available opportunity to do that and then I indicated, well, I accepted his verbal resignation at that meeting which has subsequently been followed up."

Hipkins said was an issue he still did not quite understand.

"I believe Michael to be an honest and decent person, who has been a conscientious and hardworking minister and has been a very good minister. I still don't understand how after all of this period of time over two years of the Cabinet Office asking him to attend to these matters we're still in this position now.

"In the last few weeks even, the fact that more information has come to light as those weeks have unfolded is something that I still don't understand. I accept that human beings make mistakes but this is over two years' worth and even in the last few weeks the amount of time it's taken for him to fully identify any other relevant issues, again, is not acceptable."

Hipkins said some of the decisions - the banking ones - were only made in the last few weeks.

"He still hasn't given me a good explanation ... I don't accept that it simply was just something that he didn't get to. It should have been a priority for him and it wasn't. And I haven't heard an explanation from him - an adequate explanation, in my view - explanation as to why he hasn't done that.

"His explanation was that these shares have been in the trust for a long time, and that he wasn't aware of them. I don't accept that."

He said Wood's future in politics was a question for him.

"There are people who have made mistakes in the past who have gone on to have great political careers ... but clearly one of the priorities for him right now has to be to tidy up this part of his life, which he clearly hasn't given sufficient attention to."

"If he was simply a beneficiary and someone else was managing the trust that would be a different situation, but he is a trustee of the trust. On these matters clearly he's let himself down, he's let me down, he's the government down, he's let the people of New Zealand down.

"I indicated to him that I thought his position as a minister was untenable."

In a statement, Wood said he was apologetic and was taking responsibility for the mistakes he had made in dealing with his conflicts on interests.

He said he had spent the past couple of weeks reviewing all of his financial interests and found other shares he held through a family trust that should have been reported to the Cabinet office.

"Similar to my ownership of personal shares, these were historic holdings from before I was a trustee and I have paid limited attention to them. At all times I have provided information about shares in the trust to the Cabinet office that I have believed was correct, but in this case my understanding was incorrect."

Wood said he was a "true believer in politics" and was there to serve the public.

"There has not been a second of my political career where any of my financial interests have influenced my actions or even crossed my mind. In some respects my de-prioritisation of my personal financial affairs has led to this situation.

"That being said I acknowledge the rules are in place for a reason and it is incumbent on Ministers to manage not just the reality, but also the perception of any conflicts. I have not managed this effectively, I take responsibility for it, and as such have submitted my resignation to the prime minister. I apologise to him and the public for this situation."