Financial Services

Makhlouf embroiled in budget leaks controversy in New Zealand

Having to resign from his treasury post would be embarrassing for Makhlouf, who becomes Central Bank governor in September

Gabriel Makhlouf: he has resisted mounting calls for his resignation in New Zealand

Sat Jun 1 2019 - 05:45

The Central Bank of Ireland's governor-in-waiting Gabriel Makhlouf must be cursing his luck at becoming embroiled in a budget leaks controversy in New Zealand just weeks before stepping down as head of the treasury department there.

Minister for Finance Paschal Donohoe might also be wondering what he has let himself in for by appointing the former UK civil servant who has headed New Zealand's treasury department since 2011.

The opposition National Party in New Zealand managed to access sensitive budget information before it was published by the government through the treasury’s website. Makhlouf initially claimed that its IT system had been deliberately and systematically hacked, and brought the police in to investigate. The department suffered 2,000 attacks on its system within 48 hours, he said.

The police found that there was no evidence of illegal activity by the National Party, who had simply used the search engine on the website and had no case to answer. Ouch.

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Makhlouf has resisted mounting calls for his resignation on the grounds of incompetence, including from the National Party. The opposition party also wants finance minister Grant Robertson to go, but, in true political fashion, he is waiting for the results of an inquiry before deciding what to do.

Having to resign from his post in New Zealand would be deeply embarrassing for Makhlouf, who is due to take up his role as head of the Irish financial regulator in September.

And for Donohoe, who appointed the Cairo-born official in to the Central Bank role in May ahead of other candidates including deputy governor Sharon Donnery.

Whatever transpires in New Zealand in the coming days and weeks, it is far from the ideal backdrop to Makhlouf taking on such an important and high profile role in Ireland.

Being the first overseas official to fill the post in the Central Bank’s 76-year history was pressure enough without this unseemly controversy. He probably can’t wait for his finish date of June 27th to roll around.

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