Roche admits sack-or-nothing left MBIE’s misleading boss untouched

Sir Brian Roche has said the quiet part out loud. Speaking to the Local Government NZ conference, the Public Service Commissioner said the “stark black and white choice” over whether MBIE chief executive Nic Blakeley kept his job showed the need for a wider range of penalties for public sector chief executives, including performance pay and sanctions.

Put plainly, the accountability system had two settings, sacked or forgiven, and it chose forgiven. Roche’s admission is welcome. It is also an awkward verdict on a decision he made himself.

A $50 million failure, an apology and little else

The underlying mess is a botched Immigration NZ biometric upgrade that wasted at least $50 million of public money, amid allegations that officials misled several immigration ministers and used creative accounting to avoid Cabinet scrutiny.

Parliament’s Privileges Committee then found Blakeley and former Immigration NZ deputy secretary Alison McDonald deliberately misled a select committee. It called their conduct “an insult to the entire public service”, yet recommended no further sanction on the basis that the finding itself was punishment enough.

Blakeley offered to resign. Roche refused to accept it. In August he pointed to Blakeley being only six weeks into the role at the time and to his unreserved apology, adding: “Accountability is fixing what went wrong. Mr Blakeley is responsible for ensuring the failures identified by the committee are addressed.”

Not everyone bought it. Victoria University’s Associate Professor Geoff Plimmer said in August that Blakeley should have gone: “A system that allows somebody to mislead a select committee and then say, oh well, he shouldn’t have done that … sorry, whoops, I just don’t think that that’s credible.” Plimmer and Dr Amanda Reilly later argued the decision breached the code of conduct’s core honesty principle and undermined trust in the public service.

Why this lands on every business that deals with MBIE

This is being covered as a Wellington integrity row. For business it is something more practical. MBIE is the main front door between government and the private sector, covering immigration settings, regulation, business support and growth policy. Employers waiting on visas, firms navigating regulatory regimes and exporters relying on its programmes all depend on an agency being run with discipline.

In the private sector, a chief executive who misled the board about a $50 million write-off would not be kept on to fix it. The board would have options short of dismissal, such as forfeited bonuses, a formal warning or tighter oversight, and it would use them. The public service has had no such middle ground. That leaves a choice between an outcome that looks brutal and one that looks like nothing happened, and it has usually picked the second.

The fix has been sitting in the system for years

None of this is new thinking. The Commission’s 2024 annual report recorded that work had commenced on a performance pay element for chief executive pay, tested with a reference group of chief executives. A March 2025 Cabinet report proposed performance pay for chief executives, ministerial input into performance expectations and a published review plan with assessment criteria.

The Public Service Amendment Bill, introduced in 2025, put that into law through a performance review framework requiring the Commissioner to set criteria and to consult ministers when setting targets and reviewing performance.

The reason for urgency is in the same 2024 report, which showed trust in the public service falling from 58% to 56% between June 2023 and June 2024. That was before the MBIE scandal.

Middle options only matter if someone uses them

Scepticism is fair here. The Commission had a contempt finding in hand and still chose not to act. Graduated sanctions could restore real accountability, or they could become a softer landing that saves everyone from making a hard call. A docked bonus is meaningful only if it is applied when the facts warrant it.

The Blakeley case also remains unresolved. The Michael Heron KC inquiry into the IT failure is running long, and its findings are unlikely to surface until 2027, after the election, coalition talks and briefings for incoming ministers.

The test of Roche’s reform is simple. Will chief executive targets be published and tied to outcomes business can see, such as visa processing times, project delivery and regulatory turnaround? Will the first sanction actually be applied? Until that happens, performance pay is another review dressed up as consequences. If it does happen, the public service finally gets the management discipline the firms it regulates have operated under for decades.

Sources

• Newsroom: Public sector CEOs set to face performance pay and sanctions (2026-10-14)
• NZ Herald: Immigration scandal – Fate of MBIE CEO Nic Blakeley likely unclear until 2027 as inquiry drags on (2026-10-08)
• RNZ: Lack of consequence for MBIE boss who misled MPs sends the wrong message – expert (2026-08-27)
• RNZ: ‘There is a rot’ – Stanford expresses confidence in Blakeley to fix MBIE (2026-08-26)
• Newsroom: Public service’s integrity on the line over decision to keep business ministry boss (2026-09-05)
• Public Service Commission: Annual Report 2024 (2024-10-04)
• Public Service Commission: Public Service Act amendments – updated draft Cabinet papers (2025-03-14)