How bad is it?
I will start with the worst case.
SCLEROTINIA DISEASE, WHITE MOLD
OR WATERY SOFT ROT.
The cure is!! there is no cure destroy the plant. burn it.
Good news is i do not think it is that do you have new growth?
Check for Mealybugs. Scrape some of the 'white fluff' off and if you see little critters walking around then that's what it is. Do you have copper spots, on the leaves?
As long as the new leaves are healthy I wouldn't worry too much. Clear away the nasty bits and don't compost them as if it is a disease you might spread it around. It's very humid under a Phormium and lots of mould like it!
Try a Garlic spray.
Does it look like this?
Nearest thing i can get in the dark sorry.