Cunliffe David: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11689. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):This has been an important and lengthy debate on a framework piece of legislation the State Sector and Public Finance Reform Bill that is critical to the efficient and effective functioning of our Civil Service. It may not be at first glance the sort of legislation that someone might pick up and find exciting to read but it is none the less fundamental to how we do our job collectively of serving New Zealanders to the best of our ability and extracting the very best value that we collectively can from their hard-earned tax dollars.This has been appropriately a reasonably wide-ranging debate and I appreciate your willingness Mr Chairperson to accommodate the various issues that have arisen. Let us cast our minds back to the original process that this bill went through. The Labour Opposition opposed this bill strongly at first reading. It did so because the bill as drafted particularly through the amendments to the State Sector Act would have gutted the rights of civil servants—their negotiation rights their redundancy provisions and a host of other hard-earned employment obligations and privileges.I am very very happy to reiterate that as a result of a careful and good-faith negotiation with the Minister of State Services which was led by the Labour Party and supported by the Public Service Association and the Council of Trade Unions the Government has seen fit to introduce extensive amendments that now allow us to support the legislation with the support of those union representatives. Let me clarify that that is not to say the unions themselves think this legislation is a wonderful thing. They still have as we do significant reservations about the potential interpretation of some aspects of it.When the bill is taken as a whole we are now in the position where we are satisfied with language like a State servant facing a transfer must be offered a position that is “no less favourable” than what they have in order not to be given their full redundancy entitlements. We are reasonably satisfied that the changes to the Government workforce orders which now make them workforce statements and the explicit language written into the bill during the select committee process protects and preserves all existing employment rights in that process and offers sufficient protection to State servants for us to be able to confer support for the bill.There are a number of other similar changes made at the select committee particularly in relation to the State Sector Act provisions that have given us sufficient comfort that at this stage we can support the bill again with caution with some reservations with a careful eye to how it is implemented by the current Government and with a view to potentially reviewing it when the new Government comes in in just 15 months’ time. But we do offer our support for the bill at this point.Having disposed of those very serious reservations and acknowledging the good work of the Minister the Hon Jonathan Coleman and the then chairman of the Finance and Expenditure Committee now the Hon Todd McClay let us move back to the central purposes of the bill which we commend and support. Through this legislation we will help to modernise the public sector. I think our deputy leader Grant Robertson made a very good point when he talked about moving from the age of the spreadsheet to the age of Google. We are seeking to build a flexible networked interactive service-oriented lean-but-not-mean public sector that will serve the interests of all New Zealanders while being careful and prudent with the expenditure of public moneys. It has been a shared goal of both sides of this House for many years now that the Civil Service would be able to move towards a more collective enterprise in the best sense of the word and that agencies of the State whether they be Government departments Crown entities or contracted agencies work together to achieve common goals. And it has not been that easy. Managing for Outcomes has come and gone. The Government is having real trouble I understand with its Better Public Services programme where at least half of the objectives soon to be revealed are not on track.It is not that easy to bring Government departments together in common goals and this legislation will we hope make a real contribution in that regard. There are several ways in which it does that. The first is the multi-category appropriation. That allows agencies to receive a common funding pool across traditional silos. As introduced the bill sacrificed the specificity and accountability requirements in the name of that cooperation. As amended at the select committee and with the further useful advice of our high-calibre officials there is a better balance because we now have full traceability of funds from year to year including when they have changed the jargon from output class to output class and including where they move to a multi-category appropriation as provided for. We are now comfortable that we have not sacrificed the accountability to get the flexibility.Another aspect of trying to build a more flexible Public Service has been to make somewhat less prescriptive the provisions around a statement of intent. For the public the statement of intent is one of the key contractual documents alongside a chief executive’s performance agreement by which Cabinet and the political layer which is the people’s representatives bring the direction of the Government of the day to the Civil Service and they are absolutely essential documents. What is important is that in this bill although the Government has sought to reduce the requirements to make that an annual process the Finance and Expenditure Committee has reinserted the option for Ministers to make those statement of intent updates annual. In its commentary the select committee emphasised that civil servants need to make clear to Ministers that thatannual update provision or ability still exists because we do not want to lose accountability in the search for flexibility.As a number of my colleagues have noted there is a certain irony in the Government moving to introduce legislation that provides for “whole-of-government directions” at a time when it is busily seeking to privatise part of our energy system and to gut the State-owned enterprises portfolio. Why is that ironic? Because the power to direct those crucial entities—and energy security is going to be one of the key strategic issues facing our future—is already there in a fundamental piece of legislation. It is called the State-Owned Enterprises Act. But when Mighty River Power for one is partially privatised it is no longer in law a State-owned enterprise so the power to direct is rescinded. The obligation of no surprises is rescinded.Look how important that was in the case of Solid Energy a huge black elephant—now a white elephant—on the Government’s books. It should have been even more prescient in its advice to Ministers and Ministers should have been even more hands-on to avoid the blood bath of taxpayers’ money that has occurred in relation to that entity. But to make those rules looser by partially privatising the entity as was announced—even though the Government now cannot because it is such an embarrassment—while introducing this responsible legislation to allow for whole-of-Government directions I think the public will get the irony in that situation. I see members opposite kind of shuffling looking at their feet. They have got their heads down. That is the traditional reaction when you know you are up the legislative creek without a paddle.But enough on that; back to this bill. This is responsible legislation. I am very pleased that it has the overwhelming support of Parliament and that there has been a good-faith negotiation process between the Opposition and the Government. That has I think in everybody’s understanding resulted in a better piece of legislation. Is it perfect? No. Will there be implementation issues? Yes. Will the incoming Labour-led Government watch it like a hawk? Of course it will. Will it be prepared to fine-tune it with further amendments if necessary? I am sure that the future Government will want to do that if required.We believe that this is a step forward not a step backwards now that the employment rights of civil servants have been protected. It is a step forward because it gives more flexibility. It is a step forward because it confers a greater sense of common purpose. It is a step forward because it allows for flexibility and includes some limited forms of delegation of powers and functions to interactive work with the community.