Cunliffe David: State Sector and Public Finance Reform Bill — Second ReadingText is incorporated into the Bound VolumeCunliffe David: State Sector and Public Finance Reform Bill — Second Reading[Sitting date: 25 June 2013. Volume:691;Page:11210. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):May I offer perhaps rare congratulations to the Minister of State Services on several points. The first is that by being willing to embrace changes from the Finance and Expenditure Committee I believe that the Minister and the chair of the committee Todd McClay—now the Hon Todd McClay—have assisted Parliament to get to the point where we have a piece of legislation the State Sector and Public Finance Reform Bill that is workable and does make useful amendments to our structure of Government and the Labour Opposition will now be able to support this bill. That is a change from our position in the first reading; we were opposing it at that stage. So this is a significant shift for the Labour Opposition. It reflects the amendments that have been made in the select committee process. I will comment now on the most major changes which have allowed us to switch our position.Secondarily I would like to compliment the Minister on choosing the right speech to read. It has not always been thus but we are very pleased that he—Hon Dr Jonathan Coleman: You know I wasn’t going to say anything nasty about you David.Hon DAVID CUNLIFFE: Well all in jest Minister. Come on have a thick skin; you have been here a couple of years.This bill is for the public one of those interesting pieces of legislation that might not seem particularly flashy but actually goes to the heart of how we run our institutions of Government: the rules under which Government departments and public entities are operated how they are accounted for and the rules by which they employ their staff. In the first version of this bill—the bill as introduced—which we opposed there were a number of provisions that would have violated the existing rights of public servants in the stampede to create more flexibility in the State sector. For example with regard to the redundancy rights of public servants new sections 61A and 61B in clause 49 as introduced would have removed provisions for the transfer of employees between public service departments and unduly restricted redundancy payments where State sector employees who have received a redundancy notice are offered and have accepted an alternative position prior to ceasing their employment. The effect of the provisions would have been to remove the existing rights contained in collective agreements and would have ignored the fact that the State Sector Act actually established Government agencies as separate employing organisations. The effect of that would be that State servants would have lost existing entitlements by being forced to transfer without access to redundancy payments where in fact there was a significant difference in their terms and conditions of employment.The change made by the select committee has been to enshrine the principle that for redundancy payments not to be paid the new job offer has to be “no less favourable” than the existing position. The select committee considered but rejected ultimately an alternative formulation proposed by the Government which was “no less favourable overall” and instead took advice that said it is already through the case law that courts can see the package of provisions and entitlements as they currently stand and can make judgments about equivalence. We did not need the word “overall” which would have been taken as an undue liberalisation. The Government compromised on that key point to the satisfaction of the public sector unions—the Public Service Association which led that debate and the New Zealand Council of Trade Unions—and on that basis the Labour Opposition is now willing to support that provision.The select committee’s amendments to the transition arrangements in new section 61AB in clause 49 included the insertion of a new 3-year sunset clause following the enactment of the bill which will ensure that collective and individual agreements are treated equally. That was really important to State sector employees and their representatives because otherwise individual agreements could have lasted longer than a collective agreement putting State sector employees who were on a collective agreement at a disadvantage relative to their colleagues on individual agreements. I am very pleased that the Government has seen sense on that matter and introduced a new 3-year sunset provision which means that everybody is treated equally as you might say people should have been from the start.The Labour Opposition was very concerned about the proposed Government workforce policy orders by which the Crown would have sought to tie the hands in a binding fashion of State entities involved for example in wage bargaining. The committee has amended those provisions so that they are now Government workforce policy statements not orders; that they are not binding at the level of detail; and to specifically reinforce the point that none of the existing bargaining rights of Stateservants will be trammelled by this—that is all of the existing legal rights of State sector employees to good-faith negotiation have been preserved.Other improvements made by the committee include tidying up the conflict of interest provisions. These have been strengthened where there are delegated powers and the application of the Ombudsmen Act has been clarified. Improvements have been made to the provisions for strategic intentions as embodied in the formal statements of intent. The original bill would have diluted the statement of intent process so that they were written for Ministers only once every 3 years often when Ministers were green as grass at the start of a triennium when you might say Sir Humphrey could be hard at work. The committee has prevented that from being diluted to once in 3 years—they are currently annual—to give Ministers the right to have a statement of intent update every year and it is mandatory for State servants to brief the Ministers that they have that right. New section 55B(2) in clause 42 has been amended to balance the efficiency objectives with a broader notion of effectiveness that includes fairness considerations of both a substantive and procedural notion.Those are some of the key changes and I acknowledge that they are significant changes for a Government to make and I really wish to commend the work of the committee chair Todd McClay and the Minister who has resumed his seat—the one without much of a sense of humour earlier—because they have been willing to make these changes in good faith such that the bill can now command the broad support of the House. For members of the public watching it is not actually every day that you see Parliament working in a cooperative fashion at select committee level that results in significant redrafting of bills like this.Andrew Little: Because they are so unreasonable on the other side.Hon DAVID CUNLIFFE: Sometimes they can be intransigent as my colleague Mr Little has said but in this case there was good cooperation across the committee—Hon Maurice Williamson: At least we don’t use the “f” word at the select committee.Hon DAVID CUNLIFFE: —and that has captured the imagination of the often slumbering Maurice Williamson who has come back to consciousness particularly to contribute to this debate and we are very honoured by the fact that he has woken up and tossed in a very small barb or two. No process is perfect but in general this one has been pretty good.Having said that may I in my final minute or 2 note some remaining reservations that the Labour Party has which are not significant enough in our eyes or those of the State sector unions to prevent support for the bill but upon which we will be giving close ongoing monitoring. They include these. In respect of the redundancy provisions there are still concerns that the protections relate only to the Public Service. There are concerns that someone who accepts another job during a notice period now has greater protection in maintaining continuity of service and that the position must start on before or immediately after the date upon which the current employment ends. We are also concerned that the delegation of powers from the core State sector to non-State partners and implementing agents is too broad and we will be watching very closely to see how that is used in practice and whether later amendment is required. We are concerned that immunity from suit rather than indemnity is being afforded. We think that that is a bit broad and we note the Law Commission’s concerns in that regard. The amendments to the Public Finance Act that will assist in removing barriers to greater cooperation between Public Service entities need to be balanced in practice with greater clarity of financial accountability documents. We did receive assurances from officials and the Minister that it would always be possible in the Budget documents to achievecomplete traceability of output classes even where there is a multi-category appropriation.To sum up the committee has made significant progress. We commend the Government for being able to listen to the Opposition and to the State sector unions and to actually forge bipartisan compromise on a structural piece of legislation that will most likely be around for a political generation or two.