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:11708. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):Thank you very much for the opportunity to contribute to this clause 1 debate. Thank you to the member to my right Mr Mallard who has just resumed his seat. His was a very useful summary of the issues. I join him in inviting the Minister of Revenue to explain to the Committee his use of these rules in reaching his extraordinary decision about puppy poisoning—but anyway.The clause 1 debate provides an opportunity for us to sum up the arguments that have been deployed through the Committee’s consideration of the State Sector and Public Finance Reform Bill. I would like to take this opportunity to thank our colleagues who really debated this bill with I think considerable depth over the last 24 hours. It is instructive to note that the Labour benches are relatively full and the Government’s benches are relatively empty on a bill that is supposedly a Government bill but that has actually I think benefited quite significantly from the efforts of the Labour team to redraft it.I want to recognise the excellent input of officials who have served the Finance and Expenditure Committee very well and have facilitated significant—significant—amendments to the bill. I thank the Minister of State Services Jonathan Coleman and the Minister of Revenue for his work when he was formerly in his role as the chair of the Finance and Expenditure Committee which undertook some significant changes.I would just reiterate that when the bill was introduced Labour opposed it. It is not very often that an Opposition will start out opposing a bill and then change its mind and end up supporting it. Quite often an Opposition will reserve its position during the first reading of a bill let it go to a select committee hear the submissions and then form a final view. Occasionally it will support a bill to go to a select committee to allow the public to have its say and then end up opposing it. But very rarely does it oppose and then support. That is what is happening today and that is because some very significant amendments have been made that take the rough edges off the bill and allow it to better achieve the purposes which we agree with.I would like to quickly touch on some of those significant amendments because they are also sources of ongoing concern. I do want to emphasise that our team although we are supporting the bill is going to be watching its implementation very carefully to ensure that the issues that were the cause of heavy amendment in the select committeeprocess actually work out the way that they are supposed to. The first of those was of course the redundancy provisions in the State Sector Act changes. Tough negotiations resulted in a better bill with employees’ rights now better protected. The bill as introduced did present a considerable danger to redundancy provisions. The key words here are that in order for a State servant not to qualify for their full redundancy package on a situation of transfer or job change they would have to be offered a package that was “no less favourable”. It is not “no less favourable overall” and not “sort of close to the current package” but “no less favourable”. They should not be worse off than they were before the change. That is a core principle of our support and we will be watching very closely to see how that is interpreted.The second issue was the use of Government Workforce Policy Statements originally orders. In the original draft of the bill those orders could well have been construed as conferring legal weight to a Government’s central direction to its various agencies and to chief executives to bind the hands of those chief executives in wage and salary negotiations and terms and conditions negotiations. The select committee has turned that on its head. It has explicitly ruled out the use of Government Workforce Policy Statements—as they are now called—to do anything that would affect wages and terms and conditions and it has explicitly written in a provision that will enshrine all of the existing bargaining rights that currently apply to State servants and Crown entity servants. We have taken the presumption that was in the draft and turned it on its head. The bill now specifically protects and enshrines those issues. But like the Public Service Association and the Council of Trade Unions we retain a degree of reservation about how that will be implemented in practice and we will be watching very carefully.There was also significant discussion and amendment at the select committee in respect of the ability of chief executives to delegate functions or powers. We join with the Government in wishing to see a more flexible responsive and networked public sector. Notwithstanding that and while recognising the importance of being able to delegate functions and occasionally powers to hybrid agencies subsidiary agencies and possibly non-governmental entities it is very important that that chain of delegation is rigorous so that the accountability back to Parliament and to the taxpayer to the citizen is unbroken. For that reason the select committee supported amendments to the bill that tightened the conditions and placed restrictions on when and how such delegations could happen.Labour supported the committee’s amendments to increase the accountability of the delegations including an amendment that the delegation must be in writing—that sounds obvious enough but it was not there at the start—and that the functions or powers delegated to a chief executive by a Minister or the State Services Commissioner may not be delegated further without their prior written approval. That is like a tenant not being able to sublet a flat without the prior approval of the landlord. The sub-delegation that we are seeking to make sure is rigorous is the powers of the Crown which are legitimate only because they go through the electoral process—Parliament is accountable to the people. Parliament vests that authority in Ministers of the Crown and Ministers in turn vest it in departments. The State Sector and Public Finance Reform Bill allows departments’ chief executives to vest some of those functions and powers in subsidiary entities or agencies. So we are just being very careful with that. It is a bit of an innovation but we think it could work provided the powers are rigorously mandated.A fourth area of ongoing vigilance will be in the area of multi-category appropriations. We have had quite extensive debate on this through the Committee stage of the bill. I think there is general agreement in the Committee on the idea although itis to be fair experimental that we would allow multi-category appropriations—that is Budget lines that are shared between different departments or entities. So it might be the Ministry of Fisheries which is now a part of the Ministry for Primary Industries—it might be the Ministry for Primary Industries and the Ministry of Business Innovation and Employment sharing with Callaghan Innovation a new research budget. We want those agencies to work together. We are allowing them to share a common pot of money but several things follow. The first is it must in all cases be possible for the public through Parliament to see where the money came from and where it went. That includes being able to trace back from Budget 2014 to Budget 2013 and Budget 2012 so we can see the time line. The amendments require what we call strict traceability of funds including how they got into and out of the multi-category appropriations right down to the nitty-gritty which in our language of the bill is called sub-output classes. What we are trying to enshrine here is that the accountability to Parliament through the Budget cycle is no less than it was even though we are allowing for a new hybrid funding instrument called a multi-category appropriation.There have been a number of Supplementary Order Papers brought to the Committee and we have received explicit assurances from officials and the Government that there are no new policy issues embedded for example in Supplementary Order Paper 262 which is a multi-page Supplementary Order Paper. It is quite a large one. We are advised that it is purely consequential partly because of date changes and technical in nature. We are of course willing to take our highly qualified advisers at their word but we are acting in reliance on that advice in conferring our support for the bill and we will be aware of the possibility that there could be subsequent issues that arise in respect of those Supplementary Order Papers. We will give them the benefit of the doubt.We would note also that the Green Party has brought Supplementary Order Paper 265 to the Committee in support of further enshrinement of State sector employees’ rights. We supported that Supplementary Order Paper even though it was not passed by the Committee. The Government voted it down and we think that was a shame although the Green Party might have brought that amendment to the Finance and Expenditure Committee for earlier consideration. We might have been able to swing it as part of the earlier negotiations but we recognise the Green Party’s good intent in bringing it to the Committee at this stage.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to clause 2 be agreed to.