O'Connor Damien: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeO'Connor Damien: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11678. Text is incorporated into the Bound Volume.]Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I appreciate the wisdom of my colleague Mr Goff but I have to say that on reading through some of the provisions of Part 3 of the State Sector and Public Finance Reform Bill I am starting to wonder whether the Opposition should indeed support the bill. Following on from his statements and our belief of course that this might bring better accountability I went to section 139 in clause 179 “Obligation to prepare statement of intent”. This goes right to the heart of what the Government is trying to do here and that is to privatise every single thing it can get its hands on. It is good to see the “Minister for Private Prisons and Prison Riots” in the chair and I am sure that she can get up and answer this question.What this effectively does is move away from the current obligation of Crown entities to provide a statement of intent every year where every single taxpayer who is a part-owner of these entities can ask the question: “What is this organisation this entity doing?”. As a former Minister I can appreciate the oversight of a Minister through this process. The ability to check the statements of intent for Crown entities and be assured that they are heading in the right direction has now been shifted to a 3-year and possibly a 4-year statement of intent process because the Minister—Hon David Cunliffe: Three.Hon DAMIEN O’CONNOR: Three and if you go to section 139A the Minister may grant an extension of time of up to a year. So what we have is potentially one statement of intent for—Hon David Cunliffe: Two parliamentary terms.Hon DAMIEN O’CONNOR: That is right. Or indeed the question is whether the National Government has an intent to shift to a 4-year parliamentary term. That is maybe something the Minister can come back to because if we are shifting from an annual statement of intent to a 3-yearly one with the possibility of a 4-yearly one then is that what the Government is intending to do? Is it intending firstly to reduce the accountability for agencies that it intends to partly privatise as the obligation to have a yearly statement of intent might be a little onerous for some of the wealthy shareholders who come in to buy these entities? They may see it as a bit too much taxpayer scrutiny.I say that without the ongoing oversight of a Labour Government—that is a Government that is here for the good of all taxpayers—then in Part 3 the objectives and the statements of intent of these partly privatised Crown-owned entities might be different from those of the fully taxpayer-owned ones; in fact we know that. We know that the partly privatised State-owned enterprises and Crown entities will in fact be there to maximise profits end of story—end of story. The statement of intent—that is the focus on providing services providing reliable electricity supply and providing sound infrastructure which has always been a core part of Governments’ intent or certainly of a Labour Government’s intent anyway—may in fact be diluted.I am concerned that the provisions in sections 139 and 139A shift from a clear annual statement of intent of what this organisation is about to one possibly every 4 years. That is a huge change in the way that any entity can account back to its core shareholders. I guess in a modern dynamic economic which we have where we have markets that change in milliseconds and trading that occurs at the push of a button then I would have thought that we should move to a more direct accountable system and one of maybe on an annual basis as has been the case.Although I applaud strategic planning long-term planning this may be a step backwards. I accept the wisdom of the Finance and Expenditure Committee which hasmade a lot of very sound changes and maybe a Government member over there might want to get up and explain why these changes have occurred and how this can—David Bennett: Get in there Hayes.Hon DAMIEN O’CONNOR: And I welcome that opportunity from Mr Hayes because as I say the Opposition is supporting the general intent of this bill on the basis that it does provide a better accountability regime. But from my reading of sections 139 and 139A in Part 3 we are stepping back from the intent of this and certainly from the reason that the Labour Party is supporting this bill. So if Mr Hayes wants to get up and answer that question that is great. It is clause 179 and it is replacing section 139.The other issue in here which should not be overlooked is section 139(2)(b): “no member of the Crown entity group other than the parent Crown entity needs to prepare a statement of intent”. This may seem like an innocuous little clause here that does not mean a hell of a lot. It means that if a Crown entity or Crown-owned enterprise can set up a subsidiary company there is no obligation whatsoever on that company to provide a statement of intent. I see that as a serious step back and maybe it is a question the Minister can answer—maybe it is the one that Mr Hayes is going to answer. But that specific section 139(2)(b) in clause 179 says “no member … needs to prepare a statement of intent.”So how many subsidiaries can a Crown entity set up? I guess that under the new partial privatisation arrangements that the Government is going to put in place for many of the Crown entities it can get on and roll out a number of companies none of which has an obligation to tell us what they are about or what they are intending to do. Even if it is just for the 4-year period that this bill can now extend them out to there is no obligation for that subsidiary to provide a statement of intent. What shareholder would buy into a company or be part of a company that does not have to tell them what it is going to do? So maybe Mr Hayes can get up and answer that very clear question—in my view. I think I will leave it at that.I come back to the point that Labour is supporting this bill on the basis that we believed we were getting better accountability regimes. But from my reading of clause 179 it says that in section 139—actually section 139 of the principal Act is replaced in clause 179. I should clarify that; sorry if I got a little confused. Under clause 179 of this bill—that is the replacement of section 139 of the old Act—we are indeed stepping back because of the extended time lines of statements of intent and the removal of the requirement of any subsidiary to provide a statement of intent. I think that is a retrograde step for Crown accountability and taxpayers should have a clear explanation as to why that has gone ahead.