Clark David: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeClark David: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11599. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I am very very pleased to take a call Mr Chair and thank you for the opportunity. The State Sector and Public Finance Reform Bill is one the Labour Party will be supporting albeit with some reservations. We opposed the bill at its first reading and those present here in the debate will remember that but ultimately changes that were forced at the Finance and Expenditure Committee by Labour and the State sector unions have averted disaster for Government workers who were set to lose their redundancy entitlements and employment rights. I guess I want to thank the members opposite who engaged in those negotiations in good faith because it has become a better bill and one that hopefully will stand the test of time. These public sector bills are important for their longevity for the fact that they survive various Governments and provide some kind of certainty for future planning for the good of all New Zealand. So I do thank members opposite who were involved in that process as well as the unions—the Public Service Association and the Council of Trade Unions—and the Labour members of the committee who fought hard to ensure that that disaster was averted for Government workers who would otherwise have lost redundancy entitlements and employment rights.The bill as I said was heavily amended in the committee in response to the strong submissions from State sector employees themselves and from their representatives. Tough negotiations at the committee have produced this better bill and these employees’ rights are now better protected than they otherwise would have been. The redundancy provisions that were improved mean that employees retain their entitlements unless they are accepting a position that is “no less favourable” than their existing package.David Bennett: Put a bit of meaning into it. Give it a bit of feeling.Dr DAVID CLARK: Mr Bennett opposite I can see is bursting to make his contribution too but Mr Bennett I will look forward to your contribution in due course. In the meantime I am just outlaying the important provisions that are now in the bill. The transitional arrangements have been improved too in our view so that collective agreements and individual agreements are now sunsetted equally. That is important and that will take effect. The Government Workforce Policy Statements have been revised to ensure that all existing legal and bargaining rights have been protected and there are conflict of interest protections in there as well. Although Labour has some concerns with some aspects of the bill with the support of the unions significant change was brokered and that means that Labour will support this passage of the bill.Overall the bill is an omnibus bill that amends the three principal statutes governing the management of the State sector and the public finances in New Zealand so it is not be underestimated just how important this bill is to the future of our country. It will notbe one of the sexiest bills to be debated in this Parliament if I can put it that way but it is an extremely important bill. The powers that it will give to chief executives and to Ministers in terms of reporting requirements in terms of the way that happens and in terms of the way in which they can work with appropriations will have long-term effects. They will make some things more efficient and hopefully the right balance has been struck in terms of providing accountability to go with these measures.In Part 1 of the bill the main changes it makes involve strengthening the role of the State Services Commissioner—that is the first one that should be noted—to make sure that the role of the State Services Commissioner in leading the State services and ensuring that agencies work together collaboratively as a system is strengthened. It is set out for the first time ever in legislation—the commissioner’s role. That is a very significant step but an important step. The commissioner’s functions will be broadened to include the ability to transfer chief executives within the Public Service when a vacancy arises and to draft Government policy on workforce and employment matters from the perspective of the State sector system as a whole. This power would not extend of course to determining pay or conditions. Extending the responsibilities of chief executives to their Ministers to include matters relating to the collective interests of the Government and stewardship of the interests of the Crown and departments in the medium and long term is another significant change that is being proposed. Chief executives will have the power to delegate statutory functions and powers between agencies and subject to certain safeguards to non-government service providers.The proof will be in the pudding with these particular amendments. How these interests are played out the kinds of delegated statutory functions that we are asking—and I speak collectively—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the chair for the dinner break.Sitting suspended from 6 p.m. to 7 p.m.Dr DAVID CLARK: When I was rudely interrupted by the dinner bell I was discussing the strengthened role of the State Services Commissioner and the effects of the changes to the amendments to the State Sector Act 1988. I was about to introduce a person as an example of why this is important policy. These new powers will give a formalisation to the role of the commissioner. It will also mean that he or she has the ability to transfer chief executives within the Public Service as a vacancy arises. It gives them the ability and responsibility for Ministers and chief executives to have a greater interest in the stewardship of the interests of the Crown and departments in the medium and long term.An example of this might be if a future Government for example had a priority to change the way in which the electricity system worked. As it happens currently the Prime Minister has said that he thinks that Kiwis are paying about the fair amount for power prices. Most New Zealanders—Hon Ruth Dyson: What? He didn’t say that!Dr DAVID CLARK: No he did say that. Most New Zealanders think that power prices are far too high but the Prime Minister thinks that they are about right. Labour sides with most New Zealanders in thinking we should have a fair price for power—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: I am coming to a point here—The CHAIRPERSON (Lindsay Tisch): Yes. Well you are meant to be.Dr DAVID CLARK: —which is that if we wish to change the policy it would very much involve implementation by the public sector by people who are tasked with implementing changes whether you agreed with the policy—not meaning you MrChair—if changes need to be made. This flows on to the responsibility of Ministers and agencies concerned and these additional powers should ease the ability to change policies. So where one party has decided that capitalising the value of free water is not the fair way to build a system where you think the cost of electricity should not rise at double the rate of inflation for the last 15 years and where you wish to implement a new policy that says instead of the long-run marginal cost you would look at a model that looked at a fair return on capital and paid only the marginal cost for new generation you could implement that—I do not mean you Mr Chair. But the Government of the day could implement that change through the powers of the State Services Commissioner filling a vacancy in a relevant department and/or having the sanctions and rewards necessary—Hon Ruth Dyson: As long as it wasn’t privatised.Dr DAVID CLARK: —as long as that department had not been privatised as my colleague alludes to. Subject to the normal powers there is a wider range of abilities or a strengthened range of abilities for the State Services Commissioner to effect change. That at least in theory is partly how this legislation could play out and we in Labour think that is a good thing and that is why we will be supporting this bill. The Government thinks it is a good thing also. It should enable the Government to achieve its objectives more easily if it has any that are clear and in the interests of New Zealand.There is no accounting for bad policy. If the Government has bad policy or no policy or no idea or no plan about how it is going to get ahead—and we have argued often on this side of the House that this Government seems to have no direction and no plan—then that cannot be accounted for by this legislation. This legislation really is about implementing the plan. If the Government does have a plan how will it be implemented? What is the role of the State Services Commissioner? That will be spelt out more clearly. How does that flow on to chief executives in the Public Service? What are the implications for their workloads and the way that their responsibilities are set up? That flows into the State sector system as a whole. So if as is done by members on this side of the House good policies are put forward and the party has the opportunity in Government to implement them this State Sector Act amendment bill will allow for those policies to actually take effect and actually make a difference for real New Zealanders.So that is why we will be supporting the bill. We are satisfied with what has been achieved in terms of protecting the arrangements for State sector workers the redundancy provisions that have been approved as opposed to what was originally proposed the transitional arrangements and the conflict of interests protections—all of those things that were negotiated in the select committee and fought for strongly by the Labour Party along with the New Zealand Public Service Association and the New Zealand Council of Trade Unions.