Hague Kevin: Crown Entities Reform Bill — In Committee 
Text is incorporated into the Bound Volume 
Hague Kevin: Crown Entities Reform Bill — In Committee 
[Sitting date: 23 May 2012. Volume:680;Page:2366. Text is incorporated into the Bound Volume.] 
KEVIN HAGUE (Green) 
: 
 I wish I could say it is a pleasure to take a call on Part 3. I have spoken on Part 1 and Part 2 of this Crown Entities Reform Bill in the debate today and in both of those contributions I have spoken about the fact that reorganisation mergers in the State sector typically end up costing more than was expected and typically fail to deliver the gains that were anticipated. That is not just a risk of doing that kind of thing; it is the usual experience. The usual experience is that actually the financial gain is not there and that a critical loss of momentum in the performance of the functions of the entity occurs quite commonly in both entities that are being merged. I think that is a big problem in this case because the only case that has been made for the change the Government intends here is about increased efficiency: a cost saving in back-office functions. Well for goodness’ sake the Charities Commission is a tiny entity and so its merger into the Department of Internal Affairs has even in the most optimistic scenario a very very small gain and that gain is extremely likely to be outweighed by the cost of that change and a critical loss of momentum. So given that the potential upside is tiny what about the cost?  
Like Chris Hipkins I am a bit confused by the Government’s inconsistent approach to decisions in this area. It seems to have a confusing attitude towards the State sector because in this move it is taking a step that is in 180-degree contrast to its usual approach to the performance of the role of government. Ordinarily National is the party of smaller government—trying to keep government out of the lives of citizens and make it as small as it possibly can—and I usually disagree very heartily with that. But in this case here we have an institution the Department of Internal Affairs which is at the very core of the executive part of the government sector actually being added to by something that is on the very fringe. That is important because what is occurring here in contrast to other parts of this bill is that the Government is wading apparently heedlessly into an area of constitutional arrangements.  
It is of fundamental importance that we have in this country a State sector a private or business sector and a community sector that have separation from each other. The arrangements that govern the interfaces between those three sectors have arisen over a considerable period of time and ought not to be done away with without very considerable thought. The third sector or community sector—and I would prefer those terms I must say to the “charitable sector” but “charitable” perhaps at least gives a hint about the history of the organisations in this sector—has come about largely independent of Government and so Government’s interface with that sector is an issue of considerable sensitivity to those within the sector. The creation of the Charities Commission in the first place occurred through very considerable consultation with the community sector organisations. What we are about to do is disestablish that institution which was brought about by consultation with the sector and we are going to disestablish it in the face of consultation that shows pretty uniformly opposition to that change from the community sector.  
It is of course appropriate for the State to have some institution that manages its side of the interface between the Government and community sectors—it is entirely appropriate—but the community sector is saying extremely clearly that it wishes that institution to be at some distance from the core State and not right at the very heart of the core as the Department of Internal Affairs is. That is why the community sector in its many submissions on this part of the bill was pretty uniformly opposed to what the Government intended to do. What we are experiencing here is a change that has even in the most optimistic scenario a tiny upside and on the downside we see not only a very very likely cost blowout but also a disruption of the basic arrangements between the State and community sectors. That is why members of this House—and I am sure it is not just us—are being exposed to the expression of considerable disquiet from the community sector.  
I just want to mention a letter that I received from Greenpeace about this. I will quote a little bit from its letter because it referenced some basic misunderstandings on the part of the Government about what it is actually engaged in here. Greenpeace said first of all that the proposed change illustrates a “Lack of understanding that charities are set up by ordinary New Zealanders … to address an issue they see in their community. And that such goodwill and initiatives do not require the involvement of a government department”. Secondly it said “Most charities receive no direct funding from government so their responsibility is to their members and their community—not government”. Thirdly it said the involvement of the Department of Internal Affairs “is likely to dampen initiatives in the community rather than encourage them”. And fourthly it said “The proposed change is out of step with government’s own policy push around Better Public Services—it will instead lead to more bureaucracy and lower innovation.” That is typical of the kind of feedback that Parliament is receiving from the community sector the sector that is to be managed and controlled by this new institution and that ought to give everyone pause for thought. It is the wrong thing for this Parliament to be doing.  
I hesitate in saying this but I would very much like to hear from the Hon Peter Dunne in this debate because the leader of the United Future party campaigned on one thing and I understand is intending to vote for this ridiculous part of the Government’s bill. I believe that the community and the community sector would very much like to hear from Mr Dunne as to his reasons for that change. 
Hon Lianne Dalziel 
: Hear hear! We seek leave for Mr Dunne to take a very extensive call on this matter. 
KEVIN HAGUE 
: Yeah. Of course the bill is intended to be split into three parts and there will be another opportunity for Mr Dunne to vote against it at the third reading. I certainly hope he chooses to take up that opportunity.  
In the meantime this is a part of the bill with a negligible upside and very considerable downside not only in the obvious and explicit terms of extra cost loss of efficiency and loss of momentum but also in implicit terms in a disruption of the constitutional arrangements between the State and community sectors. Those arrangements have come about through history and tradition and a lot of hard-won gains and they ought not to be set aside as lightly as this Government intends.