Cunliffe David: State Sector Amendment Bill Public Finance Amendment Bill (No 2) Crown Entities Amendment Bill — Third ReadingsText is incorporated into the Bound VolumeCunliffe David: State Sector Amendment Bill Public Finance Amendment Bill (No 2) Crown Entities Amendment Bill — Third Readings[Sitting date: 10 July 2013. Volume:692;Page:11934. Text is incorporated into the Bound Volume.]State Sector Amendment BillPublic Finance Amendment Bill (No 2)Hon DAVID CUNLIFFE (Labour—New Lynn):I acknowledge the Minister who has just resumed his seat and acknowledge his role as the Minister for Regulatory Reform. His attitude to regulation is of course akin to the person with a chainsaw who cannot see the wood for the trees and chops down both. Our view of regulation is that it is a bit like a hedge. It needs to be kept pruned but it plays an important role in setting boundaries for conduct for the benefit of the whole community.Labour supports this legislation arising from the State Sector and Public Finance Reform Bill and in the third reading it is an important time for us to sum up the reasons why we do. It is worth recalling that this is an unusual process because at the first reading of the bill Labour quite strongly opposed it. We did so for good reasons and those reasons were echoed in submissions notably those of the Public Service Association—and I acknowledge the presence in the gallery of its secretary BrendaPilott—and of the Council of Trade Unions. The strength of submissions from both was notable.This is legislation where the Government and the Opposition have entered into good-faith negotiations and made major changes to the text leading to the recognised improvement of the final product. It is an example where Parliament is doing its job at both the select committee and House levels.I am going to briefly summarise some of the key issues that were amended in the Finance and Expenditure Committee. But before I do so let me recall first the overall objectives of the legislation upon which there is now near consensus in the House. It comes down to what kind of State we want to have. Do we want to have a State that has shrunk to the point where it cannot effectively serve its citizens? No we do not. Do we want to have a State that is intrusive and where civil liberties protections and civil rights are done away with as in the thread of bills currently before this House? No we do not. Do we want a monolithic State where bureaucratic action by individual agencies fails to deliver teamwork flexibility and cost-effectiveness? No we do not. We want a State that is able to operate leanly but not meanly a State that is effective and a State that fulfils New Zealanders’ aspirations for their communities. To do that we need Government agencies to be able to cooperate together and they need to be able to work in partnership with communities and thus to delegate functions and occasionally powers where appropriate and with appropriate accountability. This legislation sets the legislative framework that allows that balance to be sought and it has been much debated much argued and much amended so that both sides of Parliament have been able to contribute to the outcome.There were a number of provisions particularly in respect of the State Sector Act component of the legislation that were abhorrent at first reading. Redundancy provisions have been improved so that State sector employees retain their redundancy entitlements unless accepting a position that is “no less favourable” than the one they currently have—no less favourable. The protection of State servants’ rights upon redundancy situations has been a bottom line for the Opposition and we have benefited greatly from the work of submissions in that area.Transition arrangements have been improved so that collective agreements and individual agreements aresunsetted equally 3 years after the legislation takes effect. We have removed the possibility that individual contracts could outlive hard-fought well-negotiated collective agreements. The idea that Government Workforce Policy Orders could trammel the good-faith bargaining rights of State servants was abhorrent. I am pleased to report to the House that the select committee has rewritten those provisions so that the orders now specifically provide for the maintenance of all existing legal and good-faith bargaining rights by employees. The orders no longer exist; they are now statements that are not binding in relation to employment matters.Conflict of interest provisions enhanced governance for delegated powers and strengthened accountability requirements in State sector financial reporting have all also been amended. Labour still has some significant concerns about aspects of the legislation but we believe that the amendments secured in the select committee with the support of unions have brokered significant enough change to mean that Labour can now and will now support the passage of this legislation.I would like to take the opportunity to speak in a little more detail about some of the substantive provisions of the legislation turning first to the State Sector Amendment Bill and the amendments to the State Sector Act. The bill strengthens the role of the State Services Commission in leading the State Service and to ensure that agencies work collaboratively as a system. The amendments broaden the commissioner’s functions to include the ability to transfer chief executives within the Public Service as part of building a collaborative culture. They extend the responsibilities of chief executives to their Ministers and how they delegate statutory functions and powers between agencies subject to safeguards which have been strengthened. They create new organisational arrangements called a departmental agency as an option for providing public services in order to provide focused specific and accountable services within a broader department. I note in passing that that is in some ways opposite to the trend that we have seen with the formation of agencies like the Ministry of Business Innovation and Employment which has collectivised so many functions into one disparate group that we have grave fears for its effectiveness.The Public Finance Amendment Bill (No 2) contains amendments to the Public Finance Act. It establishes a new type of appropriation called a multi-category appropriation which is an important innovation. It means that when cooperation is mandated between several Government agencies comprising several different votes of expenditure that financing can be collectivised into a single pool thus hard-wiring the cooperation between those agencies for the project or programme. It is a good idea in principle but in order to be proper and effective it is essential that Parliament is able to trace the money going into and out of multi-category appropriations as part of a broader set of accountabilities to ensure that all funding can be appropriately traced. I am happy to report to the House that work is ongoing in the Finance and Expenditure Committee to ensure that those accountabilities are detailed and transparent right down to the sub-output level and we are working with officials to ensure that improvements are made to the structure of Crown accounts.Amendments to the Crown Entities Act 2004 in the Crown Entities Amendment Bill amongst other things require the boards of statutory entities to ensure that they collaborate where practical and broaden the grounds for the Minister of Finance and the Minister of State Services to issue whole-of-Government directions which can be issued to large or small groups of entities. The irony is that at a time when Mighty River Power—or half of it—has been flogged off the Government is taking large parts of the State sector out of the provisions of the State-Owned Enterprises Act which provides very similar powers of direction to those that we are now introducing in this bill. Wouldsomebody please establish what the Government really wants? It seems that it wants cash even when it overrides principle. This is a bill that does contain principle and so we support it. We absolutely abhor the dilution of the Crown’s asset portfolio and the loss of strategic control over New Zealand’s energy system and that is why we are going to be introducing soon after taking power next year NZ Power a system whereby consumer interests are protected and power companies are once again brought within the control of the community as a whole.We retain a number of reservations about the legislation and in closing let me just note that we have concerns which we will be monitoring closely around redundancy provisions and around payments and bargaining. We are also concerned about aspects of the implementation of Government Workforce Policy Statements to ensure that they do not in practice trammel the rights that are being protected in principle. We are going to be monitoring closely any delegation by chief executives of their powers to ensure that accountabilities to Parliament and to the public are not diluted. And we are going to be working very closely with officials to make sure that the accountability arrangements in financial reporting are tight and transparent so that the public can get the information it deserves and is entitled to in order to ensure the proper functioning of government.In process terms let me express a degree of concern about the extensive Supplementary Order Papers to the legislation which we feel should have been introduced earlier. This concern is not sufficient to cause us to vote against the legislation. It does have Labour’s support. We look forward to working to modernise and improve the functions of the State sector.