State Sector Management Bill — Second Reading 
State Sector Management Bill — Second Reading 
[Volume:669;Page:15898] 
State Sector Management Bill 
Second Reading 
Hon TONY RYALL (Minister of State Services) 
: 
 I move  
That the State Sector Management Bill be now read a second time 
. This is the second reading and report back of the State Sector Management Bill which has come back from the Education and Science Committee and I would like to acknowledge the contribution of all members on the bill. 
The State Sector Management Bill is an omnibus bill and the intention is that during the Committee of the whole House it be divided into three separate bills: a research science and technology bill a National Library of New Zealand (Te Puna Matauranga o Aotearoa) amendment bill and a public records amendment bill. 
I recap the bill and the machinery of government objectives. The bill provides for machinery of government changes in two important sectors. Two existing agencies—that is the Ministry of Research Science and Technology and the Foundation for Research Science and Technology—will merge into a new Ministry of Science and Innovation and the National Library and Archives New Zealand will be brought together into the Department of Internal Affairs. These changes are part of the Government’s drive to ensure that State services are organised to deliver improved front-line services within existing baselines to reduce costs once the transitions are embedded and to future-proof the long-term delivery of services by Government agencies. The changes along with other well-publicised structural reforms in the State services such as those in the New Zealand public health service add up to a commitment by the Government to put in place the administrative arrangements that are best suited for each sector. 
Part 1 addresses the research science and technology sector. The amalgamation of the existing Ministry of Research Science and Technology and the Foundation for Research Science and Technology—a Crown entity—will see the new Ministry of Science and Innovation clearly leading the sector as a single agency combining the operational and policy skills of the two current agencies and simplifying and streamlining the accountability arrangements both for the new ministry and for the recipients of research science and technology funding. The changes will also reduce complexity and transaction costs across research science and technology and will enable gains in efficiency. The changes will future-proof the delivery of services by combining the expertise of what are now two small agencies which will put them on a more viable corporate platform with increased critical mass and capability. 
Part 1 does much more than repeal the foundation’s current Act disband the foundation and transfer its employees to the new ministry. Its main provisions are to set out the purposes for which specified research science and technology funding may be allocated; to require the Minister to establish one or more boards to make independent decisions on the proposals for specified research science and technology funding; to require the Minister to set and publish in the  
Gazette 
 the criteria that the boards will use to make their allocation decisions; and finally to require the chief executive of the new ministry to refer the funding proposals to the boards and to supply all secretarial and administrative services to enable the boards to carry out their functions. 
Parts 2 and 3 bring together the Government departments that gather protect and develop the current and future use of some of New Zealand’s main records knowledge and information resources. The amalgamation of Archives New Zealand and the National Library with the Department of Internal Affairs will bring together knowledge leaders in fields of mutual interest. The amalgamation will build on their common capability and their overlapping strengths in information management and information technology. That will put them on a par with a number of other agencies around the world. 
The bill by amalgamating the three departments will set up the core infrastructure that will enable better-integrated decision-making in the future be the decisions about future spending technological systems development or other aspects of their operations. For these amalgamations we can expect systems improvements lower corporate overheads and reduced costs within the public management system. 
A key feature of Parts 2 and 3 is how much of the existing legislation remains intact for Archives New Zealand and the National Library whereas Part 1 repeals the Foundation of Research Science and Technology Act. Parts 2 and 3 deliberately leave untouched much of the National Library of New Zealand (Te Puna Matauranga o Aotearoa) Act and the Public Records Act. The objective of the bill is to make only the necessary minor changes to the existing Acts in order to bring about the machinery of government changes. These are largely technical matters about departmental administration. I expect that the Hon Nathan Guy as the Minister responsible for the National Library and the Minister responsible for Archives New Zealand will take the opportunity to outline these provisions in more detail. 
The State Sector Management Bill was introduced towards the end of August and to have it reported back to the House so early in December is a really significant achievement. I thank the Education and Science Committee and I commend it for its hard work and its valuable recommendations. Thirty-one individuals and organisations also made submissions. The committee recommended a number of amendments which I will go through. 
In relation to clause 7 “Purposes for which specified RS&T funding may be allocated” the select committee recommends and the Government agrees that “RS&T” should be spelt out in full to “research science or technology or related activities;”. [ 
Interruption 
] It is just great that the Labour Opposition turned up and achieved something. It is intended that these terms have their ordinary and natural meanings and there should be no confusion about the references to “RS&T”. 
Secondly it is important that the boards that are set up are making independent funding decisions. In respect of clause 9 “Decision making on specified RS&T funding” the select committee recommends and the Government accepts the addition of subclauses to enable the board to require the ministry to provide all the information it holds in respect of the decisions before it. 
The committee has also recommended that clause 11 be deleted. The clause provided for the boards to reconsider their decisions on referral by a Minister or chief executive. The clause was not intended to fetter the independence of the boards. The clause was discretionary and merely permitted the board to reconsider a decision. The committee made a recommendation which the Government is agreeing to that that clause be removed from the bill. Clause 15 was also unnecessary and the committee has recommended that it be deleted. The clause dealt with the transfer of functions from the Ministry of Research Science and Technology and the Foundation for Research Science and Technology to the new ministry. That transfer of functions is not usually conferred by way of statute; it is dealt with through Cabinet process and that will continue. 
With regard to the amalgamation of the National Library and the Department of Internal Affairs the select committee recommended one important change in the bill which the Government supports and that is deletion of clause 27(2) so that the legislation clearly retains reference to the collections of the Alexander Turnbull Library remaining in the custody of the National Library rather than in the custody of the department. Though the National Library will be part of the department it was never intended to cause doubt or confusion on this important point. 
In regard to Part 3 which deals with the amalgamation of Archives New Zealand and the Department of Internal Affairs the committee recommended amendments on an important point. It commented on the importance of retaining the identity of Archives New Zealand. Although the bill continues to define Archives New Zealand as the repository referred to in section 9 of the Public Records Act the Government agrees that references to the department should be removed where it is appropriate to maintain explicit references to Archives New Zealand. This applies to eight clauses where the specific functions in question will continue to be the functions of the repository—for example receiving transfers of public archives. 
The Hon Nathan Guy will no doubt have the opportunity to speak in more detail about the submissions received in respect of Parts 2 and 3 and about the Crown Law advice that the Government has received confirming the ongoing independence of the statutory offices within Archives New Zealand and the National Library. 
Despite a rather pathetic scare campaign by the parties opposite New Zealanders are not in the least bit worried about these changes. I again thank the Education and Science Committee for its judicious recommendations and the very speedy and prompt way that it reported this bill back to the House. The Government certainly supports progress on this bill. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 That was Tony Ryall the Minister of State Services whose life’s passion is State services—that is his passion. Imagine if we heard about something he did not care about—imagine that! That speaking slot should have been given to Chris Finlayson because he knows as the Minister for Arts Culture and Heritage how important the National Library and Archives New Zealand are. In fact people around Wellington are saying that Chris Finlayson dropped the ball on this bill because he did not pick up the damage that was being done to Archives New Zealand and the National Library by this merger. 
Hon Christopher Finlayson 
: The luvvies know I’m a better Minister than Helen. 
GRANT ROBERTSON 
: I say to Mr Finlayson that the kumara does not speak of how sweet it is. This bill from Labour’s point of view is very much a bill of two halves. One half of the bill is about the merging of the Foundation for Research Science and Technology and the Ministry of Research Science and Technology. My colleague David Shearer will speak in detail on that. There is not a particular issue we oppose. There are some issues Mr Shearer wants to raise but that part of the bill from our point of view is not something we have a great deal of trouble with. However Parts 2 and 3 of the bill dealing with the merger of Archives New Zealand and the National Library of New Zealand into the Department of Internal Affairs we strongly oppose. We oppose the merger because those two institutions are vital to our constitutional and democratic infrastructure. This bill will reduce their independence and it will reduce their influence. But it struck me in the select committee process that we were offered no reason by the Government for why this merger should take place. 
Hon Darren Hughes 
: Step change? 
GRANT ROBERTSON 
: Step change! This was it; this was the answer to the economy; this was how we were going to do it. But no Mr Hughes that is not what it was because Archives New Zealand and the National Library of New Zealand are not failing. If these were failing Government departments or institutions that were struggling to meet their mandate perhaps that could be a justification for doing this merger. But actually in the Government’s own papers it said Archives New Zealand and the National Library of New Zealand are well regarded and successful institutions. If it ain’t broke why fix it? But the Government has pushed ahead. Perhaps it is about savings—perhaps it is about saving a huge amount of money for the country. Well no that is not true. It was very difficult to find out in the select committee actually how much money was intended to be saved by this merger but it could be as little as $166000 a year and there are 15 jobs going—$160000 a year for 15 jobs! So it cannot be about savings. 
We also heard raised the prospect that the legislation was about bringing together the technological parts of government—because the Department of Internal Affairs has taken on some of that work from the State Services Commission—and that there was a great deal of digitalisation work— 
David Shearer 
: They’ve got a bigger server. 
GRANT ROBERTSON 
: That is right. They have a big computer; that is right. There was a great deal of digitalisation work going on in Archives New Zealand and the National Library of New Zealand. The problem is that the medium and the message are being confused here. The fact is that the National Library of New Zealand and Archives New Zealand do a great deal more than just the process of digitalisation so that is not enough to justify the merger. In fact the officials themselves said that it is not enough to justify the merger. We were quite unable in the select committee process to actually discover what the rationale was for the Government. It seems that it is simply an ideological rationale about reducing the number of agencies no matter that those two agencies Archives New Zealand and the National Library of New Zealand are operating better than they ever have before. Yet they are now being merged into a department the Department of Internal Affairs that the chief executive himself and the review of the department have acknowledged is struggling to deal with the many different tasks and areas it has to cover. Now two more are being added in which are critically important institutions to our constitutional infrastructure. 
But why does this matter? It matters because Archives New Zealand provides the ultimate accountability of Government. It means that departments have to maintain records; it means that departments have to deposit records. At the moment Archives New Zealand’s role is critical in ensuring those records are there but this bill will reduce Archives New Zealand’s influence and it will reduce Archives New Zealand’s independence. That is bad for all of us in the long run because although it might not make the headlines this is the material that means that Governments are held to account. This Government on the opposite side of the House does not seem to care about ensuring that that occurs. 
In terms of the National Library of New Zealand it is similar: a reduction in influence a reduction in independence and a reduction in status and mana particularly for the Alexander Turnbull Library. We had submitters coming to the committee who said they would think again about depositing their families’ records in the Alexander Turnbull Library because it would be downgraded. 
During this process we became aware of the structure the Department of Internal Affairs is putting in place for this merger. That structure will mean that the Chief Archivist and the National Librarian will be third-tier managers within the Department of Internal Affairs. They will not even be part of the executive leadership team. They will not be part of setting the strategy for the Department of Internal Affairs. They will have no guaranteed access to the Minister. They will not be reporting directly to Parliament. This is a reduction in independence and a reduction in influence of key democratic historical constitutional and cultural institutions in this country. The Department of Internal Affairs already weighed down with other tasks will simply not be able to provide the kind of leadership needed and this is no great statement on the chief executive. 
I shall talk about the submissions we heard in the select committee. They were outstanding submissions and I think even the Government members of the Education and Science Committee who sat through the submissions would acknowledge that. They were some of the best that I have heard in my brief time here in Parliament. They came from people who knew their subject who had lived through this and this is not a theoretical exercise. In the 1990s Archives New Zealand went through the process of being part of the Department of Internal Affairs and it ended up in court. That was a failure in the 1990s and in the 10 years since Archives New Zealand was made a separate entity it has grown in leaps and bounds and now the Government is determined to drag it back to the time when it struggled. 
To quote one of the submitters a former Chief Archivist who said in terms of the Department of Internal Affairs’ control of Archives New Zealand: “The story of the care and control of New Zealand’s public records and archives … has been one of ignorance and neglect. Thousands of unique items that have relevance today have been lost by fire water vermin and indifference.” Vermin and indifference—that is what happened when Archives New Zealand was the—[ 
Interruption 
] That is right; there they are—vermin and indifference absolutely! 
That is the problem. That is what happened the last time the Department of Internal Affairs had control of these things. Another submitter said that the Department of Internal Affairs has an unfortunate history characterised by arrested development lack of resourcing poor understanding litigation rancour and distrust. That sounds like the National caucus as well. But that was also the Department of Internal Affairs when it had control of Archives New Zealand. It is simply not good enough for this Government to drag Archives New Zealand back to the 1990s when it was the subject of litigation rancour and distrust. We had two former chief archivists who lived through this and they know from their personal experience that they were not able to achieve their role fully. It was not always because of the Chief Executive of the Department of Internal Affairs—sometimes they were helpful. But when they were not that limited the role of those people performing those key historical constitutional and democratic roles. 
This bill is the wrong path to go down. We all want efficient and effective organisations in the State sector. We all want organisations that provide good services to New Zealand. Sometimes that will come from small independent agencies; sometimes it will come from larger bodies. Here we have a situation where Archives New Zealand and the National Library have been delivering good quality services to New Zealanders for the last 10 years. If we go back to the 1990s we simply go back to a period of time where New Zealanders did not know whether they could trust the archival records. They did not know whether the National Library would be able to provide the services that we all expect it to do for New Zealand. This part of the bill is wrong. Labour will continue to oppose it and in the Committee stage we will put forward Supplementary Order Papers to try to ensure that there is independence for the Chief Archivist that there is independence for the National Librarian and that that the status and mana of the National Library the Alexander Turnbull Library and Archives New Zealand are recognised. Those are important institutions. The National Government may not care about that but we on this side do and we will be opposing this bill. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to speak in the second reading of the State Sector Management Bill. In doing so I cannot help but pick up on the comment that the previous speaker from the Opposition made the part-time member of the Education and Science Committee Grant Robertson. In actual fact New Zealanders spent 9 years putting up with vermin and indifference in New Zealand. The Opposition would be mindful to realise that the Government is presently trying to construct a first-class world-class State sector and that this bill is part of that. Effectively from that point of view we are looking at the amalgamation of the libraries and the archives. 
Debate interrupted.