Hipkins Chris: State Sector and Public Finance Reform Bill — First Reading 
Text is incorporated into the Bound Volume 
Hipkins Chris: State Sector and Public Finance Reform Bill — First Reading 
[Sitting date: 28 November 2012. Volume:686;Page:6922. Text is incorporated into the Bound Volume.] 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 About the only notable thing about the speech that was just made by Jonathan Coleman is that at least it was on the right bill for a change. But as for everything else it was possibly the most boring ministerial statement that we have heard in this House for quite some time coming from the architect of the Mt Albert disaster for the National Party. There is much in this bill the State Sector and Public Finance Reform Bill that the Labour Party supports. We do support moves to join up the public sector more to streamline public services more and to make the public sector more efficient. There are a lot of elements in this bill that we would be very happy to work with the Government on. However there are also elements in this bill that mean it is not possible for us to support it at its first reading. I am going to run through those in a moment but I am also going to make an offer to the Government. If Government members genuinely believe that improving public services requires some cooperation across the Parliament—and I believe that it does—then we are willing to work with them. But they are going to have to give up some of the things they are trying to put forward in this bill in order to get that cross-party support. 
There are three main areas of concern. I want to talk first of all about the ability of chief executives to delegate their powers outside of the Public Service. What we have at the moment is that a chief executive can delegate the powers they are given by law to someone else within the Public Service and this Parliament can hold those people to account for that. Ultimately every public servant one way or the other through the Public Service chain of command is accountable to Parliament. What this bill will do is allow the chief executive to delegate the statutory powers they hold outside of the Public Service to an entity a private entity that is not accountable to Parliament. That is something that we in the Labour Party will simply not support. We have already seen this happen in a particular piece of legislation that related to private prisons where statutory functions held by corrections staff can now be delegated to the private sector. We did not support that then and we will not the support the blanket application of that particular principle to the wider Public Service. 
The second thing that we are concerned about is the potential reduction in the scrutiny of the Public Service that comes into effect through this bill through the amalgamation of the estimates and financial review scrutiny processes. I should point out at this point that that is quite a significant change to the way this Parliament operates. Yet the Standing Orders Committee has not been consulted about that. At the moment in this Parliament we have two major financial processes that we engage with through select committees. We have the estimates where we look at the forward-looking Budgets of the Government and we hold Ministers to account for the decisions they have made about how taxpayer money should be generated and how it should be spent. And there is a clear accountability of Ministers to their parliamentary colleagues through the select committee process and through that to the public for the decisions they make about where money should be appropriated and where it should be spent. 
 The second process that we have is one that is retrospective and it is holding the Public Service to account for how that money has been spent and for the decisions that agencies have taken on how it is applied and how Government policy is delivered upon. The key accountability there is of the chief executive. The chief executive is responsible for their agency or their department delivering on what the Government has provided them funding to do. So there are two clear accountability processes here and we as a Parliament deal with them separately through the estimates process and through the financial review process. This bill combines those two processes together. That is a significant change to the way the Parliament operates yet the organisations in the Parliament that would normally deal with these sorts of changes—the Standing Orders Committee and so on—have not been consulted about that. 
Hon Clayton Cosgrove 
: You’re joking! 
CHRIS HIPKINS 
: They have not been consulted. This has not gone to the Standing Orders Committee yet it is a significant change to the way that the Parliament will function and it effectively halves parliamentary scrutiny of the Public Service. Let us be really clear about this: this bill halves parliamentary scrutiny of the appropriation of public funds and the expenditure of public funds. That is something that we in the Labour Party simply will not support and we certainly will not support it if the Government has not taken the steps to consult with other parties in Parliament to make sure that such a significant change is broadly supported. 
In New Zealand we do not have a written constitution. We do not have a law or a written document that allows other laws to be struck down as unconstitutional. This Parliament has the ultimate power. What we say goes. The laws we pass apply. What that means is that when the rules of this place are changed they should be changed only with broad bipartisan—or multipartisan—agreement. That has not been secured for this bill. This is a huge change to the way the Parliament operates and the National Government expects to pass this through I think with a one or two vote majority—or probably only a one vote majority or maybe a three vote majority depending on what the Maori Party does in this House. That is simply not good enough. It is halving parliamentary scrutiny of taxpayer financing. That is not good enough and it is not OK for the Government to pass that with a bare majority. It is simply unacceptable. I will extend to the Government again the offer that we are willing to work with it on the elements of this bill that we think are positive because there are many elements in the bill that we think are positive. But we will not allow it and we will not support it unilaterally overriding the rules of this Parliament and reducing the public scrutiny of its activities in the way that it intends to do. 
The final area where the Labour Party has major concerns with this bill is around the changes that relate to collective bargaining by those working in the Public Service. What this bill allows the Government to do is issue by Order in Council directives around the outcomes of collective bargaining before the bargaining has even started. So the Government can effectively say by law what the outcome of collective bargaining is going to be before anyone has sat down at a table to even put a claim on the table. That just cuts against all of the principles that underpin good-faith employment relationships. It means that the Government decides before bargaining has even started what the outcome of it is going to be and we will not support that either. That is the sort of policy that Rob Muldoon would have implemented. It would have given him the power—and he did have policies and legislation like this—to decree what settlements were going to be without any reference to any kind of bargaining process. That is effectively what this bill will do under the current provisions in it and there is simply no way that we in the Labour Party will support that. 
There are provisions in the bill as I mentioned that we will support. We do support moves to get Government departments working more closely together sharing services and making sure that the public sector offers I guess seamless career opportunities for those working within it. For younger people who move into the Public Service they want to know that they can move around quite seamlessly between different departments and agencies. It is not like the old sort of days that we might be familiar with from TV shows like  
Gliding On 
 where once you got a job in a Government department you were there for life. Younger people moving into the Public Service actually do not want that. What they do want to know is that when they move around within the Public Service their tenure within the Public Service is going to be recognised. So elements of this bill that move more towards a seamless Public Service and more towards career progression opportunities within the Public Service are things that we will certainly support. In fact we will actually go out there with the Government and champion them. Improving accountabilities of the Public Service and improving accountabilities of Crown entities—these are elements of this bill that we will support. 
But we will not support provisions in this bill that allow the Government effectively to contract out its statutory responsibilities. We will not support the provisions in this bill that allow the Government to decree by law the outcomes of a collective bargaining process before it has even started and we will certainly not support the elements of this bill that will halve parliamentary scrutiny—and through that public scrutiny—of decisions the Government makes around the appropriation and expenditure of taxpayer money. That is simply not democratic and it sets a very alarming precedent for this Parliament that the operating process of this Parliament can be changed by legislation rather than by a change to the Standing Orders supported by all of the Parliament. It is actually a very dangerous precedent for this Government to establish and to seek to establish through this legislation and I seriously ask it to reconsider that element of this bill. Changes to the way Parliament operates and changes to the provisions in our Standing Orders should be made through the parliamentary process and through changes to the Standing Orders not by legislation that is passed by a bare majority of the people in this Parliament. That is a change to our constitutional arrangements in New Zealand and the way the Government is going about doing it is simply wrong.