English Bill: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
English Bill: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 14 December 2004. Volume:622;Page:17868. Text is incorporated into the Bound Volume.] 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I am grateful for the opportunity to speak on this riveting legislation. I am sure that for many in the Committee who bothered to scrutinise the legislation—other than perhaps Dr the Hon Lockwood Smith—this will be the first time they have actually seen the appropriation process down on paper. 
The bit I want to see if I can get some answers about is section 26A inserted by clause 8 about the transfer of resources between output expense appropriations. I think it is pretty obvious to anyone who has worked in the system that that is probably not a bad idea because Ministers can find themselves having to grapple with a rigid process to make comparatively small adjustments that would be much more easily dealt with outside the appropriation process without upsetting accountability. The problem of course with that multi-output class appropriation is just how far it can be pushed. 
I will use an analogy that is nothing to do with the Government’s finances but is to do with the parliamentary process. We have seen the way that flexibility in drafting legislation is being used to create bills with very few parts so that we do not have long Committee stages. Parliament goes along with that flexibility except it can be abused—and often is particularly under the watchful and penetrating eye of the current Leader of the House. It is not hard to imagine at all that this provision could also be manipulated and pushed beyond the boundaries this Parliament has imagined. 
Tonight we are taking a pretty benign view of the provision because I suppose we all believe it will be used in good faith. But when I look at the restrictions on this capacity they do not seem to me to be very robust. Could the Minister tell us for the benefit of our information whether there are restrictions to do with accounting standards the Standing Orders or any other process of Parliament that would hedge the way a Minister of Finance is able to use these capacities. 
There are quite vague definitions like “similar output classes”. How similar is similar? I can look through the education estimates and see at the moment a long list covering everything from school transport to curriculum support covering hundreds of millions of dollars in about 50 different categories. Could I as the next Minister of Education collapse that into one appropriation? I do not know the answer to that question. It is not evident to me from the bill which is why I am asking the question. 
Hon Dr Michael Cullen 
: It would have to go to a regulations review and it would have to be confirmed in an appropriation bill because it’s a regulation. 
Hon BILL ENGLISH 
: Yes it is a regulation. 
Hon Dr Michael Cullen 
: So you’ve got a double check. 
Hon BILL ENGLISH 
: So the answer is yes subject to any pressure from the Regulations Review Committee. 
Hon Dr Michael Cullen 
: It would be most unlikely. 
Hon BILL ENGLISH 
: Well there could be a purpose in it because any Minister would love more flexibility than he or she has. Ministers would love to be able to move money around without being subject to too much scrutiny. 
Hon Dr Michael Cullen 
: The 5 percent levy would make that very difficult. 
Hon BILL ENGLISH 
: That is probably the most meaningful. The provision refers to the amount transferred not increasing the appropriation by more than 5 percent. I do not quite understand that because if there are a number of outputs within an appropriation I could shift them around without making any difference to the total appropriation. 
John Key 
: That was the limit wasn’t it? Five percent was the previous limit. 
Hon BILL ENGLISH 
: But it is a limit on increase. 
John Key 
: I think you could only move up to 5 percent before. 
Hon BILL ENGLISH 
: But now I have the capacity to bunch output classes under one appropriation. [ 
Interruption 
] The question is not so much about the increase in the appropriation—I am not worried about that—but about how far I can go at the start to bunch them up. 
Hon Dr Michael Cullen 
: The one you’re adding to can’t increase by more than 5 percent so that is actually quite tight. 
Hon BILL ENGLISH 
: So when a new Budget cycle starts I cannot bunch them in a way that adds more than 5 percent to an existing appropriation. If that is the right answer then I will feel a great deal less concerned about the flexibility.