Smith NickHon Dr NICK SMITH (National—Nelson): Thank you for the opportunity to speak on the second reading and report back by the Governance and Administration Committee on the State Sector and Crown Entities Reform Bill. National will be supporting the bill. I want to join with Minister Hipkins in thanking the chair Brett Hudson and the members of the committee for the work that has gone into this bill. I want to make some comments about the specific provisions in the bill and also in the broader context of New Zealand's State sector and reform.The first change in this bill is in respect of the setting of salaries of chief executives of Crown entities and a tension that exists between getting the best people for the job and on the other hand making sure that we get best value for money for the taxpayer.There is a bit of a debate around the extent to which the all-powerful State Services Commission is able to override the judgments that are made by boards of significant Crown entities whether we look at the New Zealand Superannuation Fund or ACC or other entities. From National's point of view we want the best person for the job. While we can have a pretty low-level argument sort of driven by the politics of envy about the salaries that are paid when you're dealing with an entity like the New Zealand Superannuation Fund—with $30 billion worth of assets—or with ACC National wants first-class governance and management of those organisations because that is what is in the best interests of New Zealand and the taxpayer. Now we do want to ensure that the elected Government of the day has some control so that is why we are not unsupportive of the changes. We would prefer to have gone a little further than where the select committee has and I commend the select committee on putting a bit more constraint and criteria about the State Services Commissioner's role in that. We believe it should have been a statutory criteria and we may move some amendments in the committee stage on that note. There is also the intention in this bill to more broadly extend codes of practice around the conduct of not just members of the Public Service but those people that serve on boards of our Crown entities. We're supportive of that. In respect of the Inquiries Act we're proud of our work as a Government on the 2014 Inquiries Act. It is a big improvement on the somewhat old and outdated 1905 Act. This State services bill updates the powers of the State Services Commissioner to be able to better interact with the Inquiries Act of 2014.Now one of the issues that the select committee grappled with was the issue of the Privacy Act and how that interacts with the State Services Commissioner when they're doing some inquiry of some wrongdoing that's gone on within one of the thousands of Crown entities. The only constraint that National would want to note on that issue of the interaction of this bill and the Privacy Act is to be careful that we do not set one set of rules for the public sector and a different set of rules for the private sector. Parliament is so good at saying that if it's a State Services Commissioner and they're doing an inquiry into one of the Crown entities they should be able to override the Privacy Commissioner to be able to identify wrongdoing. Why should that not equally apply to a private company or entity outside the State sector? That is really a cautionary note whether it is the Privacy Act or others to make sure that we have practical laws that are going to work in both sectors. I'm always cautious as a parliamentarian when we're saying Actually there are exceptions to the Privacy Act for the State Services Commissioner because there are special circumstances for it." when actually there are large private sector entities that have exactly the same issues in respect of wrongdoing and their powers to be able to inquire.This is a relative minor bill and I do want to put it in the context more broadly of changes that are going on in the State sector. It is entirely appropriate that Parliament this morning is pretending that it's yesterday because there is much which the Government is doing in the area of State sector reform that reminds me of yesterday—that is if we come to the issue of ensuring that our public sector is accountable and performance-orientated. The truth is this Government is taking us backwards. We have seen an announcement from the Minister that he's going to remove any at-risk component of State sector chief executives. This is that classic left-wing notion that if we just pay everybody the same somehow that will result in us getting ahead as a country. National makes no apologies for being a party that wants to reward those that make the effort and those that deliver performance. It was particularly ironic that when Chris Hipkins the Minister of State Services announced with a great deal of fanfare changes to the employment arrangements of our chief executives he just happened to forget that he was giving every one of our chief executives an extra week's holiday in a trade-off for other provisions. That was a bit cute and that was going backwards. I don't know the justification for why the chief executives of our public sector entities should get any more holidays than the nurses the doctors the policemen and the others that are doing the hard graft and that are at the core of our public services. I also find it somewhat ironic that in this bill we are setting very tough standards and codes of ethics for boards of Crown entities. I would challenge the Government and say "Please apply to yourselves." because in so many instances we are seeing this gaping canyon between standards that this Government demands of others and what they are prepared to deliver themselves. Whether it be the Clare Curran episode with Radio New Zealand and Carol Hirschfeld whether it be the issues of the appointment of the Chief Technology Officer or whether it be the quite extraordinary comments that we saw at the beginning of the year from Minister Shane Jones—and I'm not going to repeat the phrase. I'm simply going to say that he wants the Public Service to be dominated by s-kickers and says that the politicians should be able to control it. He wants an American-style public sector where the politicians are able to appoint their political mates into senior positions in the Public Service—how that contrasts with the high-feeling objectives that are in this bill. Again it highlights the huge gap that exists between the lofty goals that this Government aims for and what happens when it comes to practice. It is our view that an independent politically neutral State sector is absolutely critically to New Zealand's ongoing success. When we have Ministers sitting down with a very sensitive organisation like Radio New Zealand and with Carol Hirschfeld the head of news that is breaching those standards and the Minister of State Services has been strangely quiet. When you have the Minister for Regional Economic Development Shane Jones talking about the fact that the public sector are just asking awkward questions of his Provincial Growth Fund and he wants to be able to install his political lackeys into distributing those billions of dollars of public funds we will challenge the Minister of State Services and say that that is wrong. Equally so when we have the Government in an absolute pickle over the appointment of the Chief Technology Officer we will challenge the Government too. This was an appointment that was meant to be made in February. This is an appointment where there is crass political interference in the State sector process. I will challenge the Minister and say "How do the lofty goals and the code of ethics that you are proposing in this bill and wanting to impose on others"—how have we seen that conduct from those that are responsible for the appointment of the Chief Technology Officer for Government? Whether it is the Minister of State Services whether it is the Minister for open Government or whether it be the Prime Minister who in the Cabinet paper were responsible for that appointment we see a huge gap between the intent of this bill and the practice by this Government.So there are some minor changes in this bill that National will support. They are not the be-all and the end-all of achieving a quality Public Service for New Zealand. We are more concerned about some of the broader reforms that the Government is doing in the State sector area that are taking away the incentives for performance and that are taking away the measures of that performance because members on this side of the House want a strong and accountable public sector politically neutral that delivers results for Kiwi families."