Smith Lockwood: Public Finance (State Sector Management) Bill — In Committee 
Smith Lockwood: Public Finance (State Sector Management) Bill — In Committee 
[Volume:622;Page:17923] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 The debate we are now having on Part 7 of the Public Finance (State Sector Management) Bill is possibly one of the most important debates with regard to this bill. I believe the Committee should look at and spend some time on the complexity of what we are debating right now. Clause 236 brings in schedule 8 which as my colleague John Key has just said amends a whole plethora of Acts. Of greatest significance to New Zealand are the amendments to the Education Act 1989. In order for these matters to be in a schedule they should be purely consequential amendments I would have thought and should not make major changes that are not purely consequential. 
I would like the Minister in the chair to give some thought to this. The particular part of schedule 8 that I am concerned about amends the Education Act 1989. The particular sections in the Education Act 1989 that are being amended that I would like the Minister to focus on are those relating to section 203 which is repealed and substituted in schedule 8. That schedule lays out how this bill affects our tertiary institutions because section 203 refers to the institutions being Crown entities. That is covered in section 48 of the Public Finance (State Sector Management) Act 2003. 
The bits that I wanted to look at particularly are the new unanimous sections 203(2) and 203(3) to the Education Act. Section 203(3) states: “The provisions of that Act set out in Schedule 6B of that Act”—which refers to this bill that we are now debating. I would like to focus on schedule 6B which is obviously part of this debate too because schedule 8 brings in schedule 6B. Schedule 6B which relates specifically to the tertiary education institutions sets out the number of sections derived from this bill that will apply to tertiary education institutions. One that is included is section 51. 
I will trouble the Minister to look at clause 51 of this bill—through that convoluted process we are now back to clause 51 of this bill—because it sets out a number of interpretations including the interpretation of “direction”. What troubles me about this and I think where our tertiary institutions will be getting pretty concerned is that through this convoluted pathway—schedule 8 which amends the Education Act 1989 which brings in schedule 6B of this bill which relates to the various clauses that affect tertiary institutions—we get back to this issue of direction where a Minister can direct an entity under this legislation. 
Hon Dr Michael Cullen 
: The interpretation clause does not give the power of direction. It defines what “direction” means if it has got the power and it has not. 
Dr the Hon LOCKWOOD SMITH 
: But the interpretation clause spells out the kinds of directions a Minister can give. If it was not intended to apply to tertiary institutions why does schedule 6B specifically mention section 51? The Minister could assist here by showing us where in schedule 6B the tertiary institutions are specifically excluded from ministerial direction. It would certainly ease concerns if the Minister in the chair could point out which of the sections that apply to tertiary institutions in schedule 6B specifically exclude ministerial direction for a tertiary institution. Clause 51 shows the breadth of a direction that the Minister can give and it can be right down to employee level. We are talking about the potential possibility for the Minister to give a direction to a tertiary institution that could breach the issue of academic freedom. I see the Minister shaking his head. I would be pleased if he would take a call—because I imagine that tertiary institutions are very concerned by this—and point out where schedule 6B specifically excludes such direction.