Logie JanJAN LOGIE (Green): Thank you Madam Deputy Speaker. It's with pleasure that I rise to speak to the State Sector and Crown Entities Reform Bill at its first reading which the Green Party will also be supporting. It's nice to have some unanimity in the House on a piece of legislation. It's been a while.This bill as I think it's been explained is seeking to provide greater integrity and accountability in the management of State services through strengthened and more consistent regulation of conduct and remuneration of employees at the most senior level for a more consistent approach to the State Services Commissioner's investigatory and inquiry powers.I think the Minister first indicated that legislation might be coming in December of last year—that was the first time I at least picked it up—in response to a degree of public concern and the State Services Commissioner speaking out and naming the State-owned enterprises (SOEs) that were breaching the advice from State services about what appropriate remuneration increases might be for their chief executives (CEs). He singled out three SOEs that had made the decision against advice and the view of the Minister to increase their CEs' remuneration at a significantly higher level.A previous speaker and particularly the Hon Clare Curran talked to this and the importance of this issue in terms of public trust. The pay of those at the top of our public institutions does matter. It really does impact on people's perceptions of the Public Service and the view of whether those institutions are serving them as the people or whether they are out of touch and having motives of their own.There has been significant international commentary on this as an issue over recent years. Some academics who have been watching this space have commented that they believe that the Brexit decision and potentially the election of Donald Trump were connected to the growth in CEO salaries being out of step with the increase in average people's incomes and they have warned us as a country that we need to be watching this.In New Zealand there has been research done by Helen Roberts through the University of Otago over the last 18 years that has been tracking CEO salaries and average wage increases. She has found that the gap between wages earned by staff and their bosses has been steadily widening and in fact that between 1997 and 2015 the period of her review the salaries of those at the top have increased by 7 percent whereas for your average worker it's increased by only 3.7 percent. So salaries have increased at twice the rate for those at the top. It's probably more than that because the average wage that that is calculating includes the wages at the top. So indeed it's even worse than that. Some of the salaries of CEs in New Zealand are over 60 times that of the average salary of the people doing the work. Justification has been made for that and we've heard of instances of this very situation. Well we're told that it's important to pay these CEs more and we have to increase their wages because we're benchmarking against other CEs and we need to make sure that we can attract the best people. But of course this creates this kind of escalating effect for those salaries at the top because they're all benchmarking against themselves and they keep on just escalating. There are formal recruitment salary processes—DEPUTY SPEAKER: Come to the bill.JAN LOGIE: Madam Deputy Speaker this is to the point around the State services advice and trying to actually send a signal to us as a country that we have the intent of bringing in that gap between those at the top and the average workers in New Zealand because it is out of step.I do want to say as well that we've heard arguments that often it's the performance of the CEs that actually deserves that pay increase. Well I'm not sure anyone deserves $1 million a year. Personally I can't see what you can do to deserve that. But even with that said if you didn't have that view on the world if you looked at the performance of CEs and tried to see if their salary increases matched an increase in performance in their—DEPUTY SPEAKER: Can I just ask the member to come to the bill which is not about in-general salaries. It is about a change to the State Sector Act.JAN LOGIE: Indeed.DEPUTY SPEAKER: I've given quite a lot of latitude. I understand the philosophy.JAN LOGIE: Thank you Madam Deputy Speaker. I guess the point—I was seeing it as relevant because some of the arguments—DEPUTY SPEAKER: I'm not arguing with the member. I'm asking the member to come to the bill.JAN LOGIE: Speaking to the bill because of the arguments that were made in defence of the increase in those CEs' salaries against the advice of the State Services Commissioner performance was used as an argument against the judgment of the concept of the State Services Commissioner and the Minister that actually we have a public-good consideration. When you look at the evidence performance and pay do not correlate. In fact if you look at it often the worst-performing CEs are those that are the most highly paid. So we do have an interest and a duty as lawmakers to ensure that we've got mechanisms to just consider that public good and what is going to result in better decision-making in our SOEs and having a mind and a cap potentially on those top salaries. The evidence is that that will produce better results overall.Another part of this bill is to be able to extend the five-year term that is applied in the State services to CEs in the State-owned enterprises. And this I think makes sense just around the point of having consistency right across our State sector and not having State-owned enterprises (SOEs) out of step. Another part of that too was to bring district health boards (DHBs) in line with this and it makes a change to the Public Health and Disability Act to do that so that they are consistent as well with the tertiary education boards and other similar boards.I did note that the Minister while introducing the bill pointed out the reality of many DHB boards who have CEs that they haven't appointed. They haven't had a say in what their conditions and remuneration rates are and yet they are held publicly accountable for their results and the links to their remuneration. So having that five-year term of employment does make sense in terms of democratic accountability.I share the view of Minister Tracey Martin in noting surprise that the code of conduct as well wasn't previously able to be applied to board members or that the law was unclear around that. It is good indeed to see that being tidied up because it is hard to imagine how anyone would assume that board members would be less likely to have issues relating to conduct than employees or contractors.So this is overall a strengthening of legislation to ensure public confidence and the integrity of our State services and the Greens are pleased to add our voice of support to it.