Mallard Trevor: Third Readings 
Mallard Trevor: Third Readings 
[Volume:622;Page:17950] 
Hon TREVOR MALLARD (Associate Minister of Finance) 
: 
 I move  
That the Public Finance Amendment Bill the State Sector Amendment Bill (No 4) the Crown Entities Bill and the State-Owned Enterprises Amendment Bill be now read a third time 
. The provisions contained in what was formerly the Public Finance (State Sector Management) Bill represent the most significant enhancement in public sector management in New Zealand for over a decade. I thank members of the House for their cooperation in progressing this important legislation through the House. This is the Government’s legislative response to the early work done by the Hon Simon Upton enhanced by the recommendations from the 2001 Review of the Centre. That review concluded that the New Zealand public sector management system was fundamentally sound but identified three areas for improvement: first achieving better integrated and people-focused service delivery; second addressing fragmentation and improving alignment; and third enhancing the people and the culture of the State sector. This legislation benefits New Zealanders. 
The Public Finance Amendment Bill reinforces the existing principles and objectives of the Public Finance Act and the Fiscal Responsibility Act strengthens accountability to Parliament and improves flexibility. It will ensure that Parliament gets a wider range of information about what is intended and about the actual performance of departments. Similar requirements around statements of intent will also apply to non - public service departments the Reserve Bank and Crown entities ensuring a consistent approach to reporting across the State sector. Greater consistency in reporting is one key feature of the bill that will contribute to reducing fragmentation and improving alignment across government. Multi-class output appropriations will increase flexibility for Ministers and departments and enable Parliament to focus its scrutiny on significant policy changes. Requiring the approval of the Minister of Finance for those appropriations will provide a safeguard. 
Integration of the Fiscal Responsibility Act has been one of the more debated aspects of the Public Finance Amendment Bill. The Government firmly believes that consolidating the legislation regarding public finances will ensure that the current level of transparency is maintained by future Governments and that New Zealand continues to demonstrate international best practice in fiscal reporting. New Zealanders rightly expect that people working in any Government organisation will adhere to high ethical standards. This bill will broaden the State Services Commissioner’s mandate covering departments outside the public service Crown entities and the Reserve Bank. The commissioner will be able to provide advice and guidance on matters that concern the integrity and conduct of people working in the State services and may issue appropriately customised codes of conduct. I might say that during the Committee stage I have never heard so much nonsense spoken as I heard spoken on that area. 
The commissioner’s mandate will also be extended to provide leadership across the development of organisational leaders and senior management across the State services—outside the public service of course the commissioner does not have responsibility. 
Good governance and effective accountability arrangements are the key to ensuring that Government organisations perform well and deliver results. The new Crown Entities Bill replaces a patchwork of provisions applying inconsistently across statutes governing different Crown entities with a coherent framework for governance accountability and performance. In the area of board fees for example disclosure of fees will be required and any compensation for a loss of office will be precluded. 
I think the essence of this part of the legislation probably goes back to the work of the Hon Murray McCully and his relationship with the Tourism Board his gross interference in that area and his causing of the paying out—on an illegal basis—large amounts of money to get rid of a board. This legislation makes it clear that that sort of ministerial interference cannot occur again. 
There is currently some uncertainty among Crown entity chairs boards and staff around exactly how Crown entities fit into the Government and what is expected of Crown entities regarding Government policy and processes. This bill will clarify the roles and responsibilities of Parliament Ministers Crown entity chairs and boards ensuring that governance standards are comprehensive transparent and consistent. Through judicial use of the whole-of-Government direction power Governments will have a greater scope to set expectations across the State sector. I do not think it will be used often but when it is used it will be used transparently. Again this is something that is particularly important. This will contribute to reducing fragmentation and as a Minister who has some responsibility for e-government I think it can be particularly useful in reducing overlap and fragmentation in that area. 
The Government is mindful however—and this is a point that comes through from the work of the Hon Simon Upton—of the significant differences in the types of Crown entities and this legislation does not attempt to impose a one-size-fits-all approach. It is crucial for example that the independence of entities such as the Commerce Commission be both protected and be seen to be protected. Amendments to the legislation proposed by the Finance and Expenditure Committee have further strengthened the legislation in this regard—for example by explicitly defining “just cause” in relation to grounds for removal. The Government also recognises that the very different business needs of Crown entities depend on what they do. For example we have some tiny rural schools with as few as four or five pupils that are Crown entities running right through to entities such as the Accident Compensation Corporation and district health boards that are responsible for budgets in the hundreds of millions of dollars. 
So the umbrella framework of the legislation has been carefully designed to include mechanisms for tailoring provisions to the varying business needs of entities while ensuring that the fundamental principles and standards for accountability and governance are met. 
In summary this legislation forms the foundation for a new level of excellence and cohesion in public sector management in New Zealand while retaining and strengthening the fundamentals of the current system. I would like to thank all those people who were involved in developing the legislation. While being aware of the Standing Orders I would like to acknowledge a group of officials who are currently in the gallery for the years of work they have done. This legislation goes back well before the time I became Minister of State Services. People have been working on the principles and there have been various draft bills around now for pretty close to 5 years. I want to thank those people for their concerted efforts on that. 
I welcome the enactment of the Public Finance Amendment Bill the State Sector Amendment Bill (No 4) the Crown Entities Bill and the State-Owned Enterprises Amendment Bill and I look forward to the resulting improvements in transparency accountability and effectiveness.