Goldsmith Paul: State Sector and Public Finance Reform Bill — Second ReadingText is incorporated into the Bound VolumeGoldsmith Paul: State Sector and Public Finance Reform Bill — Second Reading[Sitting date: 25 June 2013. Volume:691;Page:11213. Text is incorporated into the Bound Volume.]PAUL GOLDSMITH (National):It is my pleasure to speak on the State Sector and Public Finance Reform Bill. Indeed it was a positive experience working closely with our colleagues on the other side of the House in the Finance and Expenditure Committee process working our way through what were complicated issues and reaching an agreement. That is important with such structural legislation as this which is intended to guide the State sector over generations and continue that sense of bipartisanship we have had over these bills in the past.The key point of this legislation is delivering Better Public Services to New Zealanders as one of National’s main priorities. This omnibus bill amends the State Sector Act the Public Finance Act and the Crown Entities Act to provide the legislative grunt to deliver Better Public Services. Why is that important? Well for a start core Crown expenses represent about one-third of the economic activity of this country. Core Crown expenditure peaked at around 35 percent of GDP during the global financial crisis and thanks to prudent management by this Government we are back on track to get it down to about 30 percent in 2015. When we add in local government and capital spending total Government spending is around 43 percent of GDP. So when we are interested in New Zealand growing and becoming more prosperous we have to pay attention to that large part of the economy which is directly in the hands of the Government.How we ensure that the State sector itself is productive that it is increasing its productivity year in year out is a very significant question. I have spent much of my career to this point writing business histories and the striking thing when considering successful companies is that they are constantly innovating and rethinking every part of their business from ground zero every year. They have to do that because they know that if they do not they will go out of business because somebody else will have discovered a better way of doing things and they will eat their lunch. That basic discipline is sometimes muffled when it comes to the public sector funded by taxes which are ultimately funded by force.The amendments in this legislation create a range of public sector management tools to foster an innovative efficient public sector to deliver better-indicated results for New Zealanders. If we drill down to the specifics of this legislation we see that the changes to the State Sector Act in particular focus on strengthening the State Services Commissioner’s role in leading the State services and extending the chief executive’s responsibilities to consider the collective interests of the Government and longer-term sustainability rather than focusing on single departments or agencies. This legislation has been a result of detailed thinking over an extended period led by the Better Public Services Advisory Group which was set up to identify the issues that need addressing in order for the State sector to be more productive and more effective. That group identified the tendency of agencies to work in silos at the expense of the sector and system-wide performance. So this change which is getting Government agencies led by their chief executive officers to work more closely together and to organise themselves around results that make a difference to New Zealanders is I think a more effective way of doing things rather than carrying on the way things have always been done.So what is it that we are trying to achieve in child health or education outcomes and how is it best for all the relevant agencies to work together? That might sound simple and obvious but the structures of how the Government is organised and how the leaders of each department are incentivised makes a huge difference. This legislation by broadening the things that a chief executive in a particular department has to think about and broadening that into a wider public sector will I think make a difference over the long term.There are many other things that were handled during the select committee process. The Minister of State Services has covered the issues of redundancy and the ability of chief executive officers to delegate powers and create a mechanism. I will not go into that in further detail. I will leave that to other speakers but in all I commend this bill to the House. Thank you.