Ardern Jacinda: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeArdern Jacinda: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11627. Text is incorporated into the Bound Volume.]JACINDA ARDERN (Labour):Thank you.Kris Faafoi: What a gentleman.JACINDA ARDERN: I smiled a lot. This is my first call on the State Sector and Public Finance Reform Bill. I am pleased to have—Hon Trevor Mallard: You only get four on this part.JACINDA ARDERN: —an opportunity to speak to Part 1. I am pleased also to know how many opportunities I have to speak on Part 1 because it is an extensive part and I think probably that the points I have to make will take some time.I want to start with some of the recommendations and comments that were made by the Finance and Expenditure Committee on Part 1 particularly around the purpose of the bill. From someone who obviously did not sit on this committee some clarification from the Minister in the chair Nikki Kaye on some issues would be beneficial to me and perhaps to other members of the Committee—in particular the recommendation around amending clause 5 new section 1A(e) of the bill. There was obviously some debate amongst members of the select committee around the wording in the objective. If I could flick to the purpose clause of the bill in new section 1A it says: “The purpose of this Act is to promote and uphold a State sector system” and then it goes on to list the things that are required by the bill that are upheld.An important question I think though is to what degree does upholding become defending? To what degree does upholding then transition into defending when there is potential for the erosion of certain objectives for the State sector? I say that because when we come down to paragraph (e) where the wording has been changed from “provides for” to “is supported by effective workforce and personnel arrangements;” there was obviously some debate by select committee members. As that currently stands on the face of it it sounds like it is almost a passive role for the State sector actors in that regard but obviously I come at it from looking at an area of the State sector like the Ministry of Social Development and like those who are working in Child Youth and Family as public sector servants. To what degree is this bill to defend the role that they have when they are no longer able to act as an effective workforce because of workplace issues for instance?What role is there for intervention in order to support that workforce? What do I mean by that? Well we know that the Government has pursued what at various times it has called capping it has called streamlining it has called efficiencies it has called various things. But let us cut to the chase of what that has meant. It has meant that in some of our departments despite demand and workforce demands increasing for those departments it has outstripped their ability as a workforce to grow and meet that demand. In the past several years alone for Child Youth and Family for instance there has been a 33 percent increase in substantiated notifications so notifications that require further action. Over that period we have had 16 new social workers per annum. One might be able to claim that it is very difficult for that workforce to be an effective workforce under those circumstances—to fulfil their requirement as public servants to act appropriately and according to their own Acts that they are required to fulfil and be governed by. So to what degree is this bill about just upholding a State Sector system and to what degree is it one that is able to defend it when that position becomes untenable for them?The second part that I want to speak to relates to chief executives’ ability to delegate functions or powers. This was obviously in clause 35 another area of contention and discussion for the select committee. In particular I see that they have distinguished between Public Service chief executives being able to delegate functions or powers from of course the separate ability to contract out the delivery of services. I would like to hear from the Minister in the chair though as to what examples she may have ofthose distinctions between the contracting out of services which happens daily within Government departments and other forms of delegation that might occur by a chief executive to just give a little flavour as to the kinds of circumstances we might be looking at. That would be important for us to consider because I think it is right that we be concerned when we are delegating any powers to ensure it is done properly.The reason I imagine the select committee said: “Look contracting is distinct.” is that we assume transparency. We assume that through the contracting system—because it is tendered and because to a certain degree of course the portals that the Government provides are meant to be a process that even the public who may not be engaging in those particular contract arrangements are at least able to see. My concern is that in recent times perhaps our trust even the select committee’s trust that we can treat the contracting out—that form of delegation by a chief executive—to be sacrosanct and fine is something that we may need to question whether or not we still actually have that layer of transparency within that tendering process.The reason I question that is because in recent times—very recently—for instance we discussed at the Social Services Committee the welfare reform bill where for the first time significant parts of the Social Security Act were being delegated to external agencies. For the first time we were seeing the administration of welfare payments particularly as they related to young people taken out of the Social Security Act and delegated to contractors. We are now seeing a second stage of that. We are now delegating the important role of support mechanisms for the transitioning into work of mental health patients and the like to contracted authorities.We have very little transparency about how that is working. We could not get it through the select committee process. I have requested tender documents and I have not seen them there. So in respect of the transparency in this bill that I think we assume through the delegation and contracting I question whether or not that necessarily exists particularly as I have said for this latest set of delegations because it is a very new delegated power in that regard. It is one given that it is such a core service that I think we would be right to ensure we do have that transparency. So as I say I would be very interested to hear from the Minister in the chair about the delegated functions and the decision-making powers—the kinds of examples that may have been considered by the select committee. I would be very interested to hear what it may have considered and what it considers to be carefully defined circumstances.I will throw up one other example. I query for instance the Work and Income board that the Ministry of Social Development has established recently under the leadership of the Minister. That Work and Income board is working directly with Treasury. In fact we have the bizarre circumstance now where the Ministry of Social Development is being asked to account directly to Treasury on whether or not it is decreasing the actuarial valuation that has been done on the Ministry of Social Development around the overall cost of benefits. It is also having to report to a Work and Income board which has delegated powers from the Minister not from the chief executive. This is an important point. This is where things get very murky. In fact there were questions on whether the chief executive departed from her role because those delegated powers came directly from the Minister and there were questions as to the hierarchy of who actually held seniority in this case. Is the chief executive reporting to the Work and Income board? Or is the chief executive reporting to the Minister for Social Development and vice versa? It became very murky.I would like some clarity because increasingly we are seeing roles like that emerging. That is a significant amount of power that the Work and Income board has now. Paula Rebstock by virtue of being appointed to this board basically could have delegated powers from almost every chief executive in the Public Service the way thatthings are currently running. She is the one individual who seems to be delegated the power of everything. So I would be interested to hear from the Minister on those situations because we lacked clarity for a very long period of time and we just cannot afford to have that for a ministry as significant as the Ministry of Social Development.I note that the bill expanded on the range of conditions and restrictions where they are using delegated powers. For instance after any delegation a chief executive would have to report on it in the annual report and comment on its effectiveness. That is an interesting point but again how far does that extend? Just a little more. I do completely acknowledge that I was not on the select committee for this so there actually may have been much more clarity on the select committee as to the circumstances where that would apply. I would love to see that kind of requirement exist for some of the delegated powers that we have seen in more recent times.The restriction of redundancy payments in certain situations is another area that I think is extraordinarily interesting and worth a degree of clarification. Obviously it is an area of much contention and we have seen many times in the past couple of years where redundancy payments have caused some distress—