Smith Lockwood: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Smith Lockwood: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 14 December 2004. Volume:622;Page:17861. Text is incorporated into the Bound Volume.] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to Part 1 of the Public Finance (State Sector Management) Bill what I am curious to observe in this legislation we are debating tonight is an unprecedented backdown by a Minister in presenting legislation to this Parliament. As I count the pages in Part 1 that have been struck out by the Finance and Expenditure Committee it seems to me that three-quarters of the original Part 1 introduced into this Parliament has been struck out and replaced; only a quarter of the Minister’s original intent remains. That is unprecedented. I do not recollect in my time in this Parliament any other occasion where a Minister has had three-quarters of what he or she had proposed to Parliament struck out by the select committee. What is more troubling is that I gather a lot of this was struck out on the strong submission of the Clerk of the House. 
What this legislation is all about is the public scrutiny of what a Government is up to. Having been deputy finance Minister for a number of years I understand to some extent what the Minister was trying to achieve. The issue is the compromise between the achievement of outcomes the Government is seeking to achieve and the outputs specified in estimates. I understand the problem—that at times there is difficulty in making sure how well the outputs specified which this Parliament approves estimates to fund can ensure the achievement of the wider outcomes the Government wants. 
I think a number of issues need to be explored by this Committee in some detail tonight because if we look at the parts of this Part 1 that are “struck out” we can see that it is troubling that so much of what is struck out is not amended in the new provisions in Part 1 inserted by the select committee. A lot of this stuff is just struck out. For example I am looking at all the provisions struck out under the bill’s original clause 8 where a number of those provisions related to some of the principles around and the fundamentally important parts of the Fiscal Responsibility Act. They have simply been struck out. 
But incorporated in the new unanimous provisions of Part 1 and particularly in new clause 14 are the estimates. They have been reinstated. I think the Minister should explain to the House how the balance of what he was seeking to achieve remains within this bill because a number of clauses around the Budget Policy Statement the various fiscal updates and the pre-election fiscal update are all in the “struck out” parts of Part 1 and there are a number of reinstatements of estimates requirements in the new unanimous clauses. 
This is such important legislation because it involves the transparency of the Government’s spending plans and the ability of this Parliament to scrutinise Government spending and the way that that spending relates to the outputs and outcomes of Government departments. Yet it is not clear from Part 1 what the final balance of all that is. Quite clearly when the Minister introduced this legislation he intended that there should be more discretion for departments: that outputs would be aggregated and that departments would have greater flexibility—perhaps to pursue the Government’s wider outcomes. The problem with that is that this Parliament has less ability to scrutinise particular expenditure in detail because the aggregation of outputs leaves departments more flexibility. 
I can understand what the Minister was trying to achieve but he should explain to this Parliament what the changes delivered by the select committee to this bill will mean in that balance. What kind of balance will we now see given these new clauses here with the specific outputs those estimates provisions will reinstate in the legislation and the way they will tie in with what he was trying to achieve? I think this legislation is so important that Parliament should hear some serious comment from the Minister on how the select committee changed what he sought to do.