Nash Stuart: Social Housing Reform (Transaction Mandate) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Social Housing Reform (Transaction Mandate) Bill — In Committee[Sitting date: 17 February 2016. Volume:711;Page:9113. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): I would like to talk about new section 50H inserted by clause 8 titled “Provisions applying to things Minister may do”. Mr Twyford made a very good point when he said that basically how people judge us is their perception of how we do things. So something may be right technically but if it is perceived to be wrong or there is a general perception that it may lead to corruption then it will affect not only how people perceive us but whether they decide to invest in this country etc. When I look at new section 50H “Provisions applying to things Minister may do” new section 50(2) says “However the Minister is not constrained by and sections 50E to 50G apply despite—” and it says ”(a) the objectives functions or powers of the Corporation or subsidiary:”. So again as Mr Twyford said the Minister can do anything. But worse than that if we work our way down here—and the thing that really alarms me—is paragraph (d) of this which says “the role authority powers or duties of any relevant board:”. So what this is basically saying is the Minister is not constrained by the governance arrangements that had been put in place to ensure good governance is practised here.If we have a look at the definition of “governance” or “corporate governance” it is—and this is from Investopedia which by a number of measures is one of the top investment websites on the net. I go to it a lot actually. And I will quote: “Corporate governance essentially involves balancing the interests of the many stakeholders in a company—these include its shareholders management customers supplies financiers government and the community.” What this bill says is that despite what the board members who are supposed to be experts in how you govern a company and in good practice—the overarching guidance—despite what they may think do say the Minister has the right to overrule them.There are two things I would say to that. First and foremost who in their right mind would accept a board position for Housing New Zealand if they knew that no matter how good the governance they practised was or how good they were as a corporate governor or as a director of a board they could be completely overruled? Therefore their reputational risk is so high you would not go on this in case that did happen.The second thing I would say is despite what we may think Ministers are not experts. Ministers very rarely are experts in the area with which they are charged. So what Ministers do is they make sure that they have experts in place to give them the advice they need to make really good sound decisions. One of the things they do is they make sure there is a really robust process in place to ensure that the people who sit on boards of organisations like the Housing Corporation are very good at what they do. They make sure that when the New Zealand Herald says “What is going on at Housing Corporation?” they can say “Ah well let’s talk to the board.” or “This is an operational matter and I have complete faith in my officials and I have complete faith in the people sitting on that board.” That is the right thing to do because that is why we make sure that we have a series of experts because corporate governance is an art and skill that is learnt over time and you have got to bring a lot of experience.What this says is no matter what that board of learned experts say the Minister can ignore it and go and do whatever he or she wants. That is wrong. But the perception that that sends is almost as damaging as what the Minister himself or herself could do. The reason I say this is that I have had a good look at this because when it came out that we had dropped from first in the anti-corruption measure down to second to third equal and now to fourth I thought: “What is going on here?”. The countries above us—it is Finland Singapore and I think the Netherlands—are still countries that we perceive have very good systems in place. But this slow slide affects our global brand and that is a real concern.I am sure there are other ways that the Government could achieve what it wanted to achieve without giving itself such wide-ranging powers. When I see something like this what it says to me is that the Minister does not trust the officials or those charged with maintaining good corporate governance to do the right thing. This is the thing about governors and directors: they are supposed to act in a way that is unbiased but in the best interests of that corporation. What this says is that the Minister does not have to act in the best interests of the community of the Government or of the stakeholders—because if he or she thought that they were acting in the best interests then they would seek advice from the board and then they would take advice accordingly.If I go down to new section 50H(2)(e) it says “anything to the contrary”—so the Minister is not constrained; remember that—“contained or implied in this Act the Crown Entities Act 2004 or the Companies Act 1993”. I do not know—and I have not been here for a great length of time—but I do not know any Minister in any portfolio anywhere who has powers that can actually override the Companies Act. Again that just sends an incredibly poor message to corporate New Zealand as well. It is a big business. What we have said to big business through the Companies Act is: “This is a set of rules that you must stick to and if as a corporate you don’t stick to these rules then we’re going to haul you over the coals.” This bill says that there is one exception in New Zealand and that is the Minister. I think that is extremely dangerous and I think it sends a very bad message.What I would like is to hear from a number of those gentlemen sitting in the back row of the Government benches who I know have been in high-level positions in organisations. They must be feeling incredibly uncomfortable about this piece of legislation. They must be feeling incredibly uncomfortable because they know that this is just really really bad governance. It is bad legislation because it does not deliver the level of accountability that I believe New Zealanders demand from our Ministers and that they demand from our parliamentarians. This really is not right. It is not New Zealand. I will just make this point one more time: this will I believe damage our global brand and that is substantial. Our global brand in 2005 was valued at $20 billion a year.Chris Bishop: Oh here we go.STUART NASH: It was $20 billion a year Mr Bishop and you know what I mean because you have heard me say this a number of times. One of the few things we have to take to the world is a fantastic global brand. If we start diminishing it by giving Ministers unfettered powers to override boards and override Acts—then we will diminish it. I would bet $10 that when this goes through in that next—Carmel Sepuloni: $10!STUART NASH: It is just a figure; it is just showing that I believe that in the next corruption index because of new section 50H in this piece of legislation we will be down to No. 5. People may say there are 174 countries below us but this is bad legislation. I think that as a Parliament we need to think very very hard before we give the Ministers the sorts of powers that Part 2 of this bill does. Thank you very much.