State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeState Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11665. Text is incorporated into the Bound Volume.]Tuesday 2 July 2013(continued on Thursday 4 July 2013 )State Sector and Public Finance Reform BillIn CommitteeDebate resumed.Part 2 Amendments to Public Finance Act 1989(continued )IAIN LEES-GALLOWAY (Labour—Palmerston North):It is a pleasure to take a call on Part 2 of the State Sector and Public Finance Reform Bill. Should any notes become apparent in front of me in the near future that would be excellent. I know that members have made a considerable contribution to this debate and that Labour members have come to be able to support this bill thanks to some robust discussion at the Finance and Expenditure Committee.Of particular interest in Part 2 is the fact that there are adjustments being made to the Public Finance Act that allow for a more multi-sectoral cross-departmental approach to a range of issues. I certainly welcome that. I think of issues such as mental health which obviously sits firmly in the health budget—and it is good to see the Minister of Health in the Chamber today. I personally would like to see mental health as more of a priority in the health system but there is no doubt that factors that contribute to good mental health sit in the education sector they sit in the employment sector—they sit across a range of different departments. The idea that these amendments to the Public Finance Act would allow for perhaps a single budget that draws together a package involving a range of different departments and agencies with a single focus and a single line of reporting—with a focus on something like reducing the incidence of mental illness or better managing the incidence of mental illness or supporting people with mental illness into work and using that range of departments in that way—is I think an excellent step forward.It is actually fantastic that the aspects of the bill that the Labour Party was not able to support at the first reading have been tidied up because I think this is something that many many people working in the Government sector and many people working in non-government organisations that deal with the Government sector will be very very pleased to see. I think every member of this House will have heard people say that they want to see the breaking-down of the silos between Government agencies and this would certainly support that happening. The fact that the information in the estimates and supporting information would be more closely aligned with that cross-sectoral approach would I think be welcomed by members as well because there are often times when we really want to drill down to an issue and look at all the different factors relating to that issue and to be able to see in a simple document and in simple terms how the different agencies and departments of the Government are working together to alleviate that issue.That just simply has not been clear in the past. Often something like mental health might be discussed at the Health Committee it might also be discussed at the Education and Science Committee and it might also be discussed at the Social Services Committee. Members would not have a full understanding of what was happening across those different agencies. So the idea that that type of reporting would be able to occur is an important step forward and well supported by this side of the Committee. Standardising the governance and performance reporting requirements for companies currently listed in schedule 4 of the Public Finance Act and proposed to be moved to a new schedule 4A to make the framework more consistent with the provisions that applyto Crown entities companies covered by the Crown Entities Act is also I think a sensible move. Standardising practices across agencies is very helpful. I listened to the Hon Trevor Mallard last night talking about his frustration—Hon Ruth Dyson: It was a very good speech.IAIN LEES-GALLOWAY: It was a very good speech. He talked about his frustration as a Minister at discovering that people employed in different agencies were essentially doing the same job and not talking to each other and not reporting back to Cabinet in a way that made it clear that that kind of redundancy was occurring within the Government sector. So with those few comments I would certainly like to add my weight to this piece of legislation.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to Part 2 be agreed to.Amendments agreed to.A party vote was called for on the questionThat Part 2 as amended be agreed toAyes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes24Green Party 14; New Zealand First 7; Māori Party 2; Mana 1.Part 2 as amended agreed to.Part 3 Amendments to Crown Entities Act 2004The CHAIRPERSON (H V Ross Robertson): I advise members that the debate on this part also includes the schedules 3B through to 4.Hon DAVID CUNLIFFE (Labour—New Lynn):Tēnā koe Mr Chairman. It is delightful to see you at this hour of the morning which I think is still technically part of Tuesday but you are looking in pretty good shape. I am so pleased that you have mentioned the schedules because I am sure that they are going to excite a lot of attention from members on our side of the Chamber. Part 3 is a very important part of the State Sector and Public Finance Reform Bill and I hope that with your good grace Mr Chairperson we will have ample time to scrutinise its clauses because this is fundamental legislation. This might sound like housekeeping but believe me it is not. This is some of the core legislation that amends the Public Finance Act the State Sector Act the State-Owned Enterprises Act and other core Acts that actually determine the machinery of government so that when the Ministers of the day the Cabinet of the day pull the levers of power something happens and we can tell what happened. For that to occur we need to make sure that the rules of delegation of financial probity of accountability all are tight as a drum and work as they should.In the past one of the things that has happened is that in an effort to make sure that the Public Service and the public sector operate efficiently and accountably there has been a tendency for departments to work on an individual basis and for their differing views to ultimately be brought together around the Cabinet table if they have not been harmonised prior in a Cabinet committee. For many many years Governments of both sides have viewed that as an imperfect state of affairs. We look forward to hearing the Minister in the chair the Minister of Immigration with his long experience give the Committee the benefit of his views as to how this could be made to work better. But for members opposite the objectives set out in Part 3 of the bill are incontrovertible. That is that the Government should be able to issue whole-of-Government directions andemploy a range of new legislative powers set out in this part of the bill to require if persuasion has not already done it Government agencies to work together for a common cause.It might be for example—let us think of a random example—border security requiring immigration and customs to cooperate by data sharing to pool their information to better identify risks coming across the border. A lot of that happens anyway. I do not wish to create any false impression. There is excellent cooperation between those two agencies but at the level of detail if necessary this part of this bill will give the Crown the authority to legally require cooperation between departments which is particularly important for enforcement agencies.Of course this is an interesting week to be discussing this bill because outside the Chamber in media-land public attention has been focused on cooperation between a number of other agencies some of which have been decidedly outside the law where some of our security agencies have been subcontracting to others without legal authority. There is now a desperate scramble by the Government to legalise activities that have hitherto by its own admission been outside the law in some 88 known cases. That is certainly something that neither side of the House could countenance. The question is whether the solution to that is actually to rein in some of those behaviours or otherwise to adjust the law to catch up with reality. The Labour Opposition believes that the rule of law should be paramount and that at no time should there be any actions outside the law but that is a debate for another day.The amendments to Part 3 are crucial. They are just aspects of the Crown Entities Act 2004 and they bring that alignment to bear not only on Government departments but on entities that are one step removed from departments—Crown entities. This is also an extremely interesting avenue for debate because there is a well-known and very visible oxymoron going on on the part of the National Government here. On the one hand it is passing this legislation which we heartily agree with that there should be ways of improving cooperation between core Crown agencies and Crown entities and getting Crown entities to work together and on the other hand it has embarked on a partial privatisation programme for the State-owned entities which will make it harder for the Crown to govern those State-owned enterprises as a portfolio and puts them further away from cooperative effort.The key example is the electricity system. We are an energy-dependent country. Right around the country New Zealanders are either shivering through the winter or facing bigger power bills and the Prime Minister thinks that that is just fine and dandy and that power prices are not too high. He thinks they are “about right” but New Zealanders know they are not about right at all. Power prices have been going up faster than wages faster than incomes and they are putting huge pressure on our families. Last weekend I was doorknocking in Upper Hutt and I had the privilege of meeting some families who are doing it tough in flats that looked more like dog kennels that leak that had mould growing up the walls that had children growing up in them with respiratory disease. Every time I go out doorknocking in areas of high deprivation I am shocked all over again by the way some people live. Why do I mention that? Because energy poverty is part of the bigger picture. Privatising our energy system as the Government is trying to do is going to be putting more pressure on family budgets because power prices are going to rise.What is the relevance to this bill? The relevance is very clear. In this bill the Government is trying to draw Crown entities into closer cooperation by requiring that cooperation through whole-of-Government directions. At the same time it is removing the existing power to direct State-owned enterprises the power companies currently residing in the State-Owned Enterprises Act and scrubbing that out because they willjust be publicly listed companies like any other in which the Crown happens to hold 51 percent. But there is no power to direct no no-surprises rule no portfolio synergies no sense of strategy—that will be the oxymoron at play. The Government is probably doing the right thing in this bill but it sure as heck is doing the wrong thing with the privatisation of State-owned enterprises.Broadening the grounds as this part does on which the Minister of Finance and the Minister of State Services can issue whole-of-Government directions and allowing those directions to be issued either to all departments or to a smaller group of entities including Crown entities presupposes a more important point a prior point: does the Government have a strategy upon which to direct? We have a Government here which at best resembles parts of the Holyoake Government of the 1960s—steady as she goes don’t fiddle with it she’ll be right. I have never seen four less effective more boring Budgets than the last four that Bill English has brought down. The bits that were not boring and meaningless were positively downright awful like giving huge fiscally negative tax breaks to rich people and putting GST up on everybody else. What has this Government actually done in the way of economic strategy other than making New Zealand’s incomes more unequal through the tax system and putting off paying for superannuation so our children face higher taxes?The Government wants to issue whole-of-Government directions. This part of this bill gives it the power to do so. We think that is a good thing. But in order to issue whole-of-Government directions it has got to have a direction to travel in in the first place and the problem with this good-for-nothing lackadaisical lazy useless National Government is that it would not know a direction if it tripped over it. Government members would not know a strategy if it bit them on the behind. They would not know an economic plan if it fell off the top of Steven Joyce’s glossy head. I have seen so many glossies out of “MoBIE Dick” the Ministry of Business Innovation and Employment that I am so sick of public relations spin rebranding and reissuing things that have been done since Adam was a cowboy. What I am still waiting for is a real plan that will grow jobs and incomes and employment and well-being. It is all very well in this part of this bill—Part 3 of the innocuous boring State Sector and Public Finance Reform Bill—to give themselves the power to issue whole-of-Government directions but there is no direction to issue because they have no idea what direction the country should be heading in.Hon MARYAN STREET (Labour):It is a pleasure to rise to talk on Part 3 of this legislation the State Sector and Public Finance Reform Bill. [Interruption ]The CHAIRPERSON (H V Ross Robertson): Order! Order! I know it is Thursday morning—Hon Member: It’s not Thursday.The CHAIRPERSON (H V Ross Robertson): Well Tuesday morning then. I know that everyone is in jovial spirits but the reality is that we have one speaker addressing Parliament and when members who do not have the floor interject on each other it is not permitted. All of you may have a call or take one shortly.Hon MARYAN STREET: I raise a point of order Mr Chairperson. I wonder whether you could clarify for the member opposite which part—[Interruption ]The CHAIRPERSON (H V Ross Robertson): Order! There is a point of order on the floor. The member is a long long experienced member and he knows.Rt Hon Winston Peters: Point of order.The CHAIRPERSON (H V Ross Robertson): I already have a point of order from the Hon Maryan Street. [Interruption ]Hon MARYAN STREET: I think he has just recognised my point of order.The CHAIRPERSON (H V Ross Robertson): I cannot take two.Hon MARYAN STREET: Thank you very much Mr Chair. I wonder whether you could clarify for the members opposite which part of the bill we are discussing. Is it Part 3?The CHAIRPERSON (H V Ross Robertson): It is Part 3.Rt Hon Winston Peters: I raise a point of order Mr Chairperson. I hate to interrupt my colleague but that was in part what my point of order was because I was actually shocked to find out that across the Chamber someone thought it was Part 2. But then again that is the person who would have things not happen over her dead body.The CHAIRPERSON (H V Ross Robertson): Thank you. As I said it is Thursday morning but we are still in Tuesday.Hon MARYAN STREET: Thank you very much Mr Chairperson. In case some of the members opposite who were also here in the Chamber late last night when I spoke on Part 2 of the bill which we have just passed were asleep at that time I would like to repeat the importance of this legislation and the timeliness of it. I glossed over the fact that it is 100 years this year of good-quality public service in New Zealand. That is being celebrated by Transparency International New Zealand as it moves to do its audit on our processes and the apparatus that keep us at the top of the indices on transparency and on the perception of a lack of corruption. Those are parts of our reputation that I personally—and I know my colleagues also—hold very dear. That reputation is absolutely predicated on the transparency and the quality of the Public Service.So it is 100 years of public service and simultaneously 100 years since the formation and of the work of the Public Service Association. In case people were not up at midnight last night when I said that I would like to draw that to people’s attention again. I would also like to invite people to come to the opening of the exhibition of 100 years of the Public Service Association’s banners at the Nelson Provincial Museum in a couple of weeks’ time. If people wish to have a weekend in Nelson—which of course is a lovely place to be—come on the Friday night and come to the opening of that banner exhibition which is part of the history of the Public Service Association an organisation that has always prided itself on defending the quality and the independence of our Public Service.In accordance with this bill that is apposite because amendments that have been made to this legislation have been done with agreement across the House and have also been taken to the Public Service Association and the Council of Trade Unions as appropriate stakeholders in this legislation. That is important and it is one of the things that allows us to have a robust Public Service—that it also has union representation that not only protects the terms and conditions of the people who work in the Public Service but also works to ensure the highest level of integrity of that service. So I would like to pay my particular tribute to the Public Service Association in its centennial year.But one of the things I want to focus on especially in Part 3 is the point that my colleague David Cunliffe has been talking about just now in a slightly different context. It is the requirement that boards of statutory Crown entities—and this is the relevant part because we are talking about amendments to the Crown Entities Act—ensure that those entities collaborate with other public entities where appropriate.Again I would like to give an example that may highlight the importance of this. That example is that for the moment in time—the moment in history—when I was the Minister for ACC a portfolio that I really loved one of the things I enjoyed about it was the fact that I chaired a cross-government working group. In those days we had an Injury Prevention Strategy. We no longer have an Injury Prevention Strategy under this Government which is a tragedy. But when we did there were six work streams in that Injury Prevention Strategy and they covered a huge array of Crown entities and ministries and departments so they covered all kinds of interests.When that committee met to consider the Injury Prevention Strategy and its success or otherwise in each of those streams it meant that the people in the room were from the Ministry of Justice they were from the Ministry of Transport they were from the police they were from Water Safety New Zealand they were from the Ministry of Health and they were from mental health organisations in particular. They were from a whole range of interests. If this is one way of getting the Government to work more horizontally than vertically then I welcome it. That committee I am using as the example worked horizontally because it needed to look at suicide prevention it needed to look at deaths and injuries caused by water and it needed to look at road transport accidents. It needed to look at six areas where injuries could be prevented. It had a work stream on falls. Well it is unfortunate that this Government has now taken away the funding for the National Falls Prevention Strategy that was in place. It really enabled lots of elderly people to prevent themselves from falling and having those injuries that we know are so tragic and difficult in older age.So the point is that in this committee room—and yes it was almost bigger thanBen-Hur —to have all these people talking to each other was critically important. The prime example I give which will be of interest to my colleague Iain Lees-Galloway is that across each of those work streams 28 to 35 percent of the accidents if I remember correctly were caused by alcohol. In seeing that synergy across six different work streams of injury prevention it was patently obvious that an area that the Government needed to focus on was harm caused by alcohol. That I have to say is another lost opportunity that this Government has committed in recent months—that it did not take the opportunity to reduce the harm caused by alcohol in the way that it could have.When I as a Minister was sitting there with all of those departments there they could all listen to each other. In transport we could talk about road transport accidents. We could talk about deaths by boating injuries from boating or water-related accidents and so on. Then it became clear that there was an underpinning commonality amongst all of those that should become a priority for Government action and so it did with our Government with the inquiry and the report on alcohol reform from the Law Commission.I use that as an example in order to point out why this legislation is important. It is so that we can ensure that requiring the boards of statutory Crown entities not even departments or ministries but just Crown entities to talk to each other—like requiring Housing New Zealand for example to talk to other parts of Government apparatus—would be an advantageous thing for the people of New Zealand. I welcome this provision in particular and I welcome it as a little step. I do not see it as a huge cataclysmic step or an improvement in Government administration but I do see it as an important small step to learning how we might govern horizontally across portfolios and Government departments and Crown entities rather than vertically in the silos that we have been accustomed to administering in the past. I think this is a useful harbinger I hope of change—PAUL GOLDSMITH (National):I am very pleased to take a quick call on Part 3 of this bill the State Sector and Public Finance Reform Bill. We have had a very long and thorough debate on this legislation so far and—Hon David Cunliffe: More to come.PAUL GOLDSMITH: I am looking forward to further comments from the honourable member Mr Cunliffe. I was just interested to see that the main point of Part 3 is to create a range of public sector management tools to foster an innovative effective public sector to deliver better-identified results for New Zealanders. What we mean by that is that all these public entities these Crown entities have grown likeTopsy over the years. Some of them are doing their own thing and it is not unreasonable—indeed it is a perfectly reasonable idea that we would—Hon David Cunliffe: I raise a point of order Mr Chairperson. The Standing Orders provide that in instances where a member is reading from an official document there is an opportunity for that document to be tabled so that the Committee might have access to the underlying information. If the member is reading from an official document I seek leave for it to be tabled.The CHAIRPERSON (H V Ross Robertson): I thank the honourable member for that. The member should know that normally a request like that is done at the end of the member’s speech.PAUL GOLDSMITH: Given the fact that we have heard many lengthy comments from that member perhaps he might have the courtesy of listening to the short and succinct comments that I prepared to make on this bill. As I was saying the member did ask and question—Hon David Cunliffe: You write books.PAUL GOLDSMITH: Well yes but I write about successful people; that is the difference there. I want to remind the Chamber that we are talking about—Hon David Cunliffe: John Banks.PAUL GOLDSMITH: That was one of the earlier ones. I want to remind the Chamber that the member was talking about the lack of overall direction by this Government so I thought I should just remind him that there is no lack of direction. It is very clear that we are focused on those four things: getting the books in order creating a competitive economy building better public services and rebuilding Christchurch. That direction is very well articulated and it is consistently prepared and consistently driven forward by this Government.This legislation is one piece of the jigsaw one piece in that delicate lattice structure that is the arrangements of the Government in order to enable the Government of the day where it has worked out what its priorities are to effect those priorities through the work not just of Government departments but also of Crown entities so that we working together and pulling in the same direction.One of the details is around the area of statements of intent and one of the proposals in this bill is to enable a Crown entity’s responsible Minister to require the entity to prepare a new statement of intent at any time. Again this is just another mechanism by which we can call the parties to account and make sure that everybody is singing from the same song sheet at the same time. So on that basis I am very keen to have continued with this detailed discussion of Part 3 of this bill this morning. Thank you.Dr Rajen Prasad: Mr Chair.Jacinda Ardern: Mr Chair.Dr Rajen Prasad: Oh a difficult decision.The CHAIRPERSON (H V Ross Robertson): Front bench.Dr Rajen Prasad: I was first.The CHAIRPERSON (H V Ross Robertson): It is not a race. I call the honourable member Jacinda Ardern.JACINDA ARDERN (Labour):Thank you Mr Chair. It is a gamble every time but I appreciate the opportunity. And I know that this only gives Mr Prasad more time—Hon David Cunliffe: Dr Prasad.JACINDA ARDERN: —Dr Prasad; what an outrage of me—to prepare further queries for the Minister in the chair. I certainly have some of my own. I think though just for the purposes of those who may be watching this crucial debate and may be seeking a summary perhaps of what we are debating here—Part 3 of the State Sectorand Public Finance Reform Bill—obviously my colleague the Hon David Cunliffe has already talked about the ability for the Government to set whole-of-Government directions. There is some debate around whether or not that is indeed possible. He has set that out. I will have a little bit more of a discussion about that but other elements of this part include requiring the boards of statutory Crown entities to ensure that the entities collaborate with other public entities where practicable. I wonder whether or not the Minister in the chair could talk us through some examples that may have been canvassed at Finance and Expenditure Committee level of what that collaboration may look like and some situations where we could have benefited from that previously but without having that set out clearly in the Crown Entities Act which is what that amendment amends we were not able to. I think it would be beneficial to the Committee if we had some tangible examples there to work from.Equally Part 3 enables the broadening of the grounds for which the Minister of Finance and the Minister of State Services as I have already said can issue whole-of-Government directions and allow directions to be issued to smaller groups of entities. I do have some questions at that point around the degree to which that then hands over I guess the discretion or the power of the primary Minister who oversees a particular department by broadening the role of the Minister of Finance. For instance clause 162 amends section 107 and that is about the whole-of-Government directions which of course have been changed to directions to support the whole-of-Government approach. It sets out there that “The Minister of State Services and the Minister of Finance may jointly direct Crown entities to support a whole of government approach by complying with specified requirements for any of the following purposes: (a) to improve (directly or indirectly) public services: (b) to secure economies or efficiencies: (c) to develop expertise and capability: (d) to ensure business continuity: (e) to manage risks to the government’s financial position.” That is quite a broad set of criteria that would allow that specific intervention.I raise this because I have seen particularly in recent times with the management of the Ministry of Social Development that recently the Minister undertook a process where a company by the name of Taylor Fry carried out an actuarial evaluation of the future liability of welfare essentially in New Zealand. It put a figure on it and the reason that the Government claimed that it wanted to do that was to put requirements set directions for the Ministry of Social Development by Treasury as to what it then had to achieve to bring that future liability down. Potentially the Ministry of Social Development could lose future funding baseline funding almost putting it on a whole-of-Government performance pay. That whole ministry could lose future funding if it did not reduce its future liability. You can raise significant questions over that. As soon as you hit financial trouble or you hit a recession and you have an increase in the number of people placing demands on the welfare State and then suddenly you have a department unable to meet its requirements as set out by Treasury its baseline drops as does its ability to then do its work and reduce its future liability and it becomes a self-fulfilling prophecy if you will.But my concern is that all of this actually has been governed has been driven by the Minister of State Services and the Minister of Finance. In fact Cabinet papers that I have read on this particular issue have all been signed off by the Minister of State Services and the Minister of Finance. They are the ones driving an agenda within the Ministry of Social Development to the degree that now their departments have significant oversight significant power—which has always existed but this is much more explicit now—over the operations of the Ministry of Social Development to the degree that it almost feels like the chief executive is secondary in their own department to the Secretary to the Treasury. That is almost how the hierarchy now seems within theMinistry of Social Development. I have concerns about that in itself. That has already happened. Now with these directions to support the whole-of-Government approach I guess my concern is to what degree our own ministries are able to manage internally their own statements of intent and to what extent this is actually now being overseen by the Minister of State Services and the Minister of Finance. And as I say it is already happening to a degree so it is hard to necessarily know whether or not this changes that that much or actually just sets out the legislative framework for that.I did want to also point out that we do have some changes to the statement of intent. It looks like there was some select committee debate around the issuing of statements of intent. Obviously a statement of intent sets out not just the priorities for a Government department but how it will get there. In the summary of the Finance and Expenditure Committee discussion on the changes to the issuing of statements of intent there have been changes it appears to ensure that there is transparency if there is ever any recommendation by a Minister to extend the amount of time available to issue a statement of intent or indeed issue a waiver for an issuing of a statement of intent. I applaud the attempts to ensure that there is transparency when those decisions are made. I will just cover off where that is covered in the bill. New section 139A “Minister may grant extension of time for or waive requirement to provide statement of intent” states: “If a Crown entity is likely to have a significant change in the nature or scope of its functions the responsible Minister may grant the Crown entity an extension of up to 1 year of the period specified …”.I thought it would be useful for the Committee to hear perhaps the process that was undertaken for “Mobie”—we do not call it that any more. What are we meant to call it now? Is it “M-bie”? What process did the Ministry of Business Innovation and Employment the new giant entity go through for its reissuing of a statement of intent? I think it would be useful to know how it managed that process and what kind of time period was required because that was a significant change. I would assume that there would not be much beyond that scale so if it was able to complete that within a specified time frame I wonder whether a year is perhaps too generous a time frame to be issued. I would be interested in the view of the Minister in the chair on that.But the legislation also states that “the responsible Minister must not grant an extension unless he or she is satisfied that the extension will enable the entity to improve the quality of the statement of intent that it provides.” That seems to me to be quite a broad provision because surely any Minister could create justification that in just looking at a statement of intent they need extra time because they think it can be better than this. You do not really need much beyond just the opinion of the Minister to decide under that quite broad set of criteria.But I am satisfied that even though that is broad there is the transparency around when they are making that decision that it must be published and I think probably the balance there is about right. My question though is this: if it does seem clear that there is some kind of stalling tactic at play around a statement of intent what right of redress to keep in check the use of the Minister’s power and discretion in that regard is appropriate? It is a genuine question. It may well indeed be contained in the legislation that for instance an appeal could be made to the State Services Commission or the Minister of State Services to check that the discretion had been used appropriately around that extension of time. But is that indeed intended to be the way that you would seek redress if an extension or a waiver was granted and there was concern that that power had not been used appropriately? How is that redress sought particularly when one assumes that to improve the quality of the statement of intent one would be able to access a draft?Dr RAJEN PRASAD (Labour):There you go. Thank you very much. You cannot pull rank all the time. That is great Mr Chairman.I am pleased to take a call on Part 3 of the State Sector and Public Finance Reform Bill. I want to refer to a number of the provisions here. I will put them in the context of the independent Crown entities and the autonomous ones in the advocacy area if you like: the Human Rights Commission the Privacy Commissioner the Children’s Commissioner and the Families Commission. That is the context in which I want to make my comments.Clearly these provisions in Part 3 around Crown entities begin to codify a number of the aspects of Crown entities’ practice and particularly in relationship to their purchasing ministry and the Minister. It is codifying. A lot of this is happening already and here it is now translating into legislation. Many of these changes started my recollection is around 2004 and it is now that we are seeing them coming through in legislation. Some of them are tried and true.But along the same lines as my colleague Jacinda Ardern who just sat down I will talk about clause 162. These are the directions to support a whole-of-Government approach that is possible. My colleague took the line that two Ministers now have the ability to direct in any number of different ways. I agree with those kinds of comments. But in section 107(1) as amended by clause 162(1) paragraphs (a) to (e) in themselves are actually quite broad. We do not have an idea as to what the limits are of some of these directions. Look at the first one in clause 162(1) section 107(1)(a). We can direct independent Crown entities for example “to improve (directly or indirectly) public services:”. That could be anything. There are no limits to what is being suggested here. Indeed Crown entities generally in terms of the delivery of public services cannot be directed as such and many Crown entities actually do not offer a public service in terms of the traditional sense. I wondered what the limitations there were.The second purpose is “to secure economies or efficiencies:”. That also is so broad. Will the two Ministers be able to take under this provision very specific directions on how an independent Crown entity might want to use its resources for structuring itself? I see some difficulties and some dangers here.Some of the others are so self-evident it is difficult to understand why they are being included here. The third purpose is “to develop expertise and capability”. It is self-evident that Crown entities Government departments and ministries will develop expertise and capability. In fact that is why they are appointed but here is the ability to give another direction. Does the Minister have some other ideas in mind about these directions?Without any qualifications from paragraphs (a) to (e) on those kinds of provisions I see some difficulties some dangers probably and some difficulties in the future if these provisions were going to be relied upon by a Minister to instruct a Crown entity to do or not to do certain things. Therefore I see some difficulties in that particular area.Moving on to the provisions of clause 164 here we have again codified procedures for ministerial directions on Government policy. Ministers under the present Crown Entities Act have the ability to direct. Indeed there is quite a well set out series of steps in the Crown Entities Act on what the procedures are if the Minister intends to direct and then how it is to be reported to the House or gazetted. Some of that is being restated here again.I can see how officials have worked on this as a provision but there is another parallel track that operates and this is the very subtle almost surreptitious way in which currently Ministers direct Crown entities. If we take for example the Families Commission here over a period of the last 4½ or almost 5 years the Minister has been directing that commission and reshaping it in a very different way. Much of that is byway of “direction”—in quotes. Yet nothing has been gazetted about what those directions are. There is a bill before the House at the moment where all of that comes together. But the Minister has shaped it by the appointment of the chief commissioner. The Minister has shaped it by the appointment of other commissioners and putting in the kinds of commissioners who have been put in there in probably not so subtle ways has begun to shape that particular Crown entity and indeed others.So although the provisions here are clear and precise and I support them I would expect the Minister to actually follow this and not go along the parallel track that currently is in vogue which is the surreptitious and subtle shaping of the role and activities of Crown entities. I hope the Crown entities will rely upon this much more than the Ministers might to say: “Well if you’re going to direct me there are particular ways in which you might need to do certain things.” according to the provisions of section 115(3A) amended by clause 164.Then section 115 and subsequent sections begin to talk about the review of those directions. Quite interestingly the Crown entities I have been talking about in the advocacy area in the rights area have rarely received a direction from the Minister and the subtle ones have never been reviewed. I know that for a fact. What is the Government contemplating here? What is being signalled here? How can you review something that in a sense you have rarely if ever used on these particular entities that I am talking about?Then under section 115A(3)(b) in clause 165 if there is to be a review the expectation here is that there will be consultation with key people outside. I hope that the Government intends to follow those because in many of the changes it has made to Crown entities particularly to the Families Commission there has been no consultation with the stakeholders outside and yet they have been restructured and reorientated in quite significant ways and they will be a shadow of what they were before if the bill currently before the House is passed.So both the codification of the opportunity to direct and the review of those directions and the time-limited nature of those directions are very good provisions. They are now here they are now codified and I encourage Crown entities to actually utilise them and Ministers to utilise them. I rather suspect that Ministers and heads of Crown entities in the human rights area and the rights and advocacy area will find this a very very useful and transparent process which is what is being talked about here rather than the underhand secretive almost surreptitious way in which some of those Crown entities have currently been shaped.I want to talk a little bit now about the provisions of clauses 168 and 169 about office holders in Crown entities. I am glad to see this particularly clause 168 because it was just a month or two ago that the Social Services Committee was doing the financial review of the Retirement Commissioner. It amazed me that this was actually there—that in answer to questions for written answer the Retirement Commissioner had refused to give information to the select committee saying that this was the privacy of contractors. It took a couple of goes going backwards and forwards to say: “Well hang on they are still working as public servants.” which is what is clarified in section 135(1A) inserted by clause 169. Those provisions are particularly useful and now make it very clear as to the kind of information that select committees can have on these Crown entities.I want to talk a little bit now about the obligations to prepare and report statements of intent. Again this is simply—The CHAIRPERSON (H V Ross Robertson): I call the Hon Philip Goff.Hon PHIL GOFF (Labour—Mt Roskill):It is always nice Mr Chairman to be addressed in such a formal manner. That is what my mother christened me. The Labour Party is supporting this bill the State Sector and Public Finance Reform Bill as awhole and in particular it is supporting the third part of the bill relating to Crown entities.The reason why we are supporting the bill and the section is that the Finance and Expenditure Committee was allowed to act in a more independent way to listen to evidence to respond to evidence and to correct basic flaws in the legislation. That meant improved legislation and to give credit to the Minister of State Services he went along with what the select committee recommended. As a result we have a bill that does achieve support from across the House. I think that is particularly important in terms of the State sector because we want to see continuity and we want to see the State sector working as effectively and as efficiently as possible and not subject to the whims of a changing Government and being a political football.There has been flexibility shown by the Government in responding to evidence on the ground but I have some questions for the Minister in the chair the Minister of Immigration about how this section will work in relation to the performance of Crown entities. I hope that the flexibility shown on this bill might be shown in regard to the Crown entities and the Government’s intention to dispose of Crown entities when all evidence suggests that that will not be in the public interest.Under Part 3 the amendments to the Crown Entities Act do a couple of things. In the first instance they support sectoral leadership by requiring the board of the statutory entity to ensure that the entity collaborates with other public entities where practicable. I think that is important because too often what happens in the public sector is that you have a silo mentality and each organisation goes its own way does not think about the wider picture what is in the interests of the country and what the Government wants across the board. I think that that is a very good principle that is set down in the bill. It also supports functional leadership by expanding the scope for the use of whole-of-Government directions and that really goes down the same track—it follows the same theme. I think those two aspects in this section of the bill are really important.What I want to ask the Minister is for him to perhaps give some practical ideas about how these new powers might operate. In particular I want him to address the Crown entities in the energy sector—Meridian Energy Genesis and Mighty River Power. These are three Crown entities—no I am sorry these are now 2½ Crown entities so I want to know how this bill deals with the other half that the Government has sold off. The Government has established in this bill the principle that it would be really good to get the Crown entities working together for the good of New Zealand and now it has sold off half of one of them. I wonder how that sale might undermine the principle that is set out very clearly in Part 3 of this bill.I want to ask the Minister how these principles will work in relation to the problems that we find in the areas that relate to these three Crown entities. It is about energy generation and it is about energy prices. The Minister is perhaps aware that since 1997 the prices for power to households have increased at double the rate of inflation. This must be a real worry to the Government and even more of a worry because in the last year I think power prices to households have gone up at five times the rate of inflation. We are debating this bill in the middle of winter and although those on ministerial salaries of a quarter of a million dollars probably do not even know what they are paying on their power bills people on this side of the Chamber represent electorates where households are really feeling the pinch. Old people are suffering we have the problems of hypothermia and we have young people children living in cold damp conditions. Those young people are being hospitalised they are missing out on school time and they are missing out on career opportunities.I want to bring this bill to bear on those particular problems that are worrying so many New Zealanders. We have got this problem that we have 2½ Crown entities inthis area of producing electricity yet the prices have run at double the price of inflation for about 16 years. They have been doing that since there was another change by Government in the way the Crown entities operated which was the Bradford reforms which were supposedly about competition. But the Minister will be aware that there was a formal report sought and commissioned by the last Labour Government called the Wolak report. The Wolak report found that the four power generators made super-profits over a 6-year period of $4.3 billion—Hon David Cunliffe: What?Hon PHIL GOFF: —$4.3 billion. The only upside of that was that that money went back to the taxpayer because the companies were Crown-owned. So it was a bit of a cycle. We paid more for our power but we got the dividends back to the Government. That is not going to happen with the sale of the assets. Those super-profits are going to go to those wealthy enough to invest in the shares and to the overseas investors indeed as they did with Contact Energy—you know $200 million a year flowing out of the country to the Aussies making them rich at the expense of the New Zealand taxpayers who paid for the dam on the Clyde.This bill is about getting collaboration. I wonder whether the Minister has considered using the provisions of this bill to set up a single buyer of wholesale electricity. That would seem to be really sensible if we wanted to tackle the problem that ought to be worrying the Government of escalating power prices. The gap between what the household consumer and the industrial consumer pays is one of the biggest—the second biggest—in the OECD. The cost of electricity is going up at a faster rate than in almost any other country notwithstanding the fact that we produce this electricity through water which is free in assets that we invested in 60 years ago.I agree with this bill that you actually need to have collaboration. You need to have the Crown entities working together but I am asking the Minister whether there is a fundamental contradiction between that very good objective in this bill and what the Government is doing in selling off the State assets so that that collaboration will no longer be possible. New Zealanders ought to be worried that the price of electricity has gone up five times faster than the overall rate of inflation in the last year. They ought to be worried that the super-profits from these companies are now going to private investors and to overseas investors. Here we have a bill that potentially has a solution to the problem of electricity prices but it is being undermined by another set of policies that the Government is pursuing.I go back to what I said about the select committee. It made sensible changes because we looked at the facts and the Government was in this instance prepared to respond to evidence on the ground. I wonder whether the Government will likewise respond to evidence on the ground about the failure of its Bradford reforms which will be exacerbated by the privatisation of half of the Crown entities in that regard.There is a second area set out as the objectives of the changes to the Crown Entities Act that occurs in Part 3. That is to formalise the role of the monitoring department and the ability of the Minister of State Services to request information and also to make provision for more meaningful performance information to Parliament. Those are absolutely appropriate goals but I wonder how those goals sit alongside the privatisation of the Crown entities which takes them out from the Official Information Act and takes them away from the role of the Ombudsman.We have in the bill good sound objectives about greater accountability. That is why we are supporting this bill. But at the same time the Government is doing exactly the opposite in privatising these companies so that they are no longer accountable to the New Zealand taxpayer who paid for their construction. We no longer get the information we need and there is no longer the protection of the Ombudsman and theother things that apply to Crown entities. We have in essence very sound provisions in Part 3 of this bill. We absolutely applaud the objectives of greater collaboration and greater openness but those goals are fundamentally undermined in regard to those objectives by what the Government is doing against the public opinion in privatisation.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):I appreciate the wisdom of my colleague Mr Goff but I have to say that on reading through some of the provisions of Part 3 of the State Sector and Public Finance Reform Bill I am starting to wonder whether the Opposition should indeed support the bill. Following on from his statements and our belief of course that this might bring better accountability I went to section 139 in clause 179 “Obligation to prepare statement of intent”. This goes right to the heart of what the Government is trying to do here and that is to privatise every single thing it can get its hands on. It is good to see the “Minister for Private Prisons and Prison Riots” in the chair and I am sure that she can get up and answer this question.What this effectively does is move away from the current obligation of Crown entities to provide a statement of intent every year where every single taxpayer who is a part-owner of these entities can ask the question: “What is this organisation this entity doing?”. As a former Minister I can appreciate the oversight of a Minister through this process. The ability to check the statements of intent for Crown entities and be assured that they are heading in the right direction has now been shifted to a 3-year and possibly a 4-year statement of intent process because the Minister—Hon David Cunliffe: Three.Hon DAMIEN O’CONNOR: Three and if you go to section 139A the Minister may grant an extension of time of up to a year. So what we have is potentially one statement of intent for—Hon David Cunliffe: Two parliamentary terms.Hon DAMIEN O’CONNOR: That is right. Or indeed the question is whether the National Government has an intent to shift to a 4-year parliamentary term. That is maybe something the Minister can come back to because if we are shifting from an annual statement of intent to a 3-yearly one with the possibility of a 4-yearly one then is that what the Government is intending to do? Is it intending firstly to reduce the accountability for agencies that it intends to partly privatise as the obligation to have a yearly statement of intent might be a little onerous for some of the wealthy shareholders who come in to buy these entities? They may see it as a bit too much taxpayer scrutiny.I say that without the ongoing oversight of a Labour Government—that is a Government that is here for the good of all taxpayers—then in Part 3 the objectives and the statements of intent of these partly privatised Crown-owned entities might be different from those of the fully taxpayer-owned ones; in fact we know that. We know that the partly privatised State-owned enterprises and Crown entities will in fact be there to maximise profits end of story—end of story. The statement of intent—that is the focus on providing services providing reliable electricity supply and providing sound infrastructure which has always been a core part of Governments’ intent or certainly of a Labour Government’s intent anyway—may in fact be diluted.I am concerned that the provisions in sections 139 and 139A shift from a clear annual statement of intent of what this organisation is about to one possibly every 4 years. That is a huge change in the way that any entity can account back to its core shareholders. I guess in a modern dynamic economic which we have where we have markets that change in milliseconds and trading that occurs at the push of a button then I would have thought that we should move to a more direct accountable system and one of maybe on an annual basis as has been the case.Although I applaud strategic planning long-term planning this may be a step backwards. I accept the wisdom of the Finance and Expenditure Committee which hasmade a lot of very sound changes and maybe a Government member over there might want to get up and explain why these changes have occurred and how this can—David Bennett: Get in there Hayes.Hon DAMIEN O’CONNOR: And I welcome that opportunity from Mr Hayes because as I say the Opposition is supporting the general intent of this bill on the basis that it does provide a better accountability regime. But from my reading of sections 139 and 139A in Part 3 we are stepping back from the intent of this and certainly from the reason that the Labour Party is supporting this bill. So if Mr Hayes wants to get up and answer that question that is great. It is clause 179 and it is replacing section 139.The other issue in here which should not be overlooked is section 139(2)(b): “no member of the Crown entity group other than the parent Crown entity needs to prepare a statement of intent”. This may seem like an innocuous little clause here that does not mean a hell of a lot. It means that if a Crown entity or Crown-owned enterprise can set up a subsidiary company there is no obligation whatsoever on that company to provide a statement of intent. I see that as a serious step back and maybe it is a question the Minister can answer—maybe it is the one that Mr Hayes is going to answer. But that specific section 139(2)(b) in clause 179 says “no member … needs to prepare a statement of intent.”So how many subsidiaries can a Crown entity set up? I guess that under the new partial privatisation arrangements that the Government is going to put in place for many of the Crown entities it can get on and roll out a number of companies none of which has an obligation to tell us what they are about or what they are intending to do. Even if it is just for the 4-year period that this bill can now extend them out to there is no obligation for that subsidiary to provide a statement of intent. What shareholder would buy into a company or be part of a company that does not have to tell them what it is going to do? So maybe Mr Hayes can get up and answer that very clear question—in my view. I think I will leave it at that.I come back to the point that Labour is supporting this bill on the basis that we believed we were getting better accountability regimes. But from my reading of clause 179 it says that in section 139—actually section 139 of the principal Act is replaced in clause 179. I should clarify that; sorry if I got a little confused. Under clause 179 of this bill—that is the replacement of section 139 of the old Act—we are indeed stepping back because of the extended time lines of statements of intent and the removal of the requirement of any subsidiary to provide a statement of intent. I think that is a retrograde step for Crown accountability and taxpayers should have a clear explanation as to why that has gone ahead.JOHN HAYES (National—Wairarapa):Maybe I can help the member Damien O’Connor. One would have thought that a man of his experience with many years as a Minister in our system of Government would actually understand the day to day mechanics of how the Government’s finances work. Every one of the public servants whom you will find in this country knows that when you have a 12-month budget May and June are spent furiously trying to get rid of all the unspent money because if it is not spent by 30 June you lose it. This is an incredibly inefficient and stupid process because the world operates on a much longer time frame.If you think about the problem—let us take for example the aid programme where you are spending $600 million - plus a year on aid projects—it is really difficult to spend that sort of amount of money annually on an annual budget. You have got to have a longer time frame because you will get much more sensible spending of taxpayer money. That is why you and I are in this Chamber. That is why we are held accountable as electorate MPs because our communities expect us to be here doing the right thing making sure that their taxes are being spent wisely. That is what the changes in this billare going to provide for. They provide for a much more rational time frame and they get rid of the irrational huge expenditure that is very often on wasted items because you are trying to get rid of the money within 12 months when the real world does not work in 12-month segments.Hon David Cunliffe: I raise a point of order Mr Chairperson. The member who is addressing the Committee is a new member but he should know not to bring you into debates.The CHAIRPERSON (Lindsay Tisch): Look I am listening very carefully and that point of order was just an interruption of the member’s speech. I will take note if I am offended by the speech. I call John Hayes.JOHN HAYES: Thank you Mr Chair. One would have thought that the interrupter as an ex - public servant himself would know that what I am saying is absolutely straightforward is absolutely straight up and down and is in the taxpayer’s interest. So my only conclusion is that the comments that are coming from these very experienced people are simply filibustering. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):Firstly I would like to pay a compliment to several previous speakers—not the one who has just immediately resumed his seat John Hayes so much as the Hon Damien O’Connor and the Hon Phil Goff. Both I thought gave absolutely outstanding contributions which really nailed two key points. Mr Goff said—and I think it is a hugely important point—that there is a huge irony in this State Sector and Public Finance Reform Bill quite rightly conferring the power on the Crown to issue whole-of-Government directions but at the same time removing Mighty River Power from the State-Owned Enterprises Act by its partial privatisation and thus removing a core ability of the Crown to issue directions across the energy sector. If that partial privatisation programme continues that will be a terribly risky thing for our energy sector and flies completely contrary to the intent of this bill which we strongly support.However the Hon Damien O’Connor has raised a very important point which I would like to turn the Committee’s attention to further. This is in relation to the statement of intent provisions which are vested in clauses 178 and 179 and so forth of the bill. This was a matter of some debate at the Finance and Expenditure Committee. It was indeed a matter that we sought additional advice for and have made amendments on.Can I introduce listeners to the issue by telling a very brief war story from a time when I was one of the then economic development Minister’s team. There was a habit for draft statements of intent to arrive in Ministers’ offices for signature the day before the deadline. It may be that civil servants were watchingYes Minister  the TV series which the public thinks is a comedy members of Parliament think is a documentary and the Public Service thinks is a training video.Yes Minister behaviour is not unknown. The statement of intent is absolutely crucial but “Oh Minister this is just a routine piece of correspondence. Sign here.” is too often being heard in the Beehive.I can tell you that when it was my turn having watchedYes Minister  I rang the chief executive of a department and said: “Why don’t you pop over for a cup of tea and a chat”—this was about 6 weeks before the deadline—“because I would like to co-draft the statement of intent with you in person.” This caused a long silence on the other end of the phone. When the chief executive was departing my office after the first 3-hour session he was heard to mutter to one of his colleagues—fortunately in the hearing of one of my staff: “We’ve got a real problem with this one.” So we invited him back—[Interruption ] Yes. He would not be the only one to have reached that conclusion. But I intend to continue to be a problem for as long as I have the privilege of being in this House.Hon Lianne Dalziel: What took him so long?Hon DAVID CUNLIFFE: My colleague asks what took him 3 hours to work that out. So we had a couple more sessions. I see that the Minister in the chair the Minister of Police is smiling benignly because I think all politicians of whatever stripe have shared some of these experiences. There is always a little bit of a polite and constitutional arm wrestle in Wellington between the political layer and the professional Civil Service. We are very well served. Again I would like to record the select committee as being excellently served by our highly skilled civil servants and advisers on this bill so there are no complaints there.But it is not just National versus Labour left versus right thoughtful versus shallow or whatever you would like to—David Bennett: Oh communist versus capitalist.Hon DAVID CUNLIFFE: Sorry that you reacted to that one Mr Bennett. It was not intended for you. But the other aspect of this is always the political layer versus the Civil Service layer and it is in that context that these provisions of this bill are actually really really important.What the Civil Service has recommended is that there really is no need to have a compulsory formal contractual statement of intent updated every year. Unfortunately John Hayes who has never been a Minister swallowed that line and thought it was about just reducing paperwork. But actually there is a real risk as the Hon Damien O’Connor has pointed out. He has been a Minister and he understands that unless there are required contractual processes to nail people’s feet to the ground with hard-wired key performance indicators things can slip and that is why the statement of intent provisions were so hotly debated at the select committee.We reached a compromise which was that Ministers will have the ability to require a new or an updated statement of intent a renewed contract at any time at least annually or more frequently should they require it and that there be an obligation on the part of their Civil Service advisers to advise Ministers of that right. Although flexibility is being introduced here the obligations on the system to have clear and binding performance agreements have not been gainsaid.The incoming Labour Government will in a year or so’s time be watching this extremely carefully. If it is our experience that these clauses have weakened the contracting process with the professional Civil Service they will be reviewed. But for now we are happy to give this compromise a good chance to work. We believe it is being entered into across the Parliament in good faith and we think that there is the potential for it to be streamlined and effective. But we are not blind to the possibility of slippage as the Hon Damien O’Connor from experience has pointed out to the Committee.I think it is helpful that in new section 141 in clause 181 the content of the statement of intent is well set out. If I could direct members’ attention to that new section 141(1) places a big emphasis on strategic objectives. What we are trying to do here through this law is lift the gaze of the system from the trees to the wood from the minute to the fundamental from the operational to the strategic. We are writing here in quite clear language that Ministers and their advisers must be focused on the strategic goals. The rest of the design of this bill supports that with its interagency cooperation its multi-category appropriations its enhanced reporting requirements and its full traceability of appropriations. All of those things come together here to try to hit a sweet spot. It is a sweet spot that combines flexibility and acuity. That is our shared goal—shared between National and Labour shared between politicians and officials. That is where we are trying to aim: a modern streamlined flexible delegate-able interactive and community-integrated Civil Service that achieves more with not much more moneythat achieves better outcomes for the public and yet is parsimonious—there is a good word for a morning session—with the taxpayer’s dollars. In so doing if we can cut some red tape that would be nice too—if we can cut some red tape that would be nice too.We look forward to the Minister of Police who is an experienced Minister—I note that as this debate has hotted up the Government has put a more experienced Minister in the chair and we look forward to her sharing her experience with the Committee on the intent of this bill and how she believes it is going to work. I am sure members on this side would love the Minister to take a quick call and respond to the points that the Hon Damien O’Connor has made and if she is feeling really brave she could respond to the points that the Hon Phil Goff has made.The CHAIRPERSON (Lindsay Tisch): Order! You cannot say that.Hon DAVID CUNLIFFE: I cannot say “the Hon Phil Goff”?The CHAIRPERSON (Lindsay Tisch): No the word you said before.Hon DAVID CUNLIFFE: Brave?The CHAIRPERSON (Lindsay Tisch): Yes. That is a reflection on the member.Hon DAVID CUNLIFFE: I was emphasising her courage.The CHAIRPERSON (Lindsay Tisch): No.Hon DAVID CUNLIFFE: But I take your guidance Mr Chairperson.Hon Member: You were being snide.Hon DAVID CUNLIFFE: Never.Maggie Barry: And devious.Hon DAVID CUNLIFFE: Never. Would members opposite like to add any other adjectives to their morning pot-pourri? “We love you too Mr Lange.” Ah yes.New section 141(1) sets out the strategic objectives of the statement of intent. The Committee has debated at some length its provisions. New section 146(2) in clause 184 indicates the process that must be followed. What is really interesting about clause 184 is its degree of prescription; for example clause 184(2)(a) says: “the Crown entity must provide a draft statement of intent to its responsible Minister (i) no later than 2 months before the start of the first financial year to which the statement of intent relates;” and it even provides sub-subclauses for the cases of newly established Crown entities. That is how careful we are all trying to be to ensure that no delegated instrument of the Crown can escape the chain of accountability either for good outcomes or for the wise use of public money. The reason that this is so prescriptive about Crown entities—MAGGIE BARRY (National—North Shore):When we look at Part 3 of the State Sector and Public Finance Reform Bill it falls really into three main areas. This includes subsidiary reporting where the reporting regime focuses on a group reporting and auditing with the Minister of Finance. That group will have the power to require reporting from any member of the group so that is a tightening up of those procedures. The group reporting change does not apply however when you have school boards of trustees or tertiary education institutions that have an investor or a multi-parent subsidiary—enough said really on that aspect of it.Another aspect is greater reporting flexibility which is going to provide more meaningful information. This is an area that my colleague John Hayes dealt with a little bit earlier—the reporting changes at the start of and at the end of each year. Those are not dissimilar to other provisions in other Acts.But it is the first aspect of Part 3 and the amendments to the Crown Entities Act 2004 that I wish to concentrate on in my call and that is the collaboration with other public entities. The thing about this bill is that it amends the collective duty of statutory Crown entity boards relating to how the board is to perform its functions. Under these changes boards will be required to ensure that the entity collaborates with other public entitieswhere practicable. That is a very important measure that comes up in these amendments because it really helps break down the silo approach to providing services which this Government has identified as being part of the problem with public services. So we have a situation where we need to have these entities working much more in combination with other agencies. The limitation of the phrase “where practicable” really gives the board the ability to determine the efficiency and the effectiveness of collaboration with other agencies in any given situation.That once again is in keeping with the overall policy of our Government that there are directions to support a whole-of-Government approach. This whole-of-Government approach is very much at the heart of this piece of legislation and at the heart of Part 3. In particular there will be two smaller groups of Crown entities than currently. There is also going to be a broader range of objectives including to secure economies or efficiencies which is something we commend; to develop expertise and capability and who amongst us would argue with that; to ensure business continuity; or to manage risks to the Government’s financial position. These are all very sound policies and philosophies that underpin the legislation and that are spelt out in this amendment.The amendments will also make the use of Government directions more useful and more selective but in a way that respects the entities’ legal separation and arm’s-length relationship. These directions to entities will not come as they have in the past from public servants in part but will come much more appropriately from the Minister of Finance and the Minister of State Services.Those are the three main elements of Part 3—the amendments to the Crown Entities Act 2004. I am not going to dip into the petty politics as have others in the Chamber before me. I will leave my call at that. Thank you.GRANT ROBERTSON (Deputy Leader—Labour):It is fantastic to be present in the Chamber and for Maggie Barry to break the habit of a lifetime and not go into petty politics. It is a moment that I will truly remember for many many years.Hon Member: It’ll only be a oncer I’m sure.GRANT ROBERTSON: It will never happen again that is right so I am delighted to have made my way to the Chamber to hear that beautiful moment.It is a pleasure to take a call on Part 3 of the State Sector and Public Finance Reform Bill. As somebody who has been a public servant here in Wellington and who represents public servants as the MP for Wellington Central and also as a former spokesperson on State services I want to say there is a lot in this bill to be very happy about. This is a bill over which I know some concerns have been raised. They have been worked through in the Finance and Expenditure Committee. The idea the principles that lie behind this bill of trying to create a more responsive and more integrated State sector that can be more flexible and responsive to the needs of our communities is a goal that I do think is shared across the Parliament and I want to say from this side of the Chamber that there things in this bill that we genuinely believe will be very helpful to those overall principles.If we refer specifically to Part 3 of the State Sector and Public Finance Reform Bill I want to make a couple of comments. The first of those is around the question of whole-of-Government directions. This is what is covered by clause 162 of the bill and in this case we are talking specifically about Crown entities and the ability of the Minister of State Services and the Minister of Finance to jointly direct Crown entities to support a whole-of-Government approach. This is a very good clause in my view because one of the things that anybody working both inside Government and also with Government agencies and Crown entities hears—the criticism that is so often directed at them—is that there is a silo mentality. All of us will have in our lives interacted with a Government agency that says quite simply “I cannot help you because that is not myresponsibility.” That is something that members of the public struggle to understand. Members of the public do not wake up in the morning and think: “Today I am going to deal with the Ministry of Social Development followed by Inland Revenue Department followed by another.”; they think about the Government. They think about the Government acting as a single entity. People who use the services of the Government and who interact and have to come up against those silos are frustrated. We need to be able to create a public sector and a wider State sector that actually meets the needs of those individuals and communities.But for politicians and as public servants there is a whole other level of frustration that is created. I can remember as a staff member in the Prime Minister’s office having to come up with creative ways of trying to get the public sector to work together. Anyone who was in the public sector in the first decade of the 2000s will quake with fear at the phrases “economic transformation” “families young and old” and “national identity”. I had three little boxes on my desk in the Prime Minister’s office with information on each of those and we did actually sit down and say: “How are we going to get the Public Service to work together on the priorities of the Government?”. It does not matter whether it is a National-led Government or a Labour-led Government. Whatever the Government’s priorities are how do we shift the ship of State to support the things that the Government wants to do?Hon Lianne Dalziel: By turbocharging the economy.GRANT ROBERTSON: For instance that may well be one of the phrases: turbocharging and finding a brighter future.Hon Lianne Dalziel: They haven’t switched on the engine yet.GRANT ROBERTSON: Well unfortunately I think that at this very moment the ship has run aground so that is not even a concern. But if we generalise it enabling the Government agencies to get out of the silos—we took that approach with those three themes—was what we chose to do. And we actually went as far as saying the Budget bids had to come through one of those three themes and they were consolidated. That actually cuts against the Public Finance Act and some of the amendments in this bill start to deal with the problem that was underlying that. The problem was that each Public Service chief executive through their statement of intent had set themselves up in an agreement with the Minister and that was it. They were the apex of everything. The amount of money that they could share between agencies was severely restricted severely limited and in many ways actively discouraged. So the fact that this bill is putting in place some mechanisms that will break up some of those silos is a very good thing.Dr Richard Norman who is an academic at Victoria University talks about the fact that the State Sector Act and the Public Finance Act written as they were in the late 1980s are products of a time that he says was the time of the spreadsheet. In other words it was all about rows and columns and if you added it all up at the end of the day you would come up with the answer that you needed. We now live as Richard Norman would say in the age of Google when it is actually all about the networks and the connections between issues rather than setting up artificial barriers. At the moment the structure of our State sector lives in the age of the spreadsheet and we do need to move it into the age of Google where we focus on the networks and we focus on the connections between the issues that face our communities. This bill—and in fact Part 3 in terms of Crown entities—does go some way towards doing that. The idea of whole-of-Government directions is a useful way of going about that but I would venture to suggest that actually we could go much further. We could go much further by saying what the problems are that we want the public sector and the State sector to address what the structures are that best address those problems and then work onthem that way. At the moment form is still leading function. If the State sector is going to deliver to the needs of New Zealanders function needs to get out in front. At the moment we still struggle with that inside the State sector. This bill does good things to move us in the direction of breaking down those silos but it fails in my view to go as far as it might.I want just in the time remaining to me to briefly talk a little bit about the question of statements of intent. I know that my colleague David Cunliffe was speaking about this at some length earlier on. All of us—former Ministers current Ministers and people who have been public servants—are aware that there is a danger in the statement of intent process that it simply becomes a box-ticking form-filling - type exercise. Again there are good things in this part—John Hayes: You’d certainly know about that—box-ticking and form-filling.GRANT ROBERTSON: John Hayes and I both worked for the Ministry of Foreign Affairs and Trade and we know a good deal about form-filling and box-ticking. Actually Mr Hayes to his credit was never very interested in form-filling or box-ticking at the Ministry of Foreign Affairs and Trade. As somebody who occasionally had to go around the Pacific in the wake of Mr Hayes I can say that he was much more focused on function than form—John Hayes: Outcome.GRANT ROBERTSON: —and outcomes at that point and that is to his credit. [Interruption ] That is right—no the wake was sometimes quite large and I am not referring to size at all here; I am just referring to the impact of Mr Hayes arriving in a community. But he was focused on the outcomes and I think the statement of intent does run the risk of being less about the outcomes and more about the process. I think there are some things in this part that do go to that. The note of caution that has already been raised is the fact that what the statement of intent process usefully does is open up to the rest of us what is going on and what the priorities are. If we can get that process—the development of those statements of intent—right then I think we will go a long way towards actually having a meaningful document.Again a big part of that is ensuring that the statement of intent when it is drafted and created takes into account the views of other relevant entities and agencies. We have all had that feedback about the 10 cars in the driveway. When you have got the family with the complex messy and difficult problems you arrive along and there are the 10 cars in the driveway from the 10 Government agencies. Does Child Youth and Family know what the police have done? Does the Ministry of Education know what Work and Income is doing?Hon Member: Or what the school’s doing.GRANT ROBERTSON: Or what the school is doing indeed. We all know that those are difficult problems but if we take that all the way back to the statements of intent of those agencies when the agencies are talking to one another on the creation of those documents and they are creating those documents on the basis of the issues and the outcomes that we want that is what will get us there. If we start at that point we will get a good outcome. If we start at the point of “Here is our formulaic statement of intent that we must produce on our own and we must look good about.” then we will not get anywhere.What I am saying here is that Part 3 of this bill I believe does offer us some positive ways forward for creating a more integrated and more responsive State sector. I believe we could go significantly further in that. I encourage the Government to adopt a cross-party approach to find a way in which we can focus on the outcomes of the State sector and the way in which it serves our communities and break down the silos. If we do thatI believe that we will be proud of our efforts. But I do believe that in Part 3 there are some good measures that we can and should all support.Hon LIANNE DALZIEL (Labour—Christchurch East):I could not agree more with my colleague Grant Robertson when he says that the need to focus on breaking down those silos is fundamentally important which is why I am pleased that this part of the State Sector and Public Finance Reform Bill deals with the whole-of-Government approach that we so need.If there is one place in New Zealand that needs a whole-of-Government approach it is Christchurch. What we have had established there I think was a mistake in terms of the nature of the organisation. I think there have been a few comments lately about my views around the recovery effort and I want to place it clearly on the record that the Government has to be involved in Christchurch. It is so big and that whole-of-Government focus that is dealt with in this part of the legislation is fundamental to getting it right. But the model chosen for the Canterbury Earthquake Recovery Authority which sounds like it is an independent Crown entity or an autonomous Crown entity—in fact it is not; it is a Government department. It has a direct line of reporting to the Minister for Canterbury Earthquake Recovery. It has a statement of intent as set out in this part of the legislation as well but not as a Crown entity; it is as a Government department. It should have been a Crown entity. Everyone in Christchurch who has any understanding of the need for good governance in a recovery situation agrees that there needed to be a layer of governance between the Minister and the Chief Executive of the Canterbury Earthquake Recovery Authority.But the real problem lies in the fact that there is not the joined-up approach that we have been looking for. I was speaking to an engineer recently a geotechnical engineer when I was up in Auckland and I said to him: “I have discovered the problem. I have discovered why things are not working in Christchurch and why we have not got the joined-up approach.” I said it was here in the report of the Controller and Auditor-General:Roles responsibilities and funding of public entities after the Canterbury earthquakes  which is of course extremely relevant to Part 3 of this bill because it is precisely the issue that is concerned. I said it was all on one page. He actually could not believe me that I could have found the solution for the problem—the statement of the problem—in such graphic terms until I opened the report like this. This diagram shows what the Canterbury earthquake recovery looks like.I think that everyone on that side of the Chamber should take a very careful look at this document—a very careful look at it. What it identifies is the whole range of public sector entities private companies Ngāi Tahu and Canterbury earthquake recovery tasks as they are undertaken by regional or local public entities and whether they are part of the central government entity. So we have got Treasury the State Services Commission the Ministry of Social Development the New Zealand Transport Agency the Tertiary Education Commission the Ministry of Education schools and tertiary providers Housing New Zealand Corporation the Ministry of Business Innovation and Employment Southern Response Waimakariri District Council the Earthquake Commission the Ministry of Business Innovation and Employment—it appears again because one represents when it was formerly the Ministry of Economic Development and one when it was formerly the Department of Building and Housing—Selwyn District Council the Department of Internal Affairs Te Rūnanga o Ngāi Tahu Christchurch City Council Canterbury District Health Board the Ministry of Health the Department of the Prime Minister and Cabinet and Environment Canterbury.You know if anything is screaming out for a joined-up approach for a whole-of-Government direction it is the Canterbury earthquake recovery. In fact when the Canterbury earthquake recovery legislation was passed in this House its intention wasclear. It was to facilitate to coordinate and to direct the recovery—anything that supported the recovery. And yet we have not got anyone in charge. Still there is no authority; nobody stands in charge. So you have got the Minister for Canterbury Earthquake Recovery not knowing what is happening under the Minister of Building and Construction’s watch. We have ended up with a situation where the Christchurch City Council loses its accreditation on Monday next week and it is losing it because of a report that was prepared for International Accreditation New Zealand back in September last year. It was sent to the city council in October and it was copied to the Ministry of Business Innovation and Employment.I cannot for the life of me understand why there has been no connection made no joining of the dots. Yes there are lots of dotted lines lots of squiggles but guess what is completely missing from all of this? What is completely missing from all of this is people the community the people who live in Christchurch.The CHAIRPERSON (Lindsay Tisch): The member must relate this back to Part 3. To use Canterbury as an example is fine but you must bring it back to the content of Part 3.Hon LIANNE DALZIEL: In clause 162 amended section 107 states: “(1) The Minister of State Services and the Minister of Finance may jointly direct Crown entities to support a whole of government approach by complying with specified requirements for any of the following purposes: (a) to improve (directly or indirectly) public services: (b) to secure economies or efficiencies: (c) to develop expertise and capability: (d) to ensure business continuity: (e) to manage risks to the government’s financial position.”I would say that a direction to the Canterbury Earthquake Recovery Authority—which OK is not a Crown entity it is a Government department but it should have been a Crown entity—could actually have brought this whole thing together. But given that it is not there are many Crown entities that are operating in the Canterbury region but they are not joined up. They have not received a direction around the whole of Government or if they have it is not obvious to anyone. People who ring the Earthquake Commission EQC for example are told to ring Fletcher’s—Fletcher EQR. Then they are told by Fletcher EQR: “No it’s really still an EQC matter.” So they ring back EQC and it says: “Well ring the Christchurch City Council.” So there is this lack of a joined-up approach.The ministry—formerly the Department of Building and Housing—issued new guidelines part-way through the process of the rebuild and that has led to people having to go to the Ministry of Business Innovation and Employment as it is now. That is the problem. We do not have this whole-of-Government direction approach. So it is important that we have this not just within Government departments because Government departments themselves are operating in silos but within Government entities and where they connect in.So another Crown entity that could really benefit from a whole-of-Government direction is International Accreditation New Zealand. That is New Zealand’s accreditation body which enables an organisation to have confidence in its processes and provide assurance to customers and clients. It is part of Telarc the Testing Laboratory Registration Council which is an autonomous Crown entity that was established way back in 1972. It has a really important role around accreditation. But now we have got a huge question mark over what buildings are safe and what buildings are not safe in Christchurch. It should be in there as part of a whole-of-Government response to the issue leading the issue alongside the Christchurch City Council and the Canterbury Earthquake Recovery Authority and obviously the Minister of Local Government will now be in there today with a Crown manager.I presume that that will have a similar role or maybe even a more extensive role than the monitor’s role which is also provided for in Part 3 of the State Sector and Public Finance Reform Bill and what it is allowing itself to do is to assist the responsible Minister to carry out his or her role. The trouble is that sometimes there is not a responsible Minister when there are many Ministers who cut across and I think we heard that from the Speaker the other day when I tried to get a snap debate on the issues that were occurring in Christchurch. We could not get that responsible Minister and the failure to take any action was not regarded as a matter of recent occurrence because the failure to take action did not form a ground for a snap debate.That is the problem that we have got. I hope that this legislation has been designed with addressing problems like we have in Christchurch in mind. I hope that it does and I am really looking forward to seeing how it works in practice. But it really cannot come soon enough for Christchurch. We have had enough of the silo thinking and the inability to bring everything together for the sake of Christchurch.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to Part 3 be agreed to.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 259 in the name of Te Ururoa Flavell to Part 3 be agreed to.Amendments not agreed to.Part 3 as amended agreed to.Schedule 1The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 1 be agreed to.Amendments agreed to.Schedule 1 as amended agreed to.Schedule 1AThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 1A be agreed to.Amendments agreed to.Schedule 1A as amended agreed to.Schedule 2The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 2 be agreed to.Amendments agreed to.Schedule 2 as amended agreed to.Schedule 3The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3 be agreed to.Amendments agreed to.Schedule 3 as amended agreed to.Schedule 3AThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3A be agreed to.Amendments agreed to.Schedule 3A as amended agreed to.Schedule 3BThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3B be agreed to.Amendments agreed to.Schedule 3B as amended agreed to.Schedule 3CThe question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 3C be agreed to.Amendments agreed to.Schedule 3C as amended agreed to.Schedule 4The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to schedule 4 be agreed to.Amendments agreed to.Schedule 4 as amended agreed to.Clauses 1 and 2Hon DAVID CUNLIFFE (Labour—New Lynn):This has been an important and lengthy debate on a framework piece of legislation the State Sector and Public Finance Reform Bill that is critical to the efficient and effective functioning of our Civil Service. It may not be at first glance the sort of legislation that someone might pick up and find exciting to read but it is none the less fundamental to how we do our job collectively of serving New Zealanders to the best of our ability and extracting the very best value that we collectively can from their hard-earned tax dollars.This has been appropriately a reasonably wide-ranging debate and I appreciate your willingness Mr Chairperson to accommodate the various issues that have arisen. Let us cast our minds back to the original process that this bill went through. The Labour Opposition opposed this bill strongly at first reading. It did so because the bill as drafted particularly through the amendments to the State Sector Act would have gutted the rights of civil servants—their negotiation rights their redundancy provisions and a host of other hard-earned employment obligations and privileges.I am very very happy to reiterate that as a result of a careful and good-faith negotiation with the Minister of State Services which was led by the Labour Party and supported by the Public Service Association and the Council of Trade Unions the Government has seen fit to introduce extensive amendments that now allow us to support the legislation with the support of those union representatives. Let me clarify that that is not to say the unions themselves think this legislation is a wonderful thing. They still have as we do significant reservations about the potential interpretation of some aspects of it.When the bill is taken as a whole we are now in the position where we are satisfied with language like a State servant facing a transfer must be offered a position that is “no less favourable” than what they have in order not to be given their full redundancy entitlements. We are reasonably satisfied that the changes to the Government workforce orders which now make them workforce statements and the explicit language written into the bill during the select committee process protects and preserves all existing employment rights in that process and offers sufficient protection to State servants for us to be able to confer support for the bill.There are a number of other similar changes made at the select committee particularly in relation to the State Sector Act provisions that have given us sufficient comfort that at this stage we can support the bill again with caution with some reservations with a careful eye to how it is implemented by the current Government and with a view to potentially reviewing it when the new Government comes in in just 15 months’ time. But we do offer our support for the bill at this point.Having disposed of those very serious reservations and acknowledging the good work of the Minister the Hon Jonathan Coleman and the then chairman of the Finance and Expenditure Committee now the Hon Todd McClay let us move back to the central purposes of the bill which we commend and support. Through this legislation we will help to modernise the public sector. I think our deputy leader Grant Robertson made a very good point when he talked about moving from the age of the spreadsheet to the age of Google. We are seeking to build a flexible networked interactive service-oriented lean-but-not-mean public sector that will serve the interests of all New Zealanders while being careful and prudent with the expenditure of public moneys. It has been a shared goal of both sides of this House for many years now that the Civil Service would be able to move towards a more collective enterprise in the best sense of the word and that agencies of the State whether they be Government departments Crown entities or contracted agencies work together to achieve common goals. And it has not been that easy. Managing for Outcomes has come and gone. The Government is having real trouble I understand with its Better Public Services programme where at least half of the objectives soon to be revealed are not on track.It is not that easy to bring Government departments together in common goals and this legislation will we hope make a real contribution in that regard. There are several ways in which it does that. The first is the multi-category appropriation. That allows agencies to receive a common funding pool across traditional silos. As introduced the bill sacrificed the specificity and accountability requirements in the name of that cooperation. As amended at the select committee and with the further useful advice of our high-calibre officials there is a better balance because we now have full traceability of funds from year to year including when they have changed the jargon from output class to output class and including where they move to a multi-category appropriation as provided for. We are now comfortable that we have not sacrificed the accountability to get the flexibility.Another aspect of trying to build a more flexible Public Service has been to make somewhat less prescriptive the provisions around a statement of intent. For the public the statement of intent is one of the key contractual documents alongside a chief executive’s performance agreement by which Cabinet and the political layer which is the people’s representatives bring the direction of the Government of the day to the Civil Service and they are absolutely essential documents. What is important is that in this bill although the Government has sought to reduce the requirements to make that an annual process the Finance and Expenditure Committee has reinserted the option for Ministers to make those statement of intent updates annual. In its commentary the select committee emphasised that civil servants need to make clear to Ministers that thatannual update provision or ability still exists because we do not want to lose accountability in the search for flexibility.As a number of my colleagues have noted there is a certain irony in the Government moving to introduce legislation that provides for “whole-of-government directions” at a time when it is busily seeking to privatise part of our energy system and to gut the State-owned enterprises portfolio. Why is that ironic? Because the power to direct those crucial entities—and energy security is going to be one of the key strategic issues facing our future—is already there in a fundamental piece of legislation. It is called the State-Owned Enterprises Act. But when Mighty River Power for one is partially privatised it is no longer in law a State-owned enterprise so the power to direct is rescinded. The obligation of no surprises is rescinded.Look how important that was in the case of Solid Energy a huge black elephant—now a white elephant—on the Government’s books. It should have been even more prescient in its advice to Ministers and Ministers should have been even more hands-on to avoid the blood bath of taxpayers’ money that has occurred in relation to that entity. But to make those rules looser by partially privatising the entity as was announced—even though the Government now cannot because it is such an embarrassment—while introducing this responsible legislation to allow for whole-of-Government directions I think the public will get the irony in that situation. I see members opposite kind of shuffling looking at their feet. They have got their heads down. That is the traditional reaction when you know you are up the legislative creek without a paddle.But enough on that; back to this bill. This is responsible legislation. I am very pleased that it has the overwhelming support of Parliament and that there has been a good-faith negotiation process between the Opposition and the Government. That has I think in everybody’s understanding resulted in a better piece of legislation. Is it perfect? No. Will there be implementation issues? Yes. Will the incoming Labour-led Government watch it like a hawk? Of course it will. Will it be prepared to fine-tune it with further amendments if necessary? I am sure that the future Government will want to do that if required.We believe that this is a step forward not a step backwards now that the employment rights of civil servants have been protected. It is a step forward because it gives more flexibility. It is a step forward because it confers a greater sense of common purpose. It is a step forward because it allows for flexibility and includes some limited forms of delegation of powers and functions to interactive work with the community.CLARE CURRAN (Labour—Dunedin South):I am really pleased to take a call on these final clauses in the Committee stage of this bill the State Sector and Public Finance Reform Bill. I would like to reiterate some of the things that have been said by my colleagues and put the emphasis on the importance of transparency and accountability in this bill. I certainly think that the Government through the negotiations that have occurred around trying to come up with a solution to the problems that were obviously apparent after the first reading of this bill has seen an enormous amount of hard work that has gone on and I certainly think that the members on this side of the Chamber have put the Government on notice around how this bill is actually implemented and how it will actually work.We certainly do want legislation in this area that is geared towards a flexible interactive Public Service. It certainly is the age of Google. Technology is driving so many of the changes that we are seeing in legislation. We certainly need the joined-up-ness between Government agencies and the directions that Government agencies are receiving from Ministers but along with that comes the absolute importance of the transparency of those instructions and changes and the accountabilities back to the public. I have been looking closely at some of the provisions throughout the discussionon this bill and I remain with some serious concerns around how those transparencies and accountabilities will actually be delivered to the public of New Zealand.I do want to say that it is important that the work that has been done by the members on the Finance and Expenditure Committee—in particular the Labour members on the select committee—on trying to come up with real solutions to get this piece of legislation through the House should be commended. We know as there has been much discussion that this bill was heavily amended by the select committee. There were some very tough negotiations on that committee around trying to make this a better piece of legislation which is ultimately what the work of this House should be about.I just want to reiterate some of those things that have resulted from that because we support—and absolutely support—an enhanced focus on the need to deliver value for money for taxpayers’ funds. We absolutely support the principle of developing and coordinating leadership across State services and the intent of amending the Public Finance Act to provide for those multi-category appropriations. I know my colleague David Cunliffe has talked about that at length. But clarifying and enhancing the expenditure tracking and accountability within revised budget and performance management documents is also so important which is why there were so many problems with this bill.The progress made during the select committee really has been around those conflict of interest provisions which were strengthened around where the delegation of powers were proposed for any State Service entity and improvements around the provisions for strategic intentions through those statements of intent. I would just like to say with regard to those statements of intent that the potential for conflict between the statements of intent the ministerial expectations and the actual legislation on which they are based is of absolute importance. It is of absolute importance that the people of New Zealand can be reassured that those conflicts are able to be managed and are transparent and that officials are able to provide advice—and have to provide advice—where there are conflicts.We have seen countless occasions where the way an entity is operating appears to be in conflict with the legislation that it is actually based on. The Television New Zealand Act is one of those very good examples. Before the Television New Zealand Amendment Bill actually went through this House the way that the entity was operating was in direct conflict with the legislation upon which it was based because of expectations that had been put on it from Ministers. It was therefore operating completely on a commercial basis which was in direct conflict with the legislation. We have to ensure that that does not happen and that people then do not start to believe that Government is operating its entities in conflict with the legislation upon which they are based. Those things and those accountabilities are absolutely critical.The full traceability of those votes and appropriations have been clarified in the provisions relating to Budget documents including where the title of appropriations and the output and sub-output classes have changed and where those multi-category appropriations have been instituted. Another improvement has been balancing the efficiency objectives within a broader notion of effectiveness which includes the procedural and substantive fairness considerations. We do support this bill. We have serious reservations that I know we have outlined at length in this Chamber over the last 12 hours or so and the reason why we have outlined them is the nature of those reservations. They need to be on the record so that if it is demonstrated through the implementation of this legislation that there remain substantive issues we can come in as the next Government and change them and have the mandate to change them because we have outlined what our concerns are.We remain concerned that the protections in redundancy provisions relate only to the Public Service. We remain concerned that the delegation of powers from the core State sector to non-State partners in implementing agents is constructed too broadly. We think that close monitoring will be required to ensure that this practice is used only in circumstances where benefits to the public clearly outweigh the costs and the risks. We remain concerned that immunity from suit rather than indemnity is being afforded and we note as we think the Government should note the Law Commission’s concerns in this regard.Amendments to the Public Finance Act that will assist in removing barriers to greater cooperation between public sector entities need to be balanced in practice with greater clarity of the financial accountability documents.So returning to those statement of intent processes we know that it is important that there is a clear contractual arrangement a relationship between the Ministers and public sector executives. We know that this is a crucial link in the accountability chain to Parliament and the public but the reduction of the frequency of required statement of intent updates to 3 years risks diluting that ministerial accountability for the agencies. We absolutely believe that it is important that we keep a close eye on how that plays out.The amendments to this bill we believe have given us cover to provide support. We know how important it is to get cross-party agreement on these sorts of pieces of legislation. They are absolutely foundational pieces of legislation for the ability to run Government and to run accountability right across Government. But we remain absolutely vigilant on a number of these issues and will be keeping a close eye on how they play out.Hon LIANNE DALZIEL (Labour—Christchurch East):As colleagues have said Labour actually opposed this bill the State Sector and Public Finance Reform Bill at its first reading. I think it is significant that we are now in a position to support its passage through the remaining stages in the House and speaking to clauses 1 and 2 I think that it is an important point to place on the record of the House. It was really picking up the point that Clare Curran ended on and I refer to the commentary from the Labour minority view where we stated that the amendments to the bill provide sufficient protection for Labour to be able to support it as a whole acknowledging that bipartisan consensus on framework legislation of this type is desirable where broad agreement can be forged. Can I just say that that is really important. I think it is absolutely vital. If we can get cross-party consensus on framework legislation then we end up having debates about the detail as it were rather than about the most fundamental aspects. If we can get agreement across party lines on the framework then in fact that is good for New Zealand it is good for certainty it is good for business and it is good for the community as a whole. So that is why I am very pleased that we are able to support the passage of the legislation.But I have been asked to display one more time why this could not come soon enough. Perhaps the Minister in the chair the Minister of Conservation would like to cast his eyes upon this document because this diagram is the Canterbury earthquake recovery. It is actually pretty obvious what is going wrong with the Canterbury earthquake recovery when one looks at this web of particular agencies that do not all connect with each other and certainly do not all connect with the people.When I was the Minister for Small Business and the Minister of Commerce I had undertaken a quality regulation review. What I came out with was a very simple phrase because—and colleagues and Ministers on the other side of the House will know this as well—we do think in silos because we are responsible for an individual silo. We are responsible for the Department of Labour or we are responsible for foreign affairs or weare responsible for a different component of Government. But when Government actually sees itself as all these individual arms that is not how the public sees them. So when business looks at the Government it sees the Government and it says: “Why on earth is the Government asking me for exactly the same information we provided it with last week?”. That is because the public do not see the Inland Revenue Department they do not see ACC they do not see all these individual departments and Crown entities—all of them covered by this legislation. They do not see individual departments and Crown entities; they see the Government and they ask it why it is putting them through the mill yet again. The simple solution that I came up with which I think is a very simple solution is to ask why the many arms of Government cannot extend a single hand to business. Why can they not?In the Canterbury earthquake recovery why cannot the many arms of Government extend a single hand to the people? I personally think actually that in this legislation as we have debated it that has become crystal clear. That is exactly what we need in Christchurch. So I actually think we are on the same page. We actually do understand that the framework has to be across these silos. It has to break down all of the silos. But in Christchurch what has become crystal clear is that it is not just with the Government departments and the Crown entities; it is also all of the organisations that they interact with as well and in Christchurch it is the councils that have to have the silos broken down. So what we have got in Christchurch is we have got the council with its own silos we have got the Government with all of its silos and we have got the Canterbury Earthquake Recovery Authority which looks like it is the overarching organisation because its purpose is to coordinate facilitate and direct all of the issues that relate to the recovery. [Interruption ] Well the Canterbury Earthquake Recovery Authority is in there but it is only one of the many things. All of these squiggly lines tend to lead to the Canterbury Earthquake Recovery Authority but the Canterbury Earthquake Recovery Authority does not have any overarching authority and that is the problem.The Minister for Canterbury Earthquake Recovery does not know what the Minister for Building and Construction has been discussing. That has been obvious over the last few weeks. But there are so many other things. The Minister for Canterbury Earthquake Recovery did not know that the Minister of Education had not consulted with the schools before announcing the massive shake-up of the schools. It is not knowing what the left hand and the right hand are doing it is not knowing what the impact that will have on the recovery of Christchurch that is the fundamental flaw. All of that can be fixed if we have our focus on the framework and the framework cannot—cannot—be like this one. We cannot have all of these different lines operating in this particular way. We actually have to have the whole thing as a coordinated whole and meeting the objectives of the recovery.I think that Canterbury has served to provide a very clear example of why this legislation and the approach that this legislation is adopting is so needed. The cross-agency breaking down of silos is absolutely fundamental but I think that you also have to think about the silos that exist within the Government departments themselves. In the Canterbury earthquake—Hon Trevor Mallard: Especially “MoBIE”.Hon LIANNE DALZIEL: Yes—the Ministry of Business Innovation and Employment. I have never understood why the Government decided to put the Department of Labour into a brand new huge expanded organisation after the two reports—Hon Trevor Mallard: It’s because of Steven Joyce.Hon LIANNE DALZIEL: Yes but the Pike River coal mine tragedy report would have actually said: “No. Hold off. Do not put the Department of Labour in there rightnow. It might be the right thing to do later but do not do it now.” The second group that you would not put into the Ministry of Business Innovation and Employment right now is the Department of Building and Housing. The royal commission report on the building collapses in Christchurch—it is just crazy to have all of these different departments come together.I think this is the fundamental problem: the Government thinks that by putting the departments together it solves the silo problem. It does not. Silos exist within Government departments. All that has done is made the silos less obvious but they exist all the same. If I use as an example the Canterbury Earthquake Recovery Authority which has been set up for a single purpose it is riddled with silos. It has got one silo for economic development it has got one silo for the central city development it has got one silo for social recovery it has got another silo for the built environment and the natural environment and it has another one for cultural matters. So what it has done is manage to create silos in a brand new department where it actually could have ensured that there were no silos to have to break down. That is the problem that we have got in Christchurch. This legislation—Hon Trevor Mallard: What happened to the doctrine of the indivisibility of the Crown?Hon LIANNE DALZIEL: The indivisibility of the Crown?Hon Trevor Mallard: What happened to that doctrine?Hon LIANNE DALZIEL: Well I know it is a doctrine but I do not know how it is relevant to this.Hon Trevor Mallard: Well the silos.Hon LIANNE DALZIEL: Yes I know but the silos—Hon Ruth Dyson: Trevor will take a call.Hon Trevor Mallard: I will.Hon LIANNE DALZIEL: Oh Trevor is going to take a call to explain the doctrine of indivisibility.I actually think that one of the problems that we have had and I think Ruth Dyson could also comment on this is when you have got reporting lines that do not allow for the money to flow with the decision making. For example back in 2000-and-something we managed to get a high and complex needs formula which had funding directed to it from health education and Child Youth and Family and we got the three together. It was a massive change. We broke down the silos. How long did it take to write the rules for access to the fund? It took 2 years—2 years—to write the rules and that is the problem. We have got to fundamentally change the culture and the cultural change will come about if we start to think about those whole-of-Government outcomes that are so fundamental. Christchurch I think would be a classic case where we could start right away. We do not actually have to wait for the legislation to be passed to do the right thing. Canterbury is waiting for this mishmash to be resolved and—Dr DAVID CLARK (Labour—Dunedin North):There have been several points raised by the Hon Lianne Dalziel that I wish to pick up on. The first amongst them is the shambles that is “MoBIE”—the Ministry of Business Innovation and Employment. She spoke about how the Department of Building and Housing would appear to be out and the Department of Labour would appear to be out. It is true also that health and safety is something that needs specific attention. This Government is talking about pulling that out. It has folded things in; it is pulling them out. There is a huge amount of cost that has gone into that particular organisation over recent years.Minister Joyce has until now avoided answering questions on the costs of restructuring and rebranding the Ministry of Business Innovation and Employment. It is an organisation that is not performing terribly well. Mr Joyce himself was unable toanswer questions before a select committee recently in a public session on the costs of restructuring in the organisation. We had the Ministry of Research Science and Technology and the Foundation for Research Science and Technology or “MoRST” and “FoRST” as one limb in there. They got divorced and then we had the Ministry of Science and Innovation which could not reconcile them and so on and so forth. There are a bunch of departments shoved in together with no seeming logic to it and they are not performing well. There are ones that should come out. It is a shambles what is going on in the Ministry of Business Innovation and Employment and we are only just touching the surface of it.This bill the State Sector and Public Finance Reform Bill is one that we will of course be supporting. The title could be different. To bring it into the title and commencement clause discussion we could call it the “Ease of Good Government Bill”. We are delighted that the Government has seen fit to include changes that were put through in the Finance and Expenditure Committee at the behest of Labour and the State sector unions that have averted disaster for Government workers who were set to lose their redundancy entitlements and employment rights. We are pleased that members of that committee could work together to ensure that those things did not happen. We voted against this bill initially and now we are supporting it and that is as a result of that committee taking a longer view and saying that this legislation needs to survive different Governments. So those things have made this a better bill.We could also call it the “Can’t Stop Bad Policy Bill” because no matter how good the regulations are and how smoothly the apparatus of Government works you cannot account for bad policy. You just simply cannot. Nobody can—not even you Mr Chairperson. If the Government wishes to push bad policy through it can do that despite legislation. It can pursue anything it wants to. We know for example that in the electricity sector power prices are going up and up and up and up. John Key says that Kiwis are paying about the right amount for power; most of New Zealand disagrees with him I think. This Government is pursuing that same strategy with the same electricity sector that it has always had with prices continuing to rise. That is something that Labour thinks we need to do something about.This kind of bill will actually enable good policy to be put in place more cleanly. It will mean that the apparatus of Government is not tied up with unnecessary reporting or overly burdensome reporting. It will hopefully be more effectual in reporting the kinds of things that the public needs and wants to know about. The Government will be held accountable to the public in an appropriate way with a minimum burden on officials to deliver accountability mechanisms but an appropriate one. It is a balance as I have said earlier. Again we could call it the “State Sector and Public Finance Reform (Providing Balance) Bill”. We could put brackets in there and that would be an alternative name.I think that some of these names I am discussing will be considered by the Minister in the chair the Minister of Conservation who I can see is deep in thought. I would welcome the Minister in the chair’s views on the appropriateness of these names as he thinks them over.Part of the job of us here in Parliament is to decide just which names for bills are appropriate. As people search through them online—and I know as I have searched through bills online—sometimes they are hard to locate. Sometimes it is hard to find the bill you are looking for because it is named in a way that is not intuitive. I think that bills ought to be named in a way that is accessible for the public.This bill here does pick up good governance practices. It attempts to make sure that things are done in a transparent way that there are sanctions and rewards for departments that those are clearly laid out that they are reported that there is transparency and that there are clear lines of accountability.We see in this bill the State Services Commissioner’s role outlined for the first time ever in a way that now means that we can better understand what his or her role is in the State sector and we can see how chief executives can move their own resources around from one area to another much more easily as a vacancy arises and so on. This smoothing of the paths of Government should indeed over the longer term make for a better Government.The point I raised earlier though is incredibly relevant which is that the actions taken in this bill will not stop a Government putting bad policies in place. They simply cannot.If a Government like this one thinks that the current housing shortage in New Zealand is simply unavoidable and that if we carry on with the same policies suddenly magically houses will appear despite the rate of new house builds dropping steadily over the last 20 years that may be its ideology and it can stick to it. This bill will do nothing—absolutely nothing—to address that. Labour on the other hand thinks that we need proactive policies. So for example the KiwiBuild policy which Mr Peseta Lotu-Iiga over there is admiring from afar but knows he cannot publicly endorse is a policy that will improve the lot of Kiwis. For those who currently cannot afford housing we know that this kind of policy the New Zealand KiwiBuild policy will actually make the world a better place for them. So that is what Labour is committing to—10000 new houses a year with the KiwiBuild policy affordable houses. That is 10000 new houses a year and affordable housing for New Zealanders because we think that that is a priority.Likewise in the energy sector with the NZ Power proposal we will make sure that ordinary Kiwi families pay $300 less a year for their power bills. That is significant because New Zealand families are struggling.This Government has the worst economic record of any Government in the last 50 years—Peseta Sam Lotu-Iiga: How many?Dr DAVID CLARK: —50 years Mr Lotu-Iiga; I am glad you asked—and that terrible economic record needs to be addressed but this Government seems to have no plan to do that. This piece of legislation will not give the Government good ideas; it will only enable Governments that have good ideas to put them into practice in a timely effective and efficient way. So the real effects of this legislation will have to wait for a future Labour Government I suspect.This Government is doing the right thing by putting the conditions for good government in place but unfortunately it seems to lack a plan that will really appeal to New Zealanders and make New Zealand a better place for ordinary New Zealanders to live in. As inequalities rise the Government does not seem willing to put in place the kinds of necessary economic changes such as more savings a pro-growth tax policy and monetary policy reform that would actually improve the lot of ordinary Kiwis. Instead we see median wages dropping in New Zealand consistently under this Government. Kiwis are struggling small businesses are struggling and that is because this Government is prepared to sit on its hands and stick with the policies of the 1980s which have not been working for so very long now sadly.This legislation will mean that policies that are good like those that Labour has can be introduced in an effective and efficient way in years to come. It will not help this Government which has no plan to reform the economy in the meantime because it will carry on doing what it is doing which is just taking a hands-off approach—hands off the steering wheel—as the economy goes further towards the interests of those who already have and further away from the interests of the have-nots in our country.Labour is very happy to support this legislation. As I said at the beginning we are pleased with the changes that have been made in the select committee to avert the disaster for Government workers who were set to lose their redundancy entitlements and employment rights. We congratulate the New Zealand Public Service Association and the Council of Trade Unions on their good work and I congratulate the members of the committee who worked together to make sure that this legislation did not end up dividing the House but instead ended up being legislation that with some reservations the Labour Party will happily support. I am looking forward to the Minister in the chair’s contribution. Thank you.Hon TREVOR MALLARD (Labour—Hutt South):It is my pleasure to take well three or four calls on the concluding stage of this legislation.John Hayes: Only three or four?Hon TREVOR MALLARD: Yes only three or four. One of the things that I might say I am slightly perplexed about is that we have sitting in the chair the Hon Nick Smith.Hon Ruth Dyson: Well at least he’s good compared with the others.Hon TREVOR MALLARD: Well I would not go that far and I do not know him that well. But we have sitting right at the back of the Chamber a newly minted Minister who chaired the Finance and Expenditure Committee and actually knows about the bill.Hon Dr Nick Smith: He’s good.Hon TREVOR MALLARD: Sorry?Hon Dr Nick Smith: He’s good.Hon TREVOR MALLARD: Well I am told he had potential. I would have picked Sam Lotu-Iiga to become a Minister ahead of him. My understanding is that he is going to get his best publicity ever next week when he becomes the “Minister in charge of Killing Dogs So Drug Dealers Can Make Bigger Profits”. That is Todd McClay the Minister who is going to take responsibility for that going through this House with advice from a number of departments under this legislation. He is going to be the Minister who says: “We will kill dogs so that drug dealers can have bigger profits.” I know that if Sam Lotu-Iiga had been the Associate Minister of Health he would never have had a bar of that sort of policy.Hon Ruth Dyson: He’s the only one who thinks he should be Minister.Hon TREVOR MALLARD: Who?Hon Ruth Dyson: Sam.Hon TREVOR MALLARD: No no. I think Sam would have been a better Minister than Todd McClay.Hon Ruth Dyson: Well that’s two of you.Hon TREVOR MALLARD: Well no no. That is not true. A number of the member’s colleagues tell me that they think that he would be a much better Minister for Pacific Island Affairs than for example Hekia Parata. I mean for goodness’ sake! [Interruption ] Well no I am praising the member opposite Mr Chairperson. And actually the responsibilities of a Minister of the Crown and how they are discharged are very much a part of this bill.Members opposite invited me earlier to talk to them a little bit about the divisibility of the Crown or what used to be when I was first a member of Parliament the indivisibility of the Crown. And you know it is relatively historic. It dates from the days when the Crown in the United Kingdom—probably the English Parliament at the time—was the agent for the King or the Queen on occasion. And because it was acting in the name of the monarch it could not have internal divisions. What it had to do was sort it out: “This is the Government division and that cannot be divided.” You did not have the nonsense of one Government agency suing another Government agencybecause they could not sue each other. They should not have been able to sue each other because they were a part of an undivided Crown. Obviously now with the National Government’s splits and divisions and stuff like that that doctrine has become slightly dated. I think the time of Ruth Richardson was the time when it took its biggest dive downwards.But I want to say it is relatively good that there is a tiny step back towards the concept of the Government working as a team working together and working out what is the best thing for the people of New Zealand rather than heading as it had been into the many many agencies all heading off in their own directions sometimes quite independently. I am sure all those people who have been Ministers in the past would have found agencies actually working in contradiction to each other. One of my colleagues Lianne Dalziel reminded me earlier about high and complex needs and just really the inability of the agencies to come together and to work properly as a team to get something that was logical for those young people who were really at most risk and amongst the most marginalised people in the country. The agencies could not do it.The other point that I would like to make is that sometimes some of the best policy advice does not necessarily come from the big agencies which sometimes get caught very much in their own ruts. I noticed this as the Minister of Education and the Minister for Sport and Recreation. Actually some of the best policy advice came from a tiny policy team of three four or five people because they could cut through cut to the chase work out what the issue was get the evidence and you could have evidence-based decision-making. Whereas in education especially in the early days when I was Minister there was so much long-term prejudice and not the ability not the habit of looking at the evidence. They were tied up in what had been the policy of the agency for a long time rather than working necessarily for the best for the young people of New Zealand.This State Sector and Public Finance Reform Bill is a tiny step and I do not think it goes far enough. I would like to refer to new section 47(1) of the bill “Responsibilities of Commissioner”. I am now going to plead guilty as I did to the Hon Stan Rodger a month or two ago for being the Minister of State Services who abolished the senior executive service because basically it did not work. It was a very good idea as part of the original State Sector Act to build up a team of senior people who got some special training and were more available for secondment to move from one agency to another. People who were being if not targeted if not anointed chief executives of the future—John Hayes: Groomed.Hon TREVOR MALLARD: Sorry?John Hayes: Groomed.Hon TREVOR MALLARD: Yes well grooming is a word that has different connotations these days. I think the idea that John Hayes was grooming public servants is probably not quite the approach that is appropriate. In the old sense of the “groomed” word then certainly that was the idea—that you were building up a team of people from whom the vast majority of the future chief executives would come because the skills had been developed. Basically it did not work. It did not work because of the very narrow approach of the majority of the chief executives of the Public Service who were focused on their own agency on their own outcomes and on their own statements of intent rather than considering the good of New Zealand and the quality of the Public Service both immediately but more especially in the medium and the longer term.Clause 38 of the bill puts back on to the commissioner the responsibility for developing and implementing a strategy for senior leadership and management capability in the Public Service. But what it does not do is give the commissioner any authority to actually implement it. What it says is that if a chief executive gives theState Services Commissioner two fingers then they are allowed to get away with it. The bracketed phrase at the end of new section 47(1) “(with the agreement of the relevant chief executives)” essentially goes back to the failed senior executive service model whereby they will I am sure focus more on their own agencies rather than the overall good of the Public Service. In my view—and Todd McClay might want to take responsibility for this—there is a failure within that provision to actually achieve what is a noble objective.I think all of us now agree that we have had far too many chief executives come in from offshore who do not understand the New Zealand culture. I am not going to use Lesley Longstone as an example. I do not want to go into it in any depth. As far as that one is concerned if you are working for Hekia Parata you basically have to be a saint in order to cope. It may well be that the new chief executive is a saint and he will be able to cope or more likely actually he will be able to manage the Minister in order to achieve the outcomes that are required.The CHAIRPERSON (H V Ross Robertson): I call the honourable member Darien Fenton.David Bennett: Excellent choice. Excellent choice.DARIEN FENTON (Labour):Excellent choice. Thank you to the member for that.Hon David Cunliffe: What are all those backbenchers doing just sitting there?DARIEN FENTON: That is right. It has been a very very interesting discussion in the Committee stage of this bill the State Sector and Public Finance Reform Bill. I have been listening as I have been working in my office as people have been talking about silos and their experiences with the State sector. I wanted to remind my colleague Trevor Mallard of one of the things that he tried to do I think when he was Minister of State Services. You were Minister of State Services?Hon Trevor Mallard: I was. Only for 6 years though.DARIEN FENTON: Yes I remember one of the things that he tried to do was to get the chief executives together and do a simple thing like having common leave provisions across the State sector. There was enormous resistance to that as I understand it. It was the most difficult job because the chief executives could not get their heads around doing something together. They were all precious about their departments. They all thought that they should just have the direct say on whether their staff should have I think it was 4 weeks’ annual leave then. They did not actually want to be—Hon Trevor Mallard: Some of them had 4 weeks and a day for this reason or that and they’re all bloody different.DARIEN FENTON: Oh OK. Yes they were all bloody different as Trevor Mallard just said. All the leave provisions were different. But it was such an enormous job for a very sensible proposition. I would have thought that that would be something that chief executives in the State sector would embrace actually—that they would actually embrace that. I am not convinced that the State Sector and Public Finance Reform Bill will actually change that culture. If anything I think it has gotten worse.But I should say that I am pleased that we have made progress on this bill and we have got to a point where we can support it. I am pleased that part of the hard work done by the Labour members on the Finance and Expenditure Committee in negotiation with the National Government has ended with a conclusion where we can accept—I will say it is not perfect—the changes made particularly around redundancy entitlements and workforce policy statements where the State Services Commission cannot interfere in wage bargaining.I will say again as I said in one other speech about this though that I find it very confusing that on the one hand we can get the Government to the point where it acceptsthat redundancy and redundancy entitlements are fair for public servants. We on this side of course think that is very right. But it does not think it is fair for other workers who work outside of the State sector. It continues to oppose basic redundancy entitlements for all workers throughout New Zealand. It has done that through a bill that I brought to the House as a member’s bill which is now back in the House under the name of Sue Moroney. The Government will continue to oppose that so I get confused about the conflict that there seems to be in the Government’s mind. It can have one set of rules on the one hand for public sector workers but it is not good enough for other workers throughout the country.The same goes for collective bargaining actually because there is an acceptance in this bill that collective bargaining is a good way of reaching agreement across the State sector. But then on the other hand we have Simon Bridges’ bill to completely undermine collective bargaining for all workers including State sector workers as well. So I get very confused about the Government’s messages. I think that it is not only a silo mentality in the State Service but a silo mentality amongst Ministers where they do not seem to be able to bring their policies together. They have some alignment between them and it is a little bit like that with the Employment Relations Amendment Bill as well and the health and safety reforms that the Government is bringing through. Health and safety reforms are great but then on the other hand we have the same Minister bringing forward reforms that will completely undermine health and safety by reducing workers’ rights.Talking about silos too I also heard my colleagues talking about the Ministry of Business Innovation and Employment that mega-monster that creation of Steven Joyce which he has put together which is gradually being taken apart. I like my other colleagues never saw why the Department of Labour—a department that we have had dedicated to workforce policy issues and workplace relationships for more than 100 years; for more than 100 years we had a Department of Labour in New Zealand—has disappeared and been swallowed up into the Ministry of Business Innovation and Employment. It is even hard to know what to call it any more. I think the inspectors the miserable number of 35 labour inspectors that we have throughout New Zealand still call themselves labour inspectors. But there is no resemblance in the ministry to that wonderful—Hon Trevor Mallard: “Mobie” inspectors.DARIEN FENTON: They may well be “Mobie” inspectors I am not sure but all I do know is that there is only 35 of them and they are supposed to enforce labour rights for all workers.Hon Ruth Dyson: Isn’t there meant to be more than that?DARIEN FENTON: Well there are meant to be more health and safety inspectors and that is another matter because what is happening now is that the Ministry of Business Innovation and Employment and the Department of Labour part of that is being unwound as the Government is forced to set up a new agency for health and safety. It started this brave new world on 1 July Monday this week. There were supposed to be more than 150 health and safety inspectors in place in this Lifting Our Game programme that they have been going through—yet another restructuring—that has become known as “shifting the blame” by the health and safety inspectors. It has been very disgraceful—one of the worst restructurings and botch-ups that has ever been seen. The Minister in the chair the Minister of Revenue agrees with me. I can see him nodding. This restructuring that has gone on has been an absolute botch-up. What we have in place are 74 inspectors fewer than half of what we had 2 years ago.Here we are creating a Crown agency for health and safety and moving over the health and safety enforcement part or the direction part of the Ministry of BusinessInnovation and Employment or what used to be the Department of Labour. But the transition is awful—the transition is awful. It is scary as well because how on earth are we going to make sure that people are kept safe and healthy at work in the next 12 months while the new Crown agency is established? The Government is gutting the Department of Labour part of the ministry and it is getting smaller and smaller and I really have to wonder what its purpose is. I do wonder actually whether the real agenda of the Government is to not have anything like a Department of Labour not to have anything that is responsible for making sure that workers’ rights are enforced and making sure that employment legislation actually works.Of course what we find is that because the department is so short on resources now it cannot even tell us for example whether the legislation this Government has brought in around employment rights actually works. I asked a question the other day about the 4 weeks’ annual leave that can be cashed up and the other changes that were made in 2010. The department has done no research on that. How can a Government and a department in the State sector bring forward legislation argue it and push it through because the Government has the numbers and then do no follow-up to see whether it is working or whether there is a problem? It cannot even tell us whether there have been any complaints about it. This is shocking—this is shocking. Although I am pleased we have got to a point where we can support the bill because of changes that were made during the select committee process—as I said it is not perfect; there are still some issues here—I am not convinced that this is going to change first of all the Government’s attitude to making sure that people are provided with proper information and the proper policy and guidance but second of all the attitude of chief executives.As I started out by saying in my contribution chief executives in Trevor Mallard’s time openly resisted changes that we were trying to make around having common leave provisions. I also know that they openly resisted collective bargaining which was a policy of the Labour Government and part of our legislation. They openly resisted it and they refused—and still to this day refuse—to include wages in collective agreements. That fight has been going on for 10 years because chief executives came out of the 1990s had an ideology do not believe in collective bargaining and do not believe wages should be included in collective agreements and that battle is still going on 9 years later. What I can say is that if we are the Government next year that will change—that will change. It is not acceptable to have direction from a Government and have so much resistance because of the particular ideology of the State sector executives. As I said I do not believe this will change the attitude. I think it is good that we have got to a point where we can vote for it. I do think there are ongoing problems in the State sector.I am looking forward to seeing what develops with health and safety. I am looking forward to the Ministry of Business Innovation and Employment—the old Department of Labour—recommending there should be an inquiry into forestry safety after the forestry owners came out last night and said they supported one. There is some good advice that they could get and it could be given to the Minister of Labour. He should be acting on that today.The CHAIRPERSON (H V Ross Robertson): I call the Hon Nanaia Mahuta. Tēnā koe. Kei te pēhea koe?Hon NANAIA MAHUTA (Labour—Hauraki-Waikato):Ka nui te ora. Pēhea tērā ki a koe mō tēnei wāhanga o Te Wiki o Te Reo Māori?[Very well thanks. What do you think about that for this part of Māori Language Week? ]I just wanted to pick up where my colleague Darien Fenton left off. There are some issues with the State sector and if the intention of this legislation the State Sector andPublic Finance Reform Bill is to enable Government departments to work more collaboratively together by way of merging some of the aspects of their statements of intent to some higher-level priorities then that will be a positive thing. The Government must have mechanisms through the State sector to be able to drive its priorities. That is absolutely clear. But if the Government is unclear on the nature of its priorities we have got some big problems.When I think about I guess the litmus test from a perspective that I bring to the Chamber for Māori that would be how the Government would work in partnership with Māori to advance economic and social development. It is a very important space to be considering the nature of this legislation because what we know is that since the emergence of Treaty settlements and more definitely in the post-settlement landscape significant resources have been transferred to iwi who are then in a position to take on some quite critical partnerships with the Government and with third-sector parties to focus on regional growth strategies and outcomes to invest more in social development outcomes and to be innovative in a very different way. The interface between the State sector and iwi I believe is part of what could be a litmus test as to whether or not what we are trying to do here today will achieve some broader outcomes.As I said I have listened to the debate all the way through this particular bit of legislation and it got me considering a number of things. If the Government has a priority around Māori development Māori economic growth and social development why then did National reject the proposal of Te Ururoa Flavell in terms of making some stronger recommendations around the way in which the Treaty would be recognised within this legislation? Silence. So that then urges me to ask that if the intent of the Government—Hon David Cunliffe: It’s not question time.Hon NANAIA MAHUTA: Silence except from the backbenchers who will not take a call on the bill. If the intent of the Government is to ensure that there are going to be productive collaborations with iwi and iwi who have growing economies—Tainui just this week announced it has got around about a $780 million asset base and Ngāi Tahu will be slightly over that amount. There are significant opportunities for the Government to partner with iwi to be able to better effect transformational change within specific regions so that we are looking at innovative solutions to some very age-old problems not because the Government is taking a parochial approach to these challenges but because it is expressing itself in ways that are actually more reflective of what is being urged through a regional community iwi type of perspective. On that basis alone I would have thought that the Government would consider quite seriously what the positive implications of Te Ururoa Flavell’s amendment to the legislation could provide for.The next point I want to raise is in relation to the task force that the National Government set up and that is the Crown Māori Economic Development Panel that was established looking at priorities between 2012 and 2017. It outlines six particular goals: in the area of education lifting educational participation; lifting the skilled workforce and certainly the skill sets amongst Māori; improving the financial literary and savings aspects amongst Māori especially at the grassroots; invoking more collaborative relationships with iwi and Māori; developing natural resources and having an ongoing dialogue about how that could coexist with strong kaitiaki principles amongst iwi; and having a concept of where the “Māori Inc.” strategy sits within the broader Government growth strategy. All of those have been identified by the National Government as key priorities to lift Māori economic growth and to support it but the way in which this legislation seeks to try to achieve that is unclear.It is unclear because obviously this provides structural change for inter-agency collaboration but it is unclear also because the Government on the one hand will have a certain conversation with iwi and Māori around the necessity to ensure a collaborative relationship for growth but on the other hand when it has the instruments or mechanisms to try to achieve that through legislation like this it does not make some of the hardest yet most important calls so that we can get to a really good point where actually the Government is saying that we must work differently together just as we need to get out of that silo way of thinking. That whole bringing the whole of Government approach together engaging in critical partnerships and in this instance with iwi and certainly with Māori—that whole aspect of the nature of relationships going forward for the State sector is not contemplated within the context of the changes and the amendments that were rejected.I am slightly sad by that silence over there in the corner from people who initially criticised my comments. I would say that going forward the real litmus test for Māori on the effectiveness of the changes that have been achieved and promoted today will come back to some very critical points of convergence: where there is a common interest to have a growth strategy that is more aligned and where there is a common interest to have a social development strategy that lessens the level of inequality and poverty in our communities. That is a point of convergence between the Crown the Government and iwi where the necessity to improve the skills of our people is not just a Government objective; actually it is a nationwide objective where iwi can play a critical role to help achieve that outcome.At the end of the day we have heard colleagues certainly on the Labour side of the Chamber say that the new normal for the State sector is a stronger reporting framework around outcomes. I would have to absolutely endorse that. If we take an outcomes perspective in the way in which the Government asserts its leadership on fundamental priorities of economic growth and development and social advancement then the extension of changes to the State Sector Act could go a little bit further taking into account the role—the critical and positive role—that iwi and Māori can play in this space.I had said that I wanted to comment very briefly—I have taken two part-calls on this. I want to say that although this is a start this is by no means a finish. This is an opportunity to have in the top of our minds the question of what some of the litmus tests are to ensure that the State sector is operating in a way that will I think change the nature of the way the Government interfaces with iwi but also with community. Kia ora koutou.Hon MARYAN STREET (Labour):I rise to take a call on clauses 1 and 2. It is worth restating the significance of this legislation the State Sector and Public Finance Reform Bill as I have mentioned in previous contributions but the thing that is becoming increasingly apparent as the speeches unfold is a point I referred to earlier. This is only the beginning of something that could be a substantial rethink of the way we actually administer the Government in this country and administer those parts of Government activity that receive Government appropriation and therefore taxpayers’ money.This bill will of course become three bills—the State Sector Amendment Bill the Public Finance Amendment Bill (No 2) and the Crown Entities Amendment Bill. In each of those respects it takes us further along. It takes us further towards an integrated system of administration. We have administered Government for the last umpteen decades in this country according to siloed portfolios and people have made a lot of the fact that this is a course of action that has probably run its time. I think that this bill presents a novel opportunity but it is still just a small step in the direction of alternativeways of running the Government that could in fact deliver more integrated services to New Zealand citizens.As far as the State sector amendment part of this legislation is concerned I just want to reiterate one of the old principles. I was put in mind of this by the Hon Trevor Mallard’s discourse on the indivisibility of Government. This is that in my view the Public Service the State sector not only delivers the programme of the democratically elected Parliament of the day but it also acts as a buffer between executive power and the citizenry. So it is there and it has several things that it is charged to do. Of course it must implement the Government’s programme because one would assume that the Government has been elected to implement the programme. That is of course less decisive under MMP than it was under first past the post.Often we hear the Government taking liberties with that notion of having been elected with an overwhelming mandate. Certainly if a party goes to the polls saying it is going to sell State-owned assets and it gets 40-something percent of the party vote—even if it is 44 percent of the party vote—that is still not a majority in favour of that mandate. One would assume that if it wanted to really be honest about getting a mandate for a divisive policy such as the selling of State assets it would try to go for a 50 percent or greater portion of the vote in order to be able honestly to say that it had a majority mandate for that policy.But the point behind this is that the State Service the Public Service has operated and accumulated knowledge and wisdom over time. Our Public Service is held in extremely high regard by all of those agencies that measure such things. The integrity of our Public Service and its independence are critically important to our ability to score highly on the lack of corruption index and on the transparency index which Governments are measured by around the world. It is in large measure that our reputation and our scoring highly on Transparency International’s various indices including the lack of corruption one have us coming at first or first-equal position in successive years.I trust that this piece of legislation will actually enhance the operation of the Government’s departments and ministries so that integrated services which are increasingly being seen as necessary can be delivered for the effective provision of those services to New Zealand citizens. But I do not want to leave that point just yet about being a buffer between executive power and the rights of the citizens. I think the State Service the Public Service has sat there for a long time as a buffer between overwhelming and dictatorial executive power. There are things that the Government cannot do because of the rights and the structures that are in place in our democratic system and that is how it should be.So this is important in that it changes the workings of the apparatus of government. Whether it is a Crown entity or whether it is reporting mechanisms—as in the Public Finance Act amendment part of this legislation or as I say Crown entities in the Crown Entities Act amendment part of this legislation—the principle is the same. If we can begin to integrate appropriations operations and accountabilities of government through these mechanisms then that is to be applauded. I use again the example I used late last night of the appropriation for Whānau Ora. Being a health initiative one would have thought that it could have come before the Health Committee for scrutiny. One could have thought that the Minister of Health would be able to say to the Health Committee that this is how the appropriation around Whānau Ora has been expended and these are the accountability mechanisms and the performance indicators around that appropriation. But no because it is not something the Minister of Health was very fond of it was sent out to the Minister of Māori Affairs and to Te Puni Kōkiri when really the people who had a serious interest in scrutinising it were not only the members of theMāori Affairs Committee but the members of the Health Committee as well. So if there can be better ways of ensuring that appropriations are both reported on and accounted for and made more transparent by the provisions of what will become the State Sector Amendment Bill and the Public Finance Amendment Bill (No 2) then let us proceed with that.But let us not imagine that we are there yet. What we do need is a new way of looking at how to deliver integrated services. This is particularly apparent in health but also it is really apparent in the social development portfolio. It is very apparent there. It became apparent to us when we were delivering the Strengthening Families initiative that in fact numbers of organisations needed to be involved and engaged with the welfare of a particular family and a particular child. So not only did we need to have police justice corrections education and health organisations involved but we needed to ensure that they were singing off the same page and that they were able to deliver the services that that family needed at that time. So I am hopeful that this is the beginning of something new.As far as the Crown Entities Act part of the bill is concerned the more of those entities that talk to each other and that operate in conjunction with each other the better. This is simply a subset of that working across ministries departments and other parts of Government. I welcome this bill and I look forward to what it may bring next.Hon TREVOR MALLARD (Labour—Hutt South):I want to thank you Mr Chairperson for giving me another call even if it is slightly before when I thought I was going to have it. I would like to focus in this call back where I completed my previous call and that is on the responsibilities of the State Services Commissioner with regard to the development of senior leadership in the Public Service. I want to reiterate the comment that in my opinion quality leadership in the Public Service is important.In the end despite the interjections from some of my colleagues we are never going to compete for chief executives on the basis of the money that they get. I do not have much doubt that the particular individuals in the private sector could earn more than they do in the public sector and repeated Hays surveys have shown that to be the case. In fact there is a pretty clear hierarchy of incomes in senior positions which goes first private sector; then after that generally State sector organisations other than the Public Service; then the Public Service; then local authority politicians; and then central government.Andrew Little: Community organisations.Hon TREVOR MALLARD: Well community organisations like Parliament as the member said. But there is a hierarchy that works in that way vis-à-vis the Hays surveys. Therefore when the State Services Commissioner is fulfilling his tasks under this legislation the State Sector and Public Finance Reform Bill money is not going to be the main thing that is going to get people across the line into senior Public Service positions.It is worth looking at those two words “public service” because there is a major element of public service involved in this. Although it is my opinion that having loyalty to a particular agency for which you are working at a specific time is important what is more important is that the individuals within the Public Service are in fact loyal to the Public Service overall and to the common good of the Public Service rather than to the particular agency that they are working for at that time.Although some things probably go beyond some of the privacy things that we find acceptable today back in the not too distant past—certainly within my memory—they had a thing called a stud book whereby you could look up people who were employees in the Public Service and you could see when they became public servants. You could see their career history and their particular level of appointment and what their currentsalary was. Apparently we have moved on from that level of transparency. I am not sure why because I think—Andrew Little: They’ve got Novopay now. You can do it on your own.Hon TREVOR MALLARD: Well the problem with Novopay of course is that people do have the ability to adjust their salaries. Unfortunately the ability to deliver is not particularly good.The point I am attempting to make is that we have to be offering to the people whom we expect to be leaders in the Public Service something that is challenging where they feel that they are doing some things that are extra and that involve basically making New Zealand and making the world a better place. I hate to do it but if I move over slightly to my left and look across the Chamber I can see—Hon David Cunliffe: Move to the left?Hon TREVOR MALLARD: There is not much room on my left politically.Hon David Cunliffe: There’s me. There’s me.Hon TREVOR MALLARD: The member is certainly not on my left politically that is for sure. We just need to see the policies he implemented when he was in Government. We will just leave that on one side now. Interjections like that are not helpful Mr Cunliffe. I am actually looking at John Hayes at the moment. I think he is a very good example of someone who was a relatively senior public servant and who in his area of work and especially in the western Pacific made a real difference.John Hayes: And the Middle East.Hon TREVOR MALLARD: Well I do not know the member’s details. That might have been before my time. I think he managed to get some peace in the western Pacific. I do not know whether he totally succeeded in the Middle East though I understand that his close friend Mr McCully is about to bring peace to the Middle East. I just want to say one thing. I am not going to hold my breath. I am not going to hold my breath for that.Andrew Little: Let him have a go. Let him go over and have a go.Hon TREVOR MALLARD: In fact I think he is there. Well I do not know. He is either there or he is going or he has come back.The point I am making—and I am almost inviting John Hayes to take a call—is to say to him that the difference that he made as a public servant in the world was more important than some marginal cash that there was some degree of job satisfaction that was involved. I can see that he is nodding and it is not through sleep. That is the case for many people who are true public servants. There are a lot of them who could earn significantly more money in a private sector situation.One of the unfortunate things that is happening under the policies of this Government is that as these massive mergers changes and reconfigurations occur people are effectively invited to apply for redundancy—I think they call it “rightsize” now. Back in the day it used to be called firing people. As these ministries are being downsized far too often there is a general invitation to people to take redundancy. Unfortunately often the people who take redundancy are those people who have the skills and talents that are vital to the organisation. They take redundancy and generally it takes about 2 weeks sometimes 6 weeks for the organisation to work out that it has a gap that it is required to fill and what does it do? It contracts the person back in often for 3 days a week often for more than it was paying them before anyway and they have got a redundancy payment as well.Hon Shane Jones: They’re mates of the Government.Hon TREVOR MALLARD: Well some of them are mates of the Government and some of them are just people who are sick of being treated badly by Ministers and like to have the option of providing the advice which generally goes through senior peoplewithout the indignity of having to attend on Ministers’ offices which I understand in a number of cases is something that is dreaded by public servants. Again I make no reflection on the Minister of Revenue who is currently in the chair.You just have to wander up Lambton Quay often enough and have a number of friends—I have friends whom I have known for 35 40 or 55 years in some cases—and you can just sense this from their body language. They are all proper public servants but you can sense from their body language as they come out of the Beehive when the meetings that they have had have been proper and courteous and professional and when they have been in a meeting with Tony Ryall or some of the other people who are not good Ministers. To be fair to the Minister in the chair the Minister of Revenue I make no reflection on him yet. The only comments that I have had about that Minister are about a total lack of understanding and people are just beginning to understand the issue and questions about where he got the advice—was it joined-up advice to cut puppies up?The CHAIRPERSON (Lindsay Tisch): Order!Hon TREVOR MALLARD: I ask the Minister in the chair: has he been applying the rules that sit within this legislation to get the advice that would sacrifice dogs for drug dealers? That is a relatively simple question. We want to stop drugs but where do Ministers these days get such silly advice—Hon DAVID CUNLIFFE (Labour—New Lynn):Thank you very much for the opportunity to contribute to this clause 1 debate. Thank you to the member to my right Mr Mallard who has just resumed his seat. His was a very useful summary of the issues. I join him in inviting the Minister of Revenue to explain to the Committee his use of these rules in reaching his extraordinary decision about puppy poisoning—but anyway.The clause 1 debate provides an opportunity for us to sum up the arguments that have been deployed through the Committee’s consideration of the State Sector and Public Finance Reform Bill. I would like to take this opportunity to thank our colleagues who really debated this bill with I think considerable depth over the last 24 hours. It is instructive to note that the Labour benches are relatively full and the Government’s benches are relatively empty on a bill that is supposedly a Government bill but that has actually I think benefited quite significantly from the efforts of the Labour team to redraft it.I want to recognise the excellent input of officials who have served the Finance and Expenditure Committee very well and have facilitated significant—significant—amendments to the bill. I thank the Minister of State Services Jonathan Coleman and the Minister of Revenue for his work when he was formerly in his role as the chair of the Finance and Expenditure Committee which undertook some significant changes.I would just reiterate that when the bill was introduced Labour opposed it. It is not very often that an Opposition will start out opposing a bill and then change its mind and end up supporting it. Quite often an Opposition will reserve its position during the first reading of a bill let it go to a select committee hear the submissions and then form a final view. Occasionally it will support a bill to go to a select committee to allow the public to have its say and then end up opposing it. But very rarely does it oppose and then support. That is what is happening today and that is because some very significant amendments have been made that take the rough edges off the bill and allow it to better achieve the purposes which we agree with.I would like to quickly touch on some of those significant amendments because they are also sources of ongoing concern. I do want to emphasise that our team although we are supporting the bill is going to be watching its implementation very carefully to ensure that the issues that were the cause of heavy amendment in the select committeeprocess actually work out the way that they are supposed to. The first of those was of course the redundancy provisions in the State Sector Act changes. Tough negotiations resulted in a better bill with employees’ rights now better protected. The bill as introduced did present a considerable danger to redundancy provisions. The key words here are that in order for a State servant not to qualify for their full redundancy package on a situation of transfer or job change they would have to be offered a package that was “no less favourable”. It is not “no less favourable overall” and not “sort of close to the current package” but “no less favourable”. They should not be worse off than they were before the change. That is a core principle of our support and we will be watching very closely to see how that is interpreted.The second issue was the use of Government Workforce Policy Statements originally orders. In the original draft of the bill those orders could well have been construed as conferring legal weight to a Government’s central direction to its various agencies and to chief executives to bind the hands of those chief executives in wage and salary negotiations and terms and conditions negotiations. The select committee has turned that on its head. It has explicitly ruled out the use of Government Workforce Policy Statements—as they are now called—to do anything that would affect wages and terms and conditions and it has explicitly written in a provision that will enshrine all of the existing bargaining rights that currently apply to State servants and Crown entity servants. We have taken the presumption that was in the draft and turned it on its head. The bill now specifically protects and enshrines those issues. But like the Public Service Association and the Council of Trade Unions we retain a degree of reservation about how that will be implemented in practice and we will be watching very carefully.There was also significant discussion and amendment at the select committee in respect of the ability of chief executives to delegate functions or powers. We join with the Government in wishing to see a more flexible responsive and networked public sector. Notwithstanding that and while recognising the importance of being able to delegate functions and occasionally powers to hybrid agencies subsidiary agencies and possibly non-governmental entities it is very important that that chain of delegation is rigorous so that the accountability back to Parliament and to the taxpayer to the citizen is unbroken. For that reason the select committee supported amendments to the bill that tightened the conditions and placed restrictions on when and how such delegations could happen.Labour supported the committee’s amendments to increase the accountability of the delegations including an amendment that the delegation must be in writing—that sounds obvious enough but it was not there at the start—and that the functions or powers delegated to a chief executive by a Minister or the State Services Commissioner may not be delegated further without their prior written approval. That is like a tenant not being able to sublet a flat without the prior approval of the landlord. The sub-delegation that we are seeking to make sure is rigorous is the powers of the Crown which are legitimate only because they go through the electoral process—Parliament is accountable to the people. Parliament vests that authority in Ministers of the Crown and Ministers in turn vest it in departments. The State Sector and Public Finance Reform Bill allows departments’ chief executives to vest some of those functions and powers in subsidiary entities or agencies. So we are just being very careful with that. It is a bit of an innovation but we think it could work provided the powers are rigorously mandated.A fourth area of ongoing vigilance will be in the area of multi-category appropriations. We have had quite extensive debate on this through the Committee stage of the bill. I think there is general agreement in the Committee on the idea although itis to be fair experimental that we would allow multi-category appropriations—that is Budget lines that are shared between different departments or entities. So it might be the Ministry of Fisheries which is now a part of the Ministry for Primary Industries—it might be the Ministry for Primary Industries and the Ministry of Business Innovation and Employment sharing with Callaghan Innovation a new research budget. We want those agencies to work together. We are allowing them to share a common pot of money but several things follow. The first is it must in all cases be possible for the public through Parliament to see where the money came from and where it went. That includes being able to trace back from Budget 2014 to Budget 2013 and Budget 2012 so we can see the time line. The amendments require what we call strict traceability of funds including how they got into and out of the multi-category appropriations right down to the nitty-gritty which in our language of the bill is called sub-output classes. What we are trying to enshrine here is that the accountability to Parliament through the Budget cycle is no less than it was even though we are allowing for a new hybrid funding instrument called a multi-category appropriation.There have been a number of Supplementary Order Papers brought to the Committee and we have received explicit assurances from officials and the Government that there are no new policy issues embedded for example in Supplementary Order Paper 262 which is a multi-page Supplementary Order Paper. It is quite a large one. We are advised that it is purely consequential partly because of date changes and technical in nature. We are of course willing to take our highly qualified advisers at their word but we are acting in reliance on that advice in conferring our support for the bill and we will be aware of the possibility that there could be subsequent issues that arise in respect of those Supplementary Order Papers. We will give them the benefit of the doubt.We would note also that the Green Party has brought Supplementary Order Paper 265 to the Committee in support of further enshrinement of State sector employees’ rights. We supported that Supplementary Order Paper even though it was not passed by the Committee. The Government voted it down and we think that was a shame although the Green Party might have brought that amendment to the Finance and Expenditure Committee for earlier consideration. We might have been able to swing it as part of the earlier negotiations but we recognise the Green Party’s good intent in bringing it to the Committee at this stage.Clause 1 agreed to.The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to clause 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes94New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independent: Dunne.Noes23Green Party 13; New Zealand First 7; Māori Party 2; Mana 1.Amendments agreed to.A party vote was called for on the questionThat clause 2 as amended be agreed to.Ayes95New Zealand National 59; New Zealand Labour 33; ACT New Zealand 1; Independents: Dunne Horan.Noes23Green Party 13; New Zealand First 7; Māori Party 2; Mana 1.Clause 2 as amended agreed to.The Committee divided the bill into the State Sector Amendment Bill the Public Finance Amendment Bill (No 2) and the Crown Entities Amendment Bill pursuant to Supplementary Order Paper 261.Bill to be reported with amendment presently.