Cullen Michael: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Cullen Michael: Public Finance (State Sector Management) Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 14 December 2004. Volume:622;Page:17859. Text is incorporated into the Bound Volume.] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I will take a brief call because this is an issue that has had a certain amount of public discussion of rather low quality I have to say. The ACT party once used to show some backbone—if I may put it that way—in dealing with special pleading that came from interest groups. Apparently now it is just another populist party that waves in the wind and sticks its wetted finger in the air to see which way the wind is blowing. For the information of the member I will explain that tertiary education institutions have been Crown entities since 1993. The Public Finance (State Sector Management) Bill does not make them Crown entities; they are right now. Nothing has changed in that respect. What they wanted was to cease to be Crown entities and to be totally not related to the Crown in terms of a financial interest by the Government in tertiary education. That is what they wanted. They are not going to get that and nor should they get it. The Finance and Expenditure Committee rejected overwhelmingly that submission from the universities—and quite rightly so. 
Those institutions are bodies that do not pay rates on the basis that the Government has a financial interest in them. On reading the rubbish I have seen in the last couple of days I have been tempted to offer them complete independence in return for them paying rates to their local authorities. I think they might change their minds at that point and come scurrying back under the skirts of nanny State rather rapidly in terms of the financial implications that that would have for Auckland University and Victoria University in particular given the value of their properties within the central areas of Auckland and Wellington. 
We have put aside for the moment some important issues—for example the issue of the argument around ownership. We have put aside the issue of consolidation which is being addressed by the Financial Reporting Standards Board. The only change the bill makes is that the State Services Commissioner has the legislative mandate to be able to advise on the wider State sector which includes all the different varieties of Crown entities—advice only and nothing more than that which he or she of course can do anyway without a legislative mandate. It is not a requirement that the commissioner has to give advice. He or she may advise and I think that that is perfectly appropriate. We appoint members to the councils of those bodies. Successive Governments have done so for many years. We still provide the largest part of the funding of many tertiary education institutions. The overall majority of the funding still comes from the Government. Indeed the member herself used the term “public tertiary institutions”. It is hard to use that term and then to argue that those institutions should not in some sense be encompassed within a very narrow and quite specific definition of Crown entities which is much less restrictive upon them than the general definition of Crown entities within this bill. 
I have been appalled as an ex-academic at some of the comments that have been made by the universities in that context. They show a remarkable lack of understanding of what is within the bill. It is a play not for the status quo but for a major shift in terms of the status of universities within society at the present time whereby the Government has no financial interest within the universities. That is interesting. When I was an academic we took that interest for granted. My goodness me we were subject to the State Sector Act. I was automatically dismissed as a university lecturer on being elected on election day in 1981 because I was a public servant under the definition of that Act. It did not affect in the slightest what I taught in my courses. I did not feel that academic freedom was constrained in any sense in terms of the opinions I expressed at the result of what was happening within the State Sector Act as it was in those particular times in the predecessor of the current legislation. I have to say that the submissions made by the universities on the bill were pretty much without merit. 
We have tried to take on board a number of technical issues and have dealt with those. The select committee was pretty overwhelmingly of the view that the bill in this respect should be pursued. I think the Opposition parties were by and large in agreement with that particular position and that is a wise move. There are some difficult issues still to be worked through in terms of consolidation. There is an issue to work through in terms of the so-called ownership interest—what it is and what it means. That matter is put aside; it is not affected by this bill.