Bayly AndrewANDREW BAYLY (National—Hunua): Thank you Madam Chair. It's nice to actually get a chance to speak on this bill. I haven't had an opportunity even though I tried to take the call because I had an amendment but unfortunately that wasn't allowed for during the general debate. So thank you and I'm very grateful that you've kept the telephone lines open between you and the floor.The issue I want to talk about is this issue about the implementation date because I think it is an issue around the practicality of what's been proposed. This by any standards is a massive organisational transformation and change. What we're talking about is not only the creation of the New Zealand Institute of Skills and Technology which in itself is this very significant organisation tasked with providing and arranging and supporting a range of vocational education and training but also it is involved in the consolidation of existing networks of polytechnics.Then we've got the creation of the workforce development councils and we've got a number of those. Of course their role is to provide skills leadership set skills standards develop qualifications endorse programmes moderate assessment and provide advisory and representative roles.The thing that really worries me and the one that's most pertinent to me is the construction sector where we currently have about 25000 being trained in the sector. The two lead organisations in it—the Building and Construction Industry Training Organisation particularly—made a submission which was very much against this. One of their issues was the lack of certainty around it. The other one was the New Zealand Skills Organisation. The central part about this is about how this change is managed and the time frame for managing that change.I have actually been involved in doing a lot of these types of changes and I know how complex they are. So just take for instance the two main new organisations that are going to be created: the New Zealand Institute of Skills and Technology and the workforce councils.First of all there is going to be a need to develop a statement of corporate intent or something similar for that entity or those entities. Of course we're talking about seven of those workforce development councils. There's going to be a need to work out the governance arrangements—how many do you have what the skill sets should be how are they appointed who appoints them who is going to recruit the human resources firm to recruit them? That all takes time.The issue around management—what is the nature of the skills? How is it going to be managed? Is it a devolved management style? Is it much more directorial? Does it complement certain skills? Particularly we talk about advisory as opposed to overseeing different types of qualifications. We've got the operational aspects accounting—how's that all going to be done? That's all got to be created. Have you got existing platforms for these organisations to be able to adopt to be able to put those in place?We've got branding issues. What's going to be on the top of the logo when the organisation is set up apparently on effectively 1 April 2020? The contracting arrangements between these entities will be a significant thing and I could tell you that this is where the tension point will be between any new entities. Who has got the power? Who has got the influence? Ultimately it reflects in the personal remuneration of the people who get the powerful jobs. That's why it will be an incredible scrap.Then you get into the issue of the entities that are going to be transferred and this raises valuation issues. Now as you're probably aware there's three different valuation methodologies: capitalisation of future maintainable profits net tangible assets and the discounted cash flow method. The reason I'm talking about these is these are all complicated processes to follow. To go and do the net assets will require official independent valuations. That takes a long time. The modelling—all that takes engagement with the people concerned. Let's hope that they're there. What I'm actually getting at and I hope you get my point by now is that the operational aspects to put this in place are immense. The idea of having this all come together and do it so quickly is just inane and it shows people who have actually got no experience and want to see consolidation but without understanding what the key ingredient is for a successful organisation. That is building a good culture and this is not even reflected in the conversations.