Cunliffe David: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeCunliffe David: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11642. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):Tēnā koe. Kia mahi toa. Let me just draw the Committee’s attention to the considerable size of Supplementary Order Paper 262 which contains a significant number of pages—60-odd pages’ worth—of amendments to this part. It is not ideal practice for us to have a Supplementary Order Paper brought to the Committee that is of this length and complexity because it has not had the same level of scrutiny—for example John Hayes’ minute scrutiny—in the Finance and Expenditure Committee that the rest of the bill has benefited from. It has not had the “Hayes effect”. It may still have a haze with a “z” but not the “Hayes effect”. It is true that officials have given us their word that these are purely minor technical and non-controversial amendments that are consequential upon date changes and other such things and of course therefore there can be no policy intent in them.I want to turn the Committee’s attention to the substantive amendments to Part 2 which start on page 60 of the Supplementary Order Paper. We have an updated purpose statement and we move through to the substantive provisions starting on page 64. Proposed clause 59B replaces section 3A “Power to amend Schedule 4”. This allows the Governor-General by Order in Council to add to schedule 4 of the bill the name of any body office officer trust or organisation; and apply or disapply to any organisation any provision of the Crown Entities Act. The Governor-General can change add or subtract the name by Order in Council. Section 3AB in clause 59B provides similar amendment proposals for schedule 4A of the bill. If we move through we see that clause 60A proposed by the Supplementary Order Paper inserts new section 7C which is “Responsibility for and administration and use of appropriations”.On this one I just want to make a couple of general points that are not really drafting points. It is to echo the words of my good colleague David Parker who I think really emphasised the need to have a clarity of legal appropriation authority from Parliament to the Minister to the chief executive down through the output classes to the sub-output classes. It is provisions such as the new section 7C on page 66 and their like that make clear that the Minister or the appropriation Minister is responsible for the appropriation. So it is through provisions such as this that we are really underlining that the ethical basis of the expenditure of the taxpayers’ money is through the parliamentary process as vested in the Minister. It clarifies as David Parker has said that the chain of command after advice has been listened to and understood does go from the Minister to the department because that is how we account for the use of public money and that is very very important.It makes the further point in new section 7C(3) that “the Speaker is responsible for any appropriation administered by the Office of the Clerk of the House of Representatives or the Parliamentary Service.” I would be remiss if I did not state publicly that our staff in Parliament have not had a decent pay rise for a good 5 years. So when the Speaker is next considering his or her powers under this innocuous little subsection (3) of section 7C on page 66 of the Supplementary Order Paper I ask him orher to please have a thought for our hard-working parliamentary staff whose pay and rations really have not kept up with either the private market or the inflation index. I understand that they may be facing yet another year of severe restraint and I do not think that any of us think that they should be in that situation.On page 68 we move to clause 61D. This amends the power of the secretary of the department to receive information and clause 62 amends the power of the Auditor-General to be the auditor of the Government reporting entity. That is an important power because it means that the Auditor-General has his or her full powers when dealing with a potentially sub-delegated entity body Crown entity or company in which the Crown holds a number of shares or some other organisational form. What this bill is really saying is that that concrete chain of accountability and command can apply—must apply—across a range of organisational forms for which the Crown is responsible. The bill is trying to get in short the right balance between clarity of delegation rigour of accountability and yet a new flexibility to devolve across a range of organisational forms.In these post - global financial crisis days of fiscal constraint and fiscal prudence writ large all of us—but actually particularly social democrats—know that we are going to have to do more if not with less then with not much more in terms of taxpayers’ funds. Therefore we need to be absolutely focused on getting the best value for the taxpayers’ dollar that we can. I am reminded of an example early in my time in Parliament where we were considering the cost of delivering social work into one of New Zealand’s remote regions—I think from memory it was the Gisborne - Poverty Bay area. The salary cost for the social workers in those days quite a while ago was in the $30000s a year but the total cost per social worker was around $120000 the other $90000 being departmental overheads. I have never forgotten the example. The actual salary of a social worker was only about a quarter of the total cost; the other three-quarters was overhead. That impressed upon me then that even social democrats have to have an awareness of the best and most cost-effective way of delivering services to our people. Sometimes that might be through an agency that is semi - at arm’s length from the Crown such as an NGO or a Crown entity. It may be something that is lean and adaptable to those communities.It is interesting now to come full circle and to see a piece of legislation that with a lot of good cross-party cooperation is trying to achieve a good balance between having the flexibility to deliver those services in a variety of ways as are most appropriate without compromising on the rigour of the accountability back to the taxpayer or the chain of command back to the Minister. That is a sweet spot if we can achieve it that will allow modern social democracy to be cost-effective and active and flexible and in tune with our communities and we are reasonably excited about that possibility.New section 34 proposed in clause 65B of the Supplementary Order Paper underlines the responsibilities of chief executives for financial management and for reporting both for departmental and non-departmental matters. In proposed clause 66A on page 71 of the Supplementary Order Paper it dives down. This is quite specific prescriptive language because Parliament is wanting to leave the departments in no doubt whatsoever as to the nature of their responsibilities and the clarity of their delegations. I think it is well written in that regard. Clause 66A states that departments must prepare annual reports. There is some detail about what must be in them and it is the same for departmental agencies—obligations to publish to put the information in the public domain whether it be in hard copy or on a website. There are time limits of no later than 15 working days after it is presented to Parliament. Again there is a lot of prescription a lot of rigour here to make sure that the public is as well informed.Earlier this evening I went to a presentation by Transparency International with a number of colleagues. That is an agency that rates the level of corruption in different countries around the world. Guess which is the least corrupt country on the planet? No. 1 on their rankings is New Zealand. We can be really proud of that fact and we score incredibly well for the integrity of our public sector. So today it might be hard graft. It might not be the sexiest bill in the world. It is rather a large bill and it contains the kinds of provisions that keep New Zealand safe. It keeps New Zealand safe from either graft or just inefficiency and ineffectiveness because the rules are not clear about how we account for public money. It is in the dense drafting of bills like this that we make good our promise to the taxpayer that we are going to deliver the very best services for them at the very least cost and we are going to do it in a way that is accountable rigorous clear and efficient. It is this kind of work that underlies the fact that we are the least corrupt the most transparent Government on the planet and every New Zealander should be proud of that.In closing can I just again start where I began in the last part and that is to compliment the Government our high-quality officials and colleagues across the Chamber for their work on the bill.