Clark David: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeClark David: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11635. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):As I begin my call I will just request that Mr Cunliffe give me my notes which are under there. I have prepared some quite extensive notes on this part of the State Sector and Public Finance Reform Bill Part 2. The bill itself does make some quite significant changes to a very significant Act. The Public Finance Act of course is one that as a former Treasury official I took quite a lot of interest in.I am very grateful to have this opportunity to speak in the debate. It is true that the changes to the Public Finance Act will I hope have some really positive impacts on the way the public sector is run. The establishment of a new appropriation type to be called a multi-category appropriation will allow different types of expenditure to be grouped into a single appropriation if they contribute to an overarching purpose. There are always debates around this kind of change because effectively what happens is that the nature of accountability changes. With the change in the nature of accountability is a commensurate concern for the impact that that will have on the accountability of Ministers through to the taxpayer and the public of New Zealand who want to see the investment they make through their taxes creating a better society.These changes which allow for a wider grouping of expenses will hopefully allow Ministers greater flexibility to achieve the ends they are wishing to achieve through various pieces of legislation or appropriations which is the money they vote towards specific purposes. But that comes with the risks of being in a bigger pool and of being shifted around without the same kind of attention it has had historically. We find ourselves here in Parliament debating that balance between providing Ministers with flexibility to achieve the outcomes they want to achieve on behalf of the public and on the other side of that balance the accountability proper to the taxpayers who have provided those funds.We in the Labour Party are supporting this legislation because we believe that roughly the right balance is being struck. It is important that this legislation is enduring that it survives the various administrations that the public know what they are looking at when they look at the votes and the appropriations and that when they look at where departmental spending is going they can understand what the purposes of that spending are how the money is being spent and so on—those members of the public who follow it that closely.It is of course relevant that these changes should be considered here in Parliament and debated fully because this is the place where we have the overview of that spending. We had our estimates debate earlier on. We have scrutinised here the Government’s spending and asked questions about moneys that have been moved around between different classes of output category. We have satisfied ourselves more or less that the Government has spent that money as it said it was going to spend it.Whether or not we think it has been spent wisely is a separate debate—that is a separate debate. It is related and it is often overlaid. Mr Chair you will have heard—I should not bring you into this debate. Members of the Committee will have heard me express political opinions views about how money should be spent whether it is being spent in the right way—and by that I mean on the right things. Here we are talking about whether it is being spent in the way that the Government says it is going to spend it—whether it is true to its word. That kind of accountability is important no matter which administration is in place because each administration will have its own view as to how money should be properly spent.This legislation changes the requirements for information about departments’ strategic intentions including the frequency of its provision. Again here I think this is about striking that same balance between accountability and how often departments have to outline their strategic intentions. Should they have to do it every year? Is that a good spend? Is it a good use of public moneys to update things when they may be entirely relevant from the previous year and the intentions may be the same? Just how much public servant time should be spent on judging whether or not the strategic intentions should be updated as opposed to delivering on the objectives of the Government of the day? This again is where a balance is being struck. We believe that in this legislation by and large that balance is being struck correctly.Specifying the financial responsibilities of departmental chief executives to make it clear that they include financial stewardship for the long term is another initiative found in this legislation that we think is good. The proof again will be in the pudding in this particular one we think. Just how we consider the long term—how any Government of the day considers long-term stewardship—is yet to be proven. There will need to be measures put in place to say whether we think that a measure is really in the long-term interests of the country or not. Governments will try to outline those measures. There will be political debate. There will be a political overlay to the particular debate on these matters and that is natural. It is the job of the elected representatives of the people to try to represent their concerns.For example on this side of the Chamber we might be concerned about rising power prices and we might take exception to Mr Key saying that Kiwis are paying about the right amount in power prices. We on this side of the Chamber simply do not think that is true so that is why we have launched our New Zealand power policy. We think that there should be a different way of organising the electricity market in New Zealand. Our objective will be different from that of the current Government which seems very satisfied with the rising power prices. Power prices do not bother it. It seems unconcerned that power prices in New Zealand keep going up and up and up so it will be concerned that the money being spent here is spent preserving the status quo whereas if the Labour Party was elected into Government it would be concerned that its policy of reducing power prices for ordinary New Zealanders—The CHAIRPERSON (Lindsay Tisch): Order!Dr DAVID CLARK: —would be put in place.That goes precisely to the point here in the legislation in which we are talking about financial stewardship for the longer term. In that particular policy example Labour thinks that stewardship of that resource in the long-term interests of the country is about delivering lower power prices to businesses so that they can develop and contribute to New Zealand whereas the Government may take a different view. That is its prerogative. That is the nature of Governments and of parties representing interests in this Parliament. But we will be having the debate and I think that is the important thing. We will be having the debate about whether the financial stewardship is in the long-term interests or not. I think that is a good thing.I congratulate the authors of this bill and those who served on the Finance and Expenditure Committee which managed to work this into the legislation. I join also in congratulating the officials. Although I did not sit on the particular committee for all of the consideration of this bill on its way through I know have met or have dealt with several of the officials before and regard them as being exceptionally good officials. I heard David Parker recount his experiences and congratulations and I want to echo those.This bill will survive administrations. It is a step forward for the public sector. It is a step forward for New Zealand. It is not going to address that fundamental question of whether or not the policies are right. The wrong policies cannot be helped. No amount of fine-tuning how departments deliver what they have been tasked with doing will address the fact that I think this Government has terrible policies on some things but it will fine-tune the Government’s ability to deliver on the policies it says it is going to deliver on. It will fine-tune the accountability measures for the Government so that it can be held to account by members of Parliament and by the general public to say whether or not it is delivering what it has said it is going to deliver. That will become obvious and then we can have the debate. I can stand up here as I am wont to do and say that this Government has the worst economic record of any Government in the last 50 years. It will be a political debate because Government members can be clear that they have done what they said they were going to do they have implemented the policies that they said they were going to implement—Hon David Parker: They didn’t say they were going to raise GST.Dr DAVID CLARK: —and have spent the money on the things they said they were going to spend it on. My colleague raises the issue of GST and says the Government never said it was going to raise GST and then it did. Unfortunately I do not think this legislation is going to solve that.Kris Faafoi: They said they wouldn’t.Dr DAVID CLARK: It said it would not raise it—quite right Mr Faafoi; you have corrected me. The Government said it would not raise GST and then it did. Well that shocked New Zealanders and it was I think the wrong thing to do.The CHAIRPERSON (Lindsay Tisch): Order! That is not part of this debate.Dr DAVID CLARK: Coming back to this particular debate this legislation will not I guess stop Governments doing the wrong thing but it will—