Ardern Jacinda: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeArdern Jacinda: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11671. Text is incorporated into the Bound Volume.]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?