Hudson BrettBRETT HUDSON (National): I rise to continue National's support for this bill but not entirely without reservations. We certainly do agree that there is a role for the Government through the State Services Commissioner to ensure that the salaries of public sector CEOs are not disproportionate to the value of the role and indeed in the minds particularly of the public. Everything we do and say here is scrutinised by the public should they choose and the nature of the services the Government provides and the people that provide them including their employment terms of conditions and salaries are also able to be judged by the public and the public will do so. So we do acknowledge and accept that there is a role.We also fundamentally view it as important that the Government has the right person in the role of chief executive (CE) for any Crown entity—and in fact any Government agency. There could be some concern then that with the measures that will be enacted when this bill does pass—and it certainly appears that it has to now—we could end up with a certain situation where a preference or weighting is given to certain criteria that could result in something other than the very best or the best person for the job being prepared to take it. We don't prejudge that the best person for a Crown entity CE role is someone currently from outside of the public sector and we certainly don't wish to prevent someone inside the public sector who is the right person for the job from getting that job.So we don't want to create a race for the top in the sense that the public sector would be competing with the very highest-paid private sector CEs to somehow claim that only they can be the source of the right skills for that Crown entity therefore ratcheting up salaries unnecessarily or needlessly. But we do think that it should be worked in a way and operated in a way that we do get the right person for the job and if the right person for the job happens to be someone from outside the public sector currently then we should make sure that the terms and conditions of the employment don't present a barrier to that right person seeking or taking the role.Similarly if the person is within the public sector we shouldn't use these mechanisms as some sort of an artificial ceiling on the recognition of their value in taking up the role. So likewise if the right person is someone in the public sector and the role has a value in contrast to the private sector we shouldn't use this as a mechanism to suppress the potential remuneration for that current public sector individual. The way the bill has exited the committee stage it still has certain elements in it that could lead to that. We made points that for instance the criteria that are set out—such as Government expectations such as public expectations but also the commercial realities or the market realities and market similarities—are each elements that the commissioner will weigh up or can give regard to as they assess giving their consent or not to the terms and conditions of the deal put in front of them. But there is no sense of a weighting there is no sense of quantifying or qualifying how each of them will be measured against the other because they are corresponding views in many ways—two sides of an argument. So at the moment if the bill passes the State Services Commissioner can give regard to all these factors but not only do we not know what factors will get greater weighting in any set of circumstances; neither do the boards for those entities. To that degree we're all sort of shooting in the dark and I think that's unnecessary.The outcome could be unfortunate but it's actually not necessary. The House could have taken the opportunity to have made amendments to that. Unfortunately I wasn't able to voice this consideration yesterday but when we consider the actual process it has even greater relevance because the process we set out in this legislation is that first the board will negotiate with the current CE or prospective CE. They will reach agreement. They will have a deal in principle and it is only then that the board goes off to the State Services Commissioner and says Will you agree to this?" That has very real prospects that if the State Services Commissioner then says no—because the legislation doesn't require them to say "I'll agree to X Y and Z."; they simply say yes or no. If the State Services Commissioner says no then we can potentially see what was an acceptable deal suddenly being removed from the table and that candidate exited.I think the processes in the legislation could have been improved further. The absence of that weighting element of each of the criteria means the issue is exacerbated—because of the way the process works. It's too late to amend the legislation but what the Minister responsible could do—and I ask him to consider doing just this—is set very clear expectations on the State Services Commissioner; how he anticipates that the commissioner will exercise his responsibilities and authority under this revised legislation. He could for instance ask that the State Services Commissioner communicate with the board at least in advance of them entering into employment discussions how the State Services Commissioner will weight each of those criteria. That would be very helpful for the board and I think it would help to ensure that the deal that is put on the table is one that not only is acceptable obviously to the board and the candidate but will be more readily understood and accepted by the State Services Commissioner.Equally importantly I think—particularly when we look at the process of making a deal and then presenting it to the commissioner—the Minister should make it clear that it is his expectation that the State Services Commissioner will make themselves available during the employment negotiation process such that the board can tell the State Services Commissioner where the negotiations are heading and where potential points of contention may be and while the State Services Commissioner would certainly not be obliged to give a definitive ruling at that point in time the commissioner could give some additional guidance during the negotiation which would mean that once that agreement between the prospective CE and the board is reached it is far more likely that then the State Services Commissioner would be able to endorse it give their consent and we won't have a situation where a refusal leads to a very good candidate just throwing their arms up in a sense and walking away because the deal that it been agreed has been renegotiated at what would then be for them the eleventh hour. I actually think the Minister can do that and I ask him to do that very thing. It doesn't undermine the bill in anyway. It doesn't undermine the legislation but it provides a very good working arrangement in practice which would see the intent of legislation bearing out in reality the way we would all like to see.I just also make a point which I did raise with the Minister yesterday which is still a little concerning at least to me. It is around the code of conduct—not that the State Services Commissioner can create one for boards but given that the code of conduct is around integrity and behaviour as board members I still have this concern that the legislation is saying that the State Services Commissioner can create codes. So we still have the situation where the commissioner could create multiple codes—many many different codes. If a person is a member of more than one of the boards of Crown entities they could end up having to operate under multiple codes of conduct. I think again the Minister could very clearly set out an expectation to the State Services Commission that wherever possible there should be one code of conduct that accounts for integrity and the behaviour of those board members and only in situations where it is absolutely necessary—possibly because of some interaction as the Minister pointed out yesterday with a particular professional code of conduct that related to the business or the work of the Crown entity. But unless it is absolutely necessary the goal should be one code of conduct that applies across boards and across obviously board members.So the legislation is achieving a good purpose and we will and do support it. We have some regrets that it wasn't quite panel beaten into the sort of shape that we think would have added a bit of extra value but all is not lost—all is not lost. Through expectation setting the Minister can ensure New Zealand gets exactly what it deserves. We commend the bill to the House."