Maharey Steve: Appropriation (Parliamentary Expenditure Validation) Bill — First Reading 
Maharey Steve: Appropriation (Parliamentary Expenditure Validation) Bill — First Reading 
[Volume:634;Page:5777] 
Hon STEVE MAHAREY (Minister of Education) 
: 
 The Leader of the Opposition made I think four points. Before I move on to rehearse a bit of the history of the Appropriation (Parliamentary Expenditure Validation) Bill that is before us today in the spirit of sound debate I thought I would answer each of those four points if I am able to. 
In the first point the member argued that there was no obligation to pay back this money. Of course he is right. There is no legal obligation for reimbursement of this money. But the Labour Party has made it absolutely and unequivocally clear that now we are in the position of having in front of us the reports of both the Auditor-General and the Minister responsible for this we will be refunding the money. So I say to the member that that is the first point. 
In the second point the member asked why Labour has been not responding in this way for some months. The reason was we have not had the Auditor-General’s report until now. We have not had the response from the Minister responsible for this funding until now. The member himself is debating this point now because we have those reports now. Even the member himself and the other parties that he has quoted as paying that money paid that money prior to receiving those reports. They now in a post hoc way have to be sure that they are paying back what they now regard as the appropriate amount of money on the basis of those reports. In other words most of this debate has taken place because of a leaked report. The real debate takes place now because we have the actual reports—the final report and the response from the Minister responsible. 
 The third point he made was that perhaps we need to look at commitments being carried out. I do not want to get into a silly argy-bargy back and forth across the House I simply say to the member that the reason he is sitting in an MMP Parliament of this construction is that politics had become so bankrupt following Governments that preceded both himself and myself it led to people saying that people do not carry out commitments—compared with the last 7 years when this Government has restored the notion of politics being about carrying out commitments. 
Fourthly the member said that the Labour Party’s knowingly spending money had led to a situation where it has now been required to pay it back. I do not think anybody in the House including the few members on his side who spent money during this time—I will vouch for them as well as everybody else—spent the money knowingly. The only people who appear to have done that I am sorry to say are those who did so in relation to the GST issue that applies to broadcasting. It beggars belief to think that someone who sat on the GST committee and who understood exactly what GST was did not understand that GST applied to broadcasting spending. That is knowingly spending the money and that is why the member’s party should pay the $115000 back. That is the one bit of knowingly spending money that really does need to be put to bed. The $115000 that was knowingly overspent on broadcasting is obviously something the member should have would have and could have known should be paid back. So the $115000 that we are constantly told is sitting in a bank vault somewhere should be paid back. The money should be paid back so that the member can move on. 
Hon Dr Nick Smith 
: The member who is speaking has raised the issue of the GST refund. My colleague and National leader Dr Don Brash has often sought leave to introduce the bill in his name. To see whether Mr Maharey’s just-stated comments are in fact true to his word I again seek the leave of the House for Dr Brash’s bill in the ballot to be introduced to lie upon the table and to receive its first reading forthwith. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has sought leave for that bill. Is there any objection? There is. 
Hon STEVE MAHAREY 
: I say to Dr Smith that there is absolutely no impediment in the way of the National Party paying that money back today. National members should put the cheque on the table today. There is no impediment at all to their paying it back. If they are so eager if the money is there they should write the cheque and pay it today. 
Let me go back to the bill itself and rehearse the story so far. This is how it goes. The Auditor-General reviewed advertising expenditure for the 3 months before the last election. What he did during that time was to broaden what we understood to be money being spent for parliamentary purposes. The Auditor-General I think from all of our points of view has applied a definition of parliamentary purposes that is different from what has been used by people for a large number of years. What that means is that although he focused only on the 3 months prior to the last election the implications of the ruling by the Auditor-General go back to 1 July 1989 when the rules were changed. Also just because the Auditor-General focused on advertising it should not lead us away from the fact that the way in which he has interpreted advertising’s purpose has raised implications for all of the spending by members of this House under that parliamentary rubric. 
So two points have been raised by the Auditor-General that we need to look at. One is the broadening of the “parliamentary purposes” definition—the range of spending that people in the House are involved in. As a result it is important for us to have a look at how we operate in the House. From the point of view of the Auditor-General we have not been operating properly. Therefore the rules need to be changed. 
An important point is what we do with all of this. How do we deal with the fact that he is effectively saying there are unappropriated expenses here? Effectively what he is saying means that expenses incurred outside the appropriation are in breach of section 4 of the Public Finance Act. According to the Auditor-General such a breach when it occurs is illegal notwithstanding any repayment of the money—that does not sweep away that fact. So we are put in the position that no matter what members might do to put it right—a National Party member a Maori Party member or whoever who is putting it right by deciding to refund the money—we will still be outside the Act. So the only legal remedy for such a breach of section 4 of the Public Finance Act is for those expenses to be validated by an Act of Parliament. Without that validating legislation no matter what people do it will remain an unlawful situation. Is this unusual? No it is not. Unappropriated expenditure is something that has been validated before. For instance last year the financial review bill included validation of $310 million relating to forecast liability under the Kyoto Protocol. 
Now what happens after that in respect of the situation with the Auditor-General and the situation in terms of the law; what happens next? This is what happens next. The report goes to the Minister responsible for that expenditure. That Minister makes a response because in this case the Auditor-General asked for a response. The response from the Minister responsible stated among other things that “in accordance with section 26C of the Public Finance Act 1989 the unlawful breaches of the seven party appropriations should be validated by legislation and that legislation should be introduced as soon as is practicable.” The Minister said that the validations should not await the normal annual validation process. 
The report of the Controller and Auditor-General and the report of the Minister responsible for the vote said of course that what we might want to do—and the Minister has confirmed that she will—is go for an external review of our institutions to have a look at what we do in the future. So we have validating legislation and we will have an external review to see where we go from here. One of the things we need to do of course is to look in particular at what “parliamentary purposes” will actually mean in the future. All of us are in a situation right now where we may well be spending money in a way that is outside this new understanding from the Auditor-General. So in the interim we need to make sure we are OK and that is why this legislation finishes in 2007—it is an interim measure. I reiterate the point I made before that there was no requirement to reimburse from what the Auditor-General and the Minister said but we have made it very clear that we will do it. 
This bill does three things. First it validates past expenses that may have been outside the scope of appropriations in Vote Parliamentary Service from 1 July 1989 until the bill comes into force. Secondly it validates any associated breach of a range of validated Acts such as the Civil List Act 1979. Thirdly it provides an interim solution for the period through to 31 December 2007 following which the work that we will do between now and then will set the scene for the future. 
That is the nature of the game here today. We are in a situation where nobody here has intentionally spent money except in relation to the GST. We have had the Auditor-General’s report which has changed the rules of the game. We have had the Minister’s response for Parliament to consider and the result of that has been for us to have validating legislation and a working party to look at what we will do post - December 2007. That is the situation we are in. 
Hon Dr Nick Smith 
: You are corrupt cheats. 
Hon STEVE MAHAREY 
: I say to Dr Smith that we are in the same situation as members in his party. This legislation is absolutely necessary but if the member is extremely excited about what he is doing today I ask whether we can have a cheque for the GST before the end of the day.