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:11680. Text is incorporated into the Bound Volume.]Hon DAVID CUNLIFFE (Labour—New Lynn):Firstly I would like to pay a compliment to several previous speakers—not the one who has just immediately resumed his seat John Hayes so much as the Hon Damien O’Connor and the Hon Phil Goff. Both I thought gave absolutely outstanding contributions which really nailed two key points. Mr Goff said—and I think it is a hugely important point—that there is a huge irony in this State Sector and Public Finance Reform Bill quite rightly conferring the power on the Crown to issue whole-of-Government directions but at the same time removing Mighty River Power from the State-Owned Enterprises Act by its partial privatisation and thus removing a core ability of the Crown to issue directions across the energy sector. If that partial privatisation programme continues that will be a terribly risky thing for our energy sector and flies completely contrary to the intent of this bill which we strongly support.However the Hon Damien O’Connor has raised a very important point which I would like to turn the Committee’s attention to further. This is in relation to the statement of intent provisions which are vested in clauses 178 and 179 and so forth of the bill. This was a matter of some debate at the Finance and Expenditure Committee. It was indeed a matter that we sought additional advice for and have made amendments on.Can I introduce listeners to the issue by telling a very brief war story from a time when I was one of the then economic development Minister’s team. There was a habit for draft statements of intent to arrive in Ministers’ offices for signature the day before the deadline. It may be that civil servants were watchingYes Minister  the TV series which the public thinks is a comedy members of Parliament think is a documentary and the Public Service thinks is a training video.Yes Minister behaviour is not unknown. The statement of intent is absolutely crucial but “Oh Minister this is just a routine piece of correspondence. Sign here.” is too often being heard in the Beehive.I can tell you that when it was my turn having watchedYes Minister  I rang the chief executive of a department and said: “Why don’t you pop over for a cup of tea and a chat”—this was about 6 weeks before the deadline—“because I would like to co-draft the statement of intent with you in person.” This caused a long silence on the other end of the phone. When the chief executive was departing my office after the first 3-hour session he was heard to mutter to one of his colleagues—fortunately in the hearing of one of my staff: “We’ve got a real problem with this one.” So we invited him back—[Interruption ] Yes. He would not be the only one to have reached that conclusion. But I intend to continue to be a problem for as long as I have the privilege of being in this House.Hon Lianne Dalziel: What took him so long?Hon DAVID CUNLIFFE: My colleague asks what took him 3 hours to work that out. So we had a couple more sessions. I see that the Minister in the chair the Minister of Police is smiling benignly because I think all politicians of whatever stripe have shared some of these experiences. There is always a little bit of a polite and constitutional arm wrestle in Wellington between the political layer and the professional Civil Service. We are very well served. Again I would like to record the select committee as being excellently served by our highly skilled civil servants and advisers on this bill so there are no complaints there.But it is not just National versus Labour left versus right thoughtful versus shallow or whatever you would like to—David Bennett: Oh communist versus capitalist.Hon DAVID CUNLIFFE: Sorry that you reacted to that one Mr Bennett. It was not intended for you. But the other aspect of this is always the political layer versus the Civil Service layer and it is in that context that these provisions of this bill are actually really really important.What the Civil Service has recommended is that there really is no need to have a compulsory formal contractual statement of intent updated every year. Unfortunately John Hayes who has never been a Minister swallowed that line and thought it was about just reducing paperwork. But actually there is a real risk as the Hon Damien O’Connor has pointed out. He has been a Minister and he understands that unless there are required contractual processes to nail people’s feet to the ground with hard-wired key performance indicators things can slip and that is why the statement of intent provisions were so hotly debated at the select committee.We reached a compromise which was that Ministers will have the ability to require a new or an updated statement of intent a renewed contract at any time at least annually or more frequently should they require it and that there be an obligation on the part of their Civil Service advisers to advise Ministers of that right. Although flexibility is being introduced here the obligations on the system to have clear and binding performance agreements have not been gainsaid.The incoming Labour Government will in a year or so’s time be watching this extremely carefully. If it is our experience that these clauses have weakened the contracting process with the professional Civil Service they will be reviewed. But for now we are happy to give this compromise a good chance to work. We believe it is being entered into across the Parliament in good faith and we think that there is the potential for it to be streamlined and effective. But we are not blind to the possibility of slippage as the Hon Damien O’Connor from experience has pointed out to the Committee.I think it is helpful that in new section 141 in clause 181 the content of the statement of intent is well set out. If I could direct members’ attention to that new section 141(1) places a big emphasis on strategic objectives. What we are trying to do here through this law is lift the gaze of the system from the trees to the wood from the minute to the fundamental from the operational to the strategic. We are writing here in quite clear language that Ministers and their advisers must be focused on the strategic goals. The rest of the design of this bill supports that with its interagency cooperation its multi-category appropriations its enhanced reporting requirements and its full traceability of appropriations. All of those things come together here to try to hit a sweet spot. It is a sweet spot that combines flexibility and acuity. That is our shared goal—shared between National and Labour shared between politicians and officials. That is where we are trying to aim: a modern streamlined flexible delegate-able interactive and community-integrated Civil Service that achieves more with not much more moneythat achieves better outcomes for the public and yet is parsimonious—there is a good word for a morning session—with the taxpayer’s dollars. In so doing if we can cut some red tape that would be nice too—if we can cut some red tape that would be nice too.We look forward to the Minister of Police who is an experienced Minister—I note that as this debate has hotted up the Government has put a more experienced Minister in the chair and we look forward to her sharing her experience with the Committee on the intent of this bill and how she believes it is going to work. I am sure members on this side would love the Minister to take a quick call and respond to the points that the Hon Damien O’Connor has made and if she is feeling really brave she could respond to the points that the Hon Phil Goff has made.The CHAIRPERSON (Lindsay Tisch): Order! You cannot say that.Hon DAVID CUNLIFFE: I cannot say “the Hon Phil Goff”?The CHAIRPERSON (Lindsay Tisch): No the word you said before.Hon DAVID CUNLIFFE: Brave?The CHAIRPERSON (Lindsay Tisch): Yes. That is a reflection on the member.Hon DAVID CUNLIFFE: I was emphasising her courage.The CHAIRPERSON (Lindsay Tisch): No.Hon DAVID CUNLIFFE: But I take your guidance Mr Chairperson.Hon Member: You were being snide.Hon DAVID CUNLIFFE: Never.Maggie Barry: And devious.Hon DAVID CUNLIFFE: Never. Would members opposite like to add any other adjectives to their morning pot-pourri? “We love you too Mr Lange.” Ah yes.New section 141(1) sets out the strategic objectives of the statement of intent. The Committee has debated at some length its provisions. New section 146(2) in clause 184 indicates the process that must be followed. What is really interesting about clause 184 is its degree of prescription; for example clause 184(2)(a) says: “the Crown entity must provide a draft statement of intent to its responsible Minister (i) no later than 2 months before the start of the first financial year to which the statement of intent relates;” and it even provides sub-subclauses for the cases of newly established Crown entities. That is how careful we are all trying to be to ensure that no delegated instrument of the Crown can escape the chain of accountability either for good outcomes or for the wise use of public money. The reason that this is so prescriptive about Crown entities—