Martin TraceyHon TRACEY MARTIN (NZ First): Thank you Madam Deputy Speaker. I rise on behalf of New Zealand First to speak on the State Sector and Crown Entities Reform Bill. I think it's very interesting the contribution by the member that just resumed his seat Brett Hudson. So if I understand it correctly what that member is saying is that over 9 years the previous Government thought that this was an important issue and asked for a review but did nothing to get legislation into this House. I think that is what the member has just admitted of the previous Government so I thank him for his honesty in that regard.I also think that it's very interesting that the member that resumed his seat earlier shouted out that this bill was all about State control and yet if I just heard him correctly this is all their work. So I'm becoming a little confused between the shouting out that this is all about State control and somehow that it is a negative of this Government yet the member who just resumed his seat now claims credit by the previous Government for writing the legislation. And I suppose Mr Hudson that if you believe that the representatives of taxpayer citizens shouldn't be able to stop chief executives' pay from being disgustingly out of proportion with that remuneration of those very taxpayers then one might say that.I think it's very interesting that Peter Hughes made this statement on 13 February 2018: While the board has the right to make these decisions I do not believe increases of the magnitude given are warranted or justifiable in a public agency especially where the increase follows previous increases over and above my advice … There are important guiding principles that underpin the role and function of the Public Service which are relevant to chief executives' remuneration. One of those principles is the spirit of service a duty to act responsibly in the public interest and to be a good trustee of the public resources including remuneration. The second principle is around public trust an expectation that the State sector is accountable transparent fair and reasonable."The reason why this bill is here today is to acknowledge that on some level with regard to chief executives' remuneration the public has lost a level of trust. The public has become—and we believe quite rightly—cynical that these enormous salaries that are being paid the large increases that have been made over and above the recommendation of Peter Hughes and those who held his position prior to that is out of whack and out of step with what their expectation is. There are many hard-working public servants. They are in this House they are in our offices they are in our schools and our hospitals but they have not had the level of increase in remuneration that many of these chief executives have had. Nor have they however decided to pull their labour. They have continued because of that sense of public service and this is what this bill goes to reinstate.I think Mr Adrian Orr is probably one of the most recent examples of a gentleman who had another role at which he was very well paid but has made a decision to take a significant pay cut because he wants to give service as the Reserve Bank governor in March of this year. Nobody can deny how successful Mr Orr is; nobody can deny how respected he is in the work that he has done but here is a public servant who is fulfilling that level of service and we thank him for it.I also think it's very interesting—sometimes I think the world has gone mad—that the Taxpayers' Union responded to this piece of legislation by saying that the Government's announcement of new legislation to boost the power of the State Services Commissioner in setting chief executives' pay in the broader State sector is welcomed today. "Curbing [excesses of] executive pay in the State sector is something we"—the Taxpayers' Union—"have been calling for for … years. We look forward to seeing the draft legislation later in the week." I'm not sure how many of us can actually recognise or absorb the fact that the Taxpayers' Union has just put out a press release on 12 February that endorses the work done by this Government.As I go to close can I just say the amendments to the State Sector Act 1988 and the Crown Entities Act 2004 will address three other key areas. The Crown entity chief executive terms of appointment—so the term for new appointments of chief executives will be no more than five years renewable. I believe the Minister quite clearly articulated why that is something we believe needs to take place.Setting standards of integrity and conduct for Crown entity boards: the commissioner may be able to issue a code of conduct to the board members of all entities within the scope of his mandate in line with international practice. I was quite shocked to find that this was not in place as I remember debating the removal of a code of ethics from a particular profession in this country that was to be replaced by a code of conduct and it was argued by the then National Government that all professional bodies had these things and yet it appears that those that are among the highest paid at this time did not and do not have a code of conduct.Also the State Services Commissioner's powers to carry out investigations will be changed with more consistency in the way inquiries are conducted across Government.So from that perspective I think that we have traversed most of the key points. I would probably only reiterate one more time that in a recent report it was shown that the average remuneration increase for Public Service bosses for the year to June 2017 was 2 percent up from 1.3 percent in the previous year. It was 2.7 percent for tertiary education institutions and district health board (DHB) chief executives and 4.1 percent for Crown entity chief executives which were 2.8 percent and 3.8 percent above the previous year respectively. I think if people go and just have a look at that over the general pay increase and what the people who funded these chief executives gained over the same period it's quite an interesting distinction about the percentages that we've got going on here. And of course the more you get paid the larger that percentage turns out to be in dollar value. As an example the chief executive remuneration for the year June 2017: MBIE it was between $800000 and $809000; the University of Auckland between $710000 and $719000; the Police Commissioner between $690000 and $699000; Treasury between $660000 and $669000; and Waitematā DHB between $620000 and $629000.Nobody is saying that these people are not very good at their jobs. Nobody is saying that they do not perform. What this bill is saying is that there is a level of service and that it is not necessary—we do not accept the argument that good people won't come unless they are paid in this incredibly inequitable way from the people who are paying them. So New Zealand First will support the bill as it goes through to select committee. Thank you Madam Deputy Speaker."