Smith NickHon Dr NICK SMITH (National—Nelson): There are two substantive issues with Part 2 of the State Sector and Crown Entities Reform Bill that I wish to make a contribution on and ask the Minister some questions on. The first of those relate to the powers in Part 2 for the State Services Commissioner to be able to be exempted from some of the provisions around the Privacy Act. Here's the concern that I'd love the Minister in the chair—now Grant Robertson—to be able to respond to for me. The bill is absolutely appropriate—that is when the State Services Commissioner initiates an inquiry under the Inquiries Act we don't want them being constrained by provisions of the Privacy Act that would have people refusing to provide information for the State Services Commissioner who's acting in the public interest to get to the bottom of what often is something gone wrong. Sometimes a person may have behaved unethically maybe they've breached some law or maybe they have misused some public money. But the challenge I'd want to know from the Minister—and it does concern me more generally around legislation—is that we conveniently exempt State agencies from law with no regard for organisations outside of Parliament.So if you're running a major corporation and let's say a big organisation whether it be an organisation like Fonterra which I know my colleague Barbara has an interest in—Barbara Kuriger; I'm sorry Mr Chair—Hon Ruth Dyson: Another name-dropper.Hon Dr NICK SMITH: —or whether it be another major company. Well she's a feisty chief whip and one that we must keep onside as I'm sure members of her side of the House understand. Anyway if you've got an organisation in Fonterra and the Fonterra board is wanting to investigate it—and we could take the whey inquiry for instance—why should the provisions of the Privacy Act for that organisation fully apply to that investigation but not to the State Services Commission? The reason I raise that question is because so often when Parliament passes law we impose all sorts of requirements on the private sector like the Privacy Act and then the State sector comes in the back door and says This makes practical life too hard; we're going to fix it." rather than us actually fixing it for everybody.So my challenge for Parliament with Part 2 and the provisions of the Privacy Act is if the Privacy Act does not work for the State sector shouldn't we fix the Privacy Act for the private sector as well where there are investigations of wrongdoing rather than going down this road of conveniently just exempting the State sector from those provisions? I would suggest to the Government—and this is important because the Privacy Act is currently being reformed with a major bill before the Justice Committee. The Justice Committee is waiting for further advice from the Minister where actually in our view that would be a better vehicle for fixing this problem for both public sector and private sector agencies. For instance rather than amending the State Sector Act why don't we make provision in the Privacy Act whether you are a Fonterra or whether you are an ACC or a superannuation fund organisation to say that where an organisation is investigating wrongdoing—breaking the law inappropriately using funds—there are exemptions to the Privacy Act rather than having the quite selective approach that's taken in Part 2 of this bill?Now the second question I have is in respect of clause 12 of this bill and that relates to the important issue of the minimum standards of integrity and conduct. It is actually quite significant. What clause 12 is proposing is that the influence of the State Services Commissioner and the minimum standards of integrity and conduct don't just apply to the employees of that organisation. Whether it be the officials that are within Housing New Zealand or whether they are in ACC my point is that what this provision in clause 12 is proposing is that those standards that are set down by the State Services Commissioner now apply to board members. Now the Parliament should not underestimate how significant that is. I recite back to the history of the original intent of the 1988 State Sector Act. It was actually to enable boards of our Crown entities to operate with a lesser level of that sort of Gliding On Public Service culture and while National members totally support the application of standards of integrity and conduct what we don't want it to become is an all-encompassing State Services Commission that starts returning us to that sort of amorphous mass of an unaccountable and blurry public sector.Now I also want to specifically ask the Minister how these provisions will apply to some of the new innovations that the Government's applying. It's fascinating to read the Cabinet paper on the appointment of the Chief Technology Officer because what the Government's wanting to do is to get out of the normal State sector requirement of appointments being politically neutral and create a really odd situation where the Chief Technology Officer will be a political appointment made by the Prime Minister and the Minister for Government Digital Services and not through the normal State services process. Now the question I've got for the Minister in the chair is: will the new standards of integrity and conduct set down in clause 12 of this bill apply to that new office?It's quite interesting that the Government did not want the Chief Technology Officer to be a normal public servant to be accountable to a chief executive or to be accountable to the State Services Commissioner—that they wanted a political process. In fact the way it's described in the Cabinet paper is that the Chief Technology Officer for the Government will actually be like a one-person board. So my question for the Minister in the chair—and I'm pleased the Minister of State Services is back in the chair and is able to respond to this point. It is: will those minimum standards apply to whoever it is—and there's some controversy about it—who is appointed as the Chief Technology Officer for the Government? When I look at the list of employees in new section 57(3)(b) in clause 12 it says that yes it will apply to chief executives that it will apply to employees and that it will apply to board members but it is absent on whether this new innovation—that I think the Government has quite cynically created to be able to override the normal standards of appointment and political neutrality. It's created this new role without any of that constraint and that person is not specifically listed in clause 12.The analogy that I would make is that we have the position of the Prime Minister's Chief Science Advisor and I would expect the new codes of conduct that are being set down through clause 12 for members of boards public servants and chief executives should equally apply. Whether you are the Prime Minister's Chief Science Advisor or the Chief Technology Officer it would seem to us to be an anomaly in this provision that those specific office holders are not mentioned.The last part we just want to put a question to the Minister on in respect of Part 2 is how far will these standards of integrity and conduct go—that is we're all in favour of the issues of probity and being careful with public money and those sorts of issues being included in these codes but what we don't want is for these codes of conduct to have those arms legs and fingers of the State Services Commissioner sneaking too deeply in to it whether it be our school boards of trustees whether it be our health boards whether it be our other significant Crown entities. It would be very helpful if the Minister was able to give a steer as to how far those codes will go."