Parker David: State Sector and Public Finance Reform Bill — In CommitteeText is incorporated into the Bound VolumeParker David: State Sector and Public Finance Reform Bill — In Committee[Sitting date: 02 July 2013. Volume:691;Page:11602. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour):Can I begin by thanking the officials. We see a range of officials and they are generally very good at the select committee but it is refreshing when we see officials who are so on top of their understanding of complex issues that they are able to engage with the select committee and not just hold a line in defence of what is proposed but engage in discussions that both educate the committee and show some movement on the part of officials at times when perhaps the policy intent is clear but there are details that need to be addressed. We found the officials—or I found the officials—advising the Finance and Expenditure Committee and providing advice to be of the highest calibre so thank you.There are a couple of issues that I want to address in this contribution. The first relates to why it was necessary to change provisions relating to Government Workforce Policy Orders. That is the language that was used in the form of the State Sector and Public Finance Reform Bill when it came to select committee. The new provisions in Part 5 of the Act as inserted by clause 42 of the bill—to insert new section 55A into the Act more precisely—provide for Government Workforce Policy Statements. These workforce policy statements are very broad in their ambit. They were described as orders and the Governor-General could by Order in Council on the recommendation of the Minister approve a Government workforce policy as a Government Workforce Policy Order as if it were something akin to a Government regulation of some kind. But then it went on to say that those orders were not a regulation for the purposes of the Regulations (Disallowance) Act or the Acts and Regulations Publication Act 1989.Labour members of the select committee were concerned that the ambit of these regulations was so wide as to allow the Government to effectively issue a directive that was akin to an order by the executive which would have enormous power across the whole of the State services but it did not need to come to Parliament in respect of it and there was no ability for people to challenge it under the Regulations (Disallowance) Act 1989. That was wrong.On the Labour side we were aware of course that the Government that was the most egregious in its use of statutory regulations in the past was another National Government under Mr Muldoon who gave himself hugely broad regulation-making powers under the Economic Stabilisation Act which allowed him by Government regulation to impose a wage freeze and he did. Incredible though it now seems he didthat by way of statutory regulation. We on the Labour side thought that the subsequent Lange Government with Geoffrey Palmer’s assistance in this regard cleaned up a lot of that silly overly broad regulation-making power and tried to make sure that the big decisions for New Zealand were taken by Parliament and not by Ministers using executive powers.We were concerned that this proposed provision allowing Government Workforce Policy Orders to be made was so broad as to allow the Government to effectively say that there will be a wage freeze across the public sector. We asked officials whether that was the case and they said that was not the intention but it did appear to be that that was the effect of the words or at least that was a concern that I had. The select committee agreed across both party sides that that was inappropriate and that the power of the executive the power of the Government to make workforce policy orders should not be that broad. Indeed it would be absurd to be giving the executive powers that broad.So the select committee has recommended to the Committee that we amend the provisions in respect of Government Workforce Policy Orders and that we start to call them Government Workforce Policy Statements rather than orders. So already you can see that they are not sounding as legislation-like as the original language proposed. They still are a statement. They still are not a regulation for the purposes of the Regulations (Disallowance) Act but there is a statement at the proposed new section 55D that says that notwithstanding that “A department must give effect to a Government Workforce Policy Statement.” the policy statement cannot “create alter or remove employment or other legal rights or obligations;”. So if there is an existing employment right that cannot be taken away by a workplace order. If there are existing legal rights or obligations on the employer—for example to embark upon good-faith bargaining—then this provision could not be used to cut across those obligations and impose a wage freeze. The Labour Party is pleased that that was picked up by submitters and that this change has been made.I want to raise another issue which I have spoken of previously and which is raised in our minority view. The Labour Party is still not convinced that it is right in principle that the Public Service is immune from liability as opposed to being indemnified for the consequences of its actions. In the Labour Party we do believe that public servants who are acting in good faith no matter how negligent they are should be protected from the consequences of civil liability for their actions. But that does not mean to say in our view that they should be immune from prosecution—sorry immune from suit is a better way to put it or immune from prosecution of the suit if I was trying to cover my own language there which was rather loose.We had submissions from the Legislation Advisory Committee that said that it is wrong in principle that the Public Service is immune from liability in civil proceedings. The committee thought the Public Service should be indemnified in its duties rather than have an immunity from prosecution. There are a couple of reasons behind that. Firstly it says: “Do we really want to live in a society that a public servant who acts egregiously”—egregiously—“cannot be brought before a court and suffer the embarrassment in a civil proceeding of being involved in the proceeding?”. The Legislation Advisory Committee—or was it the Law Commission? I forget which. I might have that the wrong way round. One of those two august bodies—Hon David Cunliffe: Law Commission.Hon DAVID PARKER: The Law Commission. Thank you David Cunliffe. It was the Law Commission that came to us and said that what we risk doing is actually creating a faceless bureaucracy and that there should be some accountability for conduct. So if conduct is egregious why in the public sector would you not be requiredto appear in court in civil proceeding as a party and suffer the consequences of that process as opposed to the consequence of the award of damages that might flow from the end and why is it that indemnity is not enough? If you look at the comparison—and I know the comparison is not perfect but there is some truth in it—where someone was in the private sector and you were acting in the course of your employment for a private employer and you made a mistake then you could be sued in your own name probably in some situations. You certainly would not have immunity from prosecution. You would at most have a right of indemnity.And in the case of the injured party in society who has had harm caused to them by an arm of the State through this public servant doing something wrong—and it could have been deliberately wrong even if it was not maliciously wrong—why is it that there is some question as to whether the private citizen who suffers that injury has got a right of action against the individual? One of my concerns in this and it was something that we explored with the Law Commission is that there is a difference between the liabilities of the Crown which is vicariously liable for the actions of its employees which are sometimes not as broad as one might think. I can see I am running out of time here.