Smith Lockwood: Third Readings 
Smith Lockwood: Third Readings 
[Volume:622;Page:17952] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to the third readings of these bills I must say that this is important legislation. The public finance issues and the size of the State sector itself make this hugely important legislation. In my view the State sector in this country is too big—it is huge whichever way we look at it—and therefore its management is vastly important. During the 1980s and 1990s New Zealand led the world in reform of our State sector and public financial management. I know from my work internationally at the OECD that New Zealand was recognised as having implemented world-leading reforms and I remember one day in Washington a Deputy Secretary of the Treasury saying to me that New Zealand was an international public good in the way we had led the world in State sector reforms and reforms of public finances. 
There is no question that even with the very good reforms that New Zealand implemented in the 1980s and 1990s—reforms like the Fiscal Responsibility Act brought in by the National Government in the early 1990s and like the State-Owned Enterprises Act of the previous Labour Government in the late 1980s which at the time were excellent legislation—we accept there will always be room for improvement. The State sector is so huge in New Zealand we could almost qualify as a communist country not a market economy. It is so huge that ongoing reform of it is important. Of course it started under the last National Government as the Minister has mentioned. He pointed out to the House that the Hon Simon Upton started this work. 
But the tragedy is that the good work on improving the public financial management in this country and the management of the State sector has been hijacked by this left-wing Labour Government. The Public Finance (State Sector Management) Bill caused such concern when it was introduced into this Parliament that the Clerk of the House made an unprecedented submission to the Finance and Expenditure Committee and the result of that was such that major portions of the bill were struck out and replaced. That shows the extent to which this Labour Government ran it off the rails—it ran this vitally important improvement of the management of our State sector right off the rails and forced the Clerk of this Parliament to intervene and make a submission to the select committee. 
The problems that have emerged with this legislation—the original 500-page Public Finance (State Sector Management) Bill—are because we have a Government that wants to meddle more. There is nothing wrong with the way this legislation provides for better coordination. We do not object to some of that material in this legislation. The objectionable parts are the way this legislation in quite an insidious way—in clauses spread right throughout it—enables this Labour Government to meddle much more in the State sector. 
Let me give this House examples of what I mean about this power to meddle more and the increased control that is given to this Government. I guess this is led by the control freak the Prime Minister—that is what the public call her. It diffuses right down through this Government and we see it in this legislation. 
The first example is the ability that this legislation gives the Minister to direct the affairs of Crown entities. There is nothing wrong obviously with Ministers being involved with the board of directors in determining the statement of intent for Crown entities. Obviously Crown entities’ statements of intent should reflect the objectives of the Government. That makes good sense. There is no objection to the parts of the legislation that facilitate that. But the bits that enable the Minister to direct a Crown entity right down to employee level is objectionable. 
We know what this Government does to employees. We saw what this Government did to Kit Richards. When he did not agree with what Helen Clark wanted she drove him out of his position. This legislation gives the Minister the power to meddle far down into the organisations. It gives the Minister the power not just to be involved in setting the broad objectives and the statement of intent for Crown entities but to get involved in how they will deliver them. Again that is unprecedented meddling in the management of these entities. So that is our first concern—the increased control that this legislation gives the Minister over Crown entities when the whole idea of the reforms of the late 1980s and the early 1990s was to enable those Crown entities to be less influenced by politics and to get on with doing the job they were meant to be doing. 
The second problem that emerges and flows on from that ability for the Minister to direct is that this legislation gets right down into the employment arrangements of some Crown entities. This legislation for example incorporates blatantly racist provisions that I would argue are demeaning to Maori. I am referring specifically to clause 156 in this legislation. The clause requires certain Crown entities to specifically look at the employment aspirations of Maori. I am unaware of any other legislation that does that. It is racist. The legislation does not require the Crown entity to examine those aspirations for any other group of New Zealanders. That is racist whatever way one looks at it and it is objectionable to have it in legislation that is being passed in this House under urgency in 2004. 
What is also bad about this legislation is the prescriptive claptrap in it. Maybe if I can engage your interest in this area Mr Speaker as someone—and I know I should not bring you into the debate but just in passing—who I know has a particular interest in the English language and the structure and grammar of it. I invite you Mr Speaker to look at some clauses in this legislation that provide for Crown entities to “do an act”. 
This bill uses that phrase. It provides for Crown entities to “do an act”. I invite any member of this House to tell me what part of the English language the phrase “to do an act” comes from. Are we so legislatively hopeless today is our knowledge of English so appalling that we are reduced to putting into the laws of this land such a phrase. Clause 59 “Acts must be for purpose of functions” states: “A statutory entity may do an act under section 57 …”. I believe that one can perform an action in the English language. However I would be interested when one last heard of someone doing an act. It is jargon and should not be put into our legislation. 
Finally I shall focus on a hugely important part and that is the removal from our legislation of the Fiscal Responsibility Act. That Act has been hugely important to the economic well-being of this country. When I became a Minister in 1990 prior to the passing of the Fiscal Responsibility Act the first thing the financial controller of the Ministry of Education told me in my office on the first day was that there were things I needed to know about how the Government—this was the previous Labour Government—had been spending money illegally. 
The Hon Phil Goff was the Minister I replaced. His financial controller in the ministry wanted me to know on the first day about the Mickey Mouse stuff that he believed was illegal that he had been forced to do by the Minister the Hon Phil Goff when he was the Minister of Education. The Fiscal Responsibility Act made that kind of thing impossible. It was iconic legislation that has led this country to a period of fiscal surpluses and sound financial management. One would ask what the motives are for that iconic legislation to be wrapped up into this legislation in this way. I believe that it has a lot to do with this Government actually wanting less transparency. We know how this Government likes to hand out money to all and sundry. It is not helpful for the future prosperity of New Zealand.