Key John: Public Finance (State Sector Management) Bill — In Committee 
Key John: Public Finance (State Sector Management) Bill — In Committee 
[Volume:622;Page:17929] 
JOHN KEY (National—Helensville) 
: 
 Part 8 is obviously a very small part of this 500-page bill. However the fact that Part 8 is small does not make it any less important. 
Simon Power 
: Belies its importance. 
JOHN KEY 
: It belies its importance and like a lot of small things in life it is easy to take them for granted and to wonder whether they are as significant as big things. 
Lindsay Tisch 
: Like Mark Peck. 
JOHN KEY 
: Well Mark Peck—yes. For instance in All Black terms people might not have taken Grant Batty who was a very small All Black seriously. 
Simon Power 
: Dave Loveridge. 
JOHN KEY 
: Dave Loveridge is another example of a small All Black who could be taken for granted. 
Simon Power 
: Gary Whetton. 
JOHN KEY 
: Gary Whetton was not small. 
Hon Dr Michael Cullen 
: Lindsay Tisch. 
JOHN KEY 
: Lindsay Tisch is small but he is not an All Black. He could be. One never rules someone out from being an All Black. 
Hon Dr Michael Cullen 
: He used to be the ball in the game. 
JOHN KEY 
: Oh I do not think one could say that Lindsay Tisch was the ball; he was the pride of the game. 
Part 8 is small but it has an interesting part to it and that is clause 238. Part 8 amends the State-Owned Enterprises Act. New Zealanders will know there are—roughly off the top of my head—17 State-owned enterprises in New Zealand and they range from power generators such as Meridian Energy Genesis and Mighty River Power those sorts of enterprises to the coal operator Solid Energy and New Zealand Post. There are a number of entities that fall within the State-owned enterprises group. 
Clause 238(2) is interesting in that it states: “Before entering into any collective agreement under the Employment Relations Act 2000 every State enterprise to which this subsection applies must consult with the State Services Commissioner over the conditions of employment to be included in the collective agreement.” 
Firstly my understanding is that that clause is new. In other words we have a situation whereby our 17 State-owned enterprises—which are large organisations many of which already have collective arrangements—are now being told that under clause 238 their power will somehow be diminished by the dead hand of Government in this Public Finance (State Sector Management Bill) that is being rushed through under urgency at 25 past 11 in the evening. So in this situation before a State-owned enterprise agrees to its collective arrangement it will have to tell the State Services Commissioner that it is about to negotiate a collective arrangement and what the conditions are within that collective arrangement. 
The first question that comes to mind is about what that will do to the process. What is it likely to do? Anyone who has been involved in collective arrangements will know that they can be quite slow and tedious to negotiate. They can be large can involve quite a number of parties and can certainly take a long long time. So one can imagine situations whereby a collective arrangement is being negotiated on behalf of one of our 17 State-owned enterprises. That process could be dramatically reduced or slowed down because there could be a situation where the State Services Commissioner did not agree to the terms of the collective agreement. 
We are now in the middle of an interesting little furore—if one likes—over Judy Bailey’s salary which is of concern to some people but not necessarily to others. 
Darren Hughes 
: Small fry. 
JOHN KEY 
: Small fry—yes. What is interesting about that scenario is that it is a debate over whether Judy Bailey should get $400000 $500000 $600000—or whether the number should have been $800000. But that absolutely is chicken feed compared to the numbers that will be paid through a highly negotiated collective arrangement. So that is the first issue. 
The second interesting issue it raises is the question of what happens in the instance where there is a dispute between the State-owned enterprise and the State Services Commissioner. Maybe the Minister might want to clarify this but I cannot see what will happen when a State-owned enterprise is wanting to negotiate its collective arrangement and cannot agree with the State Services Commissioner over the terms of that collective arrangement. 
One could imagine a situation like the incident with Television New Zealand and Judy Bailey. The board—I have to say at this stage that I have some sympathy for the board—is arguing—[ 
Interruption 
] A huge amount of its revenue may be gone but a huge amount will come from a commercial activity. As I see it on the one hand the directors are doing their job to preserve that income but on the other hand they are trying to resolve a situation that clearly for political reasons may be uncomfortable or unfortunate. That situation is not impossible to imagine.