Coleman Jonathan: State Sector and Public Finance Reform Bill — First Reading 
Text is incorporated into the Bound Volume 
Coleman Jonathan: State Sector and Public Finance Reform Bill — First Reading 
[Sitting date: 28 November 2012. Volume:686;Page:6920. Text is incorporated into the Bound Volume.] 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 I move  
That the State Sector and Public Finance Reform Bill be now read a first time. 
 I nominate the Finance and Expenditure Committee to consider the bill. 
Delivering better public services to New Zealanders within tight financial constraints is one of the Government’s top priorities. In March this year the Prime Minister launched the Better Public Services programme which is designed to create State services that are more innovative efficient and focused on delivering on what New Zealanders want and expect. Although there is much that works well in our State sector we need to perform better in securing the outcomes that matter most to New Zealanders. To achieve this State services need to be reshaped so that they are fit for purpose not just for the present but for the next decade or more. 
One hundred years ago the Public Service Act 1912 became law. Wednesday 7 November marked the 100th anniversary of a politically neutral and professional Public Service in New Zealand. A century on we take another step forward and pursue the challenges of tomorrow’s State services. This legislation is a key part in ensuring the State services continue to support a robust economy and reflect our values as a society in the next chapter of this story. 
The State Sector and Public Finance Reform Bill is an omnibus bill that strengthens the management of the State sector and public finances in New Zealand. This bill has three parts: amendments to the State Sector Act 1988 amendments to the Public Finance Act 1989 and amendments to the Crown Entities Act 2004. These three Acts are the foundation of New Zealand’s public sector management system. The Government has consulted with political parties across the House on the proposals to amend these Acts. In my view these are pragmatic non-ideological changes and I would expect that all parties will support what we are trying to do regardless of the pressure that vested interests may try to apply. 
The amendments provide a wider range of public sector management tools. These tools support and encourage Government agencies working more closely together and organising themselves around results that make a difference to New Zealand; Government agencies sharing functions and services purchasing goods and services and developing systems together in order to leverage the scale and expertise of the State services; greater financial and reporting flexibility to support agencies working together and to provide more meaningful performance information to Parliament; and stronger leadership at the system sector and departmental level to achieve the desired change in the performance of the State services. 
The proposed changes to the State Sector Act 1988 will strengthen the State Services Commissioner’s role in leading the State services. It will extend chief executives’ responsibilities to consider the collective interest of the Government and make their stewardship role more explicitly focused on the Crown’s medium and long term interests. It will add a new organisational arrangement called a departmental agency to the options available for delivering public services. This is an alternative to creating a stand-alone department or Crown entity. A departmental agency will operate within the policy and funding framework of a host department but will have operational autonomy under its own chief executive who is directly responsible to a Minister who may or may not be the same as the host department’s Minister. The bill will also improve the clarity and operation of the legislation by way of technical changes. 
New Zealand’s public finance legislation has a strong reputation internationally for being robust and comprehensive. This bill will ensure that this continues to be the case into the future. The proposed changes to the Public Finance Act 1989 will provide more meaningful information to Parliament about what the Government is spending and achieving and will reduce the compliance costs involved in producing that information. This includes shifting the default for tabling strategic information to at least once every 3 years. The changes will improve financial flexibility to facilitate innovation and different ways of working within the executive branch of Government. They will clarify departmental chief executives’ responsibilities for financial management and financial stewardship and they will specify the governance regime for companies that are currently listed in schedule 4 of the Public Finance Act. The proposed changes to the Public Finance Act do not include amendments to the fiscal responsibility provisions in Part 2 of this Act which are the subject of a separate bill. 
The proposed changes to the Crown Entities Act 2004 will bring Crown entities within the influence of the proposed new leadership arrangements across the State sector improving their ability to align with Government priorities while retaining Crown entities’ self-governing autonomy. The proposed changes will support coordination and collaboration between Crown entities and other agencies by amending the collective duties of Crown entity boards so that board members ensure their entity collaborates with other entities where practicable. They will support functional leadership by expanding the scope for the use of whole-of-Government directions. They will simplify streamline and improve the planning and reporting provisions by providing greater flexibility to provide more meaningful performance information to Parliament and by making the default for tabling statements of intent 3-yearly. They will formalise the role of the monitoring department and the ability of the Minister of State Services to request information and they will improve the clarity and operation of the legislation by way of technical changes. 
It is intended that this bill be divided into the following separate bills at the end of the Committee of the whole House stage. Part 1 will become the State Sector Amendment Bill Part 2 will become the Public Finance Amendment Bill and Part 3 will become the Crown Entities Amendment Bill. 
Delivering better public services— 
Hon David Cunliffe 
: Better doesn’t know any different. 
Hon Dr JONATHAN COLEMAN 
: Do you want to shut up David for a second? Thanks. Delivering better public services involves a comprehensive and ongoing programme of work supporting the effort and commitment of public servants. The State Sector and Public Finance Reform Bill tackles an important component of this programme of work by strengthening the current legislative framework to support better-performing State services. I commend this bill to the House.