Public Finance (State Sector Management) Bill

We are at the tail end of the Committee stage—

Simon Power: We’re only halfway.

JOHN KEY: OK, we are getting near the tail end of the evening session. I see that we have a new Minister in the chair, the Hon George Hawkins, and I am looking forward to some comments from him.

Dr the Hon Lockwood Smith: We’ll be here until Sunday morning.

JOHN KEY: We are finishing on Sunday morning—OK. I want to look at clause 148, “Power to direct Crown agents to give effect to government policy”. That is interesting, is it not?

Simon Power: That’s reassuring.

JOHN KEY: It is very reassuring. There is some flaky Government policy being developed, and we are now going to be able to roll it out to our Crown agents to give effect to that flaky Government policy for whatever we want. So let us take a moment to dwell on what sort of Government policy we might possibly see from this Government.

We have seen all sorts of things from this Government in relation to Government policy—

Simon Power: Closing the gaps was one.

JOHN KEY: Closing the gaps is the first one that comes to mind. That policy was rolled out by the Prime Minister—

Dr the Hon Lockwood Smith: A flagship policy.

JOHN KEY: It was a flagship policy. We had a situation whereby the Government’s policy was closing the gaps and many Ministers were running to their relevant Crown agents and telling them “This is the direction we want you to follow.” I wonder at what point, when the polls were not doing too well—

Simon Power: The focus groups.

JOHN KEY:—and when the focus group was making the worm look as if it were about to crash into the earth, the Government said that that particular policy was to be a policy no more and that Ministers had to run out and tell Crown agents that there was to be a U-turn and a new direction.

There are many other such Government policies, as well. For example, there was getting back into the top half of the OECD.

Dr the Hon Lockwood Smith: That was a good one.

JOHN KEY: It was a good one. They even had graphs on that one.

Dr the Hon Lockwood Smith: Signed by the Prime Minister.

JOHN KEY: Yes, there she was proudly down at the printers standing beside that thing, except that nowadays we are not allowed to talk about that, either.

Simon Power: There was the change in the speeding policy.

JOHN KEY: That is right. So it is moderately interesting that there is that power, under clause 148 in Part 5 of the Public Finance (State Sector Management) Bill, to direct Crown agents.

It is very interesting that under clause 149 the same powers exist to direct autonomous Crown entities to have regard to Government policy. I do not want to spend the whole of my 5 minutes debating the failed Government policies of this Government—

Simon Power: Go on.

JOHN KEY: I could do, but I do not want to rub salt into the wound. The Minister looks a bit tired. He has suddenly realised—

Simon Power: He’s grumpy these days.

JOHN KEY: He is a little grumpy. He used to be a lot of fun when I first came here. He was good when I first came here, and he would not have brought in a 500-page doorstop like this then. But no problems—that is fine.

Clause 149 is entitled: “Power to direct autonomous Crown entities to have regard to government policy”. The good bit comes, as it always does, when one reads on in this bill. It is really interesting; it is a bit like a fairytale. When we get to clause 150 we see that, lo and behold, Ministers have no power to direct independent Crown entities or Crown entity companies on Government policy. So the rules are that under clause 148 a responsible Minister may direct a Crown agent, and under clause 149 a responsible Minister may direct an autonomous Crown entity. But, lo and behold, under clause 150 a responsible Minister may not direct an independent Crown entity. So what is the difference between an autonomous Crown entity and an independent Crown entity?

Dr the Hon Lockwood Smith: Ask Christine Rankin.

JOHN KEY: Yes.

Pansy Wong: They can ignore Government policy.

JOHN KEY: They can ignore Government policy. I ask out of interest exactly at what point something is Government policy, because it is clearly not necessarily Government policy if the Government is still talking about it. We know for a fact that a lot of things Government members talked about are no longer Government policy—for example, getting back into the top half of the OECD—so clauses 148 and 149 are very interesting.

I now want to refer to clause 156, “Employment of chief executive”, which states: “(1) A statutory entity must not agree to the terms and conditions of employment for a chief executive … without—(a) consulting the State Services Commissioner; and (b) … the responsible Minister.” That is an interesting provision. I actually agree with that clause and I am not arguing that it should not be there, but my point is simply that when a chief executive makes a hash of something in a Crown entity, I do not want to come down to the Chamber and have the Minister tell us that he or she is not responsible.

I want to go back to a provision that I am developing a lot of anxiety about. I am referring to clause 157(2), which is to direct the Crown entity to be a good employer. Apparently to be a good employer it has to operate a personnel policy, and that policy has to recognise the aims and aspirations of Māori and their employment requirements. I do not have too much problem with the clause up to that point, but clause 157(2)(d)(iii) refers to the need for the involvement of Māori as employees of the entity. The Minister in the chair, the Hon Trevor Mallard, should take a call and say whether the employment of Māori staff does not naturally mean they are employees of that entity. It is a very strange provision that states that after Māori staff are employed they are required to be treated as employees of the entity.

Of course, it gets even more interesting. For me, coming from an Asian background, I looked to see whether the Minister or the chief executive would make sure that other ethnic minorities would also be involved as employees. Apparently not. All that clause 157(2) states is: “(d) recognition of—(i) the aims and aspirations of Māori; and (ii) the employment requirements of Māori;”—whatever they are—“… and (f) … the cultural differences, of ethnic or minority groups;”. I ask the Minister to take a call and explain to us whether that provision means that a chief executive would be labelled as a good employer if he or she were somehow to employ ethnic minority staff without involving those staff as employees. One has to scratch one’s head and ask what that is all about.

When it comes to women, the provision simply refers to the recognition of the employment requirements of women. So somehow a good employer does not have to recognise the aims and aspirations of women, but just their employment requirements. That is all very strange.

The Minister should take a call and say what the different requirements mean for those chief executives. I think that the chief executives of some Crown entities might find it difficult to make that distinction. I presume that if they employ European males then they do not have to pay attention to the aims, aspirations, and employment requirements of those males, or involve them as employees. It is all very, very strange, so clause 157, “Crown entity to be good employer”, needs a lot of explanation before people like myself in the future can conduct financial reviews of Crown entities and ask them to explain themselves when they may not be aware of those specific requirements.

Clause 174(1) states: The board of a Crown entity must supply to its responsible Minister any information relating to the operations and performance of the Crown entity that the Minister requests.” I thought that that sounded pretty fair. However, clause 175(1) states that there are exceptions when the Crown entity can withhold information on the grounds that it is necessary to protect the privacy of a person or that it will limit the ability of the Crown entity or its members, etc., “(b)… to act judicially or to carry out the statutorily independent functions of the entity,”.

I think the Minister should take a call. I am not sure whether that provision is helpful to him. After all, if we refer back to Part 4—

I want to take up exactly where my very good colleague Pansy Wong left off. Clause 157, “Crown entity to be good employer”, in Part 5 is blatantly racist legislation. I want the Minister to explain to this Committee why he expects us to pass racist legislation like that. It is an insult to Māori. I am speaking specifically with respect to clause 157(2)(d). What on earth is it about being a good employer that requires a Crown entity to recognise the aims and aspirations of only Māori? What about people of Pacific origin, and people of other ethnic backgrounds? Why does this law require a Crown entity, in order to be a good employer, to recognise the aims and aspirations of only Māori? That is blatant racism. I expect the Minister to explain that clause, because I suggest that it is offensive to Māori as well as to anyone else. Does the Minister think Māori are pathetic? What does the Minister want with regard to that clause? I think this Committee deserves an explanation, because that clause can only be described as racist legislation.

Clause 157 mentions no group of people other than Māori. Why should the aims and aspirations of Pacific New Zealanders not be relevant? Why should the aims and aspirations of people of European descent in New Zealand not be relevant to a Crown entity being a good employer? Why are only Māori referred to? I thought the Prime Minister had made the Minister in the chair, the Hon Trevor Mallard, responsible for dealing with this kind of racist legislation, yet he has brought to this Chamber legislation that perpetuates racism in our law. That is disgraceful. Why is it that in order to be a good employer, under clause 157(2)(d)(iii) Crown entities have to consider only “the need for involvement of Māori as employees”? Why do they have to consider only that? What about other New Zealanders and their need for involvement as employees? What would occur if a Crown entity were involved in other issues around, for example, Pacific Island New Zealanders? Some Crown entities may be involved in such specific issues. But, no, they will have to consider the aims and aspirations of Māori, and the need for involvement of Māori as employees. This Committee deserves an explanation of that, because we should not be asked to pass such blatantly racist legislation without explanation.

I also want to draw the Minister’s attention to clause 165. I think we deserve an explanation of what the hell it means. Clause 165, “Saving of judicial protections from liability”, states: “A Judge who is appointed as a member of a statutory entity has the same immunities and limitations or other protections from liability when acting as a member of that entity as he or she would have as a Judge.” Now, if the Minister appoints a judge to any old Crown entity, why should that judge have the same protections that he or she has when acting as a judge in a specific judicial role, when the appointment to the Crown entity may not be in a judicial role? In fact, I can think of plenty of judges who have been appointed to Crown entities where they are not acting in a judicial role. Why should those judges have the same protection as they have when they are performing a judicial role? I think that should be explained to the Parliament, if the Minister expects us to support this legislation.

Even though it is close to 5 minutes to midnight, the Committee does deserve an explanation, because this is important legislation. It affects the entire Crown entity sector. Here we have, in clause 157, blatantly racist legislation. I also think we need to be given an explanation as to what the Minister is seeking to do under clause 165 by providing to those members of the judiciary who are appointed to Crown entities the protections that they have when acting as judges. I am prepared to take my seat so that the Minister can answer before we rise.

I take the call on Part 5 of this doorstop of a piece of legislation. I want to help out my colleague Mr Key. He asked a very good question of the Minister. The question was: when can a Minister give direction to a Crown entity? It appeared from my reading of Part 5 that there were contradictions in the legislation, so I thought I would help my colleague out. I went to page 166 and looked at the definitions of statutory entities, Crown entities, and Crown entity subsidiaries. I thought that if I cleared this matter up for my colleague, he might go to bed tonight with a smile on his face, because I knew it would keep him awake otherwise.

If we look at the definition of “Statutory entities” we see there are three different types. The first is a Crown agent. I say to Mr Key that the subtle difference here is that Crown agents “must give effect to government policy”, autonomous Crown entities “must have regard”—

John Key: What’s the difference?

BRIAN CONNELL: The member should save his questions. Independent Crown entities “are generally independent of government policy”. So there is the distinction. The independent Crown entities “are generally independent”, the autonomous Crown entities “must have regard to government policy”, and the Crown agents “must give effect to government policy”. I wonder whether that has cleared the question up for Mr Key.

John Key: No.

BRIAN CONNELL: Well, I do not know how to explain it more clearly, because I have read the explanation from the bill itself. What I suggest we do now is ask the Minister, who is the architect of this legislation, to get to his feet and enlighten the Committee, at 3 minutes to 12 on Wednesday—no, it is Tuesday the 14th—so we can all go down to the press gallery party, have a drink, and relax in the knowledge that this issue has been cleared up and my colleague Mr Key can sleep well tonight.

Before the Minister does take that call, I also want to ask him to answer the question as to the difference between the entities whose definitions I have just read out and Crown entity companies. This is particularly important as to when a Minister can give direction to a Crown entity. I will pause and let the Minister take that call. Will the Minister enlighten us? No, I see that he will not. I will direct members, then, to look at clause 157, “Crown entity to be a good employer”. This bill, because it contains a whole lot of repetitious, arrant nonsense, is so heavy that it is no wonder a strong man like me can hardly lift it. We dealt with the nonsense—the nonsense I am about to talk about again in clause 157—when we debated Part 3. This clause deals with exactly the same issues we dealt with then. It states that a Crown entity must be a good employer. Well, hello, that is news to us! A Crown entity must be a good employer, and it must operate a personnel policy. Now, that is earth-shattering news. I am sure the Minister could not wait to draft that line and get it into legislation. Then we get to the issue that my colleague—

Simon Power: There’s no Minister in the chair.

BRIAN CONNELL: No Minister in the chair! I thought he was on his feet to take a call. I ask members whether the Minister was on his feet to take a call and answer my questions.

Hon Dr Michael Cullen: When the member sits down.

Simon Power: No, don’t sit down.

BRIAN CONNELL: No, I was not going to—not until the bell rang, anyway.

Debate interrupted.

Sitting suspended from 12 midnight to 9 a.m. (Thursday)