Crown Entities Reform Bill

This is a debate on clauses 41 to 54 and schedules 7 to 9.

I will start where I almost ended my last contribution. I want to focus again on the initial briefing to the Government Administration Committee by the State Services Commission on 15 February 2012. The last rationale for the Crown Entities Reform Bill was that the disestablishment of the Charities Commission and the transfer of functions to the Department of Internal Affairs were estimated to save the Crown $2.432 million over 4 years. These costs did not take into consideration the proposal for the three-person independent board. But I guess I would like to ask the Minister in the chair, the Minister of State Services, whether or not that is correct. If that is the biggest rationale for merging the Charities Commission into the Department of Internal Affairs, it would be interesting to know, given that there seems to have been no evidence for these financial savings. In fact, I know that the group Te Ora o Manukau sent an email out, and the Minister would have received it, and its assertion is that it is more likely that the integration of information and communications technology systems, information, and operational functions will result in additional costs and wastage of resources already invested in the commission. No work has been done to determine the savings over the long and medium term of keeping the commission in place. So it would be wonderful if the Minister was able to provide some evidence about that.

The other point that I want to highlight from the Te Ora o Manukau communication with me is that other countries have analysed the framework of the New Zealand Charities Commission with the intent to follow New Zealand’s lead. This is an area internationally where the way we do it here in Aotearoa is best practice. So it kind of does not make sense from our part of the world why the Government is pursuing this.

We completely oppose Part 3 of this bill. We oppose the fact that communities and the community and voluntary sector organisations in our country have been ignored. When the select committee process went through, it was very interesting to look at what the Government Administration Committee actually said. After committee members listened to the submitters—and of the 43 submissions, 20 were specifically related to Part 3 of the bill, with 19 opposed—this is what the select committee said. It did “acknowledge the strong concern expressed by submitters in relation to the disestablishment of the Charities Commission,”. It did highlight that the process was interrupted with the end of Parliament, which further added to confusion about the status of the submissions. There would have been many more submissions, and many more community and voluntary organisations would have told the select committee exactly what they felt.

Not all members of the select committee were convinced that legislative safeguards in the bill would be sufficient to maintain the degree of independence the Charities Commission currently provides. Members also expressed concerns that some functions would be less accessible to the public and less transparent when transferred to the Department of Internal Affairs. That is what the select committee said, with a Government majority on the committee.

What the Labour and Green members who were on that committee said—and I want to acknowledge the Hon Ruth Dyson, who chairs that committee—was that “A review of the Charities Act is due to take place following the current review of the Incorporated Societies Act 1908.” So let the first-principles review occur. The Labour and Green members believe that the Charities Commission functions should not be transferred to the Department of Internal Affairs. No decisions on either legislative or operational change should be made until the review of the Charities Act has been completed, and the independence and integrity of the Charities Commission cannot be retained if the functions are transferred to the Department of Internal Affairs.

We made some pretty clear statements about where we stood, and it has been interesting as the spokesperson on the community and voluntary sector to talk to people in the sector about what they think about this part of the bill. When I say “the people of the sector”, I am talking about the Association of Non-Governmental Organisations of Aotearoa, I am talking about Philanthropy New Zealand, I am talking about Social Development Partners, I am talking about Bishop’s Action Foundation, and I am talking about the J R McKenzie Trust. Letters have also been written, I noted, by two international speakers who attended a Charities Commission conference, Lindsay Driscoll from the UK and Bob Wyatt from Canada. What they did was express concern at the impact of this move and the poor timing of it, considering the planned review of the Charities Act that has already begun and is due for completion in 2015.

The sector does not want this merger to happen. What the sector wants is for due process to take place, for its voices to matter, and for this Government to listen to it. My colleague the Hon Trevor Mallard will be moving an amendment that defers the introduction of Part 3 for 3 years, because that is what the sector wants. On this side of the Chamber we are very interested in listening to our stakeholders, listening to the people who are going to be most affected by this part of the bill. You know, one of the four big points that our community organisations made was that the Charities Commission was established after over a decade of discussion between the voluntary and community sector and Government, plus a detailed select committee process. There was an understanding that there would be a review of the Act, which is actually going to happen. It is scheduled to be completed by 2015. So we do not understand why, if one of the clear rationales for this bill was to save money, if that is not the case, why cannot we just let due process occur?

That is the other challenge I have for the Minister: can he please explain why we will not let due process take its course. Let us see what the best configuration of the Charities Commission might be. I mean, I could understand if this was going to save money, if this was going to be more efficient, or if this was going to provide some added value to the sector. But if we do not know that, how can we just rush this part of this process through? This is within the context of the sector not having enough opportunity to have input, and particularly in the context of the sector overwhelmingly asking you to please let the review happen. These questions I would really appreciate it if the Minister answered.

I would also appreciate it if those members of the Committee seriously considered the community and voluntary sector organisations in your communities. I mean, there are over 93,000 community and voluntary sector organisations in New Zealand, and over 25,000 registered charities. The sector is very clear about what it wants, so I just plead with you to please think about it, and I look forward to the Minister explaining, particularly that part of the rationale for the bill. We hope that, actually, tonight we have an opportunity to make sure that the voices of our community and voluntary sector—which are but one step away from the families and communities across Aotearoa whom they are helping meet the needs of—have a say in the framework around how they do their jobs. Thank you.

I am pleased to take a call on Part 3 of the Crown Entities Reform Bill. It is a bill that the National-led Government believes is important and it is part of our Government’s overall programme to improve State sector performance as a whole. These changes are part of the programme to ensure that the State sector delivers the front-line services that New Zealanders expect in the context of a challenging economic climate. Reducing the number of Government agencies will improve coordination, reduce fragmentation, and ensure that functions are delivered by agencies with greater resilience that are better able to perform in tightened fiscal environments. That applies to the Charities Commission and the new board that will sit under the Department of Internal Affairs.

I think it is important that when we consider the charities issue and the question of whether it is appropriate that charities sit within the Department of Internal Affairs we consider the parts of the bill that are designed to allay the fears of those who are concerned that, one, the charities functions that the Department of Internal Affairs will have will lack independence, and, two, that the Charities Commission’s education goals will no longer exist. The charities functions of the Department of Internal Affairs will most certainly be independent. The bill clearly outlines that. And the bill also clearly outlines that the educational functions that the Charities Commission used to hold are still important and need to be implemented.

I was listening very carefully to Louisa Wall’s speech, and the point I really picked up about her speech was her mentioning Te Ora o Manukau. I think it is good that she highlighted Te Ora o Manukau, because for those who do not know the history, I would like to let them know that Te Ora o Manukau was set up in the 1980s, and it is actually an organisation that is funded by the Ministry of Health and the Manukau City Council—well, now by the Auckland Council. The reason why I think it is important to highlight Te Ora o Manukau a bit further is that it is actually an example of an organisation that is funded by a council and by the Government, has its secretariat provided by a council, and is able to provide independent governance, independent advice, and independent advocacy. That is exactly what is being talked about in respect of this board. The secretariat of this board will be provided by the Department of Internal Affairs, it will be funded through the Department of Internal Affairs, and the chief executive will provide advice from the Department of Internal Affairs to the board, but it will still have independence. So if we talk about Te Ora o Manukau as an example, Te Ora o Manukau is very similar to what we are talking about here. So I thank Louisa Wall for raising this point about the charities functions of this bill.

I think it is important to highlight to the Committee some provisions of the bill that will help to allay the fears of individuals who have submitted on the bill. The bill elevates into the purpose clause of the Charities Act principles around education. It is important that charities are provided with assistance by the board, which sits under the Department of Internal Affairs, and the very fact that the educational elements that the Charities Commission held are being moved into the purpose clause of the Act highlights the fact that education provision is important for the board. New section 3, which is in clause 43 of the bill, highlights in paragraphs (a) and (b) the board’s responsibilities for promoting public trust and confidence in the charitable sector, and encouraging and promoting the effective use of charitable resources. The bill really does accept the point that the educational functions of the commission are important. It is highlighted right there in the purpose section. It is also worth pointing out that the Chief Executive of the Department of Internal Affairs will also have functions that he is required to implement around good governance and management promotion of charities. It is all right here in the bill.

Independence is also important, and that is also highlighted very clearly in the bill. If we are looking to ensure that the board is independent, it is right here in the bill, it is going to be spelt out in legislation, and we cannot get any clearer than that. And if we want to ask ourselves whether the Department of Internal Affairs has the ability to provide a secretariat, provide funding, and still allow an organisation to act independently, we need only to look at the Gambling Commission and we need only to look at the Local Government Commission. They are examples where organisations sit within the framework of the Department of Internal Affairs, the Department of Internal Affairs funds them and provides secretarial support, but those organisations are still most certainly able to make independent decisions, independent of the Department of Internal Affairs. There are examples where the Department of Internal Affairs is already doing what is proposed in this bill. It has expertise in this area, so we should not fear the changes that are coming. In fact, the Gambling Commission often makes decisions that differ from the Department of Internal Affairs’ advice. The Gambling Commission is able to stand up to the Department of Internal Affairs. I am very sure—

I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

I am asking the Committee to support this Supplementary Order Paper that is in the name of Trevor Mallard around Part 3 of the Crown Entities Reform Bill. The Greens particularly want to defer the Charities Commission from being absorbed into the Department—

The CHAIRPERSON (Eric Roy): My understanding is that the Supplementary Order Paper in the name of Trevor Mallard is to clause 2 of the bill. We are on Part 3.

No, it is Part 3.

The CHAIRPERSON (Eric Roy): We are on Part 3, but is there a Supplementary Order Paper?

Yes, there is.

The CHAIRPERSON (Eric Roy): My apologies.

No. 32. Can I start again?

The CHAIRPERSON (Eric Roy): The situation is that the Supplementary Order Paper applies to clause 2, but in effect it is about the commencement of Part 3. So we should actually debate it at the time of clause 2.

May I speak to—

The CHAIRPERSON (Eric Roy): Yes, you certainly can. I was just trying to clarify what we are doing.

Thank you. I appreciate that. We will be opposing this part of the bill. Last night the Minister Kate Wilkinson referred to the Gambling Commission as an example of a model of a statutory board that works well, despite being under the auspices of the Department of Internal Affairs, and she suggested that the Charities Commission would fare just as well.

However, the two are very different beasts. The Charities Commission is a stand-alone organisation that operates separately from the Government and Government departments. Since its inception, it has registered 28,000 charities. It has ensured compliance and reporting, and it monitors the activities of charities to make sure they are doing what they say they are going to do, and to make sure that they deserve the tax exemptions that are conferred on them by virtue of the fact that they have gained charitable status.

On the other hand, the Gambling Commission is an organisation that sets the gambling levy, does some regulatory work around the casinos and things like the host responsibility programme, and is an appeal body for the gambling compliance unit, which sits within the Department of Internal Affairs. The Charities Commission at this moment does much more than that. Its does compliance, and, if that function is to be lost to the Department of Internal Affairs, then we are likely to see less compliance, because there is a real struggle to investigate as it is.

The Charities Commission also develops the capacity of the charitable sector. It has taken it about 6 years to develop a solid reputation, and it is hugely effective in delivering information that enhances the sector. Any move to diminish the role of the Charities Commission is a great leap backwards. International charities law experts—and there were four of them from the UK, Canada, and Australia here last month—say that to reduce the functioning of the Charities Commission goes against all international trends. According to the chief executive of The Bishop’s Action Foundation: “The changes being proposed were premised on the mistaken belief that Government funding to charitable organisations for service provision gives it ownership of the whole sector.”

Many in the charities and community and voluntary sector believe that this bill will result in less transparency around the charitable sector. They also think that it will mean more bureaucracy and subsequently less innovation. There are well-founded fears that removing the Charities Commission from its stand-alone status reduces its ability to be independent and will result in less understanding by the Government of the sector. We want to retain the special and effective characteristics that the Charities Commission has worked so hard to achieve over the last 6 years. The amendments that the Government is wanting to put up just will not manage that.

The actions that are doing this are premature. The Act is still a fairly new piece of legislation, and it is due for review in 2015. The terms of reference are currently being discussed. Additionally, the Incorporated Societies Act is due for review. Part of that review is to plan to meet the needs of the sector in the future. In light of these changes to the Charities Commission, the bill is premature.

We need to listen to the people in the community and voluntary sector who are affected by these changes. It is a significant sector. If you include all the voluntary hours they contribute, they contribute the same amount as the construction industry to the GDP of this nation, and that is about 4.9 percent. According to Philanthropy New Zealand, $2.67 billion—none of it from the Government; all of it from the private pockets and trusts of New Zealand—was used for charitable purposes throughout the last year. That alone adds up to 1.35 percent of our GDP.

The move does not make sense in terms of timing, it does not make sense in terms of what the sector wants, and it does not make monetary sense either, because we have already heard that there will be no savings if you move the Charities Commission to the Department of Internal Affairs. That is why we will be voting against it.

Before I call the Hon Trevor Mallard, there were several conversations going that were more than in a dulcet tone, so if members wish to have those conversations they might like to curtail them or go into the lobbies.

Thank you, Mr Chairman. I thought your description of the junior Government whip was a bit unkind in that way.

The CHAIRPERSON (Eric Roy): Order! The member is a longstanding member. He knows better than to comment on the ruling of the Chair.

I do. It is very rarely I come to the defence of a damsel from the other side, and that is what I get for it.

The CHAIRPERSON (Eric Roy): You’re doing it yet again!

Ha, ha! Mr Chair—

💬 Louisa Wall: She’s a good netball player, Trevor.

Is she a good netball player?

💬 Louisa Wall: She is.

Is she? Well, the member would know. I had better not make the next comment, or I could be in very serious trouble. The Chairperson has no idea what I might have been going on to say, so I certainly will not.

I want to make it clear that the Labour Party thinks this is the most obnoxious part of this bill. I think it is fair to say that, as was indicated yesterday, there was the first part of the bill, which we supported; the second part, which we opposed; and this is the part that we very seriously oppose because what is occurring is a premature killing off of the Charities Commission, well in advance of the requirements for the review of the Charities Act.

The normal process, whenever there is good governance, is that the Government does the review before it takes the decisions, rather than take the decisions and do the review after the fact, as in this particular case. There is, I think, an attempt by the Minister—and I do not know whether it is a genuine one or one that, really, is just to try to save face, to try to promote the independence of the Department of Internal Affairs in this matter, but I think all of us know that when there is a Minister and a chief executive, it is very, very hard for there to be statutory impendence as far as the decision making is concerned. In this case, there is just massive suspicion in the sector about the objectives of the Government in this abolition.

As I indicated at the time of the second reading, no one is pretending that the Charities Commission has always done its job in a way that has been positive and lacking in bureaucracy. I think it is fair to say that, especially earlier in its time, it was too tight and it was unreasonable. Again, I have related—not all members were in the Chamber at the time—the experience that one of my colleagues had with it, with regard to the non-registration of the Anglican Church as a charity because of the lack of a wind-up clause in the constitution of the Anglican Church. I think that does get to the point of being unreasonably bureaucratic, although, again, one of my more religious colleagues indicated that perhaps that sort of—

💬 Hon Simon Bridges: Raymond Huo doesn’t even believe in God!

I think what we were talking about was the other ways of intervening in order to indicate whether or not a wind-up clause was necessary for the Anglican Church. People have a variety of beliefs in that area. I might say that the Prime Minister has been a Jew, a Christian, an agnostic, and an atheist—all of those things—when it has been convenient.

💬 Hon Jo Goodhew: And they all need a wind-up clause.

The member is criticising me, after her colleague Simon Bridges brought my colleague’s religious beliefs into the debate. The members opposite cannot have it both ways. They cannot have it both ways. Either they want members’ religious beliefs left out of it or they open it up, and the Prime Minister has four positions—four positions—on his religious beliefs. I did not know you could have four positions on whether you had a religious belief. In fact, we could have the Prime Minister in charge of the Kama Sutra of religious beliefs. Getting back to the bill—

The CHAIRPERSON (Eric Roy): Please do.

—I think if there was ever a need for a wind-up clause for the Anglican Church, it would be if the Prime Minister joined it. If the Prime Minister joined the Anglican Church, I would want to wind it up if I was the archbishop. Do they have archbishops in the Anglican Church?

💬 Iain Lees-Galloway: Yes.

If I was the archbishop, I would want to wind it up. The point that I am making is that occasionally in the past—[Interruption]

The CHAIRPERSON (Eric Roy): Order!

No, I am happy, Mr Chairman. It is a robust debate, and if the members opposite disagree and want to feed me some lines, I am happy for them to do it. I am happy for them to do it, and I do not think it is your—oh, well, Mr Chairman, I am not telling you what your job is.

The CHAIRPERSON (Eric Roy): Yes, you are. Proceed.

Mr Chairman, do not coach them, please—do not coach them. Let them make their own mistakes, Mr Chairman.

Going back to the disestablishment, there is a strong view that the legislative safeguards within the bill as it was reported back by the Government Administration Committee do not go far enough. Again, I was just beginning to commend the Minister in charge of the bill, the Hon Dr Jonathan Coleman, for his attempt by way of his Supplementary Order Papers on this part to improve the bill, but we do not think those attempts go far enough to preserve the independence.

I am certainly of the view that the Department of Internal Affairs—and I know there are some very good officials who work at the moment, and from time to time, for the department—is very much a department of what no one else wants. It is a department that has a set of functions that other departments do not really want. It is sort of the opposite to the Ministry of Economic Development under Steven Joyce, which grabs everything that might be important and might make a decision.

What is clear is that with this review of the Charities Act, or with this shift of the Charities Commission, there is yet another thing being added in to the Department of Internal Affairs that will not be particularly useful. We will therefore be working very hard in order to oppose this. I want to ask the Minister whether clause 50(1), especially paragraphs (a) and (b), is, in fact, consistent with previous legislation in this area. Is this a standard technical redundancy clause, or is it something that is different? On the equivalent employment clause, clause 50(2), again, I would like the Minister to tell the Committee whether or not that clause, especially paragraph (d), on the treatment of the period of service, is, in fact, something that is the same as has been used in similar legislation in the past.

The other question is whether, because these people currently work for a Crown entity and are not public servants, that period counts as a period of public service, even though it was in a Crown entity. The Chair is nodding. I do not think he is going to sleep. I think the Chair, at least, understands the difference, and the importance of the difference, as far as the conditions of employment are concerned.

I want to get an assurance—and I want to get an assurance both ways—that the employees are not being advantaged as a result of this change, and that they are not being disadvantaged as a result of what appears to be a change of conditions for people from being State servants who work for a Crown entity to being public servants because they come in within the core of the State Service. I know that Dr Coleman is someone who is well versed in the niceties of the, if you like, different borders and rings around the State sector and the concentric circles we have, but the Public Service is important to New Zealanders.

Mr Chair—

The CHAIRPERSON (Eric Roy): Denis O’Rourke.

💬 Hon Trevor Mallard: But he didn’t call.

I did call. The Crown Entities Reform Bill, as some others have said, is proceeding in advance of an imminent review of the Charities Act 2005.

💬 Todd McClay: Already this is better than the last one.

Well, of course. It is unwise for this bill to proceed at this time, in the face of a review that is about to come and that I hope would make a better job of reforming the Charities Act than Part 3 of this bill would do. It is a piecemeal approach, and that is very bad lawmaking. The real issue we should be dealing with tonight, as far as charities are concerned, is a new definition of “charitable purposes”. That is the one that people want to be addressed, not some mindless, unnecessary restructuring of the administration of charities, which this bill represents.

It is untrue that to disestablish the Charities Commission, as it now is, at this stage would somehow create a more robust and resilient agency in the form of what is now proposed. That is absolute poppycock. The truth is that that structure will actually weaken the independence of charities, and the result of that will be negative for the whole community. In fact, the new structure would be less robust and less resilient—totally the opposite to the purpose that this bill is supposed to achieve. The result of all this is going to be less public support for charities, fewer donations, and the Government seen to be trying to take over the charities sector. That is a more Government approach, not a less Government approach, and that is surprising from a National Party and surprising from an ACT Party, which will no doubt support this bill as well. It is totally opposite to their stated—

💬 Brendan Horan: Is he still here?

—philosophy. Well, he is still here for the time being. We will wait and see. There will be more cost to the Government from this structure, not less, because the Government will have to pick up the pieces from charities that are less robust and less able to do the things that they do for us all today. The essential issue, as many have said, is the issue of independence. The current commission is, in fact, and is seen to be, independent. To transfer so many functions to the Department of Internal Affairs removes genuine independence, and it certainly will not be seen as being independent. The new board of three people will be seen as nothing more than Government lackeys by a lot of people, and there will be some justification from that point of view. The truth is this: whatever the bill says about preserving independence means nothing. It is the practice that really matters. I have to say that some Ministers would have integrity and would abide by that principle, but I am afraid that others would not as well. Others would not. That is the problem that we have got here.

Independence is important because when you look at the purpose of the bill, you see that it is to promote public trust, but it will not. In fact, it will alienate public trust. So it is going to defeat the very purpose that it is stated to be trying to achieve. It is said that it would promote the effective use of charitable resources. I do not know really what that means, but if it means State interference in the charities sector, which does a damn good job of it right now, then I see no advantage in it at all. If in fact it is so bad, then it should be reviewed and done in a holistic way, as I said before. That is why New Zealand First will also support the Supplementary Order Paper.

The truth is that the donors and the charitable organisations themselves should decide what is an effective use of charitable resources, not some department of the Government. More ominously still, we see that the bill would seek to empower a chief executive to carry out functions. That means again more Government. It means more interference in the private affairs of people and charities. It means more bureaucracy, less freedom, less public encouragement to donate, less flexibility, and less public engagement. All of the things that you would hope the Government would be trying to achieve this bill is going to defeat, so it should not go ahead. For those sorts of reasons, this bill is not wanted by any of the charitable organisations I have had contact with, and I have had contact with quite a few. Quite a few of those who have contacted me have objected to the loss of independence of a board, they have objected to the loss of flexibility in the administration of the charities sector, and they certainly do not want more bureaucracy because that is time-consuming, it is uncertain, and it is just a hassle for them and they want to avoid that, as we all would.

Bureaucracy itself is a dead hand on something that is actually functioning very well in this country. It would mean no real fair or impartial access by charities to the system of administration. I know those in the Government departments would say that no, that is not going to be the case. I am afraid that in practice it would be. There would be no real transparency of decision making either. Decisions made under this structure will be secretive, will be made behind closed doors, typically non-consultative, and that is not what we want to see in this sector. But that is typical of Government departments, which do not reach out and contact well with the people out there who are trying to raise money and distribute it for charitable purposes. Instead, the Government should be encouraging and engaging, not regulating and controlling. A Government department culture is not appropriate for these sorts of functions, and the current commission, I think, is building a good culture for itself and is a better way to conduct the administration of the charities sector in this country than what is proposed in this bill.

New Zealand First, I am happy to say, does support charities, does heed their views, has listened, and has agreed with them. On the other hand, the Government has ignored their needs and their views, and has set itself up in opposition to the charities sector as a whole. This bill weakens the charities sector. It undermines public confidence in the independence of charities, it creates barriers of bureaucracy, it provides less transparency, less accessibility, and certainly does not have anything like the public support that a measure of this sort should have. Part 3 of the bill is bad law and it should not proceed.

I think one of the most salient comments in the departmental report on this bill, the Crown Entities Reform Bill, is comment No. 152 on page 25, for those of you who are following at home. The point is—

💬 Hon Simon Bridges: It was not.

Mr Bridges, do you know what it is? Feel free to share. He knows a lot about this bill, Mr Bridges, as a knowledgable Minister. The comment that I am referring to is as follows: “The points made in favour of retaining the Charities Commission are acknowledged. However, they do not address the Government’s wider objectives for the State sector.” In other words, when people came and said to the Government Administration Committee that the independence of the Charities Commission’s functions will be compromised by transferring them to the Department of Internal Affairs, when people came to the committee and said that the Charities Commission’s role in educating the charitable sector will be compromised by the transfer of its functions to the Department of Internal Affairs, when people came to the select committee and said that the Charities Commission should be retained in its current form until after the completion of the review of the Charities Act 2005, and when people came to the select committee and said: “We don’t believe that this will actually save an awful lot of money for the Government.”, all those points were noted.

The ministry and the officials said: “Yes, we actually think the submitters have a point, but it doesn’t fit with the Government’s so-called plan.” The Government’s plan for the public sector is just to cut, cut, cut, and in this case, regardless of what the outcomes are, to cut the number of organisations and to merge organisations, whether they fit together or not and whether the outcomes are positive or not. That is the Government’s mantra: “cut, cut, cut in the public sector”. That is the only thing the Government knows how to do. It is the most unimaginative approach that you could ever have from a Government, but that is what this Government has to say.

Even in the officials’ own departmental report they say that the submitters had good points, that the submitters’ points showed an understanding of the sector, and, in fact, that the Government should listen to what those charities have to say. The report says the Government should listen to the non-governmental organisation sector, that it should trust it, and that it should believe it. But no, because it does not fit with the Government’s mantra, then it is just going to do the opposite anyway.

It certainly does feel as though Part 3 puts the cart before the horse. It is just like we saw with the Mental Health Commission—the early termination of an organisation that still has plenty of work ahead of it. As Trevor Mallard said, ordinarily, what a sensible Government would do if it was going to review a piece of legislation or if it was going to review the way a Government department works would be to carry out that review first and then make the structural changes. But what we are seeing here—

💬 Louisa Wall: Too logical.

—is the Charities Commission. Well, it is probably too logical for this Government, I think. It is frankly just too sensible for this Government. The Charities Commission really ought to be retained until the review of the Charities Act 2005 is completed.

Again, the submitters’ points were noted, but then the point was made that it is outside the scope of the bill. Well, it does not really matter whether it is outside the scope of the bill. The bill is wrong. What the bill is doing is wrong. The proper approach here should be for the review to take place first, and then for any changes to the structure to happen after that. Submitter after submitter, charity after charity, came to the select committee to tell it that, but this Government just does not listen. It does not actually trust the charitable sector, and it is not prepared to listen to what it has to say.

Of course, apparently, this is all with a view to cutting costs. The Government has got its zero Budget coming up tomorrow—its zero growth, zero imagination Budget—so it is cutting public sector organisations in an attempt to cut costs. Well, I think the submitters who came to the select committee and said: “We’re a little bit dubious about that.” actually had a point. But I am not going to trust just those submitters; I am going to trust the very select committee that heard them. I am going to trust people like Kanwaljit Singh Bakshi. I am going to trust people like Chris Auchinvole. I am going to trust people like Eric Roy. When they performed the financial review of the Department of Internal Affairs they discovered that when Archives New Zealand and the National Library were merged into the Department of Internal Affairs, that was expected to cost $2.5 million. That merger, a similar merger to the one that is being proposed in Part 3 of this bill, was supposed to cost $2.5 million. Well, in the end it did not cost $2.5 million and it did not cost $3.5 million; it cost $4.126 million, with a further $1.751 million spent on capital assets. In case you missed that, Mr Hipkins, it was $4.126 million, with a further $1.751 million spent on capital assets, for integrating the IT systems of the departments.

This will not save the Government money; this is going to cost the Government money, and all because of its ideological—

💬 Chris Hipkins: How much did they budget?

How much did it budget? Two and a half million dollars.

💬 Chris Hipkins: So it was twice the cost.

So it was twice the cost—all up, it was twice the cost.

💬 Louisa Wall: How many consultants?

That is a good question. That is a question for the Minister of State Services to answer: how many consultants were involved in that merger, and how many consultants will be involved in this merger? It will not only cost the Government money but also destroy the functionality of the Charities Commission, and it is going to put an even greater gap between the non-governmental organisations that work with the Charities Commission and the commission.

In fact, again, the select committee—the same select committee that considered this bill, with those members from the National Party whom I mentioned just before—actually noted in its financial review of the Department of Internal Affairs that it was very concerned that the integration of the Charities Commission with the department might reduce its transparency and the independence of the Charities Commission. That is coming not just from the sector and not just from the Labour Party, the Green Party, and New Zealand First but from the select committee that considered this bill—all of the members of that select committee. I would like to hear from the members of that select committee who are in the Chamber as to how they can reconcile those different positions. They are standing up and saying that they support this bill, whilst in a report that they have tabled in Parliament they express their concerns and they express their very great concern about the additional cost that goes along with these amalgamations.

With that, I am looking forward to hearing what the Minister’s response is on that. I am looking forward to hearing what the members from the other side who have made those comments in those reports have to say, because I think there are some very concerning and pressing issues here. We are undermining the Charities Commission, and it is all for naught.

I am very happy to take a call on these changes to the Charities Act 2005. I guess in beginning these comments what I want to do is express concern about the lack of a coherent plan or strategy when it comes to the Government’s approach to State sector reform. It does not seem to have any idea what it is trying to do. On the one hand it is putting a whole lot of small entities into Government departments, and then it takes one of the biggest Government departments, the Ministry of Social Development, and suddenly it is putting a board in there somewhere that will have some sort of role in welfare as well. I am not quite sure exactly why or exactly how that is going to work. It is totally incoherent.

If the Government were to say its strategy was that it was going to do away with all of these independent entities and it was going to merge everything into the superministries, that would be a strategy. It would be coherent. It may not be sensible, you know, and we might not agree with it, but at least there would be a logical flow to that kind of restructuring. That is not what we are seeing. What we are seeing is a whole lot of contradictory decisions being made in the way the Government is reorganising the State sector. In fact, it is not putting forward adequate business cases. It made the decision to create Steven Joyce’s little empire—what are they calling it—the Ministry of Business, Innovation and Employment, without actually doing the business case. The business case came after it had made the decision to create the ministry. And what we have seen, as Iain Lees-Galloway just pointed out, is that when the Government makes these decisions, it does not do the business case adequately, and it costs more money than what it was supposed to. In the case of the merger of Archives and the National Library, it cost twice what it was budgeted to cost. And unfortunately what we are seeing in this bill is yet another decision—the decision to do away with the Charities Commission—basically being made on an ad hoc basis without a coherent plan for what the Government is trying to achieve with State sector reform.

The Charities Commission was set up by the last Government after a substantial process of engagement with the charitable sector. I think that stands in stark contrast to this Government’s approach. The National Government regards government as something that it does to people, rather than something that is done with people. And I think in the case of the charitable sector, what is actually the most sensible and logical process to follow is one that involves all of the stakeholders and gives them a say in the process. When the decision was made to establish the Charities Commission there was a process put in place to review it. That process has not yet been completed. So why undertake more structural reform, which is going to impact significantly on the charitable sector, without actually involving it in the review and having a full consultative process whereby the charitable sector can buy into whatever decision is being made?

I have to say I have monitored the Department of Internal Affairs; I sat on the Government Administration Committee in the last Parliament. I have monitored the Department of Internal Affairs, which is becoming this huge mother ship, basically, of a whole lot of agencies, departments, and entities that do not really have any relationship with one another. The Department of Internal Affairs is basically just everything else that is left over. All the stuff that no one else wants gets lumped into the Department of Internal Affairs. It is not necessarily a coherent entity. Of course, they put the Minister that no one else wants in charge of it, normally, as well. But that does not necessarily make it the most sensible decision. It does not necessarily make things more efficient, because they do not fit together. If there were logical fits for the Department of Internal Affairs it might be more efficient, but, actually, it is not necessarily.

I have some real concerns about the independence of these smaller entities that are being sucked up into the Department of Internal Affairs, though the Charities Commission is the one that is being debated in this bill. But we have seen it with the National Library and with Archives. They have statutorily independent roles that are being sucked into the Department of Internal Affairs without, in my view, strong protections for the independence of those roles. I am very concerned that if we allow the Charities Commission to be sucked into the Department of Internal Affairs we could actually undermine the charitable sector’s confidence in this process and people’s confidence in the charitable sector because there is not a coherent plan for what the Government is trying to achieve with this particular reform.

The Supplementary Order Paper being put forward by my colleague Trevor Mallard is, in my view, a very sensible one. It allows for this provision basically to be put on ice while the review that I have talked about is conducted and takes place. I think that is a very sensible thing to do. But I would actually go further and say that more than just review the Charities Commission, it actually needs to go wider than that, and what we need to see is a coherent plan for public sector reform. I think it is totally legitimate to say that there should be reform in the public sector, that we want a more citizen-centric, responsive, efficient Public Service. The Labour Party is quite happy to support change where we think that that is what is going to be delivered. We certainly do not think that is going to be delivered by this piece of legislation, because it is simply ad hoc. It is, basically, creating another little empire.

Like the previous part of the bill that I talked about when we were talking about the new Health Promotion Agency, I guess this differs a little bit from other elements of the State sector reform being undertaken by the National Government in that this is another little component part that is not going to end up in the “Ministry of Joyce”, the Steven Joyce empire. It is only a matter of time—it is only a matter of time—before this gets sucked up into the orbit of Steven Joyce’s new—

💬 Hon Trevor Mallard: No, no. It’s not attractive enough.

It is not attractive enough. No, there are not enough fun things for Steven Joyce to play with. So he is just going to leave this behind. But I do not know—I do not know.

💬 Hon Trevor Mallard: But he is beating Bill English at the Budget.

Treasury could be next to be sucked into the orbit of Steven Joyce’s little empire; it certainly would not surprise me, at all.

This is obviously quite different from other elements of State sector reform in that it is not putting more and more under Steven Joyce’s control. The Department of Internal Affairs is, I think, an agency that we need to take a step back from and think about what the department is, why it is there, whether it is a logical grouping of agencies, whether there is a more logical grouping to take place there. But we should do that by asking the question of what we are trying to achieve out of it, rather than simply having reform for reform’s sake, which is what we see from this Government. There is no coherent plan. It is not like it is out there saying: “Well, these are the principles behind our State sector reform.”, whether it is about efficiency or about making it more responsive to the public. It does not have that coherent, articulated set of principles behind the public sector reforms it is doing; it is just literally making it up as it goes along, and making contradictory decisions.

In this decision, like the Ministry of Business, Innovation and Employment decision, it is pulling together Government agencies; it is removing independence from the process. Yet in other areas it is adding independence. It is adding independence—or supposed independence—into the welfare system, for goodness’ sake, and yet it is taking it away from the charitable sector. Well, how is that coherent? How does that make any sense whatsoever? I cannot see the logic in it, and I have yet to hear the Government articulate exactly what it is that it is trying to do with State sector reform. State sector reform is costly, it is time-consuming, and when there are these constant reorganisations, mergers, segmentisation—segmentation—of different agencies—

💬 Louise Upston: New word.

—yes, it was nearly a new word—but when you are constantly—

💬 Hon Trevor Mallard: He thinks he’s John Key.

Golly, I am not John Key. That is a bit rough. But when you are constantly pulling departments apart and putting them back together again, what it does do is disrupt all of the people who work in those entities from the job that they are there to do. Because of the lack of a coherent plan for State sector reform under this Government, we are seeing that the poor people who work in, say, science and innovation, who have only just been reformed and restructured, are just finally coming to terms with that fact that they are part of this new agency, and now they are being lumped into another new agency. It is constant. The people who work in housing policy, who previously were with the Housing New Zealand Corporation, then they were yanked out of that and put into the Department of Labour, are now going to be put into the Ministry of Business, Innovation and Employment. It is symptomatic of the lack of a coherent strategy for public sector reform, which is what we are seeing in this bill when it takes the Charities Commission—particularly in this part—with no coherent plan for what it is trying to do with it, and whacks it into the Department of Internal Affairs. I think that is wrong.

I think what the Government needs to do is take a pause, take a breath, and come up with a coherent plan for public sector reform. If it actually gets it right—if it gets the principles behind it right—it might actually find that it gets more support from around the Parliament for what it is doing, because public sector reform can be a positive thing. If the principles behind it are very clear and if the benefits of it are very clear, then we might actually support it. We do not think that this has been well-thought-through. We do not think that undermining the independence of the charitable sector is a good thing, and that is the reason why I think the Government should reconsider. It should look at the amendment being put forward by Trevor Mallard, and consider putting this one on ice and getting it right.

I wish I could say it is a pleasure to take a call on Part 3. I have spoken on Part 1 and Part 2 of this Crown Entities Reform Bill in the debate today, and in both of those contributions I have spoken about the fact that reorganisation mergers in the State sector typically end up costing more than was expected, and typically fail to deliver the gains that were anticipated. That is not just a risk of doing that kind of thing; it is the usual experience. The usual experience is that, actually, the financial gain is not there, and that a critical loss of momentum in the performance of the functions of the entity occurs quite commonly in both entities that are being merged. I think that is a big problem in this case, because the only case that has been made for the change the Government intends here is about increased efficiency: a cost saving in back-office functions. Well, for goodness’ sake, the Charities Commission is a tiny entity, and so its merger into the Department of Internal Affairs has, even in the most optimistic scenario, a very, very small gain, and that gain is extremely likely to be outweighed by the cost of that change and a critical loss of momentum. So given that the potential upside is tiny, what about the cost?

Like Chris Hipkins, I am a bit confused by the Government’s inconsistent approach to decisions in this area. It seems to have a confusing attitude towards the State sector, because in this move it is taking a step that is in 180-degree contrast to its usual approach to the performance of the role of government. Ordinarily, National is the party of smaller government—trying to keep government out of the lives of citizens, and make it as small as it possibly can—and I usually disagree very heartily with that. But in this case here, we have an institution, the Department of Internal Affairs, which is at the very core of the executive part of the government sector, actually being added to by something that is on the very fringe. That is important, because what is occurring here, in contrast to other parts of this bill, is that the Government is wading apparently heedlessly into an area of constitutional arrangements.

It is of fundamental importance that we have in this country a State sector, a private or business sector, and a community sector that have separation from each other. The arrangements that govern the interfaces between those three sectors have arisen over a considerable period of time, and ought not to be done away with without very considerable thought. The third sector, or community sector—and I would prefer those terms, I must say, to the “charitable sector”, but “charitable” perhaps at least gives a hint about the history of the organisations in this sector—has come about largely independent of Government, and so Government’s interface with that sector is an issue of considerable sensitivity to those within the sector. The creation of the Charities Commission in the first place occurred through very considerable consultation with the community sector organisations. What we are about to do is disestablish that institution, which was brought about by consultation with the sector, and we are going to disestablish it in the face of consultation that shows, pretty uniformly, opposition to that change from the community sector.

It is of course appropriate for the State to have some institution that manages its side of the interface between the Government and community sectors—it is entirely appropriate—but the community sector is saying extremely clearly that it wishes that institution to be at some distance from the core State, and not right at the very heart of the core, as the Department of Internal Affairs is. That is why the community sector, in its many submissions on this part of the bill, was pretty uniformly opposed to what the Government intended to do. What we are experiencing here is a change that has, even in the most optimistic scenario, a tiny upside, and on the downside we see not only a very, very likely cost blowout but also a disruption of the basic arrangements between the State and community sectors. That is why members of this House—and I am sure it is not just us—are being exposed to the expression of considerable disquiet from the community sector.

I just want to mention a letter that I received from Greenpeace about this. I will quote a little bit from its letter, because it referenced some basic misunderstandings on the part of the Government about what it is actually engaged in here. Greenpeace said, first of all, that the proposed change illustrates a “Lack of understanding that charities are set up by ordinary New Zealanders … to address an issue they see in their community. And that such goodwill and initiatives do not require the involvement of a government department”. Secondly, it said “Most charities receive no direct funding from government, so their responsibility is to their members and their community—not government”. Thirdly, it said the involvement of the Department of Internal Affairs “is likely to dampen initiatives in the community rather than encourage them”. And, fourthly, it said “The proposed change is out of step with government’s own policy push around Better Public Services—it will instead lead to more bureaucracy and lower innovation.” That is typical of the kind of feedback that Parliament is receiving from the community sector, the sector that is to be managed and controlled by this new institution, and that ought to give everyone pause for thought. It is the wrong thing for this Parliament to be doing.

I hesitate in saying this, but I would very much like to hear from the Hon Peter Dunne in this debate, because the leader of the United Future party campaigned on one thing and, I understand, is intending to vote for this ridiculous part of the Government’s bill. I believe that the community and the community sector would very much like to hear from Mr Dunne as to his reasons for that change.

💬 Hon Lianne Dalziel: Hear, hear! We seek leave for Mr Dunne to take a very extensive call on this matter.

Yeah. Of course, the bill is intended to be split into three parts, and there will be another opportunity for Mr Dunne to vote against it at the third reading. I certainly hope he chooses to take up that opportunity.

In the meantime, this is a part of the bill with a negligible upside and very considerable downside, not only in the obvious and explicit terms of extra cost, loss of efficiency, and loss of momentum but also in implicit terms in a disruption of the constitutional arrangements between the State and community sectors. Those arrangements have come about through history and tradition and a lot of hard-won gains, and they ought not to be set aside as lightly as this Government intends.

I want to reinforce the call made by Kevin Hague for Peter Dunne to take a call in this debate. I think the Committee will be interested in his view on this and the apparent inconsistency between the promises that he has made to charities and to the funders of charities and the position that he has set out in a recent email. Earlier I spoke of contortions with regard to religious positions, but I think it is fair to say that Peter Dunne is subject to a pretty serious contortionist act in this particular circumstance.

Mr Chairman, through you I would like to ask the Minister in the chair, the Minister of State Services, about the charitable entities that are dealt with in new section 12 in clause 45, which goes to the establishment of the board and the chief executive. There does not appear to be a definition of “charitable entity”. There is a requirement for the chief executive to have meetings at least once a year with representatives of charitable entities, and those people have to be given an opportunity to ask questions around the Act and to make submissions on the operation of this Act to the chief executive. But nowhere in here is any sort of definition of the group that has to be brought together for this annual review or marking process.

My question to the Minister is whether there is a definition of “charitable entity” within the bill. I think it is fair to say that despite the very good work of the Government Administration Committee, the bill is not that well drafted with regard to references. It is a bit of a hodgepodge. It may be that I have missed the definition of “charitable entity” within the bill, but I cannot find it.

I would now like to turn to clause 46 of the bill, which is the clause that adds schedule 7 to the Charities Act. Schedule 7, of course, as you are aware, is set out in the bill, and I would like to focus, first of all, on the validity of members’ acts. No, before I do that, I really just want to ask the Committee what we think we are doing by spending $2.4 million in change to replace a commission with a board. You know, what are we actually doing here? We are going from an independent commission to a semi-independent, quasi-independent board subject to the Department of Internal Affairs. We are spending a fortune in doing it, and what for? Because what we have got is that instead of all the legislation we had about a commission, we now have a whole pile of legislation as part of schedule 7, which relates to provisions relating to the board, the chairperson, and members.

I am focusing in particular on the appointments, and then on clause 3 of schedule 7, “Validity of members’ acts”. I am going to plead guilty to not focusing carefully on this clause at an earlier stage, but seeing that we are at the Committee stage I think it is important that we do so. This is the time to get down to the nitty-gritty and to the detail. Clause 3 is around the validity of members’ acts. It says: “The acts of a person as a member or chairperson of the Board are valid even though—(a) a defect existed in the appointment of the person;”. So you can end up with a person who has been improperly appointed, and maybe even a whole board that has been improperly appointed, but it does not matter.

It just seems to me that you have got to ask a question about why we are passing a set of legislation here that sets out requirements as to the appointment of a board, which is replacing a commission for no good reason, but somehow we are giving carte blanche to the Minister to make a total mess of the appointment process, and, even if the Minister has made a total mess of the appointment process, then it does not matter what the board has done. I just ask why we are putting into the legislation some requirements around an appointment process if we are saying it does not matter, because, whatever the board does, if it is improperly appointed its acts will be valid, anyway. Especially if we look at clause 3(b), it just adds to the question.

It then seems to repeat itself, and, again, it would be good to ask the Minister in the chair to tell us what the difference is between clause 3(a) and (b) of schedule 7 taken together, and clause 4(1). Clause 3 says: “The acts of a person as a member or chairperson of the Board are valid even though—(a) a defect existed in the appointment of that person;”. Then clause 4(1) says: “The appointment of a person as a member or chairperson of the Board is not invalid only because a defect existed in the appointment of the person.” Well, you know, what is the difference? Why have we got both? Is it belt and braces, or is it things that are completely different? Is it a matter that the Minister worked through carefully? In fact, I do not think he was the Minister in charge of the bill. Maybe the Minister could tell us more about the costs of the three-person board, how much is saved, and what the cost is as a result of this transfer.

I would like to ask the Minister whether this is autonomous or semi-autonomous according to the definitions in the State Sector Act, and especially with regard to the removal of members, where clearly the Minister, under clause 6 of schedule 7, has to consult with the person concerned before the member of the board is removed from office, and must notify the removal in the Gazette. It says: “(5) To avoid doubt, the Minister may not remove a member unless the Minister has properly considered the matter and complied with the principles of natural justice.” Does that mean that the Minister can remove without cause, or does it mean that the Minister has to have cause in order to remove the person? That, I think, is a pretty important thing.

We are dealing with a group that is meant to be autonomous, and what it gets down to is whether or not the Minister, in firing someone who is meant to be independently fulfilling some functions independent from the chief executive and independent from the Minister in the actions of this board, has to give a reason. If the reason is just that the Minister does not like the decisions, then I have no doubt that the person will have cause against the Minister and there would be some definite changes as a result of that.

On the term of the appointment of a chairperson, there appears to be no ending of the term of a chairperson on death. That is a normal provision, as I think the Chairperson of this Committee knows. It is a normal provision within legislation that terms end with death, and that has not been taken into account as far as I can see under clause 8 of schedule 7 of the bill. I want to ask the Minister in charge of the bill why not. Why has the provision, which is a standard provision that clarifies that a dead person cannot chair a board—[Bell rung] Mr Chairman.

You have had your four calls.

That was a very interesting dissertation there from Mr Mallard, trying to tie the public up in all the intricacies and all the detail to make this sound like some morass. But, look, the fact is the Government Administration Committee did its work, the officials have done a very good job on this, and what we have got here is something completely consistent with the Government’s approach to public services.

Chris Hipkins talked about plans for the Public Service. What I can tell you is that under Labour there was a plan for the Public Service. It was to grow it bigger and bigger, year by year, and sink more and more money into it. And what happened? Nothing. We did not get any real meaningful outcomes that meant something to the average person in the street in New Zealand. So the Government’s approach around this has been to get public services focused on things that matter to New Zealanders. Within that we have got to provide better public services within a constrained fiscal environment.

Trevor Mallard talked about so-called inconsistency on the part of Peter Dunne around this issue. It was not like Mr Dunne did something like speak out against Skycity when he was in Parliament but support it when he was in the corporate box at the Rugby World Cup final. It was not like he did anything like that. But, no, it is one rule for people over there and one rule for the rest of the people.

When you look at what is happening overall with this Charities Commission situation, the functions are going to remain. I can understand that people in the charities sector could be concerned with any change. People do not like change, and they have had a situation that they have got used to and been comfortable with for a long time. But when you look at the wider situation, and what we have got to do across the public sector as a whole, it is about actually making some sensible changes that get some efficiencies made and get greater functionality out of what we have got there.

We will have this three-person board. The New Zealand First member down there was worried about independence. Frankly, I think some of these members have been questioning the independence of the Department of Internal Affairs. What I can tell you is the officials are very used to handling this sort of situation. They have done it with the Gambling Commission and the Registrar-General of Births, Deaths and Marriages. There is extensive experience there and the registration and the deregistration function will be handled by that three-person board. The chief executive of the Department of Internal Affairs and the staff will provide the secretariat functions.

So the key message here to the public is: “Look, the functions of the Charities Commission are going to remain. It’s just going to be within a different entity. Life will go on. Charities will continue to play a vital role in New Zealand society. Don’t be scared by these people over there.” Opposition members are trying to seize on a political issue in difficult times for them and turn it into something that scares people out there. The reality is it is quite simple. It is very consistent with the wider plan around the public sector to make sure that things are working far more efficiently, and that we are getting some outcomes that actually make a difference for people.

Mr Mallard also, I think, got very confused about costs as opposed to the benefits of this. He was citing costs of $2 million. Well, actually, they are the benefits. The cost of setting up this board is probably going to be about $400,000, so overall it is going to be a net positive. The message is that the functionality remains. We have actually strengthened the education function. We have strengthened that. This is going to end up being a better server of the original purpose of the Charities Commission overall with that strengthened education function. So there are many positives that will come out of this. Not the least, though, one point that needs to be made is that one around independence. The New Zealand First member also said: “Look, the Charities Act review is just around the corner. It’s just about to happen. Why don’t you wait for that?”. In actual fact, it is not happening until 2015. I guess that is progress in reforming the public sector New Zealand First - style. The reality is we need to act on this now.

Nothing that will happen in that review of the Charities Act will be precluded by these changes that the Government is putting forward and wanting to pass into law. So no one needs to be worried about that. The Charities Act review will still happen, but these changes will happen in advance, and, quite frankly, they are sensible changes. I can tell you, if you go out into the streets of New Zealand, people will still find that the charity sector is working very, very well. I was a bit disappointed by the New Zealand First member’s knowledge of the Crown Entities Reform Bill, but, you know, he has not been a member for that long and will have time to study this legislation at leisure in time to come. So Part 3 is actually a very good piece of legislation—

That was an interesting contribution from the Minister of State Services, and I would like to just respond to some of the points that the Minister raised. He seems to think that the concerns about this Crown Entities Reform Bill have actually been dreamt up by the Opposition.

💬 Hon Simon Bridges: That’s right.

That could not be further from the truth, Mr Bridges, because all that the Opposition members are relaying to the Government tonight are the concerns that were brought to the Government Administration Committee by the non-governmental organisations and the charitable sector that this piece of legislation will actually be directly affecting. This is about listening to the people who are working at the front line. That is all this is about—about listening to their concerns, listening to what they want to see happen in their sector, listening to the fact that they have said and acknowledged that there is a review coming up, that a review is appropriate, and that the only sensible, logical thing you do when there is a review coming up is you wait for that review, and then you sort out your structure afterwards. Form should follow function, not the other way round, but this is typical of this illogical Government, which has no sensible plan for anything. It certainly does not have a sensible plan for the charitable sector. So this is not just about the Opposition scaremongering.

I love the way the Minister says “Trust us. Trust us. There’s nothing to see here, nothing to worry about, nothing to worry about, nothing to worry about.” He kept on saying it over and over—

💬 Hon Member: “I’m here. I’m here to help.”

That is right. I do not know how many times he said, in 5 minutes, “There’s nothing to worry about.” Personally, I start to worry when Jonathan Coleman says there is nothing to worry about. Ask the navy personnel who used to man the inshore patrol vessels about being told by Jonathan Coleman there was nothing to worry about. But then Mr Coleman went on to say that the functions are going to remain; nothing is going to change. So I ask what the point is. What is the point of this structural change, which is going to cost money? It is going to cost money. The Minister says it is going to cost about $400,000. Well, from previous experience we know that means it is going to cost at least $800,000, and probably more, especially by the time all the consultants have been paid off. Yet this is all for nothing. The Minister himself said this is all for nothing—nothing is going to change for the charitable sector. So the Minister plans on spending money, he says, to make the public sector more efficient.

💬 Hon Simon Bridges: I can’t believe what I’m hearing from this member.

Sorry?

💬 Hon Simon Bridges: I can’t believe what I’m hearing from this member.

You have not been listening very closely then, have you, Mr Bridges? This is, according to the Minister, all about making the public sector more efficient, but time and time again we have seen the so-called efficiencies that the Government seems to think can be achieved by this kind of system of mergers and acquisitions within the public sector. All we see are additional costs, additional pain, jobs losses, and people at the front line having to pick up the work that was previously done by those poor back-office bureaucrats who are so much maligned by this Government, because they are out of sight and are an easy target. Maligned, sacked, and persecuted—there are a number of words that you could use for the people who actually perform the very important administrative functions of the public sector. Again, they are going to be under attack here. It is bad enough for those people, but, of course, what is even worse is that once they are gone, the people on the front line have to pick up those jobs. The jobs do not disappear; the work does not disappear. It still has to be done, but now, instead, by the people on the front line.

Actually, I would not be surprised if some of that work gets passed on to the charitable sector, so that it has to start picking up that additional work, and then, again, the Government will be able to say “Oh, we are making things more efficient, because we have actually passed on those costs.”

💬 Hon Trevor Mallard: Contracting them out.

By contracting them out—that is exactly right. How many times have we seen that from this Government?

I thought that was a very, very interesting contribution from the Minister, but as you can see, it is very, very easy to pick it apart. It is very easy to pick apart this Government’s argument on these changes, which are simply about doing what it can to appear to be making the public sector more efficient, and to appear to be cutting costs within the public sector. But, of course, what we have seen time and time again, and from experience, is that there could be nothing further from the truth.

I move, That the question be now put.

I raise a point of order, Mr Chairperson. Can I just do a check on that? I thought it was 61 to 60.

The CHAIRPERSON (Eric Roy): Well, I have counted the votes and I took particular note.

I am sorry. I apologise, Mr Chairperson.

Schedule 1