State Sector and Public Finance Reform Bill

This has been an important and lengthy debate on a framework piece of legislation, the State Sector and Public Finance Reform Bill, that is critical to the efficient and effective functioning of our Civil Service. It may not be, at first glance, the sort of legislation that someone might pick up and find exciting to read, but it is, none the less, fundamental to how we do our job collectively of serving New Zealanders to the best of our ability and extracting the very best value that we collectively can from their hard-earned tax dollars.

This has been appropriately a reasonably wide-ranging debate, and I appreciate your willingness, Mr Chairperson, to accommodate the various issues that have arisen. Let us cast our minds back to the original process that this bill went through. The Labour Opposition opposed this bill strongly at first reading. It did so because the bill as drafted, particularly through the amendments to the State Sector Act, would have gutted the rights of civil servants—their negotiation rights, their redundancy provisions, and a host of other hard-earned employment obligations and privileges.

I am very, very happy to reiterate that as a result of a careful and good-faith negotiation with the Minister of State Services, which was led by the Labour Party and supported by the Public Service Association and the Council of Trade Unions, the Government has seen fit to introduce extensive amendments that now allow us to support the legislation, with the support of those union representatives. Let me clarify that that is not to say the unions themselves think this legislation is a wonderful thing. They still have, as we do, significant reservations about the potential interpretation of some aspects of it.

When the bill is taken as a whole, we are now in the position where we are satisfied with language like a State servant facing a transfer must be offered a position that is “no less favourable” than what they have in order not to be given their full redundancy entitlements. We are reasonably satisfied that the changes to the Government workforce orders, which now make them workforce statements, and the explicit language written into the bill during the select committee process protects and preserves all existing employment rights in that process, and offers sufficient protection to State servants, for us to be able to confer support for the bill.

There are a number of other similar changes made at the select committee, particularly in relation to the State Sector Act provisions, that have given us sufficient comfort that at this stage we can support the bill, again with caution, with some reservations, with a careful eye to how it is implemented by the current Government, and with a view to potentially reviewing it when the new Government comes in, in just 15 months’ time. But we do offer our support for the bill at this point.

Having disposed of those very serious reservations and acknowledging the good work of the Minister, the Hon Jonathan Coleman, and the then chairman of the Finance and Expenditure Committee, now the Hon Todd McClay, let us move back to the central purposes of the bill, which we commend and support. Through this legislation we will help to modernise the public sector. I think our deputy leader, Grant Robertson, made a very good point when he talked about moving from the age of the spreadsheet to the age of Google. We are seeking to build a flexible, networked, interactive, service-oriented, lean-but-not-mean public sector that will serve the interests of all New Zealanders, while being careful and prudent with the expenditure of public moneys. It has been a shared goal of both sides of this House for many years now that the Civil Service would be able to move towards a more collective enterprise, in the best sense of the word, and that agencies of the State, whether they be Government departments, Crown entities, or contracted agencies, work together to achieve common goals. And it has not been that easy. Managing for Outcomes has come and gone. The Government is having real trouble, I understand, with its Better Public Services programme, where at least half of the objectives, soon to be revealed, are not on track.

It is not that easy to bring Government departments together in common goals, and this legislation will, we hope, make a real contribution in that regard. There are several ways in which it does that. The first is the multi-category appropriation. That allows agencies to receive a common funding pool across traditional silos. As introduced, the bill sacrificed the specificity and accountability requirements in the name of that cooperation. As amended at the select committee and with the further useful advice of our high-calibre officials, there is a better balance because we now have full traceability of funds from year to year, including when they have changed the jargon from output class to output class, and including where they move to a multi-category appropriation as provided for. We are now comfortable that we have not sacrificed the accountability, to get the flexibility.

Another aspect of trying to build a more flexible Public Service has been to make somewhat less prescriptive the provisions around a statement of intent. For the public, the statement of intent is one of the key contractual documents, alongside a chief executive’s performance agreement, by which Cabinet and the political layer, which is the people’s representatives, bring the direction of the Government of the day to the Civil Service, and they are absolutely essential documents. What is important is that in this bill, although the Government has sought to reduce the requirements to make that an annual process, the Finance and Expenditure Committee has reinserted the option for Ministers to make those statement of intent updates annual. In its commentary the select committee emphasised that civil servants need to make clear to Ministers that that annual update provision or ability still exists because we do not want to lose accountability in the search for flexibility.

As a number of my colleagues have noted, there is a certain irony in the Government moving to introduce legislation that provides for “whole-of-government directions” at a time when it is busily seeking to privatise part of our energy system and to gut the State-owned enterprises portfolio. Why is that ironic? Because the power to direct those crucial entities—and energy security is going to be one of the key strategic issues facing our future—is already there in a fundamental piece of legislation. It is called the State-Owned Enterprises Act. But when Mighty River Power, for one, is partially privatised, it is no longer in law a State-owned enterprise, so the power to direct is rescinded. The obligation of no surprises is rescinded.

Look how important that was in the case of Solid Energy, a huge black elephant—now a white elephant—on the Government’s books. It should have been even more prescient in its advice to Ministers, and Ministers should have been even more hands-on to avoid the blood bath of taxpayers’ money that has occurred in relation to that entity. But to make those rules looser by partially privatising the entity, as was announced—even though the Government now cannot, because it is such an embarrassment—while introducing this responsible legislation to allow for whole-of-Government directions, I think the public will get the irony in that situation. I see members opposite kind of shuffling, looking at their feet. They have got their heads down. That is the traditional reaction when you know you are up the legislative creek without a paddle.

But enough on that; back to this bill. This is responsible legislation. I am very pleased that it has the overwhelming support of Parliament, and that there has been a good-faith negotiation process between the Opposition and the Government. That has, I think, in everybody’s understanding resulted in a better piece of legislation. Is it perfect? No. Will there be implementation issues? Yes. Will the incoming Labour-led Government watch it like a hawk? Of course it will. Will it be prepared to fine-tune it with further amendments, if necessary? I am sure that the future Government will want to do that, if required.

We believe that this is a step forward, not a step backwards, now that the employment rights of civil servants have been protected. It is a step forward because it gives more flexibility. It is a step forward because it confers a greater sense of common purpose. It is a step forward because it allows for flexibility and includes some limited forms of delegation of powers and functions to interactive work with the community.

I am really pleased to take a call on these final clauses in the Committee stage of this bill, the State Sector and Public Finance Reform Bill. I would like to reiterate some of the things that have been said by my colleagues and put the emphasis on the importance of transparency and accountability in this bill. I certainly think that the Government, through the negotiations that have occurred around trying to come up with a solution to the problems that were obviously apparent after the first reading of this bill, has seen an enormous amount of hard work that has gone on, and I certainly think that the members on this side of the Chamber have put the Government on notice around how this bill is actually implemented and how it will actually work.

We certainly do want legislation in this area that is geared towards a flexible, interactive Public Service. It certainly is the age of Google. Technology is driving so many of the changes that we are seeing in legislation. We certainly need the joined-up-ness between Government agencies and the directions that Government agencies are receiving from Ministers, but along with that comes the absolute importance of the transparency of those instructions and changes and the accountabilities back to the public. I have been looking closely at some of the provisions throughout the discussion on this bill and I remain with some serious concerns around how those transparencies and accountabilities will actually be delivered to the public of New Zealand.

I do want to say that it is important that the work that has been done by the members on the Finance and Expenditure Committee—in particular, the Labour members on the select committee—on trying to come up with real solutions to get this piece of legislation through the House should be commended. We know, as there has been much discussion, that this bill was heavily amended by the select committee. There were some very tough negotiations on that committee around trying to make this a better piece of legislation, which is, ultimately, what the work of this House should be about.

I just want to reiterate some of those things that have resulted from that, because we support—and absolutely support—an enhanced focus on the need to deliver value for money for taxpayers’ funds. We absolutely support the principle of developing and coordinating leadership across State services and the intent of amending the Public Finance Act to provide for those multi-category appropriations. I know my colleague David Cunliffe has talked about that at length. But clarifying and enhancing the expenditure tracking and accountability within revised budget and performance management documents is also so important, which is why there were so many problems with this bill.

The progress made during the select committee really has been around those conflict of interest provisions, which were strengthened around where the delegation of powers were proposed for any State Service entity, and improvements around the provisions for strategic intentions through those statements of intent. I would just like to say with regard to those statements of intent that the potential for conflict between the statements of intent, the ministerial expectations, and the actual legislation on which they are based is of absolute importance. It is of absolute importance that the people of New Zealand can be reassured that those conflicts are able to be managed and are transparent, and that officials are able to provide advice—and have to provide advice—where there are conflicts.

We have seen countless occasions where the way an entity is operating appears to be in conflict with the legislation that it is actually based on. The Television New Zealand Act is one of those very good examples. Before the Television New Zealand Amendment Bill actually went through this House, the way that the entity was operating was in direct conflict with the legislation upon which it was based because of expectations that had been put on it from Ministers. It was therefore operating completely on a commercial basis, which was in direct conflict with the legislation. We have to ensure that that does not happen and that people then do not start to believe that Government is operating its entities in conflict with the legislation upon which they are based. Those things and those accountabilities are absolutely critical.

The full traceability of those votes and appropriations have been clarified in the provisions relating to Budget documents, including where the title of appropriations and the output and sub-output classes have changed, and where those multi-category appropriations have been instituted. Another improvement has been balancing the efficiency objectives within a broader notion of effectiveness, which includes the procedural and substantive fairness considerations. We do support this bill. We have serious reservations that I know we have outlined at length in this Chamber over the last 12 hours or so, and the reason why we have outlined them is the nature of those reservations. They need to be on the record so that if it is demonstrated through the implementation of this legislation that there remain substantive issues, we can come in as the next Government and change them and have the mandate to change them because we have outlined what our concerns are.

We remain concerned that the protections in redundancy provisions relate only to the Public Service. We remain concerned that the delegation of powers from the core State sector to non-State partners in implementing agents is constructed too broadly. We think that close monitoring will be required to ensure that this practice is used only in circumstances where benefits to the public clearly outweigh the costs and the risks. We remain concerned that immunity from suit, rather than indemnity, is being afforded, and we note, as we think the Government should note, the Law Commission’s concerns in this regard.

Amendments to the Public Finance Act that will assist in removing barriers to greater cooperation between public sector entities need to be balanced in practice, with greater clarity of the financial accountability documents.

So returning to those statement of intent processes, we know that it is important that there is a clear contractual arrangement, a relationship between the Ministers and public sector executives. We know that this is a crucial link in the accountability chain to Parliament and the public, but the reduction of the frequency of required statement of intent updates to 3 years risks diluting that ministerial accountability for the agencies. We absolutely believe that it is important that we keep a close eye on how that plays out.

The amendments to this bill, we believe, have given us cover to provide support. We know how important it is to get cross-party agreement on these sorts of pieces of legislation. They are absolutely foundational pieces of legislation for the ability to run Government and to run accountability right across Government. But we remain absolutely vigilant on a number of these issues and will be keeping a close eye on how they play out.

As colleagues have said, Labour actually opposed this bill, the State Sector and Public Finance Reform Bill, at its first reading. I think it is significant that we are now in a position to support its passage through the remaining stages in the House, and, speaking to clauses 1 and 2, I think that it is an important point to place on the record of the House. It was really picking up the point that Clare Curran ended on, and I refer to the commentary from the Labour minority view, where we stated that the amendments to the bill provide sufficient protection for Labour to be able to support it as a whole, acknowledging that bipartisan consensus on framework legislation of this type is desirable where broad agreement can be forged. Can I just say that that is really important. I think it is absolutely vital. If we can get cross-party consensus on framework legislation, then we end up having debates about the detail, as it were, rather than about the most fundamental aspects. If we can get agreement across party lines on the framework, then, in fact, that is good for New Zealand, it is good for certainty, it is good for business, and it is good for the community as a whole. So that is why I am very pleased that we are able to support the passage of the legislation.

But I have been asked to display one more time why this could not come soon enough. Perhaps the Minister in the chair, the Minister of Conservation, would like to cast his eyes upon this document, because this diagram is the Canterbury earthquake recovery. It is actually pretty obvious what is going wrong with the Canterbury earthquake recovery when one looks at this web of particular agencies that do not all connect with each other and certainly do not all connect with the people.

When I was the Minister for Small Business and the Minister of Commerce, I had undertaken a quality regulation review. What I came out with was a very simple phrase, because—and colleagues and Ministers on the other side of the House will know this as well—we do think in silos because we are responsible for an individual silo. We are responsible for the Department of Labour or we are responsible for foreign affairs or we are responsible for a different component of Government. But when Government actually sees itself as all these individual arms, that is not how the public sees them. So when business looks at the Government, it sees the Government and it says: “Why on earth is the Government asking me for exactly the same information we provided it with last week?”. That is because the public do not see the Inland Revenue Department, they do not see ACC, they do not see all these individual departments and Crown entities—all of them covered by this legislation. They do not see individual departments and Crown entities; they see the Government, and they ask it why it is putting them through the mill, yet again. The simple solution that I came up with, which I think is a very simple solution, is to ask why the many arms of Government cannot extend a single hand to business. Why can they not?

In the Canterbury earthquake recovery, why cannot the many arms of Government extend a single hand to the people? I personally think actually that in this legislation, as we have debated it, that has become crystal clear. That is exactly what we need in Christchurch. So I actually think we are on the same page. We actually do understand that the framework has to be across these silos. It has to break down all of the silos. But in Christchurch what has become crystal clear is that it is not just with the Government departments and the Crown entities; it is also all of the organisations that they interact with as well, and in Christchurch it is the councils that have to have the silos broken down. So what we have got in Christchurch is we have got the council with its own silos, we have got the Government with all of its silos, and we have got the Canterbury Earthquake Recovery Authority, which looks like it is the overarching organisation because its purpose is to coordinate, facilitate, and direct all of the issues that relate to the recovery. [Interruption] Well, the Canterbury Earthquake Recovery Authority is in there, but it is only one of the many things. All of these squiggly lines tend to lead to the Canterbury Earthquake Recovery Authority, but the Canterbury Earthquake Recovery Authority does not have any overarching authority, and that is the problem.

The Minister for Canterbury Earthquake Recovery does not know what the Minister for Building and Construction has been discussing. That has been obvious over the last few weeks. But there are so many other things. The Minister for Canterbury Earthquake Recovery did not know that the Minister of Education had not consulted with the schools before announcing the massive shake-up of the schools. It is not knowing what the left hand and the right hand are doing, it is not knowing what the impact that will have on the recovery of Christchurch, that is the fundamental flaw. All of that can be fixed if we have our focus on the framework, and the framework cannot—cannot—be like this one. We cannot have all of these different lines operating in this particular way. We actually have to have the whole thing as a coordinated whole and meeting the objectives of the recovery.

I think that Canterbury has served to provide a very clear example of why this legislation, and the approach that this legislation is adopting, is so needed. The cross-agency breaking down of silos is absolutely fundamental, but I think that you also have to think about the silos that exist within the Government departments themselves. In the Canterbury earthquake—

💬 Hon Trevor Mallard: Especially “MoBIE”.

Yes—the Ministry of Business, Innovation and Employment. I have never understood why the Government decided to put the Department of Labour into a brand new, huge, expanded organisation, after the two reports—

💬 Hon Trevor Mallard: It’s because of Steven Joyce.

Yes, but the Pike River coal mine tragedy report would have actually said: “No. Hold off. Do not put the Department of Labour in there right now. It might be the right thing to do later, but do not do it now.” The second group that you would not put into the Ministry of Business, Innovation and Employment right now is the Department of Building and Housing. The royal commission report on the building collapses in Christchurch—it is just crazy to have all of these different departments come together.

I think this is the fundamental problem: the Government thinks that by putting the departments together, it solves the silo problem. It does not. Silos exist within Government departments. All that has done is made the silos less obvious, but they exist all the same. If I use as an example the Canterbury Earthquake Recovery Authority, which has been set up for a single purpose, it is riddled with silos. It has got one silo for economic development, it has got one silo for the central city development, it has got one silo for social recovery, it has got another silo for the built environment and the natural environment, and it has another one for cultural matters. So what it has done is manage to create silos in a brand new department, where it actually could have ensured that there were no silos to have to break down. That is the problem that we have got in Christchurch. This legislation—

💬 Hon Trevor Mallard: What happened to the doctrine of the indivisibility of the Crown?

The indivisibility of the Crown?

💬 Hon Trevor Mallard: What happened to that doctrine?

Well, I know it is a doctrine, but I do not know how it is relevant to this.

💬 Hon Trevor Mallard: Well, the silos.

Yes, I know, but the silos—

💬 Hon Ruth Dyson: Trevor will take a call.

💬 Hon Trevor Mallard: I will.

Oh, Trevor is going to take a call to explain the doctrine of indivisibility.

I actually think that one of the problems that we have had, and I think Ruth Dyson could also comment on this, is when you have got reporting lines that do not allow for the money to flow with the decision making. For example, back in 2000-and-something, we managed to get a high and complex needs formula, which had funding directed to it from health, education, and Child, Youth and Family, and we got the three together. It was a massive change. We broke down the silos. How long did it take to write the rules for access to the fund? It took 2 years—2 years—to write the rules, and that is the problem. We have got to fundamentally change the culture, and the cultural change will come about if we start to think about those whole-of-Government outcomes that are so fundamental. Christchurch, I think, would be a classic case, where we could start right away. We do not actually have to wait for the legislation to be passed to do the right thing. Canterbury is waiting for this mishmash to be resolved, and—

There have been several points raised by the Hon Lianne Dalziel that I wish to pick up on. The first amongst them is the shambles that is “MoBIE”—the Ministry of Business, Innovation and Employment. She spoke about how the Department of Building and Housing would appear to be out and the Department of Labour would appear to be out. It is true also that health and safety is something that needs specific attention. This Government is talking about pulling that out. It has folded things in; it is pulling them out. There is a huge amount of cost that has gone into that particular organisation over recent years.

Minister Joyce has, until now, avoided answering questions on the costs of restructuring and rebranding the Ministry of Business, Innovation and Employment. It is an organisation that is not performing terribly well. Mr Joyce himself was unable to answer questions before a select committee recently in a public session on the costs of restructuring in the organisation. We had the Ministry of Research, Science and Technology and the Foundation for Research, Science and Technology, or “MoRST” and “FoRST”, as one limb in there. They got divorced, and then we had the Ministry of Science and Innovation, which could not reconcile them, and so on and so forth. There are a bunch of departments shoved in together, with no seeming logic to it, and they are not performing well. There are ones that should come out. It is a shambles, what is going on in the Ministry of Business, Innovation and Employment, and we are only just touching the surface of it.

This bill, the State Sector and Public Finance Reform Bill, is one that we will, of course, be supporting. The title could be different. To bring it into the title and commencement clause discussion, we could call it the “Ease of Good Government Bill”. We are delighted that the Government has seen fit to include changes that were put through in the Finance and Expenditure Committee at the behest of Labour and the State sector unions that have averted disaster for Government workers, who were set to lose their redundancy entitlements and employment rights. We are pleased that members of that committee could work together to ensure that those things did not happen. We voted against this bill initially and now we are supporting it, and that is as a result of that committee taking a longer view and saying that this legislation needs to survive different Governments. So those things have made this a better bill.

We could also call it the “Can’t Stop Bad Policy Bill”, because no matter how good the regulations are and how smoothly the apparatus of Government works, you cannot account for bad policy. You just simply cannot. Nobody can—not even you, Mr Chairperson. If the Government wishes to push bad policy through, it can do that despite legislation. It can pursue anything it wants to. We know, for example, that in the electricity sector power prices are going up and up and up and up. John Key says that Kiwis are paying about the right amount for power; most of New Zealand disagrees with him, I think. This Government is pursuing that same strategy with the same electricity sector that it has always had, with prices continuing to rise. That is something that Labour thinks we need to do something about.

This kind of bill will actually enable good policy to be put in place more cleanly. It will mean that the apparatus of Government is not tied up with unnecessary reporting or overly burdensome reporting. It will, hopefully, be more effectual in reporting the kinds of things that the public needs and wants to know about. The Government will be held accountable to the public in an appropriate way, with a minimum burden on officials to deliver accountability mechanisms, but an appropriate one. It is a balance, as I have said earlier. Again, we could call it the “State Sector and Public Finance Reform (Providing Balance) Bill”. We could put brackets in there, and that would be an alternative name.

I think that some of these names I am discussing will be considered by the Minister in the chair, the Minister of Conservation, who I can see is deep in thought. I would welcome the Minister in the chair’s views on the appropriateness of these names as he thinks them over.

Part of the job of us here in Parliament is to decide just which names for bills are appropriate. As people search through them online—and I know, as I have searched through bills online—sometimes they are hard to locate. Sometimes it is hard to find the bill you are looking for because it is named in a way that is not intuitive. I think that bills ought to be named in a way that is accessible for the public.

This bill here does pick up good governance practices. It attempts to make sure that things are done in a transparent way, that there are sanctions and rewards for departments, that those are clearly laid out, that they are reported, that there is transparency, and that there are clear lines of accountability.

We see in this bill the State Services Commissioner’s role outlined for the first time ever, in a way that now means that we can better understand what his or her role is in the State sector, and we can see how chief executives can move their own resources around from one area to another much more easily as a vacancy arises, and so on. This smoothing of the paths of Government should indeed, over the longer term, make for a better Government.

The point I raised earlier, though, is incredibly relevant, which is that the actions taken in this bill will not stop a Government putting bad policies in place. They simply cannot.

If a Government like this one thinks that the current housing shortage in New Zealand is simply unavoidable and that if we carry on with the same policies, suddenly, magically, houses will appear, despite the rate of new house builds dropping steadily over the last 20 years, that may be its ideology and it can stick to it. This bill will do nothing—absolutely nothing—to address that. Labour, on the other hand, thinks that we need proactive policies. So, for example, the KiwiBuild policy, which Mr Peseta Lotu-Iiga over there is admiring from afar but knows he cannot publicly endorse, is a policy that will improve the lot of Kiwis. For those who currently cannot afford housing, we know that this kind of policy, the New Zealand KiwiBuild policy, will actually make the world a better place for them. So that is what Labour is committing to—10,000 new houses a year with the KiwiBuild policy, affordable houses. That is 10,000 new houses a year and affordable housing for New Zealanders, because we think that that is a priority.

Likewise in the energy sector, with the NZ Power proposal, we will make sure that ordinary Kiwi families pay $300 less a year for their power bills. That is significant, because New Zealand families are struggling.

This Government has the worst economic record of any Government in the last 50 years—

💬 Peseta Sam Lotu-Iiga: How many?

—50 years, Mr Lotu-Iiga; I am glad you asked—and that terrible economic record needs to be addressed, but this Government seems to have no plan to do that. This piece of legislation will not give the Government good ideas; it will only enable Governments that have good ideas to put them into practice in a timely, effective, and efficient way. So the real effects of this legislation will have to wait for a future Labour Government, I suspect.

This Government is doing the right thing by putting the conditions for good government in place, but, unfortunately, it seems to lack a plan that will really appeal to New Zealanders and make New Zealand a better place for ordinary New Zealanders to live in. As inequalities rise, the Government does not seem willing to put in place the kinds of necessary economic changes such as more savings, a pro-growth tax policy, and monetary policy reform that would actually improve the lot of ordinary Kiwis. Instead, we see median wages dropping in New Zealand consistently under this Government. Kiwis are struggling, small businesses are struggling, and that is because this Government is prepared to sit on its hands and stick with the policies of the 1980s, which have not been working for so very long now, sadly.

This legislation will mean that policies that are good, like those that Labour has, can be introduced in an effective and efficient way in years to come. It will not help this Government, which has no plan to reform the economy, in the meantime, because it will carry on doing what it is doing, which is just taking a hands-off approach—hands off the steering wheel—as the economy goes further towards the interests of those who already have and further away from the interests of the have-nots in our country.

Labour is very happy to support this legislation. As I said at the beginning, we are pleased with the changes that have been made in the select committee to avert the disaster for Government workers, who were set to lose their redundancy entitlements and employment rights. We congratulate the New Zealand Public Service Association and the Council of Trade Unions on their good work, and I congratulate the members of the committee, who worked together to make sure that this legislation did not end up dividing the House but, instead, ended up being legislation that, with some reservations, the Labour Party will happily support. I am looking forward to the Minister in the chair’s contribution. Thank you.

It is my pleasure to take, well, three or four calls on the concluding stage of this legislation.

💬 John Hayes: Only three or four?

Yes, only three or four. One of the things that I might say I am slightly perplexed about is that we have sitting in the chair the Hon Nick Smith.

💬 Hon Ruth Dyson: Well, at least he’s good compared with the others.

Well, I would not go that far, and I do not know him that well. But we have sitting right at the back of the Chamber a newly minted Minister who chaired the Finance and Expenditure Committee and actually knows about the bill.

💬 Hon Dr Nick Smith: He’s good.

Sorry?

💬 Hon Dr Nick Smith: He’s good.

Well, I am told he had potential. I would have picked Sam Lotu-Iiga to become a Minister ahead of him. My understanding is that he is going to get his best publicity ever next week when he becomes the “Minister in charge of Killing Dogs So Drug Dealers Can Make Bigger Profits”. That is Todd McClay, the Minister who is going to take responsibility for that going through this House, with advice from a number of departments under this legislation. He is going to be the Minister who says: “We will kill dogs so that drug dealers can have bigger profits.” I know that if Sam Lotu-Iiga had been the Associate Minister of Health, he would never have had a bar of that sort of policy.

💬 Hon Ruth Dyson: He’s the only one who thinks he should be Minister.

Who?

💬 Hon Ruth Dyson: Sam.

No, no. I think Sam would have been a better Minister than Todd McClay.

💬 Hon Ruth Dyson: Well, that’s two of you.

Well, no, no. That is not true. A number of the member’s colleagues tell me that they think that he would be a much better Minister for Pacific Island Affairs than, for example, Hekia Parata. I mean, for goodness’ sake! [Interruption] Well, no, I am praising the member opposite, Mr Chairperson. And, actually, the responsibilities of a Minister of the Crown and how they are discharged are very much a part of this bill.

Members opposite invited me earlier to talk to them a little bit about the divisibility of the Crown, or what used to be, when I was first a member of Parliament, the indivisibility of the Crown. And, you know, it is relatively historic. It dates from the days when the Crown in the United Kingdom—probably the English Parliament at the time—was the agent for the King or the Queen on occasion. And because it was acting in the name of the monarch, it could not have internal divisions. What it had to do was sort it out: “This is the Government division, and that cannot be divided.” You did not have the nonsense of one Government agency suing another Government agency, because they could not sue each other. They should not have been able to sue each other, because they were a part of an undivided Crown. Obviously, now, with the National Government’s splits and divisions, and stuff like that, that doctrine has become slightly dated. I think the time of Ruth Richardson was the time when it took its biggest dive downwards.

But I want to say it is relatively good that there is a tiny step back towards the concept of the Government working as a team, working together, and working out what is the best thing for the people of New Zealand, rather than heading, as it had been, into the many, many agencies, all heading off in their own directions, sometimes quite independently. I am sure all those people who have been Ministers in the past would have found agencies actually working in contradiction to each other. One of my colleagues, Lianne Dalziel, reminded me earlier about high and complex needs, and just really the inability of the agencies to come together and to work properly as a team to get something that was logical for those young people who were really at most risk and amongst the most marginalised people in the country. The agencies could not do it.

The other point that I would like to make is that sometimes some of the best policy advice does not necessarily come from the big agencies, which sometimes get caught very much in their own ruts. I noticed this as the Minister of Education and the Minister for Sport and Recreation. Actually, some of the best policy advice came from a tiny policy team of three, four, or five people, because they could cut through, cut to the chase, work out what the issue was, get the evidence, and you could have evidence-based decision-making. Whereas in education, especially in the early days when I was Minister, there was so much long-term prejudice and not the ability, not the habit, of looking at the evidence. They were tied up in what had been the policy of the agency for a long time rather than working necessarily for the best for the young people of New Zealand.

This State Sector and Public Finance Reform Bill is a tiny step, and I do not think it goes far enough. I would like to refer to new section 47(1) of the bill, “Responsibilities of Commissioner”. I am now going to plead guilty, as I did to the Hon Stan Rodger a month or two ago, for being the Minister of State Services who abolished the senior executive service because basically it did not work. It was a very good idea as part of the original State Sector Act to build up a team of senior people who got some special training and were more available for secondment to move from one agency to another. People who were being, if not targeted, if not anointed chief executives of the future—

💬 John Hayes: Groomed.

Sorry?

💬 John Hayes: Groomed.

Yes, well, grooming is a word that has different connotations these days. I think the idea that John Hayes was grooming public servants is probably not quite the approach that is appropriate. In the old sense of the “groomed” word, then certainly that was the idea—that you were building up a team of people from whom the vast majority of the future chief executives would come, because the skills had been developed. Basically, it did not work. It did not work because of the very narrow approach of the majority of the chief executives of the Public Service, who were focused on their own agency, on their own outcomes, and on their own statements of intent rather than considering the good of New Zealand and the quality of the Public Service, both immediately but more especially in the medium and the longer term.

Clause 38 of the bill puts back on to the commissioner the responsibility for developing and implementing a strategy for senior leadership and management capability in the Public Service. But what it does not do is give the commissioner any authority to actually implement it. What it says is that if a chief executive gives the State Services Commissioner two fingers, then they are allowed to get away with it. The bracketed phrase at the end of new section 47(1), “(with the agreement of the relevant chief executives)”, essentially goes back to the failed senior executive service model whereby they will, I am sure, focus more on their own agencies rather than the overall good of the Public Service. In my view—and Todd McClay might want to take responsibility for this—there is a failure within that provision to actually achieve what is a noble objective.

I think all of us now agree that we have had far too many chief executives come in from offshore who do not understand the New Zealand culture. I am not going to use Lesley Longstone as an example. I do not want to go into it in any depth. As far as that one is concerned, if you are working for Hekia Parata you basically have to be a saint in order to cope. It may well be that the new chief executive is a saint, and he will be able to cope, or more likely, actually, he will be able to manage the Minister in order to achieve the outcomes that are required.

I call the honourable member Darien Fenton.

💬 David Bennett: Excellent choice. Excellent choice.

Excellent choice. Thank you to the member for that.

💬 Hon David Cunliffe: What are all those backbenchers doing just sitting there?

That is right. It has been a very, very interesting discussion in the Committee stage of this bill, the State Sector and Public Finance Reform Bill. I have been listening as I have been working in my office as people have been talking about silos and their experiences with the State sector. I wanted to remind my colleague Trevor Mallard of one of the things that he tried to do, I think when he was Minister of State Services. You were Minister of State Services?

💬 Hon Trevor Mallard: I was. Only for 6 years though.

Yes, I remember one of the things that he tried to do was to get the chief executives together and do a simple thing like having common leave provisions across the State sector. There was enormous resistance to that, as I understand it. It was the most difficult job because the chief executives could not get their heads around doing something together. They were all precious about their departments. They all thought that they should just have the direct say on whether their staff should have, I think it was, 4 weeks’ annual leave then. They did not actually want to be—

💬 Hon Trevor Mallard: Some of them had 4 weeks and a day for this reason or that, and they’re all bloody different.

Oh, OK. Yes, they were all bloody different, as Trevor Mallard just said. All the leave provisions were different. But it was such an enormous job for a very sensible proposition. I would have thought that that would be something that chief executives in the State sector would embrace, actually—that they would actually embrace that. I am not convinced that the State Sector and Public Finance Reform Bill will actually change that culture. If anything I think it has gotten worse.

But I should say that I am pleased that we have made progress on this bill, and we have got to a point where we can support it. I am pleased that part of the hard work done by the Labour members on the Finance and Expenditure Committee in negotiation with the National Government has ended with a conclusion where we can accept—I will say it is not perfect—the changes made, particularly around redundancy entitlements and workforce policy statements where the State Services Commission cannot interfere in wage bargaining.

I will say again, as I said in one other speech about this, though, that I find it very confusing that on the one hand we can get the Government to the point where it accepts that redundancy and redundancy entitlements are fair for public servants. We on this side, of course, think that is very right. But it does not think it is fair for other workers who work outside of the State sector. It continues to oppose basic redundancy entitlements for all workers throughout New Zealand. It has done that through a bill that I brought to the House as a member’s bill, which is now back in the House under the name of Sue Moroney. The Government will continue to oppose that, so I get confused about the conflict that there seems to be in the Government’s mind. It can have one set of rules on the one hand for public sector workers but it is not good enough for other workers throughout the country.

The same goes for collective bargaining, actually, because there is an acceptance in this bill that collective bargaining is a good way of reaching agreement across the State sector. But then on the other hand we have Simon Bridges’ bill to completely undermine collective bargaining for all workers, including State sector workers as well. So I get very confused about the Government’s messages. I think that it is not only a silo mentality in the State Service but a silo mentality amongst Ministers, where they do not seem to be able to bring their policies together. They have some alignment between them, and it is a little bit like that with the Employment Relations Amendment Bill as well, and the health and safety reforms that the Government is bringing through. Health and safety reforms are great, but then on the other hand we have the same Minister bringing forward reforms that will completely undermine health and safety by reducing workers’ rights.

Talking about silos too, I also heard my colleagues talking about the Ministry of Business, Innovation and Employment, that mega-monster, that creation of Steven Joyce, which he has put together, which is gradually being taken apart. I, like my other colleagues, never saw why the Department of Labour—a department that we have had dedicated to workforce policy issues and workplace relationships for more than 100 years; for more than 100 years we had a Department of Labour in New Zealand—has disappeared and been swallowed up into the Ministry of Business, Innovation and Employment. It is even hard to know what to call it any more. I think the inspectors, the miserable number of 35 labour inspectors that we have throughout New Zealand, still call themselves labour inspectors. But there is no resemblance in the ministry to that wonderful—

💬 Hon Trevor Mallard: “Mobie” inspectors.

They may well be “Mobie” inspectors, I am not sure, but all I do know is that there is only 35 of them and they are supposed to enforce labour rights for all workers.

💬 Hon Ruth Dyson: Isn’t there meant to be more than that?

Well, there are meant to be more health and safety inspectors, and that is another matter, because what is happening now is that the Ministry of Business, Innovation and Employment, and the Department of Labour part of that, is being unwound as the Government is forced to set up a new agency for health and safety. It started this brave new world on 1 July, Monday this week. There were supposed to be more than 150 health and safety inspectors in place in this Lifting Our Game programme that they have been going through—yet another restructuring—that has become known as “shifting the blame” by the health and safety inspectors. It has been very disgraceful—one of the worst restructurings and botch-ups that has ever been seen. The Minister in the chair, the Minister of Revenue, agrees with me. I can see him nodding. This restructuring that has gone on has been an absolute botch-up. What we have in place are 74 inspectors, fewer than half of what we had 2 years ago.

Here we are creating a Crown agency for health and safety and moving over the health and safety enforcement part, or the direction part, of the Ministry of Business, Innovation and Employment, or what used to be the Department of Labour. But the transition is awful—the transition is awful. It is scary, as well, because how on earth are we going to make sure that people are kept safe and healthy at work in the next 12 months while the new Crown agency is established? The Government is gutting the Department of Labour part of the ministry, and it is getting smaller and smaller, and I really have to wonder what its purpose is. I do wonder, actually, whether the real agenda of the Government is to not have anything like a Department of Labour, not to have anything that is responsible for making sure that workers’ rights are enforced and making sure that employment legislation actually works.

Of course, what we find is that because the department is so short on resources now, it cannot even tell us, for example, whether the legislation this Government has brought in around employment rights actually works. I asked a question the other day about the 4 weeks’ annual leave that can be cashed up, and the other changes that were made in 2010. The department has done no research on that. How can a Government and a department in the State sector bring forward legislation, argue it, and push it through because the Government has the numbers, and then do no follow-up to see whether it is working or whether there is a problem? It cannot even tell us whether there have been any complaints about it. This is shocking—this is shocking. Although I am pleased we have got to a point where we can support the bill because of changes that were made during the select committee process—as I said, it is not perfect; there are still some issues here—I am not convinced that this is going to change, first of all, the Government’s attitude to making sure that people are provided with proper information and the proper policy and guidance, but, second of all, the attitude of chief executives.

As I started out by saying in my contribution, chief executives in Trevor Mallard’s time openly resisted changes that we were trying to make around having common leave provisions. I also know that they openly resisted collective bargaining, which was a policy of the Labour Government and part of our legislation. They openly resisted it, and they refused—and still, to this day, refuse—to include wages in collective agreements. That fight has been going on for 10 years, because chief executives came out of the 1990s, had an ideology, do not believe in collective bargaining, and do not believe wages should be included in collective agreements, and that battle is still going on 9 years later. What I can say is that if we are the Government next year, that will change—that will change. It is not acceptable to have direction from a Government and have so much resistance because of the particular ideology of the State sector executives. As I said, I do not believe this will change the attitude. I think it is good that we have got to a point where we can vote for it. I do think there are ongoing problems in the State sector.

I am looking forward to seeing what develops with health and safety. I am looking forward to the Ministry of Business, Innovation and Employment—the old Department of Labour—recommending there should be an inquiry into forestry safety, after the forestry owners came out last night and said they supported one. There is some good advice that they could get, and it could be given to the Minister of Labour. He should be acting on that today.

I call the Hon Nanaia Mahuta. Tēnā koe. Kei te pēhea koe?

Ka nui te ora. Pēhea tērā ki a koe mō tēnei wāhanga o Te Wiki o Te Reo Māori?

[Very well thanks. What do you think about that for this part of Māori Language Week?]

I just wanted to pick up where my colleague Darien Fenton left off. There are some issues with the State sector, and if the intention of this legislation, the State Sector and Public Finance Reform Bill, is to enable Government departments to work more collaboratively together, by way of merging some of the aspects of their statements of intent to some higher-level priorities, then that will be a positive thing. The Government must have mechanisms, through the State sector, to be able to drive its priorities. That is absolutely clear. But if the Government is unclear on the nature of its priorities, we have got some big problems.

When I think about, I guess, the litmus test from a perspective that I bring to the Chamber, for Māori, that would be how the Government would work in partnership with Māori to advance economic and social development. It is a very important space to be considering the nature of this legislation, because what we know is that since the emergence of Treaty settlements and, more definitely, in the post-settlement landscape, significant resources have been transferred to iwi, who are then in a position to take on some quite critical partnerships with the Government and with third-sector parties to focus on regional growth strategies and outcomes, to invest more in social development outcomes, and to be innovative in a very different way. The interface between the State sector and iwi, I believe, is part of what could be a litmus test as to whether or not what we are trying to do here today will achieve some broader outcomes.

As I said, I have listened to the debate all the way through this particular bit of legislation and it got me considering a number of things. If the Government has a priority around Māori development, Māori economic growth and social development, why then did National reject the proposal of Te Ururoa Flavell in terms of making some stronger recommendations around the way in which the Treaty would be recognised within this legislation? Silence. So that then urges me to ask that, if the intent of the Government—

💬 Hon David Cunliffe: It’s not question time.

Silence, except from the backbenchers, who will not take a call on the bill. If the intent of the Government is to ensure that there are going to be productive collaborations with iwi, and iwi who have growing economies—Tainui, just this week, announced it has got around about a $780 million asset base, and Ngāi Tahu will be slightly over that amount. There are significant opportunities for the Government to partner with iwi to be able to better effect transformational change within specific regions, so that we are looking at innovative solutions to some very age-old problems, not because the Government is taking a parochial approach to these challenges, but because it is expressing itself in ways that are actually more reflective of what is being urged through a regional, community, iwi type of perspective. On that basis alone, I would have thought that the Government would consider quite seriously what the positive implications of Te Ururoa Flavell’s amendment to the legislation could provide for.

The next point I want to raise is in relation to the task force that the National Government set up, and that is the Crown Māori Economic Development Panel that was established, looking at priorities between 2012 and 2017. It outlines six particular goals: in the area of education, lifting educational participation; lifting the skilled workforce, and certainly the skill sets amongst Māori; improving the financial literary and savings aspects amongst Māori, especially at the grassroots; invoking more collaborative relationships with iwi and Māori; developing natural resources and having an ongoing dialogue about how that could coexist with strong kaitiaki principles amongst iwi; and, having a concept of where the “Māori Inc.” strategy sits within the broader Government growth strategy. All of those have been identified by the National Government as key priorities to lift Māori economic growth and to support it, but the way in which this legislation seeks to try to achieve that is unclear.

It is unclear because, obviously, this provides structural change for inter-agency collaboration, but it is unclear also because the Government on the one hand will have a certain conversation with iwi and Māori around the necessity to ensure a collaborative relationship for growth, but on the other hand, when it has the instruments or mechanisms to try to achieve that through legislation like this, it does not make some of the hardest yet most important calls so that we can get to a really good point where, actually, the Government is saying that we must work differently together, just as we need to get out of that silo way of thinking. That whole bringing the whole of Government approach together, engaging in critical partnerships and, in this instance, with iwi, and certainly with Māori—that whole aspect of the nature of relationships going forward for the State sector is not contemplated within the context of the changes and the amendments that were rejected.

I am slightly sad by that silence over there in the corner from people who initially criticised my comments. I would say that going forward the real litmus test for Māori on the effectiveness of the changes that have been achieved, and promoted today, will come back to some very critical points of convergence: where there is a common interest to have a growth strategy that is more aligned, and where there is a common interest to have a social development strategy that lessens the level of inequality and poverty in our communities. That is a point of convergence between the Crown, the Government, and iwi, where the necessity to improve the skills of our people is not just a Government objective; actually, it is a nationwide objective, where iwi can play a critical role to help achieve that outcome.

At the end of the day, we have heard colleagues, certainly on the Labour side of the Chamber, say that the new normal for the State sector is a stronger reporting framework around outcomes. I would have to absolutely endorse that. If we take an outcomes perspective in the way in which the Government asserts its leadership on fundamental priorities of economic growth and development, and social advancement, then the extension of changes to the State Sector Act could go a little bit further, taking into account the role—the critical and positive role—that iwi and Māori can play in this space.

I had said that I wanted to comment very briefly—I have taken two part-calls on this. I want to say that although this is a start, this is by no means a finish. This is an opportunity to have in the top of our minds the question of what some of the litmus tests are to ensure that the State sector is operating in a way that will, I think, change the nature of the way the Government interfaces with iwi but also with community. Kia ora koutou.

I rise to take a call on clauses 1 and 2. It is worth restating the significance of this legislation, the State Sector and Public Finance Reform Bill, as I have mentioned in previous contributions, but the thing that is becoming increasingly apparent as the speeches unfold is a point I referred to earlier. This is only the beginning of something that could be a substantial rethink of the way we actually administer the Government in this country and administer those parts of Government activity that receive Government appropriation and therefore taxpayers’ money.

This bill will, of course, become three bills—the State Sector Amendment Bill, the Public Finance Amendment Bill (No 2), and the Crown Entities Amendment Bill. In each of those respects, it takes us further along. It takes us further towards an integrated system of administration. We have administered Government for the last umpteen decades in this country according to siloed portfolios, and people have made a lot of the fact that this is a course of action that has probably run its time. I think that this bill presents a novel opportunity, but it is still just a small step in the direction of alternative ways of running the Government that could, in fact, deliver more integrated services to New Zealand citizens.

As far as the State sector amendment part of this legislation is concerned, I just want to reiterate one of the old principles. I was put in mind of this by the Hon Trevor Mallard’s discourse on the indivisibility of Government. This is that, in my view, the Public Service, the State sector, not only delivers the programme of the democratically elected Parliament of the day, but it also acts as a buffer between executive power and the citizenry. So it is there, and it has several things that it is charged to do. Of course, it must implement the Government’s programme, because one would assume that the Government has been elected to implement the programme. That is, of course, less decisive under MMP than it was under first past the post.

Often we hear the Government taking liberties with that notion of having been elected with an overwhelming mandate. Certainly, if a party goes to the polls saying it is going to sell State-owned assets and it gets 40-something percent of the party vote—even if it is 44 percent of the party vote—that is still not a majority in favour of that mandate. One would assume that if it wanted to really be honest about getting a mandate for a divisive policy, such as the selling of State assets, it would try to go for a 50 percent or greater portion of the vote, in order to be able honestly to say that it had a majority mandate for that policy.

But the point behind this is that the State Service, the Public Service, has operated and accumulated knowledge and wisdom over time. Our Public Service is held in extremely high regard by all of those agencies that measure such things. The integrity of our Public Service and its independence are critically important to our ability to score highly on the lack of corruption index and on the transparency index, which Governments are measured by around the world. It is in large measure that our reputation and our scoring highly on Transparency International’s various indices, including the lack of corruption one, have us coming at first or first-equal position in successive years.

I trust that this piece of legislation will actually enhance the operation of the Government’s departments and ministries so that integrated services, which are increasingly being seen as necessary, can be delivered for the effective provision of those services to New Zealand citizens. But I do not want to leave that point just yet about being a buffer between executive power and the rights of the citizens. I think the State Service, the Public Service, has sat there for a long time as a buffer between overwhelming and dictatorial executive power. There are things that the Government cannot do, because of the rights and the structures that are in place in our democratic system, and that is how it should be.

So this is important in that it changes the workings of the apparatus of government. Whether it is a Crown entity or whether it is reporting mechanisms—as in the Public Finance Act amendment part of this legislation or, as I say, Crown entities in the Crown Entities Act amendment part of this legislation—the principle is the same. If we can begin to integrate appropriations, operations, and accountabilities of government through these mechanisms, then that is to be applauded. I use again the example I used late last night of the appropriation for Whānau Ora. Being a health initiative, one would have thought that it could have come before the Health Committee for scrutiny. One could have thought that the Minister of Health would be able to say to the Health Committee that this is how the appropriation around Whānau Ora has been expended, and these are the accountability mechanisms and the performance indicators around that appropriation. But, no, because it is not something the Minister of Health was very fond of, it was sent out to the Minister of Māori Affairs and to Te Puni Kōkiri, when, really, the people who had a serious interest in scrutinising it were not only the members of the Māori Affairs Committee but the members of the Health Committee as well. So if there can be better ways of ensuring that appropriations are both reported on and accounted for and made more transparent by the provisions of what will become the State Sector Amendment Bill and the Public Finance Amendment Bill (No 2), then let us proceed with that.

But let us not imagine that we are there yet. What we do need is a new way of looking at how to deliver integrated services. This is particularly apparent in health, but also it is really apparent in the social development portfolio. It is very apparent there. It became apparent to us, when we were delivering the Strengthening Families initiative, that in fact numbers of organisations needed to be involved and engaged with the welfare of a particular family and a particular child. So not only did we need to have police, justice, corrections, education, and health organisations involved, but we needed to ensure that they were singing off the same page and that they were able to deliver the services that that family needed at that time. So I am hopeful that this is the beginning of something new.

As far as the Crown Entities Act part of the bill is concerned, the more of those entities that talk to each other and that operate in conjunction with each other, the better. This is simply a subset of that working across ministries, departments, and other parts of Government. I welcome this bill and I look forward to what it may bring next.

I want to thank you, Mr Chairperson, for giving me another call, even if it is slightly before when I thought I was going to have it. I would like to focus in this call back where I completed my previous call, and that is on the responsibilities of the State Services Commissioner with regard to the development of senior leadership in the Public Service. I want to reiterate the comment that, in my opinion, quality leadership in the Public Service is important.

In the end, despite the interjections from some of my colleagues, we are never going to compete for chief executives on the basis of the money that they get. I do not have much doubt that the particular individuals in the private sector could earn more than they do in the public sector, and repeated Hays surveys have shown that to be the case. In fact, there is a pretty clear hierarchy of incomes in senior positions, which goes, first, private sector; then after that, generally, State sector organisations other than the Public Service; then the Public Service; then local authority politicians; and then central government.

💬 Andrew Little: Community organisations.

Well, community organisations like Parliament, as the member said. But there is a hierarchy that works in that way vis-à-vis the Hays surveys. Therefore, when the State Services Commissioner is fulfilling his tasks under this legislation, the State Sector and Public Finance Reform Bill, money is not going to be the main thing that is going to get people across the line into senior Public Service positions.

It is worth looking at those two words, “public service”, because there is a major element of public service involved in this. Although it is my opinion that having loyalty to a particular agency for which you are working at a specific time is important, what is more important is that the individuals within the Public Service are, in fact, loyal to the Public Service overall and to the common good of the Public Service, rather than to the particular agency that they are working for at that time.

Although some things probably go beyond some of the privacy things that we find acceptable today, back in the not too distant past—certainly within my memory—they had a thing called a stud book, whereby you could look up people who were employees in the Public Service and you could see when they became public servants. You could see their career history and their particular level of appointment and what their current salary was. Apparently, we have moved on from that level of transparency. I am not sure why, because I think—

💬 Andrew Little: They’ve got Novopay now. You can do it on your own.

Well, the problem with Novopay, of course, is that people do have the ability to adjust their salaries. Unfortunately, the ability to deliver is not particularly good.

The point I am attempting to make is that we have to be offering to the people whom we expect to be leaders in the Public Service something that is challenging, where they feel that they are doing some things that are extra and that involve, basically, making New Zealand and making the world a better place. I hate to do it, but if I move over slightly to my left and look across the Chamber, I can see—

💬 Hon David Cunliffe: Move to the left?

There is not much room on my left politically.

💬 Hon David Cunliffe: There’s me. There’s me.

The member is certainly not on my left politically, that is for sure. We just need to see the policies he implemented when he was in Government. We will just leave that on one side now. Interjections like that are not helpful, Mr Cunliffe. I am actually looking at John Hayes at the moment. I think he is a very good example of someone who was a relatively senior public servant and who in his area of work, and especially in the western Pacific, made a real difference.

💬 John Hayes: And the Middle East.

Well, I do not know the member’s details. That might have been before my time. I think he managed to get some peace in the western Pacific. I do not know whether he totally succeeded in the Middle East, though I understand that his close friend Mr McCully is about to bring peace to the Middle East. I just want to say one thing. I am not going to hold my breath. I am not going to hold my breath for that.

💬 Andrew Little: Let him have a go. Let him go over and have a go.

In fact, I think he is there. Well, I do not know. He is either there or he is going or he has come back.

The point I am making—and I am almost inviting John Hayes to take a call—is to say to him that the difference that he made as a public servant in the world was more important than some marginal cash, that there was some degree of job satisfaction that was involved. I can see that he is nodding, and it is not through sleep. That is the case for many people who are true public servants. There are a lot of them who could earn significantly more money in a private sector situation.

One of the unfortunate things that is happening under the policies of this Government is that as these massive mergers, changes, and reconfigurations occur, people are, effectively, invited to apply for redundancy—I think they call it “rightsize” now. Back in the day, it used to be called firing people. As these ministries are being downsized, far too often there is a general invitation to people to take redundancy. Unfortunately, often the people who take redundancy are those people who have the skills and talents that are vital to the organisation. They take redundancy, and generally it takes about 2 weeks, sometimes 6 weeks, for the organisation to work out that it has a gap that it is required to fill, and what does it do? It contracts the person back in, often for 3 days a week, often for more than it was paying them before anyway, and they have got a redundancy payment as well.

💬 Hon Shane Jones: They’re mates of the Government.

Well, some of them are mates of the Government, and some of them are just people who are sick of being treated badly by Ministers and like to have the option of providing the advice, which generally goes through senior people, without the indignity of having to attend on Ministers’ offices, which, I understand, in a number of cases, is something that is dreaded by public servants. Again, I make no reflection on the Minister of Revenue, who is currently in the chair.

You just have to wander up Lambton Quay often enough and have a number of friends—I have friends whom I have known for 35, 40, or 55 years in some cases—and you can just sense this from their body language. They are all proper public servants, but you can sense from their body language, as they come out of the Beehive, when the meetings that they have had have been proper and courteous and professional, and when they have been in a meeting with Tony Ryall or some of the other people who are not good Ministers. To be fair to the Minister in the chair, the Minister of Revenue, I make no reflection on him yet. The only comments that I have had about that Minister are about a total lack of understanding, and people are just beginning to understand the issue, and questions about where he got the advice—was it joined-up advice to cut puppies up?

The CHAIRPERSON (Lindsay Tisch): Order!

I ask the Minister in the chair: has he been applying the rules that sit within this legislation to get the advice that would sacrifice dogs for drug dealers? That is a relatively simple question. We want to stop drugs, but where do Ministers these days get such silly advice—

Thank you very much for the opportunity to contribute to this clause 1 debate. Thank you to the member to my right, Mr Mallard, who has just resumed his seat. His was a very useful summary of the issues. I join him in inviting the Minister of Revenue to explain to the Committee his use of these rules in reaching his extraordinary decision about puppy poisoning—but anyway.

The clause 1 debate provides an opportunity for us to sum up the arguments that have been deployed through the Committee’s consideration of the State Sector and Public Finance Reform Bill. I would like to take this opportunity to thank our colleagues, who really debated this bill with, I think, considerable depth over the last 24 hours. It is instructive to note that the Labour benches are relatively full and the Government’s benches are relatively empty on a bill that is supposedly a Government bill but that has actually, I think, benefited quite significantly from the efforts of the Labour team to redraft it.

I want to recognise the excellent input of officials, who have served the Finance and Expenditure Committee very well, and have facilitated significant—significant—amendments to the bill. I thank the Minister of State Services, Jonathan Coleman, and the Minister of Revenue for his work when he was formerly in his role as the chair of the Finance and Expenditure Committee, which undertook some significant changes.

I would just reiterate that when the bill was introduced, Labour opposed it. It is not very often that an Opposition will start out opposing a bill and then change its mind and end up supporting it. Quite often an Opposition will reserve its position during the first reading of a bill, let it go to a select committee, hear the submissions, and then form a final view. Occasionally, it will support a bill to go to a select committee, to allow the public to have its say, and then end up opposing it. But very rarely does it oppose and then support. That is what is happening today, and that is because some very significant amendments have been made that take the rough edges off the bill and allow it to better achieve the purposes, which we agree with.

I would like to quickly touch on some of those significant amendments, because they are also sources of ongoing concern. I do want to emphasise that our team, although we are supporting the bill, is going to be watching its implementation very carefully, to ensure that the issues that were the cause of heavy amendment in the select committee process actually work out the way that they are supposed to. The first of those was, of course, the redundancy provisions in the State Sector Act changes. Tough negotiations resulted in a better bill, with employees’ rights now better protected. The bill as introduced did present a considerable danger to redundancy provisions. The key words here are that in order for a State servant not to qualify for their full redundancy package on a situation of transfer or job change, they would have to be offered a package that was “no less favourable”. It is not “no less favourable overall” and not “sort of close to the current package”, but “no less favourable”. They should not be worse off than they were before the change. That is a core principle of our support, and we will be watching very closely to see how that is interpreted.

The second issue was the use of Government Workforce Policy Statements, originally orders. In the original draft of the bill those orders could well have been construed as conferring legal weight to a Government’s central direction to its various agencies and to chief executives to bind the hands of those chief executives in wage and salary negotiations, and terms and conditions negotiations. The select committee has turned that on its head. It has explicitly ruled out the use of Government Workforce Policy Statements—as they are now called—to do anything that would affect wages and terms and conditions, and it has explicitly written in a provision that will enshrine all of the existing bargaining rights that currently apply to State servants and Crown entity servants. We have taken the presumption that was in the draft and turned it on its head. The bill now specifically protects and enshrines those issues. But, like the Public Service Association and the Council of Trade Unions, we retain a degree of reservation about how that will be implemented in practice, and we will be watching very carefully.

There was also significant discussion and amendment at the select committee in respect of the ability of chief executives to delegate functions or powers. We join with the Government in wishing to see a more flexible, responsive, and networked public sector. Notwithstanding that, and while recognising the importance of being able to delegate functions and, occasionally, powers to hybrid agencies, subsidiary agencies, and possibly non-governmental entities, it is very important that that chain of delegation is rigorous, so that the accountability back to Parliament and to the taxpayer, to the citizen, is unbroken. For that reason the select committee supported amendments to the bill that tightened the conditions and placed restrictions on when and how such delegations could happen.

Labour supported the committee’s amendments to increase the accountability of the delegations, including an amendment that the delegation must be in writing—that sounds obvious enough, but it was not there at the start—and that the functions or powers delegated to a chief executive by a Minister or the State Services Commissioner may not be delegated further without their prior written approval. That is like a tenant not being able to sublet a flat without the prior approval of the landlord. The sub-delegation that we are seeking to make sure is rigorous is the powers of the Crown, which are legitimate only because they go through the electoral process—Parliament is accountable to the people. Parliament vests that authority in Ministers of the Crown, and Ministers, in turn, vest it in departments. The State Sector and Public Finance Reform Bill allows departments’ chief executives to vest some of those functions and powers in subsidiary entities or agencies. So we are just being very careful with that. It is a bit of an innovation, but we think it could work, provided the powers are rigorously mandated.

A fourth area of ongoing vigilance will be in the area of multi-category appropriations. We have had quite extensive debate on this through the Committee stage of the bill. I think there is general agreement in the Committee on the idea, although it is, to be fair, experimental, that we would allow multi-category appropriations—that is, Budget lines that are shared between different departments or entities. So it might be the Ministry of Fisheries, which is now a part of the Ministry for Primary Industries—it might be the Ministry for Primary Industries and the Ministry of Business, Innovation and Employment sharing with Callaghan Innovation a new research budget. We want those agencies to work together. We are allowing them to share a common pot of money, but several things follow. The first is it must, in all cases, be possible for the public, through Parliament, to see where the money came from and where it went. That includes being able to trace back from Budget 2014 to Budget 2013 and Budget 2012 so we can see the time line. The amendments require what we call strict traceability of funds, including how they got into and out of the multi-category appropriations, right down to the nitty-gritty, which in our language of the bill is called sub-output classes. What we are trying to enshrine here is that the accountability to Parliament through the Budget cycle is no less than it was, even though we are allowing for a new hybrid funding instrument called a multi-category appropriation.

There have been a number of Supplementary Order Papers brought to the Committee, and we have received explicit assurances from officials and the Government that there are no new policy issues embedded, for example, in Supplementary Order Paper 262, which is a multi-page Supplementary Order Paper. It is quite a large one. We are advised that it is purely consequential, partly because of date changes, and technical in nature. We are, of course, willing to take our highly qualified advisers at their word, but we are acting in reliance on that advice in conferring our support for the bill, and we will be aware of the possibility that there could be subsequent issues that arise in respect of those Supplementary Order Papers. We will give them the benefit of the doubt.

We would note, also, that the Green Party has brought Supplementary Order Paper 265 to the Committee in support of further enshrinement of State sector employees’ rights. We supported that Supplementary Order Paper, even though it was not passed by the Committee. The Government voted it down and we think that was a shame, although the Green Party might have brought that amendment to the Finance and Expenditure Committee for earlier consideration. We might have been able to swing it as part of the earlier negotiations, but we recognise the Green Party’s good intent in bringing it to the Committee at this stage.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 262 in the name of the Hon Dr Jonathan Coleman to clause 2 be agreed to.