State Sector and Crown Entities Reform Bill

This brings us to Part 2, the debate on clauses 6 to 17 and schedules 2 and 3, relating to the amendments to the State Sector Act 1988.

Madam Chair, thank you. It’s just a shame that I cannot finish the point I was trying to make in Part 1. However, I’m very pleased because I did want an answer. There were three questions I posed to the Minister and I did wish for answers to those, and I know I’m now out of order in wanting those questions answered, but, in fact, the questions still remain and there will be questions arising out of Part 2 of this bill.

Just to set the scene, since I’m the first keen member to leap to their feet, Part 2 of this bill makes amendments to the State Sector Act, and it does so in a couple of ways relating to a couple of areas. It improves the State Services Commission’s investigatory powers. If you think—and some member has said this—it is a pretty light and small bill, it’s not, because, in fact, this provision on improving the State Service Commission’s investigatory powers is a very, very important part of this bill. Being able to conduct an investigation is a crucial function of the State Services Commissioner, and so this part of the bill addresses that.

We’ve had a number of incidences in New Zealand where the State Services Commissioner has had to rely on powers under the Commissions of Inquiry Act 1908 to undertake those inquiries. However, with the Inquiries Act 2013—it says “2013” in my notes, but I wonder if it’s 2014. I would be interested, actually, if the Minister can answer that little question. The Inquiries Act was a good piece of legislation that was brought through when National were in Government. So what needs to happen now is that the bill will update the commissioner’s investigatory powers under the Commissions of Inquiry Act by bringing them into and under the Inquiries Act of 2013-14. While the Minister is answering that question—whether it’s 2013 or 2014—perhaps he might care to answer the three previous questions that I posed to him. I’m sure Madam Chair won’t mind. We’ll just test that in due course, but I don’t think there’s any chance of him doing that, so that is a little bit of a moot point.

Under new section 9A(2) in clause 8, there is a list of the sections of the Inquiries Act that would apply when the commissioner investigates something in the course of their functions under the State Sector Act. As I say, this is an important aspect of the ability of the State Services Commissioner to hold Crown entities to account for their actions. I do support this part. I think, in the course of our consideration in the Governance and Administration Committee, there weren’t too many submissions in opposition to this provision—and I will be interested in other members who are looking through and recollecting. Perhaps Government members might wish to comment on this. We received only seven submissions, but they were substantive submissions, and I would be interested in other members’ views—particularly across the Chamber—on this new investigatory power, which brings them into the Inquiries Act of 2013-14. It is quite a neat little clause which has gone into this bill, and I do hope that members opposite will take time—well, I’m assuming they’ve taken time to go through the submissions on this bill—and really express their view to the committee for the fullness of—

💬 Brett Hudson: Maybe we’ll get some substantial comments.

Yeah, I’m looking for some substantial submissions on this bill. I had only a few calls on Part 1 of the bill. Part 2, again, is a substantive part, and I do look forward to making a further contribution.

Thank you, Madam Chair. In Part 2, I’d like to, firstly, draw the Minister’s attention to clause 12—clause 12(3) in particular. Now, we have absolutely no objection to giving the State Services Commissioner the power to institute a code of conduct—no issue with that at all—but my question for the Minister is, reflecting on that particular subclause, does he believe that we have actually got the wording right in, sort of, the effect and how we would expect that the State Services Commissioner might exercise that authority. It says, “The Commissioner may apply a code, with any variations that the Commissioner thinks appropriate in light of the legal, commercial, or operational context, to … (a) any agency or agencies … (b) any particular persons or groups …”. So what that actually confers to the commissioner is not to apply a code of conduct to boards of Crown entities, but to apply as many different codes of conduct as the commissioner may see fit to do over time.

Now, bear in mind that this amends section 57, and it’s about minimum standards of integrity and conduct. Do we really believe that the principles of integrity and the principles of how board members would conduct themselves in the operation of their responsibilities would vary between entities simply because the function of the entity is somehow different? Remember, we are talking about integrity and professional conduct. My contention to the Minister is that those standards are the same, irrespective of which entity a person may serve on. Indeed, you could have a situation where one person serves on multiple entities. It’s rather confusing and complex to have different codes for each entity that a person may serve as a member of a board on.

I have reflected on that, and I actually think the wording is wrong. I don’t think we should be encouraging the commissioner to have multiple codes of conduct with respect to integrity and general conduct. There will be instances, and I’m not certain—certainly in this part of the bill, at least—that the commissioner necessarily has direct influence on these or not. Where the reflection is touching upon the actual operations of the entity, its functions and purposes, and the actions that the executive takes, which may well be guided through the governance of the board, absolutely, I can understand that those things will be different—naturally different—between entities, because the entities do have different sets of responsibilities. The characteristics of the people that sit on the boards in terms of their personal integrity and the way they conduct themselves in discharging their duties, their obligations, as members of the board, I contend are the same, but the legislation, very clearly and, therefore, purposefully, is actually setting the commissioner up to create multiple codes of conduct.

So my question for the Minister—and reflect on it, firstly. Please reflect on that, Minister. Is that really the message that we’re wanting to send—that professional behavioural expectations and personal characteristics, personal qualities, around integrity, might be different, depending on the Crown entity you may serve as a member of a board on? I’m not at all convinced; in fact, quite the contrary. I think that, actually, it creates more problems than it would solve. So I’m looking forward to hearing from the Minister on that particular point.

Now, the other part of Part 2, which I’ll also be seeking, if not a complementary call now, then one later, is on the power of inquiry. In the second reading debate, and please forgive me if my memory fails me slightly on this, the Minister noted that the commissioner’s powers around inquiries were derived from a 1908 statute—I think it’s the commission of power of inquiry—and that this would bring them more in line with the Inquiries Act 2013. Aside from the minutiae of the actual provisions, I would like the Minister to consider and comment on why it is we are replicating, duplicating, certain provisions of the Inquiries Act in this piece of legislation, instead of taking a position that says that the commissioner’s powers of inquiries are defined in the Inquiries Act, and that if there were, in fact, specifics for the commissioner that were different or greater than or lesser than the elements, the provisions, in the Inquiries Act, we make amendments to the Inquiries Act instead.

Doing it this way complicates the overall statue book, because we say a number of sections of the Inquiries Act will apply for inquiries undertaken by the commissioner—for instance, section 14, “Regulation of inquiry procedure”; section 15, “Power to impose restrictions on access”—I’m not counting them, but there are about a dozen just in new section 9A(2) in clause 8. There are about a dozen of them. That means that if there’s a future amendment to the Inquiries Act, anyone who’s going through that has to establish whether those amendments will have any consequences on any other piece of legislation which refers to them, and particularly, in that instance, it does refer that they apply. Therefore, if they change, they still apply. They’re not a copy of; they are a reference to.

If we look at that, that means that that’s a very complicated future outlook for amendments to the Inquiries Act, and I could talk about how this has got a broader principle across the legislative amendments that we make. But, in this particular instance, it means that any future amendment to the Inquiries Act creates a great deal of work for officials and for drafters to understand, because any error that they make and that we don’t catch through these stages of the legislative process can have very, very significant consequences for those people that get caught up in it.

Then, those elements where there are changes to this legislation, not by way of reference to other Acts, but instead by copying the words of those Acts but not creating a connection: actually—and I don’t mean this in a perverse sense—they create the same sort of problem in reverse. Where we might want them linked to changes in those other Acts in the future, they won’t automatically be. So the real point is, Minister—and I see the smile—perhaps it would be better to take an approach that says “How do we do this by reference?”, rather than a hodgepodge of some reference that creates certain issues versus some copying that creates a different set of issues, and I think it’s particularly around the Inquiries Act but also the Privacy Act where the other part applies.

We do agree to that. We heard these in the committee. We’ve got no problem with the actual provisions themselves. We agree wholly with this, but I think it is right for us to question in this stage—in the short time that is available before this does receive Royal assent—should we look at whether it is possible, whether it is better, to do it a different way. I’m not seeking leave to put this back into the committee for another six months; I’m just saying this is an opportunity to actually make sure that what we’re doing—although, you know, the committee would do a great job if you gave it to them for another six months, of course, and that applies in both the context of the reference and the copying of wording of specific provisions.

One, particularly, that I think is perhaps a little more problematic in the minds of the public than some others is the suspension of certain privacy rights during the inquiry. My read of this, Minister, is that that is simply copying the provision. It is copying the wording of a provision, rather than making a reference to it. I think it’s that suspension of privacy—which we agree with, by the way. We think it’s absolutely the right thing to do. We do not want to compromise the evidence of other people during that inquiry process, and we do not want to compromise the inquiry itself, but it does raise the question—because there is a linkage there, and the wording was very clearly and definitely made to be consistent with other legislation—that, therefore, if there are certain changes made in other areas of legislation, we may get a natural break here that causes a future issue.

So I think it’s worth, you know, getting the officials on the phone, Minister. They can rush across; they could give a bit of advice on this. We’ve still got time. Thank you very much.

The member who’s just resumed his seat, Brett Hudson, raised a lengthy and interesting issue, which I’m sure the Attorney-General at some point would be more than happy to comment on in great detail, and that was around the issues of cross-references in legislation. I can say that in the almost decade that I have been in the House, this is something that has frustrated, I think, many a lawmaker and many a law interpreter. I’m sure, at some point, as we tidy up our statute book in New Zealand, it’s something that we’ll get better at. I think that the statute book that we have in New Zealand could do with a significant amount of housekeeping, and I know that successive Attorneys-General, including the current one, are working on that very process.

The more substantive issue was around: would there be one code of conduct or many codes of conduct? I think that’s a really important issue to raise, and I’d simply draw at this point the member’s attention to an amendment made during the select committee process which made it very clear that any specific provision does not limit or affect any other provision in the Act in terms of the conduct of a member. Their statutory requirements, if they have statutorily defined requirements, would not be affected by a code of conduct.

But there’s another related issue, which I think cuts to the heart of the concern the member was raising, which is around where people are subject to more than one code. The code of conduct that applies to the Crown entity board might not be the only code that they have to comply with, because the Crown entity itself may be regulating, for example, a profession where there’s another code that’s in existence. For example, the Code of Conduct for Directors of Victorian Public Entities in Australia states explicitly that it “should be read in conjunction with any professional code” that establishes “specific behaviours relevant to that profession.” If I go the UK Code of Conduct for Board Members of Public Bodies, it applies in addition to any duties of directors under company law or duties of trustees under charities law.

I think what the drafting of this is getting to is that—you know, I can’t envisage that the commissioner would be issuing, willy-nilly, lots of codes of conduct, but I think what they do need to have the ability to do is take into account other codes of conduct that those same people might be subject to.

There are two substantive issues with Part 2 of the State Sector and Crown Entities Reform Bill that I wish to make a contribution on and ask the Minister some questions on. The first of those relate to the powers in Part 2 for the State Services Commissioner to be able to be exempted from some of the provisions around the Privacy Act.

Here’s the concern that I’d love the Minister in the chair—now Grant Robertson—to be able to respond to for me. The bill is absolutely appropriate—that is, when the State Services Commissioner initiates an inquiry under the Inquiries Act, we don’t want them being constrained by provisions of the Privacy Act that would have people refusing to provide information for the State Services Commissioner, who’s acting in the public interest to get to the bottom of what often is something gone wrong. Sometimes a person may have behaved unethically, maybe they’ve breached some law, or maybe they have misused some public money. But the challenge I’d want to know from the Minister—and it does concern me more generally around legislation—is that we conveniently exempt State agencies from law, with no regard for organisations outside of Parliament.

So if you’re running a major corporation, and let’s say a big organisation, whether it be an organisation like Fonterra, which I know my colleague Barbara has an interest in—Barbara Kuriger; I’m sorry, Mr Chair—

💬 Hon Ruth Dyson: Another name-dropper.

—or whether it be another major company. Well, she’s a feisty chief whip and one that we must keep onside, as I’m sure members of her side of the House understand. Anyway, if you’ve got an organisation, in Fonterra, and the Fonterra board is wanting to investigate it—and we could take the whey inquiry, for instance—why should the provisions of the Privacy Act for that organisation fully apply to that investigation but not to the State Services Commission? The reason I raise that question is because so often when Parliament passes law, we impose all sorts of requirements on the private sector, like the Privacy Act, and then the State sector comes in the back door and says “This makes practical life too hard; we’re going to fix it.”, rather than us actually fixing it for everybody.

So my challenge for Parliament with Part 2 and the provisions of the Privacy Act is, if the Privacy Act does not work for the State sector, shouldn’t we fix the Privacy Act for the private sector as well where there are investigations of wrongdoing, rather than going down this road of conveniently just exempting the State sector from those provisions? I would suggest to the Government—and this is important, because the Privacy Act is currently being reformed with a major bill before the Justice Committee. The Justice Committee is waiting for further advice from the Minister, where, actually, in our view that would be a better vehicle for fixing this problem for both public sector and private sector agencies. For instance, rather than amending the State Sector Act, why don’t we make provision in the Privacy Act, whether you are a Fonterra or whether you are an ACC or a superannuation fund organisation, to say that where an organisation is investigating wrongdoing—breaking the law, inappropriately using funds—there are exemptions to the Privacy Act, rather than having the quite selective approach that’s taken in Part 2 of this bill?

Now, the second question I have is in respect of clause 12 of this bill, and that relates to the important issue of the minimum standards of integrity and conduct. It is actually quite significant. What clause 12 is proposing is that the influence of the State Services Commissioner and the minimum standards of integrity and conduct don’t just apply to the employees of that organisation. Whether it be the officials that are within Housing New Zealand or whether they are in ACC, my point is that what this provision in clause 12 is proposing is that those standards that are set down by the State Services Commissioner now apply to board members.

Now, the Parliament should not underestimate how significant that is. I recite back to the history of the original intent of the 1988 State Sector Act. It was actually to enable boards of our Crown entities to operate with a lesser level of that sort of Gliding On Public Service culture, and while National members totally support the application of standards of integrity and conduct, what we don’t want it to become is an all-encompassing State Services Commission that starts returning us to that sort of amorphous mass of an unaccountable and blurry public sector.

Now, I also want to specifically ask the Minister how these provisions will apply to some of the new innovations that the Government’s applying. It’s fascinating to read the Cabinet paper on the appointment of the Chief Technology Officer, because what the Government’s wanting to do is to get out of the normal State sector requirement of appointments being politically neutral and create a really odd situation where the Chief Technology Officer will be a political appointment made by the Prime Minister and the Minister for Government Digital Services and not through the normal State services process. Now, the question I’ve got for the Minister in the chair is: will the new standards of integrity and conduct set down in clause 12 of this bill apply to that new office?

It’s quite interesting that the Government did not want the Chief Technology Officer to be a normal public servant, to be accountable to a chief executive, or to be accountable to the State Services Commissioner—that they wanted a political process. In fact, the way it’s described in the Cabinet paper is that the Chief Technology Officer for the Government will actually be like a one-person board. So my question for the Minister in the chair—and I’m pleased the Minister of State Services is back in the chair and is able to respond to this point. It is: will those minimum standards apply to whoever it is—and there’s some controversy about it—who is appointed as the Chief Technology Officer for the Government?

When I look at the list of employees in new section 57(3)(b) in clause 12, it says that, yes, it will apply to chief executives, that it will apply to employees, and that it will apply to board members, but it is absent on whether this new innovation—that I think the Government has quite cynically created to be able to override the normal standards of appointment and political neutrality. It’s created this new role without any of that constraint, and that person is not specifically listed in clause 12.

The analogy that I would make is that we have the position of the Prime Minister’s Chief Science Advisor, and I would expect the new codes of conduct that are being set down through clause 12 for members of boards, public servants, and chief executives should equally apply. Whether you are the Prime Minister’s Chief Science Advisor or the Chief Technology Officer, it would seem to us to be an anomaly in this provision that those specific office holders are not mentioned.

The last part we just want to put a question to the Minister on in respect of Part 2 is how far will these standards of integrity and conduct go—that is, we’re all in favour of the issues of probity and being careful with public money and those sorts of issues being included in these codes, but what we don’t want is for these codes of conduct to have those arms, legs, and fingers of the State Services Commissioner sneaking too deeply in to it, whether it be our school boards of trustees, whether it be our health boards, whether it be our other significant Crown entities. It would be very helpful if the Minister was able to give a steer as to how far those codes will go.

Thank you, Mr Chair. It gives me a bit of pleasure to take a call on this bill, which, on the face of it, looks quite simple, but I just wanted to follow on from Dr Nick Smith, the previous speaker, because having been around business and boards for a fair bit of my life, I’m naturally suspicious of the motive of all sorts of things that go on in this sector.

I think one of the great challenges we have with all of our boards in this country is the stifling of innovation and the stifling of the ability to pick up on things and make change for the better. I’m not at all sure it’s bad, because I don’t really know where this will end up, and I think that’s the challenge we have with some of this stuff: we don’t know how far it’s going to go.

I guess that I’m not opposed to having codes of conduct imposed on boards of directors, but I am very suspicious of having codes of conduct that cover boards of directors, chief executives, and employees of whatever with the same conditions imposed on all of them, because I don’t think it can possibly work. So I’d be very interested to understand how the codes of conduct might work, because I do think that board members do need to have a very different set of standards around them. I know the Minister said a little earlier that the statutory requirements of board members will not be impacted by the code of conduct, and I was pleased to hear that because I think that makes a deal of common sense.

I’d also be a bit interested to understand—and, I suppose, time alone will tell us that—how much influence the Minister of the day might have in the implementation that the State Services Commissioner might put on these codes of conduct, and, in fact, what you might be able to influence in the course of the code of conduct being, I guess, implemented, because I think also that that could impact the type of person that puts their name forward for these boards. It could also impact on the quality of board member that we’re able to attract into these sorts of organisations.

I’d have to say that I’ve never, obviously, been part of one of these types of boards, but I’ve certainly been around boards for a fair bit of my life and seen what I think is inhibitory behaviour, I suppose, for want of a better word. In other words, I think it’s very easy to inhibit the quality of the result we get by legislation, and I’d be nervous that there is a potential in this for that to happen. I’m not sure there is, and maybe the Minister can assure me of that, but I just think that we need to be careful when we start to put these sorts of things in place that we don’t stifle innovation and stifle the ability to get a better result.

As I said earlier, I don’t have an issue personally with a code of conduct, and I certainly don’t have an issue with the State Services Commissioner being able to implement those, but I’d just remind the committee that this is not an academic exercise we’re undertaking here. This is about performance and about getting better results for the taxpayer, I suppose, for want of a better word. I think it’s important when we consider how we might impose these types of things on boards that it’s done constructively and in a manner that certainly—as I said a minute ago—doesn’t put people off being part of that board and that encourages the very best people to put their names forward to be part of those boards.

I guess, if we don’t do that, we could end up with a—and I think the previous speaker referred to it—situation where we’re dumbing down the State sector. Of course, as soon as that happens, you then impact on the type of person you can employ in the State sector. So I think that’s quite a concern to us, and I’m probably just slightly outside the scope of this, but I’m certainly not in favour of the massive pay increases that we get in all parts of business in New Zealand. I do think we need to be able to attract the best people at the same time, and I’m not sure how you get that balance right.

So, as I said, this is not an academic exercise; it’s really about getting a better performance for the sector. I think it’s important that we retain the independence of those board members and enable them to perform to their best. As I said, I would be quite interested to understand from the Minister in the chair, Chris Hipkins, one or two of those points I’ve raised, because I think it is interesting. I do think this kind of legislation—as we saw right through from the time of the global financial crisis (GFC)—if we’re not careful, has the ability to, I guess, stifle or impact negatively on what we’re actually trying to achieve. We saw that with some of the finance companies as a result of the impact of the GFC, because I think we ended up doing away with a sector in the New Zealand economy that was pretty important to it. So that’s my point. Thank you, Mr Chair.

Thank you, Mr Chair. I’m very happy to respond briefly to a couple of issues raised by the Hon Dr Nick Smith. I understand—I briefly had to duck out to attend to a call of nature, but I understand that he was raising issues around—

💬 Hon Member: Too much information.

—it’s too much information, yes; I apologise—whether entities other than State agencies should be exempted from the Privacy Act considerations, as State agencies will now be as part of this bill. I actually think there is some validity to the argument that Dr Smith might have been making, but it would fall outside of the remit of this bill. But I think that it is something that the House may wish to consider and that there’ll probably be opportunities to consider as we look, for example, at the rewrite of the Privacy Act and also work around the Protected Disclosures Act, for example, as to how we could deal with those issues.

With regard to the issues around codes of conduct, just to reiterate the points that I made earlier, I’ll perhaps refer people to the departmental report that was provided to the Governance and Administration Committee, paragraph 33: “A code of conduct issued by the Commissioner cannot override, undercut or otherwise interfere with Board members’ statutory duties or any statutorily independent functions, as the statute will prevail.” This bill has been amended to absolutely crystallise and guarantee that, but the report does go on to specify that there might be variations in the code of conduct and specify the reasons why that might be. The report notes that the “operational context of an agency or of particular persons or groups of persons.” might be different, and the commissioner therefore has “discretion to issue modified codes to different types of entities or different persons or groups of persons.”

The example that it cites is actually an example from the core Public Service, where the Public Service code of conduct has been modified in the case of political advisers or ministerial advisers in Ministers’ offices, because they cannot do their jobs if they operate in a completely politically neutral and independent manner. There are parts of the Public Service code of conduct that, quite rightly, should apply to them, but there are parts that, if applied to them, would stop them from doing their jobs, and so the State Services Commissioner, in recognising that, has issued a modified version of the code for them. What the provisions in the bill allow is for the commissioner to issue a code of conduct and then, if necessary, issue modified codes of conduct, depending on the particular statutory functions of an entity concerned or the people within that.

Thank you very much, Mr Chair. Part 2 of this bill, as we’ve heard, makes two amendments, one to do with the State Services Commission’s investigation powers and the other to do with setting out the codes of conduct. I do appreciate the Minister in the chair, Chris Hipkins, talking about how those codes of conduct can be specified and bespoke and tailored to the types of roles people have in the State services. But I really want to look at the investigatory powers and the additional sections of the Inquiries Act which have been included in this bill.

This bill seeks to update the commissioner’s advisory powers under the Commissions of Inquiry Act 1908. So it’s an Act that has really, truly done its time, and I think it’s really important that we regularly update some of these older bills. Interestingly enough, even though with these bills, often, the actual values don’t change, we need to modernise and simplify the provisions so that they are fit for purpose in the future. So bringing the Inquiries Act of 2013 into this bill makes common sense, and I think it’s particularly interesting what we’ve heard in terms of privacy, and I’ll come to that a little bit further in.

First of all, delegation of an inquiry—I think that’s important. We hear here that under section 21 of the Inquiries Act and section 23 of the State Sector Act, they allow for the commissioner to delegate, under certain powers, an inquiry, but, unfortunately, there’s a conflict between both of those Acts—slightly different rules about that. So the Governance and Administration Committee has recommended inserting a new clause, clause 8, inserting new section 9A(3A), which will “make it clear that [the] delegation under section 21 of the Inquiries Act must be carried out in accordance with section 23 of the State Sector Act.” I think, again, this is a good example of getting clarity in this bill.

I’m always interested, also, in these clauses exempting inquiries from privacy principles, and the two principles they are exempting for are principles 6 and 7 of the Privacy Act 1993. For those who don’t have that up their sleeve, what they actually mean: privacy principal 6 is “Access to personal information”, and privacy principle 7 is the “Correction of personal information”. I think it’s been quite an interesting and useful debate that we’ve had from my colleague the Hon Dr Nick Smith, which the Minister has also spoken about, in terms of whether this should only be for the State sector or whether it should also be available in terms of the private sector.

But what we’re saying in this bill is that the purpose of this exemption is to ensure that inquiries have access to the best evidence—the best evidence—by allowing witnesses to provide evidence in confidence and also without being concerned that a third party could have access to this information. Although the committee thought that this exemption was important, it wanted to make sure that it only applied to inquiries made by the commissioners that were formal inquiries. So, in other words, you can’t use it willy-nilly; it has to be a formal inquiry before you can have these exemptions under principles 6 and 7 of the Privacy Act.

I think the committee also recommended that the bill provide a way to signal that an inquiry has been initiated and the exemption applies, and so they did quite a lot of work in terms of amending clause 8 and proposing new sections to make sure that the commissioner had to have a written certificate in order to initiate an inquiry. It also set out in the bill what that certificate should include, also making it clear that the commissioner’s power to make a certificate could not be delegated. So, again, the commissioner has to be responsible if he is going to make a certificate. Furthermore, added to that, there were further accountability and transparency measures, which is always a good thing.

I think the issue around that in terms of reporting is that the State Services Commission annual report had to include the number of certificates that had been issued and a summary of each inquiry, so that, therefore, the public and anybody reading the annual report would know which inquiries they’re doing and why they had been initiated. So we think that’s an improvement to the Act, and we support that.

I move, That the question be now put.

Thank you, Mr Chair. Following on from my colleague Nicky Wagner’s intervention around the inquiries, there are some pretty beefy powers contained in this piece of legislation, and one of those powers that did concern the Governance and Administration Committee—and to which we have a proposed amendment—is in section 10 of the State Sector Act, which provides for access, which provides for the provision of documents and a requirement for employees to answer questions.

If you think about that provision, it is pretty wide-ranging. It must be incredibly intimidating for those who are caught up in the subject of an inquiry. I’m very mindful of what Ian McKelvie said previously, which is that we’re not just talking about hypotheticals here. We are talking about real incidences where there has been an inquiry triggered, a certificate has been issued, and that process, which has just been well canvassed by the Hon Nicky Wagner, is in train. Now, here, the rubber hits the road where, under section 10 of this power, there is an absolute requirement for access to an office, access to a building, within certain conditions, of course. There needs to be a period of notice and there needs to be consideration around that time where that office, say, for the purposes of this argument, is there.

But in the bill as drafted, the State Services Commissioner’s powers of entry, at least to a broader range of inquiries, would have started with a wider range of triggers. I think it’s also really important to note that powers of entry are not used often—in fact, very rarely used—but they also provide a very important component in the undertaking of an inquiry.

The committee, having considered section 10 of the principal Act, has proposed an amendment in new clause 8A that entry should be made only if the commissioner has first obtained the agreement of the Minister of State Services. That is a fettering or limiting of the power of the bill as it was introduced, because when the bill was introduced, the commissioner would have had quite a wide power to enter the premises of a State services entity, where an inquiry is launched and where an inquiry is launched into a matter of integrity.

So clause 8A constrains this power. Clause 8A would require the commissioner to obtain the consent of the Minister of State Services before exercising that power to enter the premises. I would imagine that would provide cold comfort to those who are on the receiving end of an inquiry such as this and who work in an office or an environment which is subject to an inquiry, but they should take some comfort that this recommendation in clause 8A, which amends section 10, limits the power and constrains the power of the commissioner to enter premises.

I move, That the question be now put.

Part 2 deals with codes of conduct and also inquiries. In terms of codes of conduct, on the website of the State Services Commission, there is a statement, actually. It specifically states why there is no code of conduct for Crown entity board members. It says, “As the Crown Entities Act 2004 specifies individual and collective duties of board members, the Commissioner has decided not to include the personal conduct of board members in the coverage of the code of conduct.” Now, of course, we are going to change that. On the other hand, it is important for us to make sure that we make it clear how we will apply the code of conduct. Will it be collectively or individually?

A submission by the Institute of Directors specifically raised this particular point. It emphasised the importance of there being clarity around the collective and individual duties of boards and board members under the Crown Entities Act 2004, and their obligations under a code of conduct. While legislation takes precedence, there may be issues with how the Act and the code interrelate and operate. It also emphasises the importance of how the proposal will not compromise the statutory independence of independent Crown entities. I think these are points that we need to bear in mind when we come to talk about this code of conduct issue.

I am very proud that the Governance and Administration Committee made a substantial contribution to Part 2 of this particular bill. For instance, the committee included section 9A(4) about exemptions—some members have mentioned that. But, at the same time, the committee also made an effort to constrain the power of our commissioner—for example, in clause 8A. The reason for us to have the exemption clause is to ensure the commissioner would have more power to make sure that the witness would be able to give their evidence without being concerned about the access of third parties. So that is important in that sense. At the same time, the committee also made it clear that we need to somehow limit the power of the commissioner, in this particular case, with the exemption. This kind of an exemption will be applied only to formal inquiries, not to other inquiries—it must be very formal. The committee also proposed a new section which would provide a mechanism for a witness to apply to the court, seeking an order to allow them to withhold privileged, confidential, or State-sensitive material.

At the same time, the committee would also constrain the commissioner under the bill. As introduced, the commissioner would have had relatively wide powers to enter the premises of a State services agency where an inquiry is being launched into integrity matters. Well, this bill, as amended by the committee, will constrain the commissioner’s power. The committee also made a contribution in the sense that the commissioner would make sure that this kind of inquiry would be limited only to formal inquiries, and also transparency will be assured with annual reports, because with annual reports we’ll be able to know how many inquiries have been launched in the past year and also all those details. This will ensure transparency.

This bill itself, of course, is about integrity, openness, and, of course, transparency. So the committee itself made a great contribution in this sense. Thank you, Mr Chair.

I move, That the question be now put.