New Zealand Public Health and Disability (Waikato DHB) Elections Bill

on behalf of the Minister of Health: I move, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be now read a first time. I nominate the Health Committee to consider the bill. At the appropriate time, I intend to move that the bill will be reported to the House by 17 June 2019 and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area, despite Standing Orders 191, 193, and 194(1)(b) and (c).

The bill will provide for the Waikato District Health Board (DHB) to be exempted from holding an election for its boards, scheduled for October 2019 in the triennial cycle, as currently required by legislation. The effect of this bill is to allow for the term of the Waikato DHB commissioner to be extended until the triennial elections scheduled for 2022. This provides the commissioner sufficient time to develop, oversee, and implement a financially sustainable plan for Waikato DHB and improve clinical service performance. Without legislative change, the commissioner would have had less than seven months to improve Waikato DHB’s position.

Earlier this month, the Minister of Health dismissed the board of the Waikato DHB and appointed a commissioner for the DHB, following serious dissatisfaction with the performance of the board. In particular, ongoing clinical service performance and poor financial performance had caused the Minister to lose confidence in its ability to deliver on its strategy for the region.

Financial deficits have been a feature of Waikato DHB’s performance for some years. However, earlier this year, the situation deteriorated considerably. The DHB recorded a deficit of approximately $37.2 million for the 2017-18 year, which was unfavourable to budget by $27.2 million. The DHB’s planned budget for 2018-19 is a deficit of $56.1 million, and the forecast budget for 2019-20 is a deficit of $61.6 million. The Minister has not approved the DHB’s 2018-19 annual plan, given the scale of the deficit and the clinical service issues.

There has also been instability at the board and executive management level. Former Waikato DHB Chief Executive Nigel Murray resigned in October of 2017, following an independent inquiry into his expenses. The chair resigned a month later. A separate State Services Commission review was critical of the DHB’s financial management and controls. When the Minister appointed Dr Poutasi as commissioner at Waikato DHB, he intended to extend her appointment beyond the 2019 DHB board elections, to allow her an appropriate period of time to address the significant governance, clinical service and delivery, and financial concerns. Minister Clark has asked Dr Poutasi to assist in addressing these financial and service issues through developing a sustainable operating plan, to ensure collaboration with Waikato’s neighbouring DHBs and to strengthen the DHB’s leadership role in the Midland region as well as to confirm a stable and effective leadership team within the DHB, to help ensure that the financial and service issues do not continue into the future.

As the commissioner will need to introduce significant changes to achieve all of these objectives, the Minister would like to give her an appropriate term to achieve sustainable change. We believe that extending her term until 2022 will provide an effective time frame to achieve these outcomes. The Minister does not propose cancellation of a district health board election lightly. The bill therefore impacts only one election at the Waikato DHB and will ensure that the next board to be appointed as part of the 2022 local board elections will begin its term on a more secure financial footing and with more stable governance in place.

The appointment of a commissioner offers an opportunity to resolve the DHB’s financial challenges and to help secure more sustainable health services and health facilities for the people of the Waikato District. These challenges will not be addressed overnight, and cancellation of the upcoming election is necessary to give time for that action to be taken. I commend this bill to the House.

Thank you, Mr Speaker. I want to start with two statements: first of all, we support the democratic district health board (DHB) elections, and, secondly, I want to acknowledge that Waikato DHB was also struggling in our hands. There were some challenges that are quite clear to everyone and that we were making our way through as well.

What we’ve heard here are the reasons for the bill and the reasons for why Waikato DHB has been struggling. But while we’ve heard these issues, what we haven’t had is any acknowledgment from the Minister as to whether he has had a hand in these past 18 months in contributing to the reason we find ourselves with this bill before us today. So whereas I’m happy to acknowledge we had some issues that we needed to deal with, I’ll help the Minister out and give the gracious speech he maybe should have given, acknowledging his failings that bring this bill here today.

Now, for background, none of us should take the removal of democratic processes lightly. In fact, I believe this is only the third time that a DHB board has been sacked. The first was in 2008, under Tony Ryall, when Hawke’s Bay DHB was replaced by Sir John Anderson. The second was in 2015, when Jonathan Coleman sacked the Southern DHB—I’ll come back to that later—and Kathy Grant took over. And here we are today, with David Clark sacking Waikato DHB and putting Karen Poutasi in the commissioner’s role—who I rate, actually; Karen Poutasi’s a very skilled and knowledgable lady.

So here are the acknowledgments that maybe the Minister should have made around his own failings that bring us here today, and there are three of them: first of all, ministerial leadership. Now, the Minister has many tools at his disposal, some of which he’s used to bring DHBs into line—for example, the letter of intent at the beginning of each year is a very clear message from the Minister to the DHBs of what he expects them to do. Waikato DHB had a very weak copy-and-paste that pretty much every other DHB had, which did not, in my opinion, firmly and strongly give them good guidance as to what the Minister’s specific expectations for them were. So what the Minister admitted in his speech was to apologise for his leadership failing with the letter of intent.

The second failing was with the Crown monitor. The Minister appointed Ken Whelan to be the Crown monitor to Waikato DHB—yeah, how has that gone? We wouldn’t be here today if that had gone well, and so I think what the Minister also admitted in his speech was to apologise for a failed Crown monitor.

I think the third and final acknowledgment that is missing is operational decision-making, where the Minister specifically gave instructions to Waikato DHB in July last year, and those instructions were around the National Oracle Solution—a multi-platform, very expensive piece of IT software that was struggling. In July last year, the Minister said to the sector, “Stop. All of you, stop on the National Oracle Solution.” This was after, of course, he’d appointed the independent review panel to review the National Oracle Solution. Deloitte, as you recall, had already worked on it—whatever.

In July, the Minister said to all the DHBs, “Stop on the National Oracle Solution. We’ve got problems with it, except for four DHBs. You can continue.” Who were those four DHBs? Canterbury, Bay of Plenty, West Coast, and Waikato. They were struggling already with a major IT platform that’s a challenge for everyone, and the Minister gave them permission to continue. We will hear more about that because the National Oracle Solution continues to struggle, but, in the Minister’s own hands, he gave permission for Waikato DHB to continue with the National Oracle Solution, and I’m sure that’s part of what brings us here today.

So, three areas where the Minister could have fessed up and said, “Ha! Maybe I could have done better as well.”: ministerial leadership, the Crown monitor, and operational decision-making around the National Oracle Solution.

I want to briefly talk to the departmental disclosure statement, which points out some issues with the Treaty of Waitangi obligations—particularly that “The exemption of the Waikato DHB from the 2019 elections means that there would no longer be a Board with Māori representation.”, and it fills out a bit further than that. Now, this is going to be a problem here today. It’s going to be a problem for the Greens and New Zealand First, and I’ll tell you why: when Jonathan Coleman sacked the Southern DHB board, it was New Zealand First and the Greens who voted against that bill, an identical bill to what we’re seeing here today that suspends democratic elections.

New Zealand First and the Greens voted against it. Here’s what they said in the House. The Greens: “The whole point here is making sure that we maintain the strongest possible, the most open, the most transparent, and the most engaging democratic process around the world. New Zealand prides itself on … democracy. We can maintain that pride only if we respect the right of New Zealanders to have a say. This bill strips that away. This Government has no respect for the right of New Zealanders to have a say over their democracy. This is yet another attack, which the Green Party will not support.” Where will they stand today? If it was good enough for us for them to stand on their morals and principles and say “We will not support this.”, I challenge them to offer the same morals and principles today.

And New Zealand First—exactly the same. Where are they going to stand: morals and principles or a coalition agreement? Well, we’re going to find out soon enough, because when we brought the similar bill in 2015 to the House, here’s what New Zealand First said: “But, first, what this bill means for democracy in this country. One of the basic principles in this country is the right to vote. It is how I got my job; it is how the Minister of Health got his. In New Zealand First we respect democracy, but this bill is an appalling affront to democracy.” So let’s see later in the day exactly where those two parties sit. Are they going to stand by their 2015 morals and principles, or have they shifted towards the coalition agreement?

This is going to be a problem for them; it’s not a problem for us. We understand fiscal responsibility and we understand the Waikato DHB has been struggling, so we will be supporting this bill. Let’s see what the other parties around the House do later in the day. Thank you, Mr Speaker.

Mr Speaker, thank you for the opportunity to take a brief call on this bill. As a member of Parliament who’s based in the Waikato region, I’m certainly very proud of the work that the staff do at the Waikato District Health Board (DHB). The challenges in the leadership have certainly been well documented over the past few years, and I’d like to acknowledge the leadership of our Minister of Health, the Hon David Clark, for the work that he’s done around bringing stability to the DHB.

The reason this bill is here is to cancel the elections, and that’s to give the commissioner time to bring about that sense of stability and return to a stable pathway moving forward. I commend this bill to the House.

The purpose of this bill has already been articulated by Minister Salesa and my colleague the associate spokesperson for health in the National Party Dr Shane Reti. I’m mindful of the fact that we’re coming to the end of an urgency period and that colleagues want to get home, but please bear with me for a couple of minutes. This is a very, very important issue for our region, and I do just want to put a couple of points on the record.

As Dr Reti has just indicated, the National Party indicated at the time that the Minister’s decision was announced that we gave it our cautious support, notwithstanding the fact that no MPs wish to see the abandonment of local democracy in their areas. I note that there does seem to be understanding of this decision in my electorate, in Hamilton West, and throughout our region.

I have to say that understanding even seems to be apparent from some of the discussions I’ve had with former district health board (DHB) members themselves. Most of them offered their resignations when the Minister’s intentions were mooted about a couple of months ago, and so there were only two who were, technically, dismissed by the Minister. I want to thank those DHB members for their service to our region, notwithstanding the fact that their departure clearly signals that all is far from well.

It has been widely reported that the Waikato DHB has had serious issues in recent times, especially the unjustified spending of the former chief executive, who, frankly, let us all down very badly, but also the board’s inability to find a replacement for Dr Murray; a forecast deficit of $56 million, which Dr Reti has just indicated; and also the fact, as Minister Salesa noted, that the Minister has not approved the Waikato DHB’s annual plan.

I do want to put on record, as a Waikato MP—and Mr Strange has just made a similar comment—that it is our view that the clinical staff at Waikato Hospital and, in particular, the outgoing acting CEO, Mr Derek Wright, did a superb job after the ignominious departure of Mr Wright’s predecessor.

💬 Hon Nanaia Mahuta: That’s right.

And it’s good to see also the Hon Nanaia Mahuta endorsing that view. Those clinical staff and Mr Wright have all worked extraordinarily hard to maintain clinical and financial viability. Blame should not be levelled at any of them. On the contrary, they deserve our thanks and support, especially as they continue to serve through this challenging transitional period.

Dr Reti noted that there are a number of issues behind the Minister’s decision, but he must also take responsibility for his inability to deliver on the promises that he made to communities about DHB expenditure and budgets. It is his failure to rein in many of the DHBs that has led to the period of instability that many now face, and I note that there will be a lot of DHBs around the country who will be looking over their shoulders at what has happened in the Waikato DHB and thinking, “Are we next?”, because, frankly, in many respects, their circumstances are very similar.

Because of the fact that most MPs are taking fairly short calls, I will do so as well. But, on behalf of my disenfranchised constituents, I urge the Minister to make good on his promises to DHBs not just in my region but right around the country. I wish Dr Karen Poutasi, the commissioner, all the very best in the challenging and important work that she is now undertaking. I very much look forward to the restoration of local democracy in my region. I’ll leave it there for now, but I do anticipate having more to say on this matter if, and presumably when, it returns to the House for its second reading.

Bill read a first time.

Bill referred to the Health Committee.

on behalf of the Minister of Health: I move, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be reported to the House by 17 June 2019, and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area despite Standing Orders 191, 193, and 194(1)(b) and (c).

The reason for the need for the shortened select committee hearing period is that polling day for local government elections, including district health boards, is 12 October 2019, and this bill needs to be passed well in advance of that date before significant steps in the election process occur. This is in order to provide certainty around the local election processes, to avoid unnecessary cost and resource being applied on preparation toward any election, and to ensure transparency for the public, including any persons who may have been considering standing as candidates, that the election is not proceeding. Thank you, Mr Speaker.

We certainly understand the need for a shortened period of consideration by a select committee, but it does seem that the 17 June date is particularly short. Given that this week coming is a recess week, and so the select committee itself is not likely to meet this week, and, even if they did, public submissions that might come on this bill would not be available for the committee to consider, it leaves just one sitting day for the committee to make consideration to hear anybody who might want to put a counter view—and I’m sure there will be; that’s the way it is with these things—before the report-back date of Monday, 17 June.

It would therefore not seem unreasonable for a three-week period to be considered by the select committee, given, particularly, the ability of the House to get this bill finished in the early part of August. The ballot papers for this election will not be printed before the closing date for nominations, which is a date in September, so there is plenty of time. While I can understand some caution, I think caution that denies some public opportunity to make a comment, particularly when the whole House today has said this is an appropriate course of action as far as the bill is concerned, is a little bit off. So would it be appropriate for me now to move an amendment to the motion?

💬 SPEAKER: I’m going to check as to whether it’s an amendable motion, and I’m also looking at the Government to see whether they’d be willing to move it by a week, as requested by leave. I’ll get advice on both at the same time. Yes, the member can amend it if he—

Well, then I would move that the report-back date for this bill—

💬 SPEAKER: No, I think what you are moving is that the date of 17 June be changed to 24 June.

If that is an extra week—24th or 25th—that would be fine.

💬 SPEAKER: The 17th to the 24th—seven days.

I’ll take your maths over mine any day, Mr Speaker. Thank you very much.

I sense there’s an agreement, so what I’ll do rather than do all the written stuff is I’ll seek leave to amend the date in the motion. Is there any objection to that? There appears to be none.

The question was put, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be reported to the House by 24 June 2019, and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area despite Standing Orders 191, 193, and 194(1)(b) and (c).

Motion agreed to.

The House adjourned at 2.50 p.m. (Saturday)