Public Service Legislation Bill

It would be hard to find a more important statute on the books of New Zealand than our legislation that governs our public sector. The very job of this institution of Parliament is to deliver public services, to provide public advice, and to provide the electoral accountability between the 5 million New Zealanders and the tens of thousands of people who work in our respective Public Service, and the extraordinary part that we have this morning in Parliament is the House in urgency, writing legislation that sets the framework for our New Zealand Public Service and the Government, this week, tabling over 500 clauses—200 pages—of law changes to this legislation. It is intending, effectively, to table in this Parliament 500 clauses of law that define how our public services work and to, effectively, say to the Parliament “and we’re going to pass it today.”

I have heard the Minister in the chair, over the last 10 years, give numerous speeches about the importance of parliamentary scrutiny and proper legislative process. I ask the Minister in the chair: how can he possibly pretend that Parliament is giving proper scrutiny to his legislation, 200 pages in Supplementary Order Paper (SOP) 549, which the Opposition got access to only two days ago, and say that it is a good lawmaking process?

Now, I’d say to Minister Chris Hipkins, in respect of the emergencies that our country has confronted around the earthquake and around COVID-19, that you can justify such speed of process, but this is nothing to do with that. This is one of our foundation Acts. It has almost a constitutional status, as we well know, with the powers of the State Services Commission. This is the most significant legislative change since the State Services Act was passed in 1988. How shambolic and awful have our parliamentary processes become, and how arrogant the Government has become that somehow it thinks it’s satisfactory process for an Act of this sort to be changed.

Now, in Part 1 of this bill, we set out the framework and we have called it the broader principles for the management of our Public Service, and we have tabled amendments because we have concerns about some of those principles. One of the most important is respect for this institution of Parliament, and I say to the Minister of State Services: how can you possibly expect that the culture that you’re trying to establish within the Public Service of one of respect for our parliamentary democracy—how is that being delivered when this Parliament of 120 members receives a 200-page SOP with the expectation that Government members will have given due reference to those provisions, and they’re going to be whacked through the Parliament under urgency in less than 48 hours?

I ask the question: is there any member in this House who’s read the 200 pages and 500 clauses of amendments?

💬 Hon Chris Hipkins: Yes.

Well, that’s very good—the Minister says he has. I will ask him a very specific question, then: why is the Government changing from the bill that was before the Governance and Administration Committee to the amendments?

The issue around appropriate medical tests that can be done in this bill is changing. There was no opportunity for submissions and no opportunity for any member of the public to be able to test whether the legal requirements for requiring a public servant to take medical examinations is appropriate. I don’t know—I only heard about it 24 hours ago. It’s a pretty significant issue.

I only spotted one question in that contribution from Nick Smith, and I’m happy to respond to it. The SOP tabled by the Government here does little more than adopt the amendments recommended in the departmental report that the select committee did not work its way through, because in the six months available to them they were unable to organise their business in a way to do that as select committees would normally do.

The SOP adopts the recommendations that arose from the select committee process, so it’s a bit surprising to see that the member who participated in the select committee process is unfamiliar with the contents of those amendments, because those amendments arose from the select committee’s deliberations on the matter. Unfortunately, the committee were unable to organise their business in such a way that they presented the bill with the amendments incorporated back to the House, so therefore the Government picked up the work that the committee had done, and adopted the recommendations from the departmental report that are a reflection of the submissions received during the select committee process. All of the amendments that are proposed in that Supplementary Order Paper flow from the select committee’s process.

It is regrettable that the committee were unable to organise themselves—as I said, in the six months they had to consider the bill—in a way that presented the bill back to the House in a shape that it was ready to pass. So the Government has picked up the work that they did, and we have followed that through, and we present the SOP that picks up the work the committee has done.

💬 Hon Dr Nick Smith: Madam Chair?

This process now is a question and answer. If you’re following a line of thought, I’m quite happy—you don’t have to take a call.

Well, I wish to challenge the Minister around the issue that every one of the amendments in the SOP comes from that select committee because that is, actually, not correct.

The second thing is the Minister says that “Well, the Public Service legislation was before the select committee for six months.” Actually, something occurred in the last six months. I don’t know whether any colleagues noticed, but, actually, we had the biggest national emergency in the history of our country. We had our Parliament shut down for a significant period. We had the very Minister in the chair say to this Parliament that, during the COVID emergency, there would only be time to consider urgent legislation associated with the COVID emergency. Now, nobody would reasonably say that this Public Service legislation, the biggest change in legislation in respect of our public services since 1988, is somehow related to the COVID emergency.

So for the Minister to say, “Well, everything in this SOP is just what the departmental report said.”—Minister, that’s at the core of the problem, because what you’re saying, Minister, is these are the amendments the department wanted, and Parliament shouldn’t take too much interest. Is that the culture that he wants to establish for the New Zealand Public Service—that the departmental officials decide what law they want to govern themselves, and Parliament should only take a peripheral interest, receive it two days ago, bang it into law?

I ask the question again: has any member of the Green Party read the 200-page SOP and the 500 amendments?

💬 Michael Wood: Repetition.

Well, the member says it’s repetition. It’s actually pretty crucial. The member Michael Wood thinks that Parliament should just take the report from the department, slap it into law, and that that’s OK. That’s the sort of Labour Party view of the job that this Parliament has around legislation that governs the expenditure of $80 billion of public taxpayers’ money every year. Members opposite think this process is fine, that it’s just Parliament’s job to rubber-stamp the law and, if the department decides that this is the law that they would want to govern the operations of the public sector, they can deliver this Parliament 500 clauses of law, give us two days’ notice, and pass it through all its committee stages, and somehow that is appropriate Parliament scrutiny of legislation, and members on this side of the House say it’s not.

We have witnessed, I would say to the Leader of the House, situations where rushed law of this sort—where a Minister has told the Parliament it’s one thing, and two days later we discover that, actually, it was a completely different law that we passed. We’ve witnessed other laws in the last few weeks where Parliament passed the law one week and the next week we had to go into urgency to pass new law to patch up the mistake we made in the previous week, and we are repeating all those errors. I can give this Parliament absolutely no assurance that I have given the level of scrutiny on any of these 500 clauses that we only saw two days ago, and that they are good law.

Again, I stress how important it is: this is a sham process; this is Parliament being treated with complete disrespect. I have heard a hundred speeches from members of the Labour Party in Opposition criticising bills under the previous Key-English Government that had a far more robust process with it. It is an incredible double standard for Mr Chris Hipkins to sit in the chair and to pretend this is satisfactory process on one of the most important pieces of legislation. It is a sham, it is a disgrace, it is actually saying to the Public Service, “Do what you like, produce what laws you wish, Parliament will not scrutinise them.” The importance of our parliamentary democracy around its control of the public sector and the way in which they behave is something that he has no regard for. He has become little more than a “Yes, Minister” in this regard, and it’s something that he will live with with regret, as will other members that are passing this law. I’ll bet you there isn’t a single New Zealand First MP that’s read this huge Supplementary Order Paper. I’ll bet you there is not a single backbench member of the Labour Party—[Time expired]

OK, OK. Now, if I can interrupt the member, I have allowed him—because the process is difficult—considerable time now to make what are quite general comments about process, but we are actually on Part 1, debating clauses 3 to 20 and Schedule 1. We are also in a different type of committee process where you are not limited to four five-minute speeches but more a question and answer process of the Minister. So I’m happy to allow the member to continue, but I do want it focused on Part 1 and I do want it in the order of a question and answer session on details of the bill.

An important clause in Part 1 is clause 10. It deals with the issue of Public Service principles. I think every member of this House hugely values the New Zealand culture of having a politically neutral public sector. We support the principle in clause 10 around the free and frank advice, the merit-assessed appointments, the principles of open government and of stewardship, but I have moved a Supplementary Order Paper because I think there is a very important principle for the Public Service that is missing, and that is an obligation to spend money wisely and effectively.

Over the last four months, I have never seen a Government spend money as recklessly as what we have seen, and I ask, for members opposite: why would you not support the New Zealand Public Service being required to spend wisely and effectively? I noted earlier last month the $570,000 spent on a little slide outside. I could refer to the waste of public money in so many spheres—the 340 working groups on which this Government has spent over $50 million. I could mention many, many areas in which this Government has been reckless with public money, and there hasn’t been a focus.

I’ll just give one little example, and it’s relevant to this part: the Ministry of Education, when this Government came to office, had 2,600 staff. In the brief nearly three years, the number of people in the Ministry of Education bureaucracy has increased by 33 percent. Let me just compare the numbers: a 33 percent increase in the number of ministry bureaucrats in Wellington. There has, over the same period, been a 1.2 percent increase in the number of teachers in the classroom. Let me say those numbers again: under this Labour Government, under this Minister, a 33 percent increase in the number of paper pushers in the Ministry of Education; a 1 percent increase in the number of teachers.

Members on this side of the House don’t share that priority. We want to maximise the amount that is spent on front-line services for our children.

💬 Marja Lubeck: These are the people that were cut—people that were cut by the previous—

Well, I ask the member who’s interjecting: would she like to explain why the numbers of people in the Ministry of Education has gone from 2,632 to 3,487? It’s a 34 percent increase in just three years. The Government has broken its promise on children getting access to special-needs support while at the same time we’ve got a bloated ministry bureaucracy.

💬 Marja Lubeck: Thirty years—30 years; still got no idea.

And the relevance—

CHAIRPERSON (Hon Anne Tolley): I just remind the member who is interjecting that, in actual fact, she has a very loud voice and she is not sitting in her seat.

So I would say to that member: will she support a requirement that our Public Service spend the money wisely and effectively? Now, I just use one small example, that National members would much rather the finances went to teacher-aides to support those three-year-old children for whom we’ve seen a blow-out, against the Prime Minister’s promise, in the time it takes for them—I think my colleague, the National education spokesperson, pointed out the time had almost doubled. Wouldn’t we rather that than the money being spent on increased bureaucrats?

So National’s view is that our Public Service does need to be politically neutral. It does need to provide free and frank advice. It does need to have open government. But why, in the principles of our Public Service, have we not included any reference to spending public money wisely? I’ll tell you why. Because it’s not part of the Government’s DNA. It’s not part of their culture. They do not feel the duty that every parliamentarian should feel, the duty that every public servant should have.

The principle around efficiency and effective use of public money is a really important one, and it is one that we considered when putting these principles together. The principles are owed to the Public Service Commissioner. When it comes to the expenditure of public funds, the duties of public servants in that respect are owed to the Minister. The basic premise of the Public Finance Act, which, of course, we all follow here in the House, is, actually, it’s Ministers that spend money—you know, public money, appropriated by Parliament—and therefore it’s Ministers who should be accountable for the efficient and effective spending of that money to this House. The issue of efficiency and effectiveness is covered in other parts of this bill.

Now, if we go to the very first provision before the one that the member speaks to, which is the purpose of the Public Service, it refers to “high-quality and efficient public services”, so it is already encompassed there, but particularly the responsibilities of chief executives, which is referred to further on. It makes it very clear that “the efficient and economic delivery of the goods or services provided by the agency and how effectively these goods or services contribute to the intended outcomes.”—that is the responsibility of the chief executives, and they owe that responsibility to the Minister.

So the question really is—there’s no question about the fact that there should be reference to the efficient and economical delivery of public services; the question is how that’s best framed within the law. I’m comfortable with the balance here, recognising that, actually, the Public Service Act, which is what this will be, is not the primary legislative vehicle for these particular provisions. It is the Public Finance Act, which, of course, sits alongside the Public Service Act, that deals with that, and there are very comprehensive duties set out there around responsible fiscal management and the responsibilities of chief executives in that.

Now, indeed, as the Hon Dr Nick Smith mentioned, it is very unusual to see a Supplementary Order Paper (SOP) as thick as this. I myself, of course, have been here for nine years—the first time I’ve seen an SOP this thick. This is largely because the Governance and Administration Committee could not report the bill back to the House. Now, the Minister mentioned the process. Also, I understand you ruled that, you know, we spent some time on this. But as the chair of the select committee, I think I should clarify a few points, really.

Now, I asked for submissions the following day, the day after the committee received the particular bill, and then it coincided with Christmas and New Year, and then we had COVID-19, so we lost a few meeting days. Then we really tried hard to meet our deadline. We tried very hard to have an extension. I have to say, the officials worked very hard, were very, very patient—and Dr Nick Smith, actually, also was very patient, and worked very, very hard—and they went through all the details of this particular bill.

I have to say, the bill itself—we support the intention; it’s very important. And the honest thing is that because it is so important, so complex, it’s a generational change bill, so therefore we thought it needed more time. I’ll give you an example of this. Indeed, many of these changes here are based on recommendations from officials, and the committee itself, and we did support most of the recommendations, but there are points we thought we should have more time to talk about. One particular point is, for example, the Chief Human Rights Commissioner. They mentioned that they would like to have a particular clause on this, but this is not included in this particular SOP.

So there are points we thought we should have more time to go through to examine and that we didn’t really have a chance to talk about—points like whether we should have a deputy commissioner to replace one particular chief executive, you know, under circumstances and for how long. We did have discussion, but in the end, we were not able to finalise some particular points. So that is why we believe that this particular SOP indeed has some flaws, because we do think that we were unable to have the time to examine carefully some particular points.

As I mentioned, really, this is a very important bill. We spent some time, but we lost some time during the six-month period, and just two or three more weeks would really have enabled us to go through all the details to improve the bill and to really make it a bill which makes a generational change.

Now, I support the vision like the commissioner’s, Commissioner Peter Hughes, and it’s a very good vision, a modern, agile system, which I believe is necessary for us. But when you have to rush and, in the end, can’t really have what we would call a perfect bill, then that’s a missed opportunity. So that’s why we believe that, indeed, as Dr Nick Smith mentioned, we would really support having more time to go through all the details. But, unfortunately, of course, we are not able to do so. But having said that, I do agree that this bill’s intention is good and there are many changes which we support.

But here, with this one particular SOP, with so many points, it’s just a rush under urgency. We don’t think that it really will serve this bill well. So that’s why we believe that we need more time. I hope that the Minister will be able to explain more points in more questions, and I believe that the committee should have that opportunity to examine the particular bill. I think that this particular bill, with more time and with more careful consideration, would be a much, much better bill. Thank you, Madam Chairperson.

Before I call the member, could I just comment that members seem to have reverted to the old style of committee stage debate, where their speeches were five minutes long, and that was it. The new regime is the House has agreed that there is a dialogue with the Minister. Some members are expected to raise questions to ask the Minister to respond. The Minister is expected to respond, and then the member can assume they’ll get another call. Five minutes is not a target.

Thank you, Madam Chair. I do have a question for the Minister based on his response to the Hon Nick Smith earlier. It is in regard to clause 10 in Part 1. The Minister’s response to the Hon Nick Smith’s tabled amendment was to refer to other parts of the bill that he thinks cover off spending public money wisely and effectively. But if we read in that clause 10, which is about Public Service principles, the first opening line is “In order to achieve the purpose in section 9, the public service principles are:”.

So while the Minister—and this is my question for you, Minister. While you’re saying, “Well, you know, Hon Nick Smith, have a look back at the purpose in clause 9. That takes care of your particular tabled amendment.”, in clause 10, it says that in order to achieve the purpose, the following principles are politically neutral, free and frank advice, merit-based appointments, open Government, and so on and so on. None of those refer to the wise and effective use of public money. That’s what Nick Smith’s tabled amendment says—the wise and effective use of public money. There is no reference in those principles to the use of public money. I take on board that there are principles around remaining politically neutral and free and frank advice, but the specific tabled amendment wants to insert the topic of use of public money. Can I ask the Minister why, if, in fact, the opening line is “In order to achieve the purpose of section 9”, they should be—I guess I just don’t see why there couldn’t be reference to the use of public money in that list of principles.

Can I just briefly reply to the member. Clauses 9 and 10 do need to be read in conjunction with clause 50, which, of course, is in the next Part of the bill. The way the Public Finance Act works—and, as I’ve indicated before, the Public Finance Act, of course, sits alongside what will be the Public Service Act—chief executives are responsible to their Ministers for the operations of their agencies and for the efficient use of public spending. So if you look under clause 50(1)(c), which says, “A chief executive of a department or a departmental agency is responsible to the appropriate Minister for—(c) the operation of their agency, including in carrying out the purpose of the public service under section 9;”, and then if you move to clause 50(1)(h), it says, “the efficient and economical delivery of the goods or services provided by the agency and how effectively those goods or services contribute to the intended outcomes.” So it is covered. There is, obviously, a cross-reference between clauses 9 and 10 and clause 50, so I’m comfortable that it is covered by the bill.

There are 24 changes in Part 1 of this bill. We only got these changes provided to us less than 48 hours ago, and I want to go through and systematically ask questions of the Minister as to what those changes mean. Now, a core part of this Public Service Act is which agencies are covered—so whether Government agencies, whether we’ve got independent agencies like ACC. We’ve got, of course, 2,700 schools. We’ve got district health boards. A really key question for all the other parts of the bill is who is covered, and we spent a lot of time at the select committee determining whether Crown agents, and which of those agencies, should have the commissioner of the Public Service oversee them, which will have powers to investigate them, and how their responsibilities will wrest back to Ministers.

We see in clause 8 some of the detail of Government departments, of departmental agencies, where we’ve got these new interdepartmental executive boards and these interdepartmental ventures, which previous Prime Minister Bill English, through the social investment model, established. Now, what we see in clause 4 of the Minister’s Supplementary Order Paper (SOP) 549 is changes to which Crown agents Part 1 applies to. When we had the bill at the select committee, I was really keen to know: will these rules of Public Service be neutral, will these rules of the Public Service be open, accountable, will these rules of merit-based appointments—all of those things. We need to know as a Parliament as to which are the agencies that are covered by them.

So I would like to know from the Minister, quite specifically, with the changes that he is proposing to clause 4(1), where we are saying “Some provisions apply to Crown agents” now—not all of them; only some of the provisions apply to parts of the Public Service. I’d like the Minister to answer the question: what does his SOP change in terms of the agencies that are now covered by this legislation, and when it says that some provisions will apply to them with his Supplementary Order Paper, I would like to know which are the agencies that are not going to have some of these principles apply. In other words, we need a very clear definition on which parts of the Public Service are covered—how is he changing that?—and when he is changing the coverage of the provisions in this bill, we need clear answers as to what those changes are. If the Minister could give some clarification of why these changes are being made at the last minute, that also would be helpful.

I’m very happy to clarify. Clause 4(1)—the clue is in the name. It says “Guide to this Act”. The additional wording added at the end of clause 4(1) is simply providing additional clarity. It does not make any changes to the substance of clause 8. Members looking at clause 8 will, of course, see that Supplementary Order Paper 549 does not make any changes to the substance of that clause.

I move, That the question be now put.

Thank you, Madam Chair. I would like to ask a question to the Minister in the chair, the Hon Chris Hipkins. First of all, in Part 1, clause 10 says that while appointing the chair of the board, it should be a merit-based appointment. In the Supplementary Order Paper, it clarifies further that it is not only the chair but the board members also. So what criteria are to be followed and who will look after that this is being followed, particularly if we look from the ethnic side? How will they get that equal representation under different boards, because so far that question was raised during the select committee process and we don’t have any report from the select committee? So my question to the Minister is: how are you going to address this issue while appointing the board members as well as the chairs from time to time?

I’m not entirely sure that I follow the member’s point. Clause 10(1)(c), which I assume is the clause that the member is referring to, refers to the fact that the Public Service should make “merit-based appointments (unless an exception applies under [the] Act):”. The basic principle of merit-based appointment, of course, is one that was in the original Public Service legislation passed early in the last century. And the purpose of that legislation was to move away from, effectively, cronyism, where the Public Service was dominated by people appointed based on who they knew rather than based on them being the best person for the job. So the basic premise here under clause 10(1)(c) is that the Public Service should operate on the basis that the best person for the job gets the job, i.e., it is a merit-based appointment rather than favouritism or cronyism, as has been the case in the New Zealand Public Service in the past—certainly the case in the early days of the New Zealand Public Service before the original Public Service legislation was passed.

With regard to board appointments, I’m not sure which particular boards the member’s referring to. But, of course, I would note that many, many boards within the Public Service, particularly when it comes to Crown agents, Crown entities, and so on, actually these provisions do not apply to because those appointments are made by the executive and there are people who are on those boards who are politically aligned. That has been the case for a very, very long time.

One of the most important features of our New Zealand Public Service is its lack of corruption. I think every New Zealander, on all sides of the House, is tremendously proud of the reputation that our New Zealand Public Service has. We do not have the patronage that you see in the US where half the Public Service—certainly the senior levels—change with changes of Government. Equally, we are ranked very, very well—in fact, National is very proud that when we left Government in 2017, New Zealand was ranked as the least corrupt country in the world. If we look at the history of that, this Parliament should be very proud of the Public Service Act 1912, that introduced a provision that has survived five generations of law changes around tough provisions in respect of anybody trying to procure some advantage from a public servant.

We were interested, at the select committee stage, in quite detailed law that was in that 1912 Act that provided for it. I notice in Supplementary Order Paper 549 that the Minister in the chair, the Hon Chris Hipkins, is intending to amend that historic clause. Now, in my interpretation—and I say to the Minister that I only saw the specific word changes that you’re proposing a day ago, only read it yesterday; that’s when we had these hundreds of amendments referred to us. But you significantly, in clause 4(6), are amending the wording of that historic provision; that is, the existing provision makes it an offence to solicit or attempt to influence any Public Service leader, and a provision in that provides immunity if it is for good-faith or omissions.

Now, we’ve had this new word added to that historic provision. I looked at some of the court cases, and the danger when you amend a piece of law that’s been around for such a long time is that the case law that is established where a behaviour with the Public Service is inappropriate, and so, sometimes, in my view, there should be a high threshold for us changing laws that actually have very good basis. So I would like an explanation from the Minister on clause 4(6) as to why he is changing the definition of an offence for attempting to solicit, to influence, a Public Service leader.

My interpretation—and I don’t claim particular expertise—is that the addition of the words lowers the bar. It will make it more difficult to get a prosecution as a consequence of the amendments in clause 4(6). I’d like to know from the Minister why we are lowering the bar around that very historic protection that it is a criminal offence to solicit or attempt to inappropriately influence a member of the Public Service. There may be a perfectly good explanation for it, but I say that given the huge importance of protecting the integrity of our public sector, the huge importance of making plain that trying to inappropriately solicit or attempt to influence the Public Service is something that we should have robust law about. When the Governance and Administration Committee considered this clause, it did not include the conditioning word. I’d like to know from the Minister why it is that we are, at this late stage of the process, under urgency, amending this core definition that sits at the heart of making sure that our public servants act properly, and at the heart of making it plain that any person trying to influence the Public Service in a way that would undermine New Zealand’s reputation for the integrity and transparency of our Public Service—why is it that the Government is changing that provision?

As I mentioned before, clause 4, of course, is a guide to the Act, and the clause that the member specifically refers to is the explanatory clause for Part 5 of the bill. So the substance of the member’s issue is with Part 5 of the bill.

However, I will address the member’s concern. Offence to solicit or attempt to improperly influence Public Service leaders—the thing the member seems to have an objection to is the insertion of the word “improperly”. It is, of course, possible to directly seek to influence a Public Service leader in a very proper manner. Lobbying happens from time to time. There is nothing improper about that. I don’t see any grand conspiracy in saying that an attempt to influence a Public Service leader needs to be improper for the rest of the provisions to apply. There are instances where people will lobby, where they will advocate for their position or advocate for their cause. That’s a perfectly proper part of the way the Public Service operates, and, in fact, New Zealanders, of course, we do want them to be working with the Public Service. So I think the thing that we’re dealing with here is improper influence—i.e., buying favour—and I think that this is merely just a clarification.

I move, That the question be now put.