Parliament Bill

We come first to the Parliament Bill. When we were last considering the bill, we had just completed the debate on Part 7. We now come to Part 8, which is the debate on clauses 191 to 215, “Amendments to the Public Finance Act 1989”, and Schedule 7. The question is that Part 8 stand part.

Kia ora, Madam Chair. This part might seem, to many, to be a little dry, because it deals with amendments to the finance Act. It’s actually one of the more important parts, and I would just invite the Minister to, perhaps, make some comments on it. One of the important aspects of it is the fact that this makes the Budget process for the Clerk’s Office and Parliamentary Service independent, at least notionally, of Government. I guess the main clause is clause 203, and in particular the inserted section 26EB, and I just would invite the Minister, essentially, to outline the nature of this process. In particular, there’s one thing here I’m interested in, and that is in new section 26EB(2), there seems to be a distinction between general appropriation and capital appropriations. I would like him to elucidate, if he can, exactly how capital appropriations will be differently treated, and whether that remains entirely independent of the executive or not.

The other thing I’d be interested in him discussing is the relationship that Parliament, through whatever committee process is engaged, will have with Treasury, because it’s clear that Treasury will be involved. Essentially, this is a special kind of Budget bid, and Treasury has a lot of work to do on every single Budget bid in working through exactly what the appropriate appropriation is, how finetuned it should be, and the final amount. Obviously, it is just as important for an appropriation, essentially, to parliamentary agencies as for anywhere else that they’re accountable. One of the basic rules of Budget is if it’s not in the appropriation line, then it can’t be spent on it. I’m wondering whether there’s an expectation that it will be a very generic appropriation, say, to Parliamentary Service, or will it be kind of a line-by-line appropriation for the various—for the library, for salary, or whatever else it might be.

There are the first two questions: can we just have a bit of a discussion around the distinction between capital appropriations and other, and also just perhaps an explanation of what the expectation is of the role of Treasury and the consultation and degree of detail that will be expected in this budgeting process.

The member makes a good point that this is an important section of the bill. The intent of the Parliament Bill is to amend the Public Finance Act to establish a model for the House to determine the funding of parliamentary agencies, similar to that used for the Officers of Parliament—the Ombudsman, Parliamentary Commissioner for the Environment, Auditor-General, for example. I think it would be fair to say that there’s been some dissatisfaction in recent years that Parliament’s budget is, essentially, controlled by the executive now. Clearly, by definition, the executive has control of the House, because if they didn’t, they wouldn’t be the executive, but it is important to distinguish between the executive and Parliament itself, and so these clauses, which are new, will change the Public Finance Act.

The member makes a range of different points. In relation to capital—the member can see it there—in new section 26EA(1)(b)(i) deals with an appropriation in a Vote that “is appropriated for the purpose of authorising the Parliamentary Service to incur capital expenditure in respect of Crown assets managed or controlled by the Parliamentary Service;”. Here, for example, this House, this Parliament, is controlled by the Parliamentary Service. There’s a variety of capital expenditure that’s put in place in relation to that for upgrades and various other things that happen.

The member asked about Treasury. The reference in new section 26EB(3): “the chief executive of the parliamentary agency must consult the Secretary”—and that reference to Secretary there at new section 26EB(3) is the Secretary of the Treasury—“before submitting information under subsection (1) or (2).” New section 26EB(1) states, “Before an appropriation in a Vote administered by an agency may be included in an Appropriation Bill for a financial year, the chief executive of the parliamentary agency [has to] prepare and submit to the House—(a) an estimate of expenses and capital expenditure to be incurred for—(i) each proposed appropriation; and (ii) each proposed category of expenses”.

I think most members will be familiar—certainly those who’ve been in Government will be familiar—with that. Ultimately, the executive lays before the Parliament the appropriations that are applied for to the House for a given year, broken down in a variety of different ways. There’s, literally, the Estimates, which are broken down into both operating and capital. The same thing will happen. But the point is they have to consult the Secretary for the Treasury before submitting that information. Then there is an Address to the Governor-General, which is, ultimately, how the Parliament funds the Officers of Parliament—which is a similar mechanism for the Estimates and the capital injection.

Ultimately, if the member reads new section 26EB(5), “The House … may request that the estimates be included as a Vote, and the capital injection be authorised, in an Appropriation Bill for that year”. The point is to give greater independence to the Parliament and give it greater control over its own destiny from a budgetary point of view but also to make sure that the Government has some ability to influence exactly how much is being asked for from the Parliament, but that’s a step forward from the status quo, where, basically, the Government, essentially, controls that budget. Now, that has not really been an issue, so one could argue this is arguably a case of constitutional niceties. The Parliament Bill itself is a constitutional nicety, in a funny way, so it’s important to get these things right from a procedure point of view. I think it’s laid out there and relatively straightforward.

Thank you, Madam Chair. Thank you for that, Minister. Also, I’m a little curious—I probably should know—what an Address to the Governor-General would look like in this House. It may just be a part of the debate, but I think moving this process to, essentially, as you say, move it away from entire control of the executive to at least—and I don’t think it’s a nicety, actually. I think it’s a pretty important constitutional point.

One of the things that does happen is that the part of the Public Finance Act which applies to reporting will apply to these parliamentary agencies: the Office of the Clerk and the Parliamentary Service. I haven’t got it in front of me, but in the relevant section of the bill, new section 45FA—I think it is—inserted by clause 207, it lists all of the things that the agencies must report on. I guess there’s—and I’ll come to the Privacy Act later, but one of the things I think it would be worth, in this Chamber, just at least giving the Leader of the House an opportunity to comment on is the number of people who said it’s all very nice to have that kind of reporting, but, in fact, we would expect these agencies to have even greater transparency—the same as any other Government department. Of course, they were referring to—and there were a number of submissions along these lines, because I sat on the Parliament Bill Committee—the Official Information Act.

Whilst there’s annual reports and all kinds of other proper financial accounts and so on, the fact of the matter is that the usual grounds for transparency under the Official Information Act still don’t apply to these agencies. Whilst there might be, within the practices and procedures of Parliament, a willingness to provide information, there’s certainly no obligation. I think it would be useful for the Minister to just speak to that, in some ways for completeness, but certainly I think it’s a useful point.

Could the member just clarify if he was speaking to a specific clause in Part 8.

Hon Dr Duncan Webb: Yeah, I was speaking to clause 207, which inserts new section 45FA, which is about the reporting obligations of the agency.

CHAIRPERSON (Maureen Pugh): Thank you.

The vexed issue of the application of the Official Information Act (OIA) to Parliament is one that members with long memories will know has been around for a while, and the proposal in the Parliament Bill is not to make any changes there. There is a case that Parliament should be subject to the Official Information Act. It applies to everything else, basically, including school boards of trustees, for example. Some boards of trustees are surprised to discover that as an agency of the State, they are subject to the Official Information Act. Most people don’t know that, including most boards of trustees, I suspect.

The challenge has always been how you disentangle the legitimate things that the public might be interested in—much of which is public, by the way—like running Parliament and the cost of the Chamber and these sorts of things. Much of that is public already. How do you disentangle that stuff from MPs’ emails and all the other things that happen in Parliament that, frankly, is rightly the province of members and should remain private? Over the last few years, there’s been quite a degree of transparency—for example, members’ travel expenses are now made public; their mileage and travel expenses are made public; hotel accommodation is made public. All of that stuff is public, and Ministers’ credit cards are made public—although, that’s a slightly separate issue, because it’s the executive.

We’ve never been able to come up with a formula in which things that everyone thinks should remain the legitimate realm of members is disentangled from everything that should be public. No one has been able to come up with a formulation. The member is finishing up in a year or so, and we will miss his wisdom and his sagacity in the Parliament—if the member wishes, in his retirement, to come up with a form of words, I’m sure the Standing Orders Committee would welcome a submission. Maybe they wouldn’t—I don’t know. But no one has been able to come up with one, so the OIA is excluded from the Parliament Bill at this stage.

I think this is, for me, my final contribution on this part. It’s actually about clause 211, which replaces section 80 of the Public Finance Act. In particular, it subjects the Parliamentary Service—fundamentally the Parliamentary Service, but also the Office of the Clerk—to Treasury instructions. Now, this might sound arcane. I mean, Treasury has the ability to issue directions which are a kind of form of secondary legislation, as I understand it. This is not an area I’m right deep into, but I understand that they can do things, for example, to say, “Your accounts should be presented in such and such a way.”, or “You must adhere to this accounting standard when you prepare your accounts.”, or “You need to report in terms of the financial situation in a particular way.”, and so on and so forth.

Just an interesting thing there, which is it’s actually giving Treasury a degree of influence over Parliament in that it can actually tell Parliament what to do, because the Clerk and Parliamentary Service is part of Parliament. Whilst we in this House are ultimately the Parliament, these are agents of Parliament. I’m just really curious. I can see why we want to have good financial procedures, but is it appropriate for Treasury to be able to tell Parliamentary Service and the Office of the Clerk how to do their job?

A couple of other matters. The member asked earlier about an Address—how that works. An Address is prepared by the Speaker to reflect the House’s resolution about its contents. In practice, it’s prepared beforehand to reflect the recommendations of the select committee. Members who’ve seen an Address to the GovernorGeneral on behalf of His Majesty in relation to the salary or the appropriation for the Ombudsman, for example, will have seen that it’s relatively unusual but an important part. I think there was a discussion around clause 207 inserting new section 45FA, where the parliamentary agencies will, largely, be required to report under the Public Finance Act in the same way as they are now. The new section 45FA, essentially, reproduces those requirements, even though those agencies will no longer be requirements.

Thank you, Madam Chair, and thank you to the Leader of the House for responses to questions on this part thus far. I wasn’t privileged to be on the select committee but have read through some of the submissions.

The Leader of the House commented on the new section 26EB, inserted by clause 203, and particularly in terms of the consultation that happens before a determination is made on the specific appropriation. I did note that the Council for Civil Liberties in their submission asked the question of what participation the public would have in terms of inputting into the appropriate amount of appropriations, if you like. They used the example of the Ombudsman and the Officers of Parliament Committee process as a model for making their point and said that the Ombudsman at one stage had argued that the office did not need additional funds to be able to meet their task of working to investigate Official Information Act complaints. The Council for Civil Liberties argued that the timeliness of those investigations was such that, actually, an additional injection of finances would have been useful, and they would have appreciated the opportunity to make that argument. Their proposal was to require “public evidence sessions on proposed budgets not only for parliamentary agencies, but also for the Officers of Parliament.” as well, and that that should be included, which of course it would have if it was in the body of section 26EB.

The question is really to the Leader of the House about whether that was considered and, if not, what sort of influence the public can have in this process.

I wasn’t familiar with Treasury instructions either, Dr Webb, but I now know slightly more than I did five minutes ago. The advice I’ve received is that Treasury instructions largely follow accounting standards, so it just really relates to the accounting treatment of the way in which things are done. Parliamentary agencies will be treated in the same way as Officers of Parliament are currently treated. Treasury will not be able to issue instructions to the Office of the Clerk or Parliamentary Service other than in relation to new section 26EA(1)(a), inserted by clause 203, which we’ve already dealt with.

In relation to Vanushi Walters’ point, it will ultimately be over to the select committee that considers the appropriations of the Officers of Parliament Committee or whatever select committee the House determines to reflect public input. My own view is that there probably is a bit of a role around public input in a way that there hasn’t been in the past. Ultimately, it will be over to the House to determine via select committee. Obviously, the special select committee considering the Parliament Bill did not see fit to include mandatory consultation in relation to the Council for Civil Liberties submission, but that’s certainly open to the House over time.

The question is that the Minister’s amendment to Part 8 set out on Amendment Paper 362 and Amendment Paper 401 be agreed to.

Amendments agreed to.

Part 8 as amended agreed to.

Part 9 Amendments to Citizens Initiated Referenda Act 1993