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Public Finance (State Sector Management) Bill — First Reading


Public Finance (State Sector Management) Bill

First Reading

Hon MARGARET WILSON (Attorney-General), on behalf of the Minister of Finance: I move, That the Public Finance (State Sector Management) Bill be now read a first time. I intend that the bill be referred to the Finance and Expenditure Committee for consideration. I am pleased to move the first reading of this bill because it is the most significant reform of State sector financial management for over a decade. It helps set out the new benchmark for public sector management in New Zealand and internationally.

This bill contains eight parts and covers three important areas of change: first, the changes to the Public Finance Act, including integration of the Fiscal Responsibility Act; second, amendments to the State Sector Act; and, third, the creation of a new Crown Entities Act. All of these amendments will work together to provide greater transparency and accountability in the use of public finances, improve flexibility for departments and ministers, reduce fragmentation, effect positive cultural change in the State sector, and provide a consistent governance and accountability framework for Crown entities.

In 2001 the Government commissioned a ministerial advisory group to review and report on practices and performance issues in the State sector. This report, now known as the Review of the Centre, aimed to find ways to maintain and strengthen the public sector and the wider State sector. The review found that although the foundations of public management systems were sound, there were some changes that could be implemented to make them respond better to the needs of the future. The legislative backing required for some of these changes is contained in this bill.

The major focus of the bill is that it improves transparency and accountability around the management of public finances and in the governance structures for Crown entities. The Crown entities spend half of the State sector budget, outside benefit payments and debt servicing, and they employ over two-thirds of all State sector staff. As such, it is very important that they operate in a transparent and accountable manner. The changes contained in this bill aim to set out consistent and cohesive governance and accountability requirements.

The bill builds on the basis for strategic engagement between Ministers and Crown entity boards to establish performance expectations and reporting of performance. It tailors the governance and accountability framework to capture major differences between Crown entities, while still reflecting their different relationships with the Crown. It also clarifies the relationship between Ministers and individual Crown entities. In addition, the changes set out rules on significant matters, such as the appointment and dismissal of board members, board duties, conflicts of interest, and financial powers. Existing legislation relating to particular Crown entities will be amended by this bill to bring it into line with this framework.

The bill also amends the Public Finance Act, and integrates into the Public Finance Act the provisions of the Fiscal Responsibility Act. I need to emphasise that these changes are solely to provide enhancements of these already fundamentally sound pieces of legislation. The Public Finance Act amendments confirm the model of public sector financial management whereby agencies provide services that contribute to the results or outcomes sought by the Government, while maintaining the capability to continue to deliver. The amendments also affirm the primacy of outcomes in the context of managing outcomes. The Fiscal Responsibility Act is being integrated because it contains key provisions for reporting on how the Government manages its finances, and it makes sense for it to be in the same stable as other provisions relating to the Government’s financial management.

There will be changes to the focus of the Budget Policy Statement and the Fiscal Strategy Report. The Budget Policy Statement will now focus on the upcoming Budget strategy. The Fiscal Strategy Report, tabled with the Budget, will focus on the short-term and long-term fiscal strategy. To further extend the benchmark for fiscal transparency, Treasury will be required to carry out a review of the long-term fiscal issues every 4 years that looks at risks over a 40-year horizon.

The bill will improve transparency and accountability by strengthening the reporting to Parliament by departments, Offices of Parliament, and Crown entities on their intended and actual performance, particularly in the area of non-financial information. For example, departments will be required to provide information on Budget day on their future operating intentions for the next 3 financial years.

The second main thing that this bill does is to provide an opportunity for Ministers and departments to manage public finances more flexibly and in a way that reduces fragmentation. Increased flexibility will allow departments to have a greater focus on achieving results, and to find synergies across various votes and departments. For example, the changes will allow more than one Minister to be responsible for different appropriations within a vote. Changes also allow for more than one output class to be covered by a single appropriation. In allowing increased flexibility I have also been clear that accountability must be retained, so although we have increased flexibility by allowing Ministers to authorise fiscally neutral adjustments between outputs within the same appropriation without further reference to Parliament, accountability is retained because reporting is still at the individual output class level. This will allow departments and Ministers to focus their energies on delivering improved outcomes in New Zealand.

Reducing fragmentation is a particular focus for the Crown entity changes, which, in addition to improving accountability and transparency, will also strengthen the whole-of-Government approach that this Government is committed to promoting within the State sector. I think the House will be interested to note that this bill will introduce a framework for board fees that both requires disclosure of fees paid and precludes compensation for loss of office.

The third main thing this bill does is to introduce changes designed to strengthen the State sector through amendments to the State Sector Act. The two main aspects of the State sector changes are extending the State Services Commissioner’s mandate for the sector, and encouraging senior leadership and management development. The commissioner’s mandate will be extended to ensure that people working in Government organisations are clear that they are required to adhere to high ethical standards. The commissioner’s mandate will also be extended to provide leadership to the State sector on other matters—for example, advice on management systems structures and organisations in the Crown entity sector. This bill aims to facilitate building a group of talented senior managers to meet the future needs of the public service.

Finally, the Government has taken steps to consult with other parties represented in the House during the development of this bill. The pre-introduction parliamentary briefing released in August provides an overview of the bill and its main points. I am pleased that all but one party took the opportunity to engage in this consultation. We seek to build broad support for this bill due to the fundamental and enduring nature of the legislation. I believe that this bill will serve the future of public sector management in New Zealand well, and set a new benchmark internationally. It is therefore with much pleasure that I commend this bill to the House.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : The Hon Margaret Wilson, who has just resumed her seat, claimed that this legislation is important to the Government, yet a few minutes ago there seemed to be no Government Minister who was much interested in reading this bill for the first time in this Parliament. No one stood to take the call, and, quite clearly, the Minister herself did not know a lot about it. She just read someone else’s speech.

National will support this bill to the select committee, but I must make it clear that we do so with some serious reservations. This bill will see the repeal of the Fiscal Responsibility Act, which is icon legislation in this country. The Fiscal Responsibility Act is pivotal to maintaining investor confidence in New Zealand. It was that legislation that gave confidence to financial markets in this country. It was that legislation that prevented Ministers of Finance from priming the pump in election years, and from concealing the true facts of the state of our accounts—as Labour did when it went out of office in 1990 claiming this country had a $89 million surplus when in reality it had a multibillion-dollar deficit, all of it hidden from the public. The Fiscal Responsibility Act stopped that ever happening again. It is pivotal to maintaining investor confidence in New Zealand.

Although I accept that many of the provisions of the Fiscal Responsibility Act are incorporated into this bill, the very fact that the old Act is being repealed means that we must be vigilant to make sure that none of the vitally important elements of that Act are lost in the transition to this bill. The last thing we want for New Zealand is investors—especially off-shore investors—to be given the impression that the Parliament of New Zealand has repealed that critically important legislation, the Fiscal Responsibility Act.

I have to confess that in my time in this place—since 1994—Dr Cullen has never been a great enthusiast for some parts of the Fiscal Responsibility Act. I suspect he has always felt it has constrained him a bit, because even though he is running what appear to be huge surpluses at the moment, he has been a very enthusiastic spender. If we look at the increases in Government spending over the years that Michael Cullen has been Treasurer, we will see that they have grown exponentially. His quite significant surpluses have resulted from his very effectiveness in increasing taxes.

He claimed that he would only put the top tax rate up from 33c to 39c, to affect 5 percent of our workforce. Counting the latest export levy, there have been 18 new taxes and levies, but, worst of all, Dr Cullen and this Labour-led Government have not altered at all the thresholds for income tax. That means that New Zealand has seen massive bracket creep, or fiscal drag—whatever one likes to call it—and since Dr Cullen has been Treasurer, the average worker in New Zealand has suffered the second highest increase in income tax in the OECD. That is why Dr Cullen has such big fiscal surpluses—18 new increases in taxes and levies, plus the greatest increase in personal income tax on average workers in New Zealand compared with the rest of the OECD. So Dr Cullen has actually been quite a big spender, and the Fiscal Responsibility Act has always been a bit of an irritant for him.

I want to come back to the details of that Act in a moment, because as the select committee explores this bill, two other issues need examination. The first is new clause 26B, which provides for appropriations to cover more than one class of output. I can understand why the Government is seeking to do that. I think its argument would be that it should give Ministers more flexibility to spend the appropriations of Parliament more effectively. But the desire of Ministers to have more influence over how they spend this Parliament’s appropriations has to be balanced against accountability back to Parliament. With this change, the select committee must examine whether Parliament will be able to identify—the way it is identified in supplementary estimates at the moment—where Ministers have changed spending and deviated from the appropriations of Parliament.

There is nothing wrong with Ministers having to change certain amounts of spending. I was a Minister for 9 years and accept that there is nothing wrong with that, but the disciplines of the current legislation require those Ministers to come back to Parliament so that it can rubber-stamp anything beyond a certain percentage. It means that changes in spending are at least drawn to the attention of this Parliament. I want the select committee to make sure that if this bill is to provide for greater flexibility so that the appropriations can cover more than one class of output, then there must be a mechanism for drawing Parliament’s attention to instances where expenditures differ significantly from what it was told was the intention of the Government in the first place.

That is the first issue that National wants to make sure the select committee scrutinises closely. The second is that the State Services Commission, as we heard the Minister say, has been given an extended mandate to provide leadership on ethics, values, and standards. I guess that sounds all fine in theory, but listen to this: the amendments to the State Sector Act also provide for the Prime Minister to direct the commissioner. I want to make sure that the select committee explores that provision very closely, because we know all about our current Prime Minister’s ethics and standards. She is prepared to forge her signature on paintings. If she is now able to direct the State Services Commissioner under these amendments to the State Sector Act, we want to make sure that there is a fair bit of constraint on how she can direct the commissioner. I highlight those issues as additional ones that we want to make sure the select committee examines.

Let me come back to the Fiscal Responsibility Act, because one of the major issues is the changes that this legislation makes in respect of the Budget Policy Statement. That statement is hugely important for New Zealand. At present, it is where the Government lays out the long-term objectives for fiscal policy, and how the Government’s current or shorter-term strategy for the Budget fits into that longer-term fiscal framework. What this legislation changes is that that long-term fiscal view will come out of the Budget Policy Statement, because it seems that Dr Cullen is arguing that there is duplication between that long-term fiscal view in the Budget Policy Statement and the Fiscal Strategy Report that is tabled at the same time as the Budget.

The issue is that the Budget Policy Statement comes out before the Budget, and for maximum value to be obtained from the Budget Policy Statement we must see how it fits into the Government’s longer-term fiscal objectives. But we will not know that, because the Fiscal Strategy Report does not come out until the Budget itself. There are issues of timing around that that I hope the select committee will examine in some detail, because we must not undermine the value of the Budget Policy Statement.

The various reports required by the Fiscal Responsibility Act are hugely important, and in repealing that icon legislation and incorporating it into this legislation, we must make sure that the powerful accountability mechanisms of the Act leading from the executive back to this Parliament are not weakened in any way. If they are, investment in the New Zealand economy in the future will suffer, and ultimately New Zealanders will be the worse off for that.

I repeat—we will support this legislation to the select committee, but there are a number of issues that require greater examination by the committee, and our final position will depend, of course, on that analysis.

MARK PECK (Labour—Invercargill) : Unfortunately, we always hear stories from the Opposition about how this country’s economic credibility will be damaged by one or other of the measuresthe Government has pursued in the last 4 years. Of course, that has not been the case, but the member does raise a number of important issues, and they are issues that the select committee will need to deal with. One in particular is about the flexibility that Ministers will have under this new regime.

Can I remind the House, too, that this is the first significant change in 10 years to the way the State sector operates. Indeed, it has come about from a thorough review of the way the State sector has worked, and a need to unleash the talents not only of Ministers but also of senior managers within the State sector, so that they can get on and do the job. It is a bit silly for Ministers to have to be constrained in what they can do on occasions, when there is work that obviously needs to be done as a result of the way things are changing along the way. They should be able to do it.

Within the bill—and this is specifically addressing Dr Lockwood Smith’s point about accountability functions—there is a responsibility on Ministers to report serious breaches to Parliament. That provides Parliament with the level of certainty and accountability around the use of the flexibility provisions to be built in that will see the Government and State sector management being able to get on with the job of delivering social services in a much more modern way in New Zealand.

I am sure the select committee will deal with a number of the other issues that have been raised in the debate. I think it is a good bill, and I hope the House will very quickly pass it through its stages.

CRAIG McNAIR (NZ First) : The Public Finance (State Sector Management) Bill is a very thick bill—though not, I might add, as thick as the income tax legislation, which is, I think, the biggest bill ever brought into this House. But this bill is about 350 pages long, so it is still a very big bill. Therefore a lot of hours will, I am sure, be spent on looking at the bill and understanding it fully, as the Finance and Expenditure Committee examines it and listens to submissions, and as we examine it to make sure it fulfils the purposes and aims that the Government wants from it.

I note that the Government claims that the bill covers the main Acts that govern public finance and the management of the State sector. I also note that this bill is the culmination of a review of public sector management—the Review of the Centre. The Review of the Centre suggested initiatives to support better integration, great flexibility, and an increased focus on results, without losing the system’s current strengths of transparency, accountability, and financial management. The finance Minister, Michael Cullen, has said that the bill is designed to strengthen the public service. He said it will make the public service more transparent and flexible, will allow a more integrated response to complex social problems involving a number of State agencies, and will invigorate the culture of the State sector.

New Zealand First will be supporting this bill being referred through to the select committee. That is all we can say at this point. As this bill goes through the select committee process and as we hear submissions, New Zealand First members will be looking to see whether the bill does just what Michael Cullen says that it will do. We also want to hear the submissions on the bill before judging whether it will achieve its goals, in more ways than one.

The bill stems from the 2001 Review of the Centre, and represents the first major change to State sector governance in a decade. It integrates the Fiscal Responsibility Act into the Public Finance Act, as mentioned by the speaker a couple of speeches before me. It amends the Public Finance Act and the State Sector Act, and when enacted will create a new Crown Entities Act. It is said that the bill will improve transparency and accountability. I do believe that the bill requires Treasury to report every 4 years on the fiscal outlook and risks over the next 40 years, with specific reference to the implications of an ageing population. I believe that New Zealand First has played a key role in this House in the last 10 years—since it was formed—in looking out for the elderly, and also in facing up to the implications of an ageing population and what we should do about that with regard to superannuation, for example. Superannuation is a big issue with regard to that part of the bill, the implications of an ageing population, and so on. In 1997 New Zealand First put up a referendum proposal that superannuation be allocated into individual accounts. The funding of superannuation is a problem that will not go away, and it is something that the New Zealand First Party has always advocated that we must face as a country. The current Superannuation Fund is one step in the right direction, but we have a long, long way to go. We have to improve the bill and we also have to improve other measures in order to make sure that, as a country, we can face those hard decisions.

I also note that the bill proposes the Budget will include a statement on the impact on revenue flows of recent Government taxation decisions. I believe that that will be very telling. Another issue I would like to raise is why we do not have a similar statement with regard to social spending, as well—on what is necessary, and what is not. I believe that this Government spends far too much money on the wrong things, and that its priorities are in the wrong place. My party agrees with me that this Government spends millions of dollars on the arts, for example, when we feel that that money could be put into other places—

David Benson-Pope: What?

CRAIG McNAIR: I raised the question a minute ago of superannuation, and that would be a great start, I tell Mr Benson-Pope. We have to face those things.

In getting back to the serious issue of this bill, I also note that it will require departments, Officers of Parliament, and Crown entities to report to Parliament annually, not just on their finances but also on their intended and actual performances. We are always interested in legislation that promotes performance in Government departments and requires Government departments to give taxpayers the best value for their money. One of the reasons we are supporting the referral of this bill to the select committee is that it has some positive aspects, and we want to see whether we can work on the bill and improve it, to make sure that it is beneficial for the New Zealand taxpayer in that way. I note that Crown entities encompass a huge number and diverse range of organisations, from schools—it is a pity that some of them have been shut down—and hospitals to Radio New Zealand, and other organisations and departments. They account for almost half the State sector administrative budget, and employ two-thirds of the State workforce.

In closing, it is interesting to note that the bill allows more than one Minister to be responsible for a vote, while also making it clear—or the Government says the bill makes it clear—which Minister is answerable to Parliament for each appropriation. Also, the bill enables Ministers to make fiscally neutral adjustments between departmental output classes covered by the same appropriation, without further reference to Parliament. The question is whether the bill will maintain accountability by requiring performance reporting on the individual output classes, and that is something we will have to examine in the select committee. Once again, New Zealand First supports the referral of this bill to the select committee and looks forward to hearing submissions on it.

SUE BRADFORD (Green) : Overall, the Green Party welcomes the introduction of this legislation, which is the culmination of the years of hard work that have gone into the Review of the Centre. After Labour’s drastic, and often destructive, reforms of the State sector in the 1980s, and National’s continued, and sometimes damaging, restructuring in the 1990s, the Review of the Centre has been a very necessary exercise to begin to clean up the mess. Both the Labour and National policies divided and split parts of the Government into ever-burgeoning silos, introduced competition, and made costs and counting things a priority over quality, ethics, and outcomes. It is good that this Labour Government is taking some responsibility for cleaning up the mess it helped to create, at a time when the chickens are still coming home to roost—as seen, for example, in the results of the Department of Child, Youth and Family Services baseline review and in cases of major corruption in various departments, when such things were unheard of in years gone by.

This Public Finance (State Sector Management) Bill marks the necessary next stage in the Review of Centre process. It amends the Public Finance Act, the Fiscal Responsibility Act, and the State Sector Act,and creates a new Crown Entities Act. The Green Party is pleased to see that the bill moves to reduce the fragmentation that exists between different parts of the sector, aims to reintegrate high ethical standards and values into the public service, and clarifies the roles, governance, and accountability requirements of Crown entities. We are also pleased that there will be an increased flow of information available to Parliament itself from the Officers of Parliament, the Reserve Bank, and from other agencies outside the core public service. The new legislation will allow more than one Minister to have responsibilities within a vote. That is particularly important now that we have an MMP Parliament where Ministers from more than one party may be sharing responsibilities across interconnected areas.

I also welcome the way that the bill finally provides, or attempts to provide, clear definitions of outcomes, outputs, and output expenses. It seems as though each year departments change the way that output classes are defined and the extent to which outcomes or outputs are prioritised—much to the bafflement of select committee members, much less of anybody else. I hope that once this bill has gone through its own rigorous select committee process the result will be increased transparency, in terms of MPs’ and the public’s understanding of what is going on. We also welcome the greater significance given to outcomes rather than to outputs, and the fact that “outcome”, as defined in the bill, dares to mention the state or condition of the environment, as well as that of society and of the economy. The bill does begin to lay a framework for improved accountability that goes beyond mere financial reporting for the State sector, with more detailed requirements than ever existed in the past as to how departments are to report on their future operating intentions.

  • Sitting suspended from 6 p.m. to 7.30 p.m.

SUE BRADFORD: However, it is disappointing that in its reporting clauses the bill refrains from being more specific and requiring social and environmental, as well as financial, reporting. That is one issue the Green Party will seek to pursue during the select committee’s consideration of the bill. This Government talks a lot about working towards triple bottom line reporting, and aspects of that are starting to appear in some legislation and in the practice of some particular departments. This bill presents a golden opportunity to go a step further towards a much more cohesive and committed approach to triple, or even quadruple, bottom line reporting right across the State sector.

This bill also provides new arrangements for developing senior leadership and management capability in the public service, sets up a new leadership development centre, and ensures that responsibility for the development of potential leaders is taken by both the State Services Commissioner and chief executives. I commend the Government for the moves it is making in that area, but I note that it will take a lot more than legislation to nurture and develop a new generation of leaders with the capacity to rebuild a really strong public service across the board. At least the framework to allow that to happen is established here.

However, I do have one concern, which is that secondments for people on the executive leadership programme are only from within and between agencies in the public sector. I think it is equally important in this day and age that people have an opportunity to experience a decent chunk of working life in the community sector as well, especially as many departments are now engaged closely with the third sector, without necessarily having a really good understanding of what managing and governing non-governmental organisations are really about. It seems to be accepted throughout the public service that a background in the private sector is a jolly useful thing—and so it can be, at times—but I would argue that experiencing a decent slice of life at the tough front end of a community-based organisation is just as valid and useful an experience for a public sector leader to have had as time spent in the very different culture of the commercial world.

There are many more aspects to this bill that I would like to talk about tonight, but time is short. Overall, I would just like to reiterate that the Green Party supports this first significant reform of New Zealand State sector legislation in a decade, and to commend the bill to the House.

RODNEY HIDE (ACT) : The ACT party supports this bill going to the select committee, but has some serious concerns. I will highlight those as best I can as we go through.

The first concern ACT has is that this bill’s purpose is stated as being to enhance responsible fiscal management. The experience the population at large has had of the Labour-Green-United Future Government is that what it actually does is the opposite of what it says. So we have a Families Commission that is anti-family, and now we have a public finance bill promoting responsible fiscal management, which suggests to me that when we look into the detail it will be the opposite.

The other thing I notice about this bill is that, according to the explanatory note, it is intended to “extend the State Services Commissioner’s mandate to provide leadership and guidance to the wider State sector, especially on ethics, values, and standards:”. That is from a Government that has overseen some of the most appalling behaviour in the public service of New Zealand in our lifetimes. [Interruption] Michael Cullen is agreeing with that, and the idea that the State Services Commissioner, who has overseen that behaviour and excused it, should be in charge of ethics, values, and standards, is truly a shock.

When I read a bit further into the bill, I see that this legislation will enable the Prime Minister—currently Helen Clark—to direct the commissioner to carry out functions and powers in respect of other parts of the State services. So the Prime Minister is going to provide a lead on ethics, values, and standards for the public sector—that from a Prime Minister who got caught forging a painting. There is no other word for it. That is from a Prime Minister who had her electorate agent destroy the evidence. That is from a Prime Minister who essentially directed the police to charge Shane Ardern—and the charge got thrown out of court. So driving a little “Fergie” up Parliament steps is somehow something that should occupy the courts, but forging a painting is OK

Let me go back to the claim of this Government that it wants ethics, values, and standards. It is quite common for MPs to get up in this House and make charges of corruption. Then we have an inquiry and we find out that it was not that bad—that the MP was exaggerating. Well, I do not exaggerate; I ask questions in this House. We now have the report—the Doug White report on the Civil Aviation Authority—and we find there that the Civil Aviation Authority, from the top, is corrupt. That is what we find in that report.

Then there is the idea that the State Services Commissioner will oversee ethics, values, and standards. If that is the case, how is it that the Director of Civil Aviation, John Jones, still has a job? That is a question for this Government. We read the report and see that it is clear what happened. A leading flight inspector of the Civil Aviation Authority was paid by the taxpayer to inspect an airline. He recommended that it be grounded. He then went and got paid by that airline, on the side. How bad is that? On the one hand, he was being paid by the taxpayer to ensure safety—and therefore he held the airline operator on the ground—and, on the other hand, he was being paid on the side to help the operator get into the air. [Interruption] I say to David Benson-Pope that that, not surprisingly, is called extortion. I hope voters remember that that member tries to interject and somehow to protect it.

There was extortion going on and—do members know something?—I do not blame that inspector, Richard Cox. I do not blame him, because the airline operator rang the Director of Civil Aviation, John Jones, and said: “Hang on, this is a bit rough. The guy who has just put our airline on the ground is now turning up seeking private work.” Do members know what the Director of Civil Aviation said? He said: “That’s OK. I know all about it.” So they had no option then—and Government members have gone quiet now—but to pay the money, which was essentially a bribe being extorted out of them, because what does one do when one’s business is put on the ground and the Civil Aviation Authority turns up and says: “We can help you but you have to pay us.”? One says: “This isn’t right.”, and rings the Civil Aviation Authority boss—and he says he knows all about it.

What do we find in this report? We find what I could have told this House months ago—that John Jones, in a letter to the company, fully authorised it. He had no problem that his leading flight inspector, charged with the safety of the airline industry in New Zealand, went to the airline company and said the company was not safe to fly. In fact, John Jones recommended that the flight inspector went to work for the company—that is what he recommended; it is in the report—and that he was paid. How can we blame that flight inspector when the boss told him to do it? That is what happened here—he was directed by the boss, so that is what he did. He went along and said: “I have to help you. Here’s what you pay.” They put a contract in place and thousands of dollars had to be paid by that airline operator. And what was happening? Richard Cox was then charged by the director, John Jones, to audit the company to see whether it was up to scratch—on the very work he was doing for it. And this is a Government that will come to this House and say it is about promoting ethics, values, and standards. How can that be?

How can we have a Civil Aviation Authority that has the power to put an airline operator on the ground, then turns up the next day and says: “What about a bit of money on the side?”—and, as it does that, it is under the instructions of the Director of Civil Aviation, John Jones. What happened? This Government said that it was OK. How was that so? It used a classic Labour Government trick: it fired Richard Cox halfway through the investigation. He was summarily dismissed for doing what he was told to do by the director. Why did the Government do that? It knew it had to do that because it needed a scapegoat. The Government took one man who was doing his job, fired him, blamed him, and said that the Civil Aviation Authority was all right.

Silly old Harry Duynhoven, who plays around in a helicopter being paid for by the industry, which is the mate of the Civil Aviation Authority, jumped out of a plane—

Gerry Brownlee: What?

RODNEY HIDE: —jumped out of a plane with a parachute attached, which opened and carried him safely to earth—and said that everything was OK. Trevor Mallard said that everything was OK. What did the chairman of the Civil Aviation Authority, Rodger Fisher, say? He said: “Oh! We have a report from the State Services Commissioner saying that the director, John Jones, authorised what in everyday language is extortion.” He authorised what in everyday language was corruption. He authorised it, and said he would give a warning in writing. That is what he did. I say that if this Government were serious about achieving ethics, values, and standards—and, dare I say it, airline safety and some respect for the Civil Aviation Authority—John Jones would be gone, Rodger Fisher would be gone, and we would be looking a bit more seriously at how it was that Richard Cox was fired before the report was finished.

Hon Dr Michael Cullen: Stephen Franks would be gone.

RODNEY HIDE: I say to Dr Cullen that that is why we will be taking some great care with this bill.

GORDON COPELAND (United Future) : This will be my final contribution to the deliberations of this House for 2003. I am sure that some will say: “Thank God for that!” I take the opportunity to wish you, Mr Speaker, all the very best for Christmas and for 2004, and also to wish that for my fellow MPs.

United Future supports the introduction of this bill, its first reading, and its referral to the Finance and Expenditure Committee. I think that the updating through this bill of what are already world-class accounting systems is good. We can make some incremental improvements, and I strongly endorse the commitment in the bill—which Rodney Hide devoted his speech to—to the improvement of ethics, transparency, and other anti-corruption measures, because we must certainly safeguard those values that are so important to our economy and our society.

I want to make just one observation about the bill. One night on television, during the debate on the foreshore and seabed, I heard the Prime Minister tell Paul Holmes that one of the reasons why the Government has gone for the term “public domain” instead of “Crown” in relation to those areas is that it would be inflammatory, as far as Māori are concerned, to hold them in the title of the Crown.

It therefore made me wonder why we have adopted the practice in New Zealand of calling our accounts the “Crown accounts”. We call other things “Crown entities”. We have a whole array of different things that are now referred to by the term “Crown”, and we have other terms like “sovereign debt”, and so on. Back in an earlier time that I am old enough to remember, the accounts were simply referred to as the “public accounts”. Debt was just called “Government debt” or “Government bonds”.

So I wonder whether it is useful in today’s society in New Zealand to refer to all of those entities using the term “Crown”, because the impression probably given of that term from a Māori point of view—as they regard the Crown as the other party to the Treaty of Waitangi—is that somehow or other it refers to the reigning monarch. We all know, of course, that those accounts do not account for the activities of the reigning monarch. They are in fact the accounts of the activities of New Zealanders themselves, carried out through the agency of the duly-elected Government. In a very real sense, therefore, they are the accounts of the people, and for the people, of New Zealand.

I will not say much more, except that I intend to take the unusual course of making a submission to the select committee on this matter, in order to ask whether the term “Crown” is the right one for us in going forward, and in considering where we are going as a nation. Is the term helpful, is it confusing, or is it ambiguous? I will ask those questions so we might give some time to a reconsideration of that aspect. With those few words, I take pleasure in signalling United Future’s support for the bill.

DAVID BENSON-POPE (Senior Whip—Labour) : I move, That this debate be now adjourned.

A party vote was called for on the question, That this debate be now adjourned.

Ayes 69 New Zealand Labour 52; Green Party 9; United Future 8.
Noes 49 New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata.
Motion agreed to.