State Sector and Public Finance Reform Bill

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Hon Dr Jonathan Coleman

State Sector and Public Finance Reform Bill

Government Bill

55—2

As reported from the Finance and Expenditure Committee

Contents

Part 1
Amendments to State Sector Act 1988

3 Principal Act

4 Long Title repealed

5 New section 1A inserted (Purpose)

6 Section 2 amended (Interpretation)

7 New section 2A inserted

2A Status of examples

8 Cross-heading above section 4 amended

9 New section 4A inserted (Role of Commissioner)

4A Role of Commissioner

10 Section 5 amended (Duty of Commissioner to act independently)

11 Section 6 replaced (Functions of Commissioner)

6 Functions of Commissioner

12 Section 8 amended (Power of Commissioner to conduct inspections and investigations)

13 Section 9 amended (Power to obtain information)

14 Section 14 amended (Acting Commissioner or acting Deputy Commissioner)

15 Section 17 amended (Vacation of office)

16 Section 23 amended (Delegation of functions or powers)

17 Section 27 replaced (Public Service defined)

27 Public Service defined

27A Meaning of department, host department, and departmental agency

27B Relationship between departments and departmental agencies

18 Section 28 amended (Delegation of functions or powers of appropriate Minister)

19 Section 30A amended (Amendment of Schedule 1 to reflect reorganisations within Public Service)

20 Sections 30C to 30G repealed

21 Section 30H amended (Consequential changes to references to departments following reorganisations)

22 Section 30I amended (Consequential changes to references to chief executives following reorganisations)

23 Section 30J amended (Application of consequential changes to references)

24 Section 31 amended (Chief executives)

25 Section 32 replaced (Principal responsibilities)

32 Principal responsibilities

26 Section 33 replaced (Duty to act independently)

33 Duty to act independently

27 Section 34 amended (Functions, responsibilities, duties, and powers)

28 Section 35 amended (Appointment of chief executives)

29 Section 36 amended (Reappointment of chief executives)

30 Section 37 amended (Appointment and reappointment of Government Statistician)

31 New section 37A inserted (Transfer of chief executives)

37A Transfer of chief executives

32 Section 38 amended (Conditions of employment of chief executives)

33 Section 39 amended (Removal from office)

34 Section 40 amended (Acting chief executive)

35 Section 41 amended (Delegation of functions or powers)

36 Section 43 amended (Review of performance of chief executive)

37 Section 44 amended (Special provisions in relation to certain chief executives)

38 Sections 46 to 48 replaced

47 Responsibilities of Commissioner

48 Responsibilities of chief executives

39 Section 49 amended (Secondments)

40 Section 50 replaced (Other organisations in State services)

50 Key positions in Public Service

41 Part 5 heading replaced

42 New subpart 1 of Part 5 and subpart 2 of Part 5 heading inserted

43 Section 56 amended (General principles)

44 Section 57 amended (Commissioner may set minimum standards of integrity and conduct)

45 Section 57A amended (Agencies must comply with minimum standards except in particular circumstances)

46 Section 57C amended (Commissioner's powers when setting and enforcing minimum standards)

47 Section 58 amended (Equal employment opportunities)

48 Section 59 replaced (Employees of departments)

59 Employees of departments

49 Sections 61A and 61B replaced

61A Restriction of redundancy payments in certain situations

61AB Transitional provision relating to restriction of redundancy payments

61B Application of employee provisions to transfers of functions between Crown entities and departments

50 New section 61D inserted (Application of collective agreements to employees following reorganisations)

61D Application of collective agreements to employees following reorganisations

51 New section 66 inserted (Certain sections do not apply in relation to ministerial staff)

66 Certain sections do not apply in relation to ministerial staff

51A Section 77 replaced (Protection from liability)

77 Immunity for education service chief executives and employees

52 Section 77C amended (Performance of teachers)

53 Section 85 amended (Offence to attempt to influence Commissioner or chief executive)

54 Section 86 replaced (Protection from liability)

86 Immunity for Public Service chief executives and employees

55 Section 91 repealed (Transitional provisions for permanent heads)

56 New Schedule 1A inserted

56A Amendment to Tax Administration Act 1994

7 Delegation of powers by Commissioner

57 Consequential amendments to Crown Proceedings Act 1950

57A Consequential amendments to Clerk of the House of Representatives Act 1988

57B Consequential amendments to Parliamentary Service Act 2000

57C Amendment relating to Legislation Act 2012

Part 2
Amendments to Public Finance Act 1989

58 Principal Act

Subpart 1 —Amendments coming into force on day after date of Royal assent

58A Section 1A amended (Purpose)

59 Section 2 amended (Interpretation)

59A New section 2A inserted (Application, savings, and transitional provisions relating to amendments to Act)

2A Application, savings, and transitional provisions relating to amendments to Act

60 New section 4A inserted (Authority to incur expenses or capital expenditure under Imprest Supply Act)

4A Authority to incur expenses or capital expenditure under Imprest Supply Act

61 Section 11 amended (Expenses or payments authorised other than by Appropriation Act)

61A Section 19 amended (Power of Secretary to obtain information)

61B Section 25 amended (Expenses or capital expenditure may be incurred in emergencies)

61C Section 26Z amended (Power of Secretary to obtain information)

61D Section 29A amended (Power of Secretary to obtain information)

62 Section 29B amended (Auditor-General to be auditor of Government reporting entity)

63 Section 31 amended (Annual financial statements must be presented to House of Representatives)

64 Section 31A amended (Monthly financial statements of Government)

~~65 Section 31B replaced (Publication, inspection, and purchase of financial statements of Government reporting entity)~~

~~31B Publication and inspection of financial statements of Government reporting entity~~

65 Section 31B repealed (Publication, inspection, and purchase of financial statements of Government reporting entity)

66 Section 37 amended (Power of departmental chief executives to obtain information)

66A Section 44 amended (Obligation to present and publish departmental annual reports)

67 Section 45H amended (Application of subpart)

~~68 Section 45I amended (First annual report for newly established entities)~~

68 Sections 45I to 45K replaced

45I First annual report for newly established entities

45J Final annual report for disestablished entities

45K Final annual report for entities that cease to be subject to requirement to provide annual report

~~69 Section 45J amended (Final annual report for disestablished entities)~~

~~70 Section 45K amended (Timing of special annual reports, etc)~~

70A Section 65ZD amended (Minister may give guarantee or indemnity if in public interest)

70B Section 65ZE amended (Departments may give guarantee or indemnity specified in regulations if in public interest)

71 Section 67 amended (Establishment of bank accounts for trust money)

72 Section 71AA amended (Delegation of Secretary's powers)

73 Section 75 amended (Minister may exercise powers relating to bona vacantia)

74 Section 76 amended (Offences)

75 Section 80 amended (Treasury instructions)

75A Section 80A amended (Minister of Finance instructions)

75B Section 81 amended (Regulations, Orders in Council, and notices)

75C Schedule 1 replaced

76 Schedule 2 repealed

Subpart 2 —Amendments coming into force on 1 July 2013

77 Section 1A amended (Purpose)

78 Section 2 amended (Interpretation)

79 Section 3A replaced (Power to amend Schedule 4)

3A Power to amend Schedule 4

3AB Power to amend Schedule 4A

80 Section 4 amended (Expenses or capital expenditure must not be incurred unless in accordance with appropriation or statutory authority)

81 New section 7C inserted (Responsibility for, and administration and use of, appropriations)

7C Responsibility for, and administration and use of, appropriations

82 Section 20 repealed (Departments may incur output expenses for, or on behalf of, other departments)

83 Section 27 amended (Annual financial statements of Government)

84 Part 4 heading amended

85 Sections 33 to 36 replaced

33 Interpretation

34 Responsibilities of chief executives: financial management of departmental matters

35 Responsibilities of chief executives: financial management of non-departmental matters

36 Responsibilities of chief executives: reporting

86 Section 43 replaced (Departments must prepare annual reports)

43 Departments must prepare annual reports

87 New section 43A inserted (Departmental agencies must prepare annual reports)

43A Departmental agencies must prepare annual reports

88 Section 44 replaced (Obligation to present and publish departmental annual reports)

44 Obligation to present and publish annual reports

89 Section 45 amended (Contents of departmental annual report)

90 New section 45AA inserted (Contents of departmental agency annual report)

45AA Contents of departmental agency annual report

91 Sections 45M and 45N and subpart heading replaced

Subpart 2 —Application of Crown Entities Act 2004 to Schedule 4 organisations

45M Application of Crown Entities Act 2004 to Schedule 4 organisations

45N Exemptions from certain sections of Crown Entities Act 2004 for Schedule 4 organisations

92 New Part 5AA inserted

Part 5AA
Non-listed companies in which the Crown is majority or sole shareholder

45OA Application of Crown Entities Act 2004 to non-listed companies in which the Crown is majority or sole shareholder

~~45OB Application of section 131 of Companies Act 1993 to directors of Schedule 4A companies~~

93 Section 49 amended (The Crown not liable for debts of Crown entities, etc)

94 Section 61 repealed (Expenses in respect of money borrowed by the Crown)

95 Section 65D amended (Payments under public securities)

96 Section 65E repealed (Expenses in respect of securities)

97 Section 65H amended (Payments relating to derivative transactions of the Crown)

98 Section 65I amended (Investment of public money)

99 Section 65J repealed (Payment of expenses relating to investment)

99A Section 65K replaced (The Crown must not lend money except under statute)

65K The Crown must not lend money except under statute

~~100 Section 65N replaced (Authority to lend money includes authority to defer payments)~~

~~65N Authority to lend money~~

100 Section 65N repealed (Authority to lend money includes authority to defer payments)

100A Section 65Z amended (Auditor-General may direct Ministers to report to House of Representatives in cases involving unlawful expenses, etc)

101 Section 65ZA amended (Auditor-General may stop payments out of Bank Accounts)

~~102 Section 65ZD amended (Minister may give guarantee or indemnity if in public interest)~~

103 New subpart 7 of Part 6 inserted

Subpart 7 —Permanent appropriation for payment of certain expenses

65ZH Permanent appropriation for payment of certain expenses

104 Section 73 amended (Payment of fines to local authorities and other organisations that conduct prosecutions)

105 Section 74 amended (Unclaimed money)

106 Section 80A amended (Minister of Finance instructions)

107 Section 81 amended (Regulations, Orders in Council, and notices)

108 Section 82 amended (Consultation and approval requirements for regulations or instructions relating to reporting standards)

~~109 Sections 83 to 86 replaced~~

~~Transitional provisions relating to State Sector and Public Finance Reform Act 2012~~

~~83 General application of provisions relating to financial year~~

~~84 Multi-category appropriations may be used in 2013/14 financial year~~

~~85 Section 45AA applies as modified by this section until 1 July 2014~~

~~86 Section 45M applies as modified by this section until 1 July 2014~~

110 Sections 83 and 85 to 88 repealed

111 Schedule 4 amended

112 New Schedule 4A inserted

113 Consequential amendments arising from amendments to Public Finance Act 1989 that come into force on 1 July 2013

Subpart 3 —Amendments coming into force on 1 July 2014

114 Section 2 amended (Interpretation)

115 Section 7 replaced (Separate appropriation required for types of expenses and capital expenditure)

7 Expenses and capital expenditure must be allocated to appropriation type

7A Appropriation types

7B Requirements for multi-category appropriations

116 Section 9 amended (Appropriation limited by scope)

117 Section 12 amended (Timing of first Appropriation Bill for financial year)

118 New sections 12A and 12B and cross-heading inserted

Requirements for capital injections

12A Capital injections must be authorised

12B Authority to make capital injections under Imprest Supply Act

119 Section 13 amended (Estimates and other supporting information must be presented with first Appropriation Bill)

120 Sections 14 and 15 replaced

121 Section 16 amended (Supplementary Estimates must be presented with Supplementary Appropriation Bill)

~~122 Section 17 amended (Content of Supplementary Estimates)~~

122 Section 17 replaced (Content of Supplementary Estimates)

17 Content of Supplementary Estimates

17A Supplementary Appropriation Bill: supporting information relating to appropriations

17B Supplementary Appropriation Bill: supporting information relating to capital injections

123 Section 18 amended (Minister must consult on proposal to change format or content of information presented with Appropriation Bills)

124 Section 19 amended (Power of Secretary to obtain information)

125 New sections 19A to 19C and cross-heading inserted

Reporting on appropriations: End-of-year performance information

19A Provision of end-of-year performance information other than by Ministers

19B Provision of end-of-year performance information by Ministers

19C Requirements for end-of-year performance information

126 Section 22 amended (Operating surplus of department)

127 Section 23 repealed (Net assets of departments must be confirmed)

128 Section 24 amended (Movements within departmental statement of financial position)

129 New section 25A inserted (Capital injections may be made in emergencies)

25A Capital injections may be made in emergencies

130 Section 26 amended (Minister may determine terms and conditions of capital injections)

131 New section 26CA inserted (Capital injections made without authority or approval require validation by Parliament)

26CA Capital injections made without authority or approval require validation by Parliament

132 Section 26D amended (Reporting requirements in relation to expenses or capital expenditure incurred in excess of, or without, appropriation)

133 Section 26E replaced (Application of this Part to Offices of Parliament)

26E Application of this Part to Offices of Parliament

134 Section 27 amended (Annual financial statements of Government)

135 Section 32A repealed (Additional reports in relation to non-departmental appropriations)

136 Sections 38 to 41 and cross-heading replaced

Reporting requirements: Information on strategic intentions

38 Departments must provide information on strategic intentions

38A Minister may require department to provide information on strategic intentions at any time

39 Obligation to publish and present information on strategic intentions

40 Requirements for information on strategic intentions

41 Minister may grant extension of time for, or waive, requirement to provide information on strategic intentions

137 Section 42 repealed (Information on future operating intentions must include statement of responsibility)

138 Section 45 replaced (Contents of annual report of department)

45 Contents of annual report of department

~~45A Statements of expenses and capital expenditure~~

138A Section 45AA amended (Contents of departmental agency annual report)

138B Section 45A replaced (Statement of service performance)

45A Statements of expenses and capital expenditure

139 Section 45B amended (Annual financial statements)

140 New section 45BA inserted (Forecast financial statements)

45BA Forecast financial statements

141 Section 45C replaced (Statement of responsibility)

45C Statement of responsibility

142 Section 45D amended (Audit report)

143 Section 45E amended (Application of this Part to intelligence and security departments)

144 Section 45F replaced (Application of this Part to Offices of Parliament)

45F Application of this Part to Offices of Parliament

145 Section 45G repealed (This Part modified for purpose of applying Part to Offices of Parliament)

145A Section 45I amended (First annual report for newly established entities)

146 Section 45L amended (Minister may allow certain information to be included in another entity's annual report if operations transferred)

146A Section 45M amended (Application of Crown Entities Act 2004 to Schedule 4 organisations)

146B Consequential amendments arising from amendments to Public Finance Act 1989 that come into force on 1 July 2014

~~147 New sections 87 and 88 inserted~~

~~87 Information on strategic intentions~~

~~88 Additional transitional provisions applicable to Schedule 4 organisations and Schedule 4A companies~~

Part 3
Amendments to Crown Entities Act 2004

148 Principal Act

Subpart 1 —Amendments coming into force on day after date of Royal assent

148A Section 7 amended (Meaning of Crown entity and categories of Crown entities)

148B New section 7A inserted (Meaning of multi-parent subsidiary)

7A Meaning of multi-parent subsidiary

148C Section 8 replaced (Meaning of parent Crown entity and Crown entity subsidiary)

8 Meaning of parent Crown entity

149 Section 10 amended (Interpretation)

150 New sections 10A and 10B inserted

10A Application, savings, and transitional provisions relating to amendments to Act

10B Status of examples

151 Section 27 amended (Responsible Minister's role)

152 New section 27A and cross-heading inserted

27A Monitor's role

153 Section 50 replaced (Functions must be performed efficiently, effectively, and consistently with spirit of service to public)

50 Manner in which functions must be performed

154 Section 62 amended (When interests must be disclosed)

155 Section 64 amended (Who disclosure of interests must be made to)

156 Section 68 amended (Permission to act despite being interested in matter)

157 Section 78 amended (Board procedure)

158 Section 88 amended (Shareholding Ministers' role)

159 New section 88A and cross-heading inserted

88A Monitor's role

159A Section 97 amended (Subsidiaries: rules applying to all Crown entities)

160 Section 98 amended (Subsidiaries: rules applying only to statutory entities)

161 Cross-heading above section 103 amended

162 Section 107 amended (Whole of government directions)

162A Section 110 amended (Obligation to give effect to direction)

163 Cross-heading above section 114 repealed

164 Section 115 amended (Procedure for all Ministerial directions)

165 New section 115A inserted (Review and expiry of all directions)

115A Review and expiry of all directions

166 Section 122 replaced (Indemnities in relation to excluded act or omission)

122 Indemnities in relation to excluded act or omission

167 Section 127 amended (Method of contracting)

168 Section 133 amended (Power to request information)

169 Section 135 amended (Members, office holders, and employees are officials)

170 Section 151 amended (Form and content of annual report)

170A New Schedule 1AA inserted

171 Schedule 5 amended

171A Consequential amendments arising from amendments to Crown Entities Act 2004 made by this subpart

~~172 Amendment to Gambling Act 2003~~

~~173 Amendments to Accident Compensation Act 2001~~

Subpart 2 —Amendments coming into force on 1 July 2014

174 Section 27 amended (Responsible Minister's role)

175 Section 49 amended (Entity must act consistently with objectives, functions, statement of intent, and output agreement)

176 Section 88 amended (Shareholding Ministers' role)

177 Section 92 amended (Duty to act consistently with objectives, functions, statement of intent, and output agreement)

177A Section 136 amended (Interpretation for this Part)

178 Section 138 amended (Purpose of statement of intent)

179 Section 139 replaced (Obligation to prepare statement of intent)

139 Obligation to prepare statement of intent

139AAA Minister may require Crown entity to prepare new statement of intent at any time

139A Minister may grant extension of time for, or waive, requirement to provide statement of intent

180 Section 140 amended (Statement of intent for newly established Crown entities)

181 Section 141 replaced (Content of statement of intent)

141 Content of statement of intent

182 Sections 142 and 143 repealed

182A Section 144 amended (Application and term of statement of intent)

183 Section 145 amended (Ministerial involvement in statements of intent)

184 Section 146 amended (Process for providing statement of intent to responsible Minister)

185 Section 147 amended (Amendments to statement of intent by responsible Minister)

186 Section 148 amended (Amendments to statement of intent by Crown entity)

~~187 Section 149 replaced (Obligation to present and publish statement of intent)~~

~~149 Obligation to publish and present statement of intent and amendments~~

188 Section 149 replaced (Obligation to present and publish statement of intent)

149 Obligation to publish and present statement of intent

149AAA Obligation to publish and present amendments to statement of intent

Planning: Statement of performance expectations

149A Purpose of statement of performance expectations

149B Obligation to prepare statement of performance expectations

149BA Statement of performance expectations for newly established Crown entities

~~149C Content of statement of performance expectations~~

149C Content of statement of performance expectations

149D Exemption for certain outputs

149E Forecast financial statements

149F Ministerial involvement in statements of performance expectations

149G Process for providing statement of performance expectations to responsible Minister

149H Amendments to final statement of performance expectations by responsible Minister

149I Amendments to final statement of performance expectations by Crown entity

~~149J Obligation to publish and present statement of performance expectations and amendments~~

149J Obligation to publish and present statement of performance expectations

149K Obligation to publish and present amendments to statement of performance expectations

189 Section 150 amended (Obligation to prepare, present, and publish annual report)

190 New section 150A inserted (Special annual reporting requirements)

150A Special annual reporting requirements

191 Section 151 amended (Form and content of annual report)

191A Section 152 amended (Disclosure of payments in respect of members, committee members, and employees)

~~192 Section 153 amended (Form and content of statement of service performance)~~

192 Section 153 replaced (Form and content of statement of service performance)

153 Form and content of statement of performance

~~193 Section 154 amended (Annual financial statements)~~

193 Section 154 amended (Annual financial statements)

~~194 New section 154A inserted (Inactive Crown entity subsidiaries not required to prepare annual financial statements)~~

~~154A Inactive Crown entity subsidiaries not required to prepare annual financial statements~~

195 Section 155 amended (Statement of responsibility)

196 Section 156 replaced (Audit report)

156 Audit report

196A New sections 156A and 156B and cross-heading inserted

Application of this subpart to Crown entity groups

156A Application of this subpart to Crown entity groups

156B Minister of Finance may require additional reporting

~~197 Section 157 amended (Reporting by multi-parent subsidiaries)~~

197 Section 157 replaced (Reporting by multi-parent subsidiaries)

Multi-parent subsidiaries: Exemptions from reporting requirements under this subpart

157 Multi-parent subsidiaries part-owned by school board of trustees or tertiary education institution

157A Other multi-parent subsidiaries

198 Section 163 amended (Restrictions on giving of guarantees and indemnities)

199 Section 170 replaced (Power to require output agreement)

170 Ministerial involvement in delivery of outputs

~~200 New sections 199A to 199C and cross-heading inserted~~

~~Transitional provisions relating to State Sector and Public Finance Reform Act 2012~~

~~199A Application of provisions relating to financial year~~

~~199B Statement of intent~~

~~199C Crown entities with financial year ending other than on 30 June~~

201 Schedule 1 amended

202 Consequential amendments arising from amendments to Crown Entities Act 2004 made by this subpart

Schedule 1
New Schedule 1A inserted into State Sector Act 1988

Schedule 1A
Replacement Schedule 1 inserted into Public Finance Act 1989

Schedule 2
New Schedule 4A inserted into Public Finance Act 1989

Schedule 3
Consequential amendments arising from amendments to Public Finance Act 1989 that come into force on 1 July 2013

Schedule 3A
Consequential amendments arising from amendments to Public Finance Act 1989 that come into force on 1 July 2014

Schedule 3B
New Schedule 1AA inserted into Crown Entities Act 2004

Schedule 3C
Consequential amendments arising from amendments to Crown Entities Act 2004 that come into force on day after Royal assent

Schedule 4
Consequential amendments arising from amendments to Crown Entities Act 2004 that come into force on 1 July 2014

Legislative history

The Parliament of New Zealand enacts as follows: