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SUBMISSION TO THE FINANCE AND EXPENDITURE SELECT COMMITTEE ON THE PUBLIC FINANCE (STATE SECTOR MANAGEMENT) BILL
2 APRIL 2004
1 INTRODUCTION
1.1 The Association of Salaried Medical Specialists (the Association) represents
salaried senior doctors and dentists. The Association was formed in April 1989
to advocate and promote the common industrial and professional interests of our
members.
1.2 The Association has over 2,300 members, the majority of whom are employed
by District Health Boards (DHBs). About 92% of senior doctors and dentists
employed by public hospitals run by DHBs are members of the Association.
While most of our membersh
a number work in primary care and outside DHBs. We have members at
hospices, community trusts, iwi health authorities, union health centres, the New
Zealand Family Planning Association and the New Zealand Blood Service.
1.3 The Association is affiliated to the Council of Trade Unions (the CTU). We have
partic
support the CTU submission.
1.4 This is a large and comprehensive piece of legislation. Despite extensive
consultation between government employers on this Bill there has been no
consultation with unions in the health sector. It is a highly complex and far-
reaching piece of legislation that will impact well beyond the core public service.
The “Review of the Centre” had extensive Public Service Association
involvement but did not involve unions from the wider public sector.
1.5 This Bill is also a legislative review of the basic accountability and funding
structures that shape
an opportunity has been missed to look at the fundamental premises of this
system, which appear to have been put in place in order to cause public sector
organisations to fail.
1.6 Because of the failure to consult properly with the wider state sector unions, the
truncated period between the full introduction of this Bill and the closing of
submissions and the sheer size of the legislation this submission is not
comprehensive and is less specific than would be desirable.
1.7 The Association does not wish to make oral submissions.
2 IMPLICATIONS FOR THE HEALTH SECTOR
2.1 It has been hard to assess the impact of the Bill on the health sector. Schedule
8 contains 15 pages of amendments to the New Zealand Public Health and
Disability Act 2000. In contrast to the core public service and to a lesser extent
the tertiary education sector, the health sector unions have not been briefed on
the full implications of the Bill (despite efforts made to obtain a briefing). In
addition we understand that tertiary education sector employers and officials
have prepared a Supplementary Order Paper which will exempt the universities
from some of the provisions of the Bill. It is possible that similar exemptions
should be made for District Health Boards. Health sector unions are simply not
in a position to know.
2.2 At least some of the provisions of the Bill have implications for Association
members. Under the Crown Entities Bill, District Health Boards will become
Crown Agents. This will mean that the State Services Commissioner will have
the power under clauses 57 to 57C to set minimum standards of integrity and
conduct in the same way he or she can presently for public servants. How this
will mesh with professional codes of conduct, the provisions of the HPCA and
present rights set out in collective agreements (for instance the right of senior
doctors to partic
unclear.
2.3 The Association, along with other health sector unions, will continue to seek a
detailed briefing on the implications of the legislation for senior doctors and the
health sector in general and seeks leave from the Committee to make additional
written submissions should we believe that they are necessary.
3 PUBLIC SECTOR FINANCIAL ARRANGEMENTS
3.1 The Association notes that the Bill does not take the opportunity to address
fears that the public sector financial management system itself encourages the
failure of public sector organisations.
3.2 The financial management model implemented through the Public Finance Act
1989, State Sector Act and other state sector legislation (retained and extended
in this Bill through the Part 1 amendments to the Public Finance Act 1989) is
designed around a contracting model. It has been suggested that this legislation
is structurally biased toward extracting money from state organisations and
setting them up to fail despite the intentions and policy of the current
Government.(1)
3.3 Clauses 205 and 206 in Part 5 of the Bill, outline the procedures for net
surpluses and capital charges to be paid by state organisations. This includes
District Health Boards. The extension of the interpretation of surplus to include
accumulated surpluses (as well as any annual profit) carries with it the danger
of asset-str
3.4 Some crown entities, (tertiary education institutions), are not to be covered by
these provisions. It may be desirable that DHBs should also be exempted.
3.5 The CTU has proposed in its submission that the Select Committee take a
cautionary approach and does not extend these provisions to areas where they
do not currently apply. An evaluation of whether, and to what extent, the Public
Finance Act and delegated regulatory powers have undermined the state
provision of services should then occur. The Association supports this approach.
3.6 The Association believes that openness, transparency and accountability for the
use of public money are important princ
extended to cover all delegated rule-making powers proposed in the Bill and
presently wielded under the Public Finance Act. The Association concurs with the
CTU view that rules proposed in the Bill as well as those presently wielded by
Treasury and other government departments should be specified as regulations
for the purpose the Acts and Regulations Publications Act 1989 and become
subject to parliamentary and public scrutiny.
health service that is able to take strategic decisions that benefit the health of
New Zealanders in the long-term. This commitment has most recently taken the
form of an attempt to negotiate a Multi-employer Collective Agreement covering
all senior doctors employed by District Health Boards. During this process there
has been evidence that the existing structures and accountabilities of the District
Health Boards are not set up to facilitate a strategic approach across the public
health service. DHBs have difficulty responding to anything other than financial
indicators from the Government. The Government becomes merely a purchaser
(or customer) or an investor. These mechanisms of contractualism are not
sufficient to actuate either the need for co-ordination in the public health service
or to implement many of the government’s non-financial goals and policies. An
example is the existence of District Health Boards New Zealand, an organisation
set up by the DHBs themselves and not subject to any of the accountabilities in
this legislation, which exists because of the failure of any existing government
structure to provide a co-ordinating role.
clause 152 of Part 5 of the Bill which introduces the ability of responsible
Minister/s to recommend whole-of-government directions covering the wider
State Sector.
concerns. We support the more generic formulation suggested by the CTU.
Rewording 152 (2) to read :
(2) The Order in Council may specify requirements that would support a whole
of government approach and improve public services including through
- ensuring the promotion of collective bargaining and support for tr
arrangements with state sector unions
- ensuring compliance with the government’s legislative and policy
requirements on Equal Employment Opportunities and pay equity
Footnotes
(1) Susan Newberry New
Financial Resource Erosion in Government Departments PhD Thesis, University
of Canterbury 2002. (A copy is held by The Treasury should members be
interested in following this up) and Susan Newberry ‘Intended or Unintended
Consequences? Resource Erosions in
in Financial Accountability and Management, 18(4), November 2002. 0267-4424
