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Questions: PM On Payments Row

Questions For Oral Answer Thursday, 24 June 1999

The following are paraphrases of today's questions for oral answer. They are not complete or official, the official record of Parliamentary proceedings is Hansard, which is not finalised some days after the event.

Question 1.

Rt Hon. Helen Clark to the Prime Minister Jenny Shipley:

Q: Was her objection to payments to departing Tourism Board directors based solely on the Controller and Auditor-General's opinion that the payments were unlawful; if so, is she now supporting the lawful settlement package for the directors being negotiated by the Minister of Tourism?

A: Cabinet has agreed that the Minister of Tourism and Tourism Board should first make their best attempt to recover the unlawful payment. They also agreed to avoid unnecessary cost to the taxpayer and to bring the matter to settlement as quickly as possible, the government is in the process of attempting to do this.

I reiterate again it is the government's intention to get the money back. The issues of crown entities are very much in the minds of New Zealanders. The government has a set of measures to cease inappropriate severence payments in the State Sector. I suggest members wait for the announcements.

Q: (Richard Prebble - ACT) Does the PM remember Helen Clark sacking the entire Auckland Hospital Board? And does she agree that if that were to happen now it would cost $1 million. Surely the problem is the law?

A: The member is quite right that since the Employment Court has become active in this area…(the Labour opposition are baying)….The member is right to say that no payment was made in relation to . But while she was minister of health a million in severance payments were made.

Q: Did she make something up?

A: This has been dealt with. This is clearly a matter that TVNZ and this person are in negotiation on.

These are contentious matters. This government does intend to settle these issues. Announcements are imminent on this.

Question 2.

Hon. Dr Michael Cullen to the Prime Minister Jenny Shipley:

Q: Will she oppose the payments of any compensation to Mr Mogridge and Mr Wall; if not, why not?

A: The government intends to clear this matter up. I have made it clear the government is proposing changes which it will announce in three weeks time. Based on the comments in his report that some payment should be made. Negotiations are underway to find a fair and reasonable settlement.

Q: Can he confirm that the board has spent $197,000 on legal advice in relation to the Audit Office inquiry.

A: I can confirm details of payments made under Labour. Major payments for voluntary severance made from 1st April 1995 to 1st June 1989 in the creation of SOEs included.

Coalcorp $21.3 million
Foresty and Lands Restructuring $70
Works Corp $36 million

Major payments by SOEs to June 1989.

Electricorp $29.9 million
NZ Post $21.2 million
Postbank $9.8 million

And in Education 1st June 1989 to 27th June 1990-- $45.8 Million

A total cost of nearly a quarter of a billion dollars. I suggest the Labour party go and find a mirror before they start chucking stones at others.

(Point of order - if the PM is going to deliver long answers….. Speaker - not at all.)

I think there is a lot of public concern about severance payments in the state sector. Departments etc. over the last 15 to 18 years. I most certainly do not support unlawful payments. We do intend to plug up the loopholes. Some of the loopholes were created by the Labour government. Some have already been closed.

There are clear rules for the Public Sector on these issues. There are theoretically clear rules about how organisations should conduct there affairs. However it appears there is significant variation in the way the rules are applied. One of the pieces of work on dealing with this consistency issue is in progress. We intend to announce new rules to sort this out.

If the member looks at the conditions in the SOE act she will see SOE boards serve "at the pleasure of the minister". In Crown Entities there is a wide range of structures and acts governing the rules on these things. We have recently discovered that the Tourism Board and Fire Service have entirely different provisions on appointments. We need to sort this out so there is consistency and public understanding.

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