skip to:

 

Legislative Change Guidelines on Process & Content

PUBLIC POWERS

Introduction

Is the particular power needed? Who should have the power? How should the power be exercised? How should the power be stated?

The decision-maker: the choice between courts, tribunals and the government

The power, the issues and the interests The qualities and responsibilities of decision-maker The procedure to be followed Conclusions

Executive government

Departments of state Offices of parliament State enterprises Other Crown bodies

Tribunals

How should the tribunal be constituted? What procedures should the tribunal follow? Professional discipline

Regulations and other subordinate lawmaking

To whom should the power be delegated? What procedure should be followed in the making of regulations? How should the power be drafted? What controls should there be over regulations once made?

Powers to give policy directions to tribunals and independent administrative bodies

Powers of entry and search

Principles The recommendations of the Search and Search Warrants Committee (1988)

Powers to require and use personal information

Introduction

Is the particular proposed power needed?

48     How does the proposed power relate to existing powers? Is it stated sufficiently broadly to achieve the intended purpose or subjected to sufficient restraints and controls to meet the demands of principle? The questions are large and important ones. Their brief statement here should not disguise that. The discussion under later headings is relevant to them.

Who should have the power?

49     The legislation in general will make the choice between

In some cases more than one officer or body may be involved, one of them perhaps with advisory powers rather than powers of decision, or with one exercising original powers of decision and the other resolving appeals. (Appeals are dealt with in paras 156-159.)

50  The choice should take account of such matters as

51     Many different examples can be given. A contemporary one is immigration legislation.  Under the Immigration Act 1987, there are

52     In general, the more serious the consequence of the decision for individual rights and interests the greater the protection for the person affected, in terms of

The principal qualification to this is when a broader public interest is seen to prevail over particular private interest (for instance in the determination of general immigration policy or in the national security deportation case). The 1990 Bill of Rights reaffirms the broad principle: "Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person's rights obligations or interests protected or recognised by law" (s 27(1)), and applies it in the deportation context: "No one who is not a New Zealand citizen and who is lawfully in New Zealand shall be required to leave New Zealand except under a decision taken on grounds prescribed by law" (s 18(4)). Some of these matters are further considered in paras 65-84 and 102-110 below.

How should the power be exercised?

53     What procedure should be followed? Should the decision-maker

give a fair hearing? consult? give public notice and invite comment? decide on a more summary basis?

54     If the answer to the first or second question is yes, there is a further question: who should be entitled to be heard or to be consulted? There are those directly affected, those less directly affected, and those who might be able to represent some relevant part of the public interest or otherwise aid the decision-maker.

55     What should the particular content of the obligation to give a hearing be? The decision-maker must in general indicate to the persons affected what the issues are, disclose the information it holds relevant to the exercise of the power, and give the persons the opportunity to present their case and to rebut material put forward to their detriment. It might vary from a full court process as a maximum to a "hearing" on papers as a minimum. The more particular answer whether it should be full or more limited depends very much on the matters listed in para 50 and the choice of decision-maker which is appropriate in the particular case. The detail of the answers should also be helped by the provisions applying in general to tribunals, paras 106-110 below.

56 In general those making decisions should be obliged to disclose the principles and policies they apply and to give reasons for their decisions, when asked by those affected. This principle already binds those subject to the Official Information Act 1982 and the Local Government Official Information and Meetings Act 1987.

57     The answers to several of the above questions may be affected by the existence of rights of appeal. Any power in the original decision-maker to reconsider the matter may also be relevant; see too the Acts Interpretation Act 1924, s 25. The existence of such safeguards by way of review and appeal may mean that procedural safeguards need not be accorded at first instance. But that may be a false economy. It is important to aim to get good quality decisions at that stage.

How should the power be stated?

58     The statute must as a minimum state the thing to be done, for instance to grant (or revoke) a licence, to confer (or cancel) a benefit, to permit a non-New Zealander to be in New Zealand (or to deport that person) .... That statement will often include a qualification or condition (for instance of age for a benefit, or non-citizenship for migration). That qualification or condition might be complex: thus the principal deportation power can be exercised only if the person in issue has committed certain offences and has done that within a particular period of becoming a resident. That is, the thing can be done only to certain persons and only in certain circumstances.

59     The legislation might set a test which has to be satisfied in respect of the exercise of the power. Once again the immigration legislation provides examples. The appeal tribunal may cancel an order issued for the removal of an overstayer if satisfied, first, that because of exceptional circumstances of humanitarian character removal would be unjust or unduly harsh and, second, that allowing the person to remain would not be contrary to the public interest.

60     The legislation might (impliedly as well as expressly) gloss the power in at least two further ways. It might indicate the matters or factors to be considered (or not to be considered) by those exercising the power. And the decision-maker might be obliged or permitted to consider (or not) certain purposes.

61 In this area clear policy decisions and instructions are critical:

62     So far as possible, those matters should be addressed and clearly answered. The matters are important in both technical and policy senses. There is for instance a critical difference between the circumstances in which the power can be exercised and the matters for consideration: the former states a prerequisite to action and must be established in the mind of the decision-maker, while the latter indicates matters which must or may merely be considered.) That is the technical matter.

63     The policy matter is this: in what circumstances should limiting purposes and factors be indicated? The standard and preferred approach is to state the purposes and factors as tightly as practicable. There may be a difference between situations where restraints are being imposed on the freedom of action of individuals (for example by way of regulations) or things are being taken away from them, on the one side, and, on the other, those situations where benefits are being conferred without there being any question, at least as yet, of entitlement.

64      Sometimes legislation will require judgments to be made on two or more distinct matters in the particular case - for instance on the need for a new operator in a licensed industry and if so on the qualifications of particular applicants; or on whether a restrictive trade practice exists and if so whether it is contrary to the public interest. Once again these matters should be addressed clearly in the legislation - with the likely consequence that they will be addressed in separate provisions.

The decision-maker.. the choice between courts, tribunals and the government

65 How is the legislature, when conferring a statutory power of decision to allocate the power of decision between the courts, tribunals and the government? A fourth possibility is the use of arbitration to resolve the dispute. Arbitration is usually based on the agreement of the parties and is supported by legislation. But in some cases it may be imposed by legislation. That possibility is considered later, para 84. There are also of course further choices to be made within each of those general answers, for instance, so far as the government is concerned, between central and local government, and then between Ministers (and officials), State- enterprises, or other public bodies. See further paras 85-101. The broad choice has already been touched on in paras 49-52.

The following paragraphs are a slightly adapted version of part of the Report of the Legislation Advisory Committee (No 3 of February 1989) on Administrative Tribunals. Cabinet has endorsed the recommendations of that report paras 82-83 below) and the relevant passage is expressly referred to in the Cabinet Office forms set out in Appendix A.

66 The reasons or criteria for the choice of a particular method of decision-making can be considered under three headings:

The criteria are based on much relevant practice in New Zealand and other similar jurisdictions and in the writing of official bodies and others about the allocation of authority.

The power, the issues and the interests

67 How confined is the power? Does it mainly involve the finding of past facts and the application of precise rules to those facts? Or does it require the making of broader judgments or the exercise of wide discretions looking to the future and to elements of public interest? Does it have a high policy-making content?

68      Elected representatives and responsible governments are fundamental to our governmental and constitutional system. The main principle of our constitution is that it is democratic. Those who for the time being have public power have it within the confines of a democratic system. A central issue is how to draw the line from area to area and time to time between those matters of public decision which are to be handled by those with political responsibility to the electorate and those which are best settled by an independent tribunal or court. The broader the policy element the more appropriate it may be for the matter to be settled by Ministers who are responsible to Parliament, and ultimately to the electorate (or, at a local level, by the relevant local authority whose members are also responsible to the people).

69     Such political processes and governmental power of decision need not stand alone. They might be complemented by a tribunal. For instance, (1) Ministers might determine the general policy by way of a public direction (see paras 130-134 below) and the tribunal might then apply the policy to particular cases or (2) a tribunal or other body, such as a commission of inquiry, might have a power to investigate a matter and make recommendations to Ministers who retain the power of decision. The latter power of recommendation is to be found for instance in the environmental area. (While there are cases in which a recommendatory power is conferred on a court, that is most unusual and is contrary to the constitutional function of a court of deciding - especially in disputes between the Crown and individuals. We might add that the basic understanding of the function of a tribunal is that it too decides - subject of course to any appeal or review. In its original and basic meaning a tribunal is a place of judgment, a place of decision.)

70     A more common procedure than such hybrid executive-tribunal methods will be for parliament to settle the broad policy and decide that a specialist body, independent of the executive and with power of decision, is best able to develop and apply the policy consistently, on a country wide basis and, where appropriate, develop it by reference to a changing perception of the public interest. Such a function might be thought better suited to a specialist tribunal with a multidisciplinary and changing membership than to the judges of a court of general jurisdiction. (That is not to deny a role for the courts in respect of questions of law and related matters arising from the exercise of such functions, see paras 156-159 below, but the special character of that appellate role also emphasises one difference between court and tribunal.)

71     The preceding three paragraphs look at the matter from the point of view of the state, of those in authority seeing to it that policy is properly elaborated and applied. It is critical as well to consider it from the other end, from the point of view of the individuals affected by the exercise of the power. How important are the individual rights and interests which may be affected by the exercise of the power? Is personal liberty involved? Do the rights justify or require elaborate and careful protections by a formal process supervised and applied by a body which is clearly independent of the government? Against that may be important public interests which suggest that the state should have a substantial or final power of decision. In general however the more serious the consequence of the decision for individual rights and interests (for example the possibility of imprisonment or detention) the greater the need for the protection of the person affected - in terms of the independence of the decision-maker (court or tribunal rather than executive) or, if it is to be the executive, the seniority of the person with power of decision (Minister or even Governor-General rather than officials), the procedure to be followed (a right to be heard and to call witnesses rather than no express procedural protections at all), the specificity of standards, criteria and rules for decision, and rights of appeal and review.

72      Constitutional principles, legislative practice, natural justice as developed and revived by the courts, and relevant international standards all give very strong support to that proposition. Early English translations of the central promise of Magna Carta require "due process" from the state. As the public powers to interfere with rights and interests grow, many statutes have required greater procedural protections (sometimes using the phrase "principles of natural justice"). The courts have long shown themselves willing to "supply the omission of the legislature" if a statute which confers public power to affect rights and interests is silent about procedural protections. And the relevant international standards, including the right to a fair trial by an independent and impartial tribunal in the determination of rights and obligations in a suit at law, are being given a liberal reading by some, see, (eg, Report of the Committee of the Justice - All Souls Review of Administrative Law in the United Kingdom, Administrative Justice - Some Necessary Reforms (1988) 256-258; see also 376-380. Sections 21-27 of the Bill of Rights Act give added emphasis and detail, as partly indicated in para 52 (see further Appendix C).

73     The right to personal liberty and especially to freedom from arbitrary imprisonment and detention of course fall within such principles. But the range of rights and interests to be protected by institutional and procedural safeguards may vary from one context and time to another as the assessment of the value of these rights and interests varies.

74     A large volume of relatively routine matters might provide a quite different reason for using a special tribunal especially at first instance rather than a general court. In some cases, this tribunal might be a public servant acting as an independent officer and usually subject to a full right of appeal to the courts. (This is true of many registration and intellectual and industrial property functions.) This relates also to the third of the general matters noted in para 66 above - the procedure to be followed. But the second matter, the decision-maker, is next to be considered.

The qualities and responsibilities of the decision-maker

75     This matter looks back to the characteristics of the issues and the function of the decision maker and, indeed, forward to the procedure. Thus the nature of the issues might require special expertise (which the tribunal members might have on appointment or might acquire by concentrating in that field), possibly across several areas (thereby justifying multi-member panels); consider for example the statutory provisions about members of the Indecent Publications Tribunal and the Commerce Commission. And the nature of the decisions to be made about the registration or approval of medicines, poisons and pesticides may dictate both much of the process to be followed in making those decisions and the qualifications of the decision-makers.

76     The nature of the issues and of the judgments to be made may affect not only the criteria for the appointment of tribunal members, but also the method and the terms of appointment. To stress the independent character of the tribunal, the Minister of Justice or Attorney-General should usually have the major role or at least be involved in the appointment (for instance by way of consultation) and there should be some security of tenure; but the relevant departmental Minister will often also - and rightly - have a role, given the greater policy component in the function. That matter also explains why party caucuses usually have a role in respect of tribunal appointments, but have none at all with judicial appointments. Tribunal appointments are also usually for a fixed term. That is often desirable. Among other things it acknowledges that the assessment of the relevant public interests can evolve, and change.

77  On the other hand the issues in some situations - for instance of law and fair procedure - might be such that judges in courts of general jurisdiction, with the traditional independence and other attributes of that office, are the appropriate people to determine them. There might be a case for specialisation within the general court as with the Family Courts. Another possibility, again seen in the Commerce Act, is to add expert members to the general court. A further variation in an appeal context is to limit the issues which a general court can consider, as mentioned at the end of para 70.

78 By contrast with the foregoing, the character of the issues and of the function might be such that Ministers should take responsibility. This could be so, for instance, if the policy and public interest components of the decision predominate. They might be such that elected Ministers accountable to the electorate should have the power of decision. Our law and administration has a democratic base.

The procedure to be followed

79     The three categories of decision-makers - court, tribunals, and the executive - have their characteristic procedures. Those different procedures, it can quickly be seen, are more apt for dealing with some issues than others. A court process is designed, for example, to resolve, through adversary presentation and testing of evidence and argument, disputes about facts and law. Sometimes that will require the formal, structured presentation of evidence and arguments. Tribunal procedure by contrast is usually less formal, with the rules of evidence being relaxed in almost all cases. Tribunals are sometimes expected to take an active inquisitorial role in contrast to a more passive court which is dependent on the parties to bring the relevant material before it. Tribunals are still however bound by the principles of natural justice. The less structured processes of ministerial decision-making may extend out to the relevant sources of information and opinion (expert and political) in the community, without rules about notice, disclosure and opportunities for rebuttal. Those processes do not require the kind of organised and complete record that a court and many tribunals must assemble. Those who decide will often not have "heard" all the material relevant to decision. Such procedures are better able to determine, say, the nature and characteristics of a new taxation regime.

80     Procedures within courts and within tribunals can of course vary greatly, and that is even more true within the executive. The procedures can be more or less formal, more or less speedy and more or less costly. Those considerations may also themselves justify the use or establishment of a tribunal instead of a court. Thus the Small Claims Tribunal (now the Disputes Tribunal) was established to deal in an expeditious, informal, private and less costly way with small claims which otherwise come within the regular court jurisdiction. The issues might by contrast be so significant or difficult that a more elaborate and formal process is required.

81     Tribunals often are more accessible and less costly and allow a greater range of individual and public participation. In the courts a party who wishes to be represented is usually required to engage a lawyer. Tribunals frequently operate without the assistance of lawyers and indeed the use of lawyers is prohibited or limited in some tribunals concerned with private law matters in the interests of informality and lower costs. However, in some tribunal cases the interests involved will be very large, the issues complex and many, and parties will wish to be represented by counsel and to engage in a relatively formal process - which in consequence may well be, in part, as costly and time consuming as Major litigation in the High Court. But in the usual case the procedural advantages will be available. Legal aid can be important in either event and is provided for in the Legal Services Act 1991 s 19.

Conclusions

82     As Appendix A indicates, the Government has specifically required that the criteria set out above are applied in relevant cases. To recapitulate, the criteria relate to

83     In many situations the above criteria may be met by a combination of (1) officials (often acting in a summary administrative way) making the first decision and (2) an independent tribunal, following the principles of natural justice, determining appeals from the first administrative decision. This is particularly so where the volume of decision-making is large and the great bulk of the decisions involve no or little difficulty. Such an approach should not of course involve an assumption that those first level decisions are not important. The characteristics of courts are considered further in the report of the Law Commission The Structure of the Courts (1989 NZLC R7) especially chs 1 and II

84     Arbitration presents a further means of resolving of disputes. Usually arbitration is based on the consent of the parties. They agree to that method. But there are statutes which impose (or appear to impose) that method on the parties. The Committee has recently further considered this matter in consultation with the Law Commission. Both bodies see the force of the argument that arbitration will sometimes have real practical advantages for settling some disputes arising under statutes even if the matter is not submitted by agreement. Further, in some cases there will in fact be a consensual element. Accordingly, the Commission included in the draft statute proposed in its report, Arbitration (NZLC R 20) a provision to similar effect to that included in the 1908 and 1938 Acts (see s 7 and the commentary in Chapter VII, paras 219-223). What is required in each particular statutory area is an assessment of the general principles and the aptness of the different methods of dispute settlement. The assessment should be undertaken when methods are being considered for inclusion in new or revised statutes.

The Law Commission and the Committee also made some more specific proposals and comments on the legislative choice between court, tribunal and arbitration:

Accordingly, the Committee and the Law Commission recommended that those considering including provisions for statutory arbitration in new or revised legislation examine the advantages and disadvantages of the range of methods of dispute resolution.

Executive government

85     The previous section treats the executive (within the choice between the executive, tribunals and courts) as a single entity. It is not, of course. There is the choice between central government and local government. Within the latter there are further choices. The following paragraphs relate to the bodies established within central government.

86     There is a continuum of bodies exercising public power at the level of central government. At one end is the standard Minister-department relationship and along it various forms of independent or partly independent power. The legal structures should reflect that continuum and the reasons for greater or lesser autonomy. Recent legislation has given a sharper definition to four distinct institutional forms:

87     The members of the first three categories are clearly identified in the State Sector Act 1988, the Public Finance Act 1989 and the State-Owned Enterprises Act 1986. The Public Finance Act (in provisions which are still being refined) identifies a category of "Crown agencies" and several particular bodies (such as those involved in tertiary education) have been expressly made Crown agencies by particular enactments. It is convenient to consider offices of Parliament here. They are not, of course, part of the executive government as usually understood.

Departments of State

88     The First Schedule to the State Sector Act 1988 lists the departments of state. They have a variety of names (mainly Department or Ministry but also, Office, one Corporation (Housing), and one Commission (State Services)), and a great variety of functions with differing balances between advisory, operational or service provision functions. While there is a relevant Minister in each case, the Ministerial power and responsibility varies from being extensive, as with policy and many operational functions, to limited or almost non-existent, as with the independent statutory and other functions of the Inland Revenue Department or the Public Trust Office. The recent reforms have led to a greater emphasis on the policy and related roles - those subject to greater Ministerial scrutiny - and to other roles being transferred to state enterprises or Crown agencies. But the operational role of Departments is still major and critical, in respect for instance, of natural resources (such as the Department of Conservation) or transfers of money (such as the Department of Social Welfare).

89      Constitutional principles and legislation relating to the public service support four broad propositions (among others). Members of the public service are:

1 to act in accordance with the law;

2 to be imbued with the spirit of service to the community;

3 (as appropriate) to give free and frank advice to Ministers and others in authority, and, when decisions have been taken, to give effect to those decisions in accordance with their responsibility to the Ministers or others;

4 when the law so provides, to act independently in accordance with the terms of the law.

90     The Committee's report on Departmental Statutes (1989, Report 4) has largely been accepted by the Government and acted on in practice by Parliament. The report arose out of the common (but not invariable) practice of Parliament enacting statutes which establish departments of State. The Committee reached the general conclusion that such legislation is usually not necessary and, as already mentioned para 18), much legislation can be and has been avoided as a consequence. The Committee stated the following conclusions and recommendations:

1 Departmental statutes and related legislative provisions should not in general be enacted.

2 Legislation should not in general confer functions on departments; rather it should confer functions on the Governor-General (in Council), Ministers or officials.

3 Legislation should not in general name specific Ministers or relate officials to particular departments; rather the reference should be general ("a Minister of the Crown" "the Registrar appointed under the State Sector Act 1988". In some cases particular Ministers are however quite properly. specified as having a statutory power.

4 Parliament should have to approve the addition of new departments to the list of departments scheduled to the State Sector Act 1988, as well as deletions and alterations.

91     The fourth recommendation has not been adopted as a general proposition (by an amendment to the State Sector Act). However, in particular cases it is often complied with since a statute is required if a department is to be abolished, as is generally the case when new bodies are being established. A fifth recommendation for the publication of a table of functions of Ministers, departments and statutes for general information purposes has yet to be taken up.

Offices of Parliament

92     The Public Finance Act 1989 identifies four offices as offices of Parliament - the Controller and Auditor-General together with the Audit Office and Department; the Office of the Ombudsmen; the office of the Parliamentary Commissioner for the Environment; and the office of the Wanganui Computer Centre Privacy Commissioner. Their distinctiveness from the other categories of public bodies is emphasised by the provisions in that Act and by the practice of the House for the handling of their estimates of revenue and expenditure. The relevant Chief Executive submits the estimates directly to the House and they are considered by an Officers of Parliament Committee, chaired by the Speaker.

93     While the Public Finance Bill was being considered the Finance and Expenditure Committee reported on Officers of Parliament and the Government largely accepted the recommendations, 1989 AJHR I 4B and 1987-1990 AJHR 1 20 p 113. The Finance and Expenditure Committee stated the essence of Officers of Parliament in this way; their primary function should be as a check on the Executive, as part of Parliament's constitutional role of ensuring accountability of the Executive para 5. 1. 1)

The recommendations relating to the creation of an Officer of Parliament, accepted by the Government, indicate the essential characteristics of such officers:

1 An Officer of Parliament must only be created to provide a check on the arbitrary use of power by the Executive.

2 An Officer of Parliament must only be discharging functions which the House of Representatives itself, if it so wished, might carry out.

3 Parliament should consider creating an Officer of Parliament only rarely.

4 Parliament should review from time to time the appropriateness of each Officer of Parliament's status as an Officer of Parliament.

5 Each officer of Parliament should be created in separate legislation principally devoted to that Office.

94     The special character of such offices is also to be reflected in the method of appointment:

The latter part of that recommendation is the law for the positions mentioned with the exception of the Controller and Auditor-General for which new legislation has yet to be enacted.

State enterprises

95      Government trading organisations have operated for much of New Zealand's history. The State-Owned Enterprises Act 1986 provides the general legal framework for most of those which operate at the moment. According to its title, it is

An Act to promote improved performance in respect of Government trading activities and, to this end, to -

(a) Specify principles governing the operation of State enterprises; and (b) Authorise the formation of companies to carry on certain Government activities and control the ownership thereof, and (c) Establish requirements about the accountability of State enterprises, and the responsibility of Ministers

The principal objective of every State enterprise is

to operate as a successful business and, to this end, to be - (a) as profitable and efficient as comparable businesses that are not owned by the Crown; and

(b) a good employer; and

(c) an organisation that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so. (s 4(1))

The Act recognises that the enterprise may have non-commercial roles and that Ministers also have relevant responsibilities.

96 The Act establishes systems of accountability by the enterprises, for instance to Parliament' (including the Audit Office) and by being subject to the Ombudsmen Act 1975 and the Official Information Act 1982. The continued application of those Acts to the enterprises was reviewed after two years and the Government accepted the relevant select committee's recommendation that the Acts should continue to apply, with some amendment (among other things by extension to subsidiaries of the enterprises), report of the State-Owned Enterprises (Ombudsmen and Official Information Acts) Committee 1990 AJHR 122 A and the Finance Bill (No 4) cls 11

Other Crown bodies

97    The Public Finance Act 1989 indicated the existence of a fourth category of bodies which it called Crown agencies. The relevant provisions of the Act have not yet in general come into effect and further work is proceeding, see, eg, 1989 AJHR I 4C pp 13-14, 26; and 1991 AJHR I 4A (proposing among other things that the expression "Crown-owned entity" be used).

98     At this stage it is possible to indicate the types of bodies which fall or may fall within this residual grouping, some of their characteristics, and some of the implications of coming within the grouping. The concern is with bodies set up by statute, not under common law or prerogative powers. The following types of bodies can be identified:

(1) administrative tribunals which in general have powers to decide disputes between the state and individuals or between individuals; some of them have separate funding but others are administered by departments; examples are the Commerce  Commission and the Planning Tribunal; see further paras 65-84 above and 102- below;

(2) funding bodies supporting education, research, arts and culture, recreation and sport, community projects, relief and assistance, and other public and charitable purposes;

(3) advisory bodies with powers to give advice to the government and often more widely in areas of public policy and public interest; see the Legislation Advisory Committee's discussion paper on Public Advisory Bodies,.

(4) bodies providing services in the public interest in a wide range of areas: roading and fire services, health and rehabilitation, superannuation and social welfare, education and training, museums and libraries, the protection of cultural and historical heritage and of the environment;

(5) trading corporations which are not state enterprises under the 1986 Act paras 95-96 above); some might also come under the previous heading, eg, Earthquake and War Damages Commission, Export-Import Corporation and New Zealand Government Property Corporation;

(6) control and supervisory bodies other than those which are offices of Parliament or tribunals; the Commissioner for Children, the Police Complaints Authority, the Human Rights Commissioner and the Race Relations Conciliator (both of which might equally be under (3)).

There are also the producer boards, and some bodies with local responsibilities might be seen (for instance because of their funding or ownership) as Crown bodies such as airport companies, area health boards, and educational bodies.

99     The bodies can be characterised as public or Crown bodies by reference to their functions, their membership (including the methods of appointment and removal), their funding, the control by Ministers over their agenda, the power to give them directions, the extent of their power, and other Ministerial powers, for instance over the number and funding of staff.

100     The consequences of falling within the broad grouping relate to the reporting, including the financial reporting, of the body, the preparation and approval of its estimates, the application of a rather standard set of financial provisions, and the application of the Official Information Act and sometimes the Ombudsmen Act. The general point is that the bodies are separate from the regular departmental system but that they are still within the broad scope of the Crown. The particular elements of the relationship to Ministers depends on the specific characteristics of the body. But those elements should be accommodated with the general principles and the standard forms which are being developed.

101 The Government has accepted the following recommendations of the Finance and Expenditure Committee in the ways indicated:

Recommendation 3:

The tests which should be used to determine whether an entity is a Crown-owned entity are as follows. Crown-owned entities are those bodies corporate other than SOEs:

in which the Crown owns a majority of the voting shares; or for which the Crown has the power to dismiss a majority of the members of the governing body or, where no such body exists, has the power to dismiss the chief executive, and replace the governing body or the chief executive with a governing body or a chief executive which is primarily responsible to the Crown; or for which the Crown has the right to more than fifty percent of their net assets on their disestablishment; or in respect of which the Crown would be expected to assume any residual liabilities other than pursuant to a guarantee; or which Parliament considers to be owned by the Crown and deems to be Crown-owned entities.

Response:

The Government agrees that these tests should be used to determine whether an entity is a Crown-owned entity.

Recommendation 4:

In legislation "Crown-owned entity" should be defined primarily by reference to a Schedule to the Public Finance Act 1989 listing entities owned by the Crown. If technically possible, the legislation should also include the tests identified by the committee for determining ownership by the Crown.

Response:

The Government agrees that in order to provide certainty, for the purposes of Part V of the Public Finance Act 1989 "Crown-owned entity" should be defined by reference to a new Schedule to the Act listing entities owned by the Crown. For the purposes of Part III of the Act, the tests in recommendation 3 should be used to define comprehensively the scope of the Crown reporting entity.

Recommendation 6:

The Schedule should be able to be amended by Order in Council only to add Crown- owned entities or to make technical amendments, such as a change in the name of a Crown-owned entity. Deletions from the Schedule should be able to be made only by Act of Parliament.

Response:

The Government agrees that such a provision should be included in the Public Finance Act 1989.

Recommendation 7:

The guidelines for the preparation of legislation formulated by the Legislation Advisory Committee and adopted by Cabinet should be amended so that all bodies being created by statute are as a matter of course considered for inclusion in the Schedule to the Public Finance Act 1989.

Response:

The Government agrees that the guidelines should be amended in this way and will have them amended at the time of the amendment to the Public Finance Act 1989.

Continued

About Us | Privacy Statement | Disclaimer | Contact Us | Previous | Next