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2019 Annual Report

Parliamentary Counsel Office
Te Tari Tohutohu Pāremata

for the year ended 30 June 2019

Presented to the House of Representatives under section 44(1) of the Public Finance Act 1989

October 2019
Wellington, New Zealand

ISSN 2537-7337

PDF version (614KB)

Creative Commons License

Crown copyright ©. The 2019 Parliamentary Counsel Office Annual Report is licensed under a Creative Commons Attribution 3.0 New Zealand Licence. In essence, you are free to copy, distribute, and adapt the work, as long as you attribute the work to the Parliamentary Counsel Office and abide by the other licence terms. Please note that neither the Parliamentary Counsel Office logo nor the New Zealand Government logo may be used in any way that infringes any provision of the Flags, Emblems, and Names Protection Act 1981 or would infringe such provision if the relevant use occurred within New Zealand. Attribution to the Parliamentary Counsel Office should be in written form and not by reproduction of the Parliamentary Counsel Office logo or the New Zealand Government logo.

CONTENTS

Chief Parliamentary Counsel’s Overview

Highlights of 2018/19

Strategic Objectives

Strategic Objective 1—High-Quality Legislative Drafting Services
Strategic Objective 2—Ready Access to New Zealand Legislation
Departmental Capital Expenditure
Organisational Health and Capability

Financial information

Introduction to the Financial Statements
Statement of Responsibility
Statement of Comprehensive Revenue and Expense
Statement of Financial Position
Statement of Changes in Taxpayers’ Funds
Statement of Cash Flows
Statement of Commitments
Statement of Contingent Assets and Liabilities
Notes to the Financial Statements
Appropriation Statements
Statement of Performance
Independent Auditor’s Report

Appendices

Legislative Framework
Governance Arrangements and Structure in the PCO

The Attorney-General

I am pleased to present to you the Report of the Parliamentary Counsel Office for the year ended 30 June 2019.

Fiona Leonard
Chief Parliamentary Counsel
27 September 2019

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CHIEF PARLIAMENTARY COUNSEL’S OVERVIEW

This is the Annual Report of the Parliamentary Counsel Office (PCO) for the 2018/19 year. This report, together with the PCO’s Strategic Intentions1 and the 2018/2019 Estimates,2 forms the components of the Managing for Outcomes framework.

The PCO is a non-public service department dedicated to drafting and publishing legislation. The PCO’s goal is to make great law for New Zealand by working with others to produce legislation that is fit for purpose, constitutionally sound, and accessible to all users.

Legislation is fit for purpose if it has a clear purpose and is effective for that purpose, is certain and flexible for the future, and fits within the wider legal system. Legislation is constitutionally sound if it reflects Treaty of Waitangi principles, reflects constitutional values, and follows good process. Legislation is accessible if it is easy to find, find your way around, and understand.

Great law for NZ - accessible, fit for purpose, constitutionally sound

The  PCO’s multi-category appropriation consists of  two  distinct but  complementary outputs—Law Drafting Services and Access to Legislation—that deliver different parts of the same service to the Government and Parliament and the wider New Zealand public.

In the Law Drafting Services area, the emphasis in the reporting year has been on:

  • drafting Bills on the current revision programme
  • supporting the Legislation Design and Advisory Committee
  • providing supporting information for the plain language standard and checklist
  • providing ongoing legislative drafting assistance to Pacific Island nations
  • continued development of a te reo Māori strategy.

In the Access to Legislation area, the major focus has been the Access to Secondary Legislation Project.

Highlights of 2018/19

This has been another year of significant achievement and delivery for the PCO.

The substantive outcomes and the high-quality work involved in delivering them are largely dependent on the creativity and dedication of those who work for the PCO.

  • The PCO drafted and published 60 Government Bills, 281 Legislative Instruments, and 54 Government Supplementary Order Papers, and published 114 Members’ Supplementary Order Papers, 33 Members’ Bills, and 3 Local Bills, in the 2018 calendar year.
  • The first Bill on the current revision programme, the Partnership Law Bill, received its first reading on 11 June 2019.3
  • As part of the work of its Pacific Island Desk, the PCO hosted two workshops in the Cook Islands that focused on legislation and the policy analysis required for effective legislation.
  • The Access to Secondary Legislation Project made good progress, with a strong focus on developing the Secondary Legislation (Access) Bill for introduction.
  • The PCO hosted a conference for public sector drafters of secondary legislation that was attended by around 80 drafters, instructors, and others involved in developing secondary legislation.
  • Public use of the New Zealand Legislation (NZL) website (legislation.govt.nz) as a source of New Zealand’s legislation has continued to grow.
  • The PCO co-hosted three seminars during the year for new instructors, which were attended by around 180 officials.
  • The PCO continued to develop its te reo Māori strategy and has provided its staff with introductory language training.
  • The PCO is providing supporting information for its plain language standard and checklist and publishing it on its corporate website.

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STRATEGIC OBJECTIVES

Strategic Objective 1—High-Quality Legislative Drafting Services

The goal of this strategic objective is to provide high-quality legislative drafting services and advice in a professional, impartial, and responsive manner. This will deliver the Government’s legislation programme and the wider range of drafting work that the PCO now undertakes.

Core work
Drafting of Government Bills

The PCO drafted 60 Government Bills in the 2018 calendar year.

Successive governments have adopted a legislation programme for drafting Bills in each calendar year. No formal programme exists for drafting Legislative Instruments. Bills are assigned categories on the programme according to their legal and policy importance. The programme changes throughout the year as Bills are added or removed, and delays in making policy decisions delay drafting.

The main categories in the annual legislation programme are:

CategoryDescription
1 Bills that must be passed or introduced in the year as a matter of law
2 Bills that must be passed in the year
3 Bills to be passed if possible in the year
4 Bills to be referred to a select committee in the year
5 Instructions for Bills to be provided to the PCO in the year
Drafting amendments for select committees and committee of the whole House

Parliamentary select committees scrutinise legislation extensively. With the exception of Appropriation and Imprest Supply Bills, and Bills introduced and passed through all stages under urgency, all Bills are referred to a particular select committee for consideration. In the usual process of select committee scrutiny of Bills:

  • departmental advisers brief select committees about each Bill for which submissions are called
  • witnesses appear and give evidence at hearings that are open to the public
  • select committees analyse and consider submissions and produce reports recommending changes to a Bill
  • some committees engage independent advisers
  • Parliamentary Counsel draft the select committee’s amendments to a Bill in consultation with departmental advisers
  • the committee’s advisers prepare a commentary on the committee’s consideration of the Bill that accompanies the Bill when it is reported back to the House.

A select committee may consider a Bill for many months. They may make extensive amendments to take account of changes following from the public submission process and the select committee’s overall consideration. Parliamentary Counsel attend meetings of select committees when departmental reports are considered and when the amendments to a Bill are decided. They sometimes attend meetings to hear evidence from key witnesses. The drafting work involved can be considerable, intellectually challenging, and time-consuming.

Parliamentary Counsel also draft all amendments to Bills required by Ministers at the committee of the whole House stage. Considerable change is possible at this stage of the legislative process to give effect to policy changes or technical refinements.

Drafting of Legislative Instruments

In the 2018 calendar year, the PCO drafted 281 Legislative Instruments. In general, Acts of Parliament contain the main policy components of a legislative regime while Legislative Instruments contain much of the essential detail and administrative mechanisms to make the Acts work. A legislative regime often has its greatest impact through such secondary legislation.

The Cabinet Legislation Committee and Cabinet consider all proposed Legislative Instruments before they are submitted to be made by the Governor-General in Executive Council.

Drafting Legislative Instruments can give rise to complex legal questions about whether there is power to make the instrument under the relevant Act. Parliamentary Counsel  are  required  to  certify  whether  proposed  Legislative  Instruments  are  in order for submission to Cabinet. This involves examining them to see if there is any ground on which they may be challenged under the Standing Orders of the House or disallowed under the Legislation Act 2012.

Other significant initiatives
Legislative stewardship

In the reporting year, the PCO continued to embed its work on legislative stewardship. This work arose from two challenges. The first, posed by the Performance Improvement Framework (PIF) reviewers, is that the PCO become the steward of the statute book. The other is a more general response to the obligations that the State Sector Act 1988 places on chief executives to exercise legislative stewardship over the legislation administered by their departments.

The PCO has undertaken a systems approach to legislative stewardship. It recognises that while it has a leadership role in legislative stewardship, other participants in the legislative system also have crucial roles to play. The PCO must work collectively with the other participants to ensure that legislation is of a high standard.

For the PCO, laws are in a good state when they are fit for purpose, constitutionally sound, and accessible to all users. The PCO works with other participants to achieve a mutual understanding of what this means in practice and how it can be achieved.

The Access to Secondary Legislation Project and the plain language initiative are two ways the PCO is fulfilling its stewardship role. The Legislation Bill currently before the House also reflects the stewardship role.

Legislation Bill

The Legislation Bill rewrites and will replace the Legislation Act 2012 to:

  • make the legal changes needed to implement the Access to Secondary Legislation Project
  • update and incorporate the Interpretation Act 1999, currently administered by the Ministry of Justice. Under the Bill, responsibility for administering these provisions will transfer to the PCO
  • make other reforms relating to the production of high-quality legislation that is easy to find, use, and understand.

The policy objectives of this Bill are to:

  • enable easy access to legislation in New Zealand for individuals and businesses, particularly by providing access to all secondary legislation on or from the NZL website
  • improve accessibility of the law by incorporating the Interpretation Act 1999 into the Legislation Bill. This will mean that the main provisions of legislation concerned with Acts and secondary legislation are in one Act
  • improve the interpretation rules in the Interpretation Act 1999 for the courts and the public by addressing a small number of technical and operational issues identified since 1999
  • further encourage the production of good legislation by increasing the availability of information about the development and content of new Government-initiated legislation to inform the parliamentary and public scrutiny
  • clarify, update, and recast some of the provisions in the Legislation Act 2012 that are being carried forward. In particular, to:
    • recast the PCO’s purpose and functions, and reinforce the PCO’s stewardship over all legislation
    • align the PCO’s secondment practices with those of the wider public sector
    • improve the revision programme powers and procedure
    • update the standard provisions for incorporating material by reference to make them more flexible and technology-neutral.
Revision Bill programme

The PCO’s statutory functions include revising the Acts on each current revision programme to make them more accessible (required under Part 2 of the Legislation Act 2012).

The  Attorney-General  is  responsible  for  preparing  and  consulting  publicly  on  a three-yearly revision Bill programme for each new Parliament. The PCO prepares and manages the programme for the Attorney-General, providing administrative support in addition to drafting revision Bills and managing their progress through Parliament.

The revision programme for the 52nd parliamentary term has ten Bills that revise 27 Acts.

The Attorney-General introduced the Partnership Law Bill on 28 May 2019. At the same time, he presented the revision certificate for the Bill to the House certifying that the Bill does not make any substantive changes to the law. The Bill received its first reading on 11 June 2019, and the Justice Committee is due to report the Bill back to the House by 11 December 2019.

The PCO is also currently working with relevant agencies on a draft Land Valuation Proceedings Bill and a draft Revision (Law Reform Acts) Bill (formerly named the Civil Liability Legislation Bill).

Legislation Design and Advisory Committee

The PCO provides secretariat support to the Legislation Design and Advisory Committee (LDAC) (ldac.org.nz). Cabinet decided in September 2018 to combine LDAC’s public service and external adviser expertise into a new single-committee structure. LDAC’s single-committee structure was implemented in 2019 through a change in its operating model.

The LDAC Chair changed during the reporting year with Paul Rishworth QC departing the public service and being appointed as a non-public service LDAC member. Karl Simpson, Director—Regulatory and Data, Ministry of Transport replaced Professor Rishworth as LDAC Chair, effective 14 December 2018.

LDAC engages on pre-introduction Bills principally through subcommittees established for individual Bills. When the LDAC has not engaged on a Bill before its introduction, LDAC may still make a submission to a select committee if it considers that the Bill raises Legislation Guidelines issues that merit a submission. LDAC has reviewed 28 legislative proposals with departments in the reporting year and, either through the previous LDAC External Subcommittee or the new single committee, has made submissions to select committees on six Bills during the reporting year.

It has advised on a wide range of issues under its mandate of promoting good quality legislation, including:

  • whether legislation is the best way of achieving the policy objective
  • how  to  ensure that the provisions of the legislation will be consistent with its purpose and meet the underlying policy objective
  • the interaction of proposed legislation with existing law
  • incorporating the principles of the Treaty of Waitangi into legislation
  • allocating provisions between primary and secondary legislation
  • the appropriate form for a new public body
  • designing compliance and enforcement regimes, including the use of civil pecuniary penalties.

LDAC is preparing supplementary material to assist officials working with their Legislation Guidelines. The supplementary material will support the guidelines with relevant case law, academic discussion, external resources, examples, and frameworks. Two pieces of supplementary material have been prepared during the reporting year: “Bespoke legislative solutions” and “Excluding or limiting the right to apply for judicial review”.

LDAC also provides seminars/workshops on its role and aspects of the Legislation Guidelines. Two seminars were held in the reporting year relating to using the Legislation Guidelines to support good legislative design.

Plain language initiative

The PCO’s goals are for laws to be drafted in plain language and for plain language to be the standard for how the whole office communicates. The aim is to make New Zealand’s legislation more accessible to all and to improve its legal effectiveness.

The PCO is continuing to develop and implement its plain language strategy to achieve these goals. The strategy sets out how the PCO will train staff in plain language and set expectations for meeting the standard. It also sets out how it will support staff in developing these skills and measure how well the PCO has met its plain language standard. The strategy aims for continuous improvement rather than radical change. It is designed to increase the emphasis on plain language in a way that is sustainable over the long term.

The PCO’s current focus under the strategy is on providing supporting documents for the PCO’s plain language standard and checklist. The supporting documents provide more detailed information and guidance on how to apply the plain language standard and checklist. As part of the PCO’s broader stewardship goals, the documents are published online as they are developed4 for use by other drafting agencies and the broader public.

Te reo Māori strategy

During the reporting year, the PCO continued to develop its te reo Māori strategy, including through a language planning process with Te Taura Whiri i te Reo Māori, the Māori Language Commission. This strategy has two strands:

  • raising the general capability of the PCO to use te reo Māori and be familiar with tikanga Māori
  • developing good processes to support using te reo Māori in legislation (either when incorporating Māori words and phrases into English language legislation or in dual language legislation) in ways that promote consistent and accessible legislation.

The strategy has, in the reporting year, involved:

  • introductory language training for staff
  • further consideration of processes for preparing and enacting dual language legislation
  • developing supporting resources with assistance from specialist staff with expertise in te reo Māori, including through collaboration with the Office of the Clerk and the Department of Internal Affairs.
Treaty Bills

The  PCO  continues  to  work  closely  with  the  Office  for  Māori  Crown  Relations—Te Arawhiti and its Minister to progress the Bills required to implement Treaty settlements.  The  Deputy  Chief  Parliamentary  Counsel  (Drafting)  is  a  member  of Te Arawhiti Governance Board, which focuses on delivering the Treaty settlement work programme. Standard clauses for matters common to most Treaty settlement legislation continue to be an effective way to progress these Bills in a timely manner. The PCO confers with the responsible Minister and the Leader of the House on using extended sittings in the House to progress these Bills.

Increasing standardisation of drafting

As part of its stewardship role, the PCO is committed to reducing complexity in legislation. More standardisation (of both the content and structure of legislation) will make it easier for users to understand and find their way around legislation. It also gives the PCO wider opportunities to increase understanding of particular concepts across legislation, lower the risks of unintentional error, and increase efficiencies in producing legislation.

During the reporting year, the PCO has progressed its programme of work to standardise drafting practice and supporting guidance in a number of areas. These range from reasonably straightforward but very common areas (eg commencement) to more complex areas where differences have caused problems (eg infringement offences). The PCO has also begun engaging with the public sector on its standardisation programme.

Assistance to departments and the Government Legal Network

The PCO’s Guide to Working with the Parliamentary Counsel Office, a regular newsletter, and a dedicated section of the PCO corporate website are designed to help departments work effectively with the PCO, particularly when giving instructions and responding to drafts. Parliamentary Counsel have presented seminars on the subject to departmental officials and wider audiences in the reporting year. In addition, the PCO and the Office of the Clerk gave a joint seminar for new instructors three times during the reporting year to around 180 officials.

The PCO is currently working on a new online interactive version of the guide for instructors and has also developed a Step-by-Step Guide for Ministerial Advisers for Developing Legislation.

Parliamentary Counsel provide advice to departments:

  • during policy development to assist with legislative design
  • in the pre-instruction phase
  • during the drafting phase
  • at other times when required.

The PCO continues to contribute to the development of the Government Legal Network (GLN). During the reporting year, it has employed a GLN graduate lawyer trainee for six months and two GLN summer clerks. The PCO will continue its commitment to the GLN graduate programme by employing two further GLN graduate lawyers.

The PCO has provided drafting training for other agencies that draft secondary legislation. As part of its stewardship role and in collaboration with other drafting agencies, the PCO co-hosted a conference for public sector drafters of secondary legislation in August 2018. The conference was attended by around 80 drafters, instructors, and others involved in developing secondary legislation.

Contributing internationally

In 2011, the PCO established a Pacific Island Desk to provide legislative drafting assistance, training, and mentoring to officials in Pacific Island nations responsible for drafting legislation. The desk operates with the assistance of funding from the Ministry of Foreign Affairs and Trade. Since January 2017, this has been under a revised memorandum of understanding (MOU).

The intended outcomes of the MOU are that:

  • participating Pacific Island countries have a greater awareness of the role of legislation as part of a well-functioning democracy, and demonstrate improved understanding and skills when preparing drafting instructions and legislation
  • legislation meets quality standards
  • stakeholders are more engaged in the wider legislative and regulatory environment
  • the overall regulatory environment in participating Pacific Island countries and territories is improved
  • the wider business environment shows increased internal cohesion and greater confidence.

The assistance is focused on the Cook Islands, Niue, and Tokelau, the three nations within the Realm of New Zealand. The PCO has extended assistance to other Pacific Island nations where resources permit.

The work includes drafting legislation for nations to increase their drafting capacity, providing and maintaining a Guide to Preparing Instructions for the Drafting of Legislation, a set of Legislative Drafting Directives, and electronic drafting templates for Bills and Legislative Instruments. It also includes training and mentoring for on-island officials.

In the 2018/19 year, the PCO held two workshops in the Cook Islands, which were attended by officials from various government departments. These workshops focused on legislation and the policy analysis required for effective legislation. The PCO will continue to work with the relevant Crown Law Offices to provide workshops that respond to identified knowledge gaps and reinforce learning gained in previous workshops.

The PCO has also proactively engaged with other legislative drafting assistance providers around the world, and forums and agencies across the Pacific, to coordinate work in the Pacific region. Channels include the Pacific Islands Forum Secretariat and the Pacific Islands Law Officers’ Network.

The Chief Parliamentary Counsel has participated in the Australasian Parliamentary Counsel’s Committee on issues relating to trans-Tasman legislation, access to legislation, and legislative drafting and publishing systems and practices.

The PCO continues its strong involvement with the Commonwealth Association of Legislative  Counsel  (CALC).  Ross  Carter,  Parliamentary  Counsel,  is  CALC  Secretary. The PCO now hosts the CALC website (calc.ngo).

Law Commission

The PCO continues to maintain a very constructive relationship with the Law Commission. In the reporting year, the PCO assisted with draft provisions for the Law Commission’s review of the Property (Relationships) Act 1976.

Drafting for the (Judicial) Rules Committee

In the reporting year, the PCO provided advice and legislative drafting services to the Rules Committee. Rules of practice and procedure for the Supreme Court, Court of Appeal, High Court, and District Court are made by the Governor-General by Order in Council with the agreement of appropriate members of the judiciary and members of the Rules Committee.

Quantity of legislation

The following graphs compare the numbers of Government Bills drafted and published, and Legislative Instruments made and published, plus the numbers of Supplementary Order Papers (SOPs) drafted and published, in the calendar years from 2014 to 2018.

Graph showing numbers of Bills drafted and published for the past 5 years

Graph showing numbers of LIs made and published for the past 5 years

Graph showing numbers of Bills, SOPs LIs for the past 5 years

Significant Bills

In the financial year under review, the following significant Bills were introduced. This PCO-drafted legislation can be viewed on the NZL website.

Bills introducedSignificance
Arms (Prohibited Firearms, Magazines, and Parts) Amendment Bill This Bill seeks to remove semi-automatic firearms from circulation and use by the general population in New Zealand. The Bill achieves this by prohibiting semi-automatic firearms, magazines, and parts that can be used to assemble prohibited firearms.
Canterbury Earthquakes Insurance Tribunal Bill This Bill establishes the Canterbury Earthquakes Insurance Tribunal. The purpose of the Tribunal is to provide speedy, flexible, and cost-effective services to help resolve insurance claims arising out of the Canterbury earthquakes in 2010 and 2011. These claims could be between policyholders and insurers, or insured persons and the Earthquake Commission.
Climate Change Response (Zero Carbon) Amendment Bill This Bill provides a framework for New Zealand to contribute to the global effort under the Paris Agreement to limit the global average temperature increase to 1.5° Celsius above pre-industrial levels. It:
  • establishes the Climate Change Commission
  • sets  new  greenhouse  gas  emissions reduction targets for 2050
  • establishes a series of emissions budgets to act as stepping stones towards the 2050 targets
  • establishes a range of climate change adaptation measures.
Conservation (Indigenous Freshwater Fish) Amendment Bill This Bill amends the Conservation Act 1987 and the Freshwater Fisheries Regulations 1983. It primarily relates to indigenous freshwater fish, and threats to those fish.
Copyright (Marrakesh Treaty Implementation) Amendment Bill This Bill amends the Copyright Act 1994 to allow New Zealand to accede to the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled.
Credit Contracts Legislation Amendment Bill This Bill amends the Credit Contracts and Consumer Finance Act 2003 to address ongoing issues in the credit market. The changes are intended to reduce problem debt and resulting consumer harms (such as financial hardship and mental and physical health issues).
Criminal Cases Review Commission Bill This Bill establishes the Criminal Cases Review Commission, whose purpose is to review convictions and sentences and decide whether to refer them to the appeal court. This will replace the power currently exercised by the Governor-General under section 406 of the Crimes Act 1961.
Crown Minerals (Petroleum) Amendment Bill This Bill provides that new petroleum prospecting, exploration, and mining permits will be available only in the onshore Taranaki region. This gives effect to the Government’s announcement on 12 April 2018 relating to offshore petroleum permitting.
Education Amendment Bill (No 2) This Bill removes from legislation the provisions relating to national standards and the partnership school model and makes changes to the governance of tertiary education institutions.
Equal Pay Amendment Bill This Bill implements recommendations of the Joint Working Group on Pay Equity Principles.
Farm Debt Mediation Bill (No 2) This Bill will establish a farm debt mediation scheme that will require creditors with security interests in farm property to offer mediation to farmers before taking enforcement action over a debt.
Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill This Bill enables NZ financial market participants to comply with international rules and therefore continue to participate in overseas derivative and other financial markets.
Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill This Bill provides for the collection of an international visitor conservation and tourism levy.
Kāinga Ora—Homes and Communities Bill This Bill establishes Kāinga Ora—Homes and Communities as a Crown entity and disestablishes Housing New Zealand Corporation. Kāinga Ora— Homes and Communities will have two key roles: being a public housing landlord, and leading and coordinating urban development projects.
Misuse of Drugs Amendment Bill This Bill classifies certain synthetic cannabinoids as Class A controlled drugs, makes changes to the prosecutorial approach to drug offences for possession and use, and enables temporary drug class orders to be issued for emerging and potentially harmful substances.
New Zealand Infrastructure Commission/Te Waihanga Bill This Bill establishes the New Zealand Infrastructure Commission/Te Waihanga as a Crown entity. The Commission will coordinate, develop, and promote an approach to infrastructure that encourages infrastructure, and services that result from the infrastructure, that improve the well-being of New Zealanders.
New Zealand Māori Arts and Crafts Institute Vesting Bill This Bill gives effect to an agreement by the Crown to vest ownership of the NZ Maori Arts and Crafts Institute in iwi parties to recognise the relationship of Wahiao Tūhourangi and Ngāti Whakaue parties with the Institute and the land it is on.
Organ Donors and Related Matters Bill This Bill aims to increase New Zealand’s deceased organ donation and transplantation rates. It broadens the functions of the New Zealand Blood Service and clarifies when donors can receive earnings compensation.
Partnership Law Bill This revision Bill revises the Partnership Act 1908 in modern language and drafting style, without changing substantive legal effect.
Reserve Bank of New Zealand (Monetary Policy) Amendment Bill This Bill amends the objectives of monetary policy to require consideration of maximum sustainable employment alongside price stability in monetary policy decision-making. It also establishes a committee to make decisions on monetary policy. These are key changes to the system that has been in place since 1989.

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Strategic Objective 2—Ready Access to New Zealand Legislation

The specific outcome of this objective is to ensure that New Zealand legislation is easily accessible at no cost to the public in a timely manner and in an accurate and authoritative form.

Access to Secondary Legislation Project

The PCO has continued to make good progress with its long-term project to make all secondary legislation readily accessible from the NZL website.

Formal project governance and assurance processes are in place, including a project board with four members from outside the PCO, and external independent quality assurance.

Two significant pieces of legislation will create the necessary legislative framework. The Legislation Bill stands reported back to the House of Representatives after consideration by the Justice Committee. It will progress further when the Secondary Legislation (Access) Bill has been introduced to the House to enable the House to consider the full legislative structure together.

Much of the work in the project this year has focused on developing the Secondary Legislation (Access) Bill for introduction. The Bill will amend about 2500 provisions across the whole statute book. It has involved agreeing changes with 35 agencies that administer primary legislation, and over 100 bodies that are empowered to make secondary legislation. This work will be completed in the second half of 2019.

The PCO has formed a Reference Group comprising 12 representative agencies to advise the PCO on how best to support agencies in implementing the proposed legislation. The Group met three times during the year.

The Access to Legislation Project featured as a “starred” commitment in the New Zealand Action Plan 2016–2018 under the Open Government Partnership, on which the PCO has worked closely with the State Services Commission.5 The project is included, with further milestones, in the National Action Plan 2018–2020.

NZL system

The NZL system is a complete drafting and publishing system. The system provides public access to up-to-date official legislation on the NZL website.

During the reporting year, the PCO worked on upgrading the authoring tool, and on migrating client agencies that use the system to access via virtual desktops. Work on upgrading or replacing technically obsolete components ensures that the services comprising the NZL system remain supported.

NZL website

The graph below shows the average monthly number of visitors to the NZL website in each of the past five reporting years. Visitor numbers have continued to grow. (In March 2015, the PCO changed the software used to gather the information, which partially explains the increase in the number of visitors from 2015 to 2016.)

 average monthly unique visitors to NZL website for the past 5 years

Declaration on Open and Transparent Government

In accordance with the Declaration on Open and Transparent Government, the PCO continues to actively release data publicly. In addition to being published on the NZL website, legislative data is made available through data.govt.nz as reusable XML.

Non-legislative data is also released in reusable form.

Disclosure statement website

Legislative disclosure statements are published by the PCO to disclosure.legislation.govt.nz, a website separate from the NZL website, as part of an administrative trial being run by the Treasury. Disclosure statements are published for all Government Bills and substantive SOPs introduced or released since 29 July 2013. The Legislation Bill includes provisions to make disclosure requirements mandatory.

Publishing

The PCO publishes:

  • new Acts
  • new Legislative Instruments
  • Bills (both new Bills introduced to the House and subsequent versions of Bills)
  • SOPs
  • reprints of Acts and Legislative Instruments (versions of Acts and Legislative Instruments that incorporate all amendments as at the publication reprint date).

These documents are published as official legislation in HTML and PDF formats on the NZL website. They are also sold in printed form at specified bookshops, to subscribers, and through the NZL website.

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Departmental Capital Expenditure

Work continued on the Access to Secondary Legislation Project and funding was provided for various technical services including business implementation, project management, and assurance.

The PCO purchased laptops and iPhones in the reporting year to replace existing hard-wired computers and desk phones respectively. The new equipment will improve staff mobility within and outside the office. It will also provide improved resilience in the event of business disruption or an emergency.

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Organisational Health and Capability

Recruitment and retention of skilled and experienced staff

Staff turnover in the past four years, compared with the maximum turnover rates:

 2018/19 Maximum target turnover2018/19 Actual2018/19 Actual (number)2017/18 Actual2016/17 Actual2015/16 Actual
Parliamentary Counsel 7% 8% 3 6% 8% 10%
Technical staff 12% 5% 1 0% 4% 10%
Corporate staff 10% 0% 0 0% 5% 23%
Total staff turnover 10% 5% 4 3% 5% 13%

Four new Parliamentary Counsel and one non-counsel staff member were recruited during the year.

Succession planning continues to be a key feature of the PCO’s efforts in organisational health and capability.

Training

The PCO continues to monitor, enhance, and apply a comprehensive training programme for new counsel.

Managers continued to develop their skills by participating in relevant development opportunities. Counsel continued to attend in-house forums, workshops, and courses for their development and to meet their NZ Law Society continuing professional development requirements.

As part of its focus on staff wellbeing and managing stress, the PCO provided refresher training on aspects of resilience. This followed a programme of resilience training for all staff the previous year. In-house training in te reo Māori during the year attracted a high level of participation. Other training and development for all PCO staff continued in accordance with individual training plans and manager-assessed training and development needs.

The PCO encourages staff development through acting in senior roles as opportunities arise, and taking on secondments, both internally and externally. During the year, PCO staff were seconded to legal roles with the Ministry of Education and Crown Law, and one non-legal role at Monash University in Melbourne, Australia. Staff from the Office of the Clerk, Ministry for Primary Industries, and the Queensland Parliamentary Counsel Office were seconded to legal roles within the PCO.

Performance management

The performance management system continues to operate well. Managers and staff agree on annual objectives at the beginning of the financial year, review progress throughout the year, and summarise achievements at the end of the year. Results from this and other criteria are reflected in remuneration decisions.

Equal employment opportunities

The PCO has a diverse workforce, and equal employment opportunities (EEO) principles are integrated into everyday business. For a number of years, the PCO has had—and continues to have—an appropriate representation of women in managerial and Audit and Risk Committee positions. All PCO managers continue to focus on equity issues as part of their human-resources responsibilities.

As at 30 June 2019, the staff gender breakdown is:

 MaleFemaleTotal
Total staff 34 50 84
Senior Management (tier 1 & 2) 2 2 4
Tier 3 managers 6 4 10
Parliamentary Counsel 8 21 29
Other Drafting Services staff 0 3 3
Access to Legislation staff 8 10 18
Corporate Services staff 10 10 20


The above table includes three fixed-term staff.

Organisational structure

See below for the PCO’s organisational structure.

Risk management

The PCO maintains a risk register that is reviewed throughout the year by business units and the Senior Management Team (with major risks also reviewed by the Audit and Risk Committee—see below). Its purpose is to help manage and mitigate the PCO’s major risks and achieve its outputs and deliverables. The framework includes procedures and practices designed to protect and enhance resources and enable objectives to be achieved.

Simplification and consolidation of information technology

In the reporting year, the PCO followed a risk-based approach to its information technology work programme. The PCO has undertaken work to ensure technology components are running supported versions and, where possible, rationalised components or moved them to more easily maintained platforms. Highlights include changing the identity management system and continuing to migrate underlying upgrading systems and databases to new platforms.

The PCO has also undertaken assurance activities to ensure the technology services used are well supported and reliable, and continues to use the Government Chief Digital Officer’s Information and Communications Technology (ICT) Operations Assurance Framework.

Use of ICT Common Capabilities

The PCO has adopted a number of all-of-government ICT common capabilities (including Infrastructure as a Service, Desktop as a Service, and the Common Web Platform). This continues at pace, with planning for the adoption of Telephone as a Service completed in the 2018/19 financial year.

Audit and Risk Committee

The PCO’s Audit and Risk Committee met four times during 2018/19. The committee consists of two external independent members (including the chair) and two internal members. It provides independent advice and assurance to the Chief Parliamentary Counsel on the PCO’s systems of governance and internal control, risk management and compliance, and external accountability responsibilities.

Business continuity

The PCO continued to test, review, and update business continuity plans where necessary. The PCO also updated its incident management communications response and plan in the reporting year. These activities ensured that essential services provided by the PCO could continue or quickly recover during periods of business disruption or emergency. The theory was put into practice when the PCO was required to vacate its building at short notice due to an asbestos contamination and to work in a variety of locations for three months. This event confirmed that most staff could work remotely when disruptive events take place.

The PCO also attended meetings of the Government Sector Business Continuity Group and was represented on the group’s steering committee.

Disaster recovery

The PCO has a disaster recovery plan in place for its information systems, including a back-up site in Auckland. This is to mitigate service delivery risks as much as possible in the event of a major incident. The PCO successfully retested its disaster recovery plan in 2018/19. Work continued during the year on strengthening the PCO systems’ resilience by housing services in two separate geographical locations.

Protective Security Requirements

The Government-mandated Protective Security Requirements (PSR) provide guidance and support for government agencies to improve the security of their people, information, and assets. The PSR framework is designed to help agencies:

  • identify their individual levels of security risk tolerance
  • achieve   the   mandatory   requirements   for   protective   security   expected   by Government
  • develop  an  appropriate  security  culture  to  securely  and  effectively  meet  their business goals.

The Three Agencies of Parliament Group, led by the Parliamentary Service and including the PCO and the Office of the Clerk, worked together to develop the 2019 PSR self-assessment report.

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FINANCIAL INFORMATION

Financial Statements of the Parliamentary Counsel Office for the year ended 30 June 2019

Introduction to the Financial Statements

The Parliamentary Counsel Office (PCO) is responsible for discharging the functions set out in the Legislation Act 2012.

The PCO is funded by appropriation of money by Parliament.

The financial statements of the PCO for the year ended 30 June 2019, including the Statement of Performance, now follow.

Statement of Responsibility

I am responsible, as Chief Executive of the PCO, for:

  • the preparation of the PCO’s financial statements, and statements of expenses and capital expenditure, and for the judgements expressed in them
  • having in place a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting
  • ensuring that end-of-year performance information on each appropriation administered by the PCO is provided in accordance with sections 19A to 19C of the Public Finance Act 1989, whether or not that information is included in this annual report
  • the accuracy of any end-of-year performance information prepared by the PCO, whether or not that information is included in the annual report.

In my opinion:

  • the financial statements fairly reflect the financial position of the PCO as at 30 June 2019 and its operations for the year ended on that date
  • the forecast financial statements fairly reflect the forecast financial position of the PCO as at 30 June 2020 and its operations for the year ending on that date.

Fiona Leonard
Chief Parliamentary Counsel
27 September 2019

Statement of Comprehensive Revenue and Expense
For the year ended 30 June 2019

2018
Actual
$000
 Notes2019
Actual
$000
Unaudited
2019
Main Estimates
$000
Unaudited
2019
Supp. Estimates
$000
Unaudited
2020
Forecast
$000
             
  Revenue          
20,223 Crown   19,493 20,223 19,493 20,223
290 Other revenue 2 258 200 200 200
20,513 Total revenue   19,751 20,423 19,693 20,423
             
  Expenses          
10,378 Personnel 3 10,502 10,392 10,997 11,302
7,036 Operating 4 6,303 6,454 6,915 6,771
1,259 Depreciation and amortisation 7/8 929 1,501 876 1,445
905 Capital charge 5 905 905 905 905
19,578 Total expenses   18,639 19,252 19,693 20,432
             
935 Net surplus   1,112 1,171 0 0
0 Other comprehensive revenue and expense   0 0 0 0
             
935 Total comprehensive revenue and expense   1,112 1,171 0 0

Explanations of major variances against the original 2019 budget (2019 Main Estimates) are provided in Note 15.
The notes to the accounts form part of and are to be read in conjunction with these financial statements.

Statement of Financial Position
As at 30 June 2019

2018
Actual
$000
 Notes2019
Actual
$000
Unaudited
2019
Main Estimates $000
Unaudited
2019
Supp. Estimates $000
Unaudited
2020
Forecast
$000
             
  Taxpayers’ funds          
15,091 Taxpayers’ funds   15,091 15,091 15,091 15,091
15,091 Total taxpayers’ funds   15,091 15,091 15,091 15,091
             
  Represented by:          
  Current assets          
3,183 Cash and cash equivalents   3,505 797 2,604 2,801
11,147 Debtors and other receivables 6 10,022 10,118 8,147 6,647
211 Prepayments   255 403 211 211
14,541 Total current assets   13,782 11,318 10,962 9,659
             
  Non-current assets          
1,654 Property, plant, and equipment 7 1,558 1,403 1,622 1,139
1,656 Intangible assets 8 2,295 4,928 4,414 6,282
3,310 Total non-current assets   3,853 6,331 6,036 7,421
             
17,851 TOTAL ASSETS   17,635 17,649 16,998 17,080
             
  Current liabilities          
1,126 Creditors and other payables 9 710 705 1,126 1,126
935 Return of operating surplus 10 1,112 1,171 0 0
629 Employee entitlements 11 637 618 711 793
2,690 Total current liabilities   2,459 2,494 1,837 1,919
             
  Non-current liabilities          
70 Employee entitlements 11 85 64 70 70
             
2,760 TOTAL LIABILITIES   2,544 2,558 1,907 1,989
             
15,091 Net assets   15,091 15,091 15,091 15,091

Explanations of major variances against the original 2019 budget (2019 Main Estimates) are provided in Note 15.
The notes to the accounts form part of and are to be read in conjunction with these financial statements.

Statement of Changes in Taxpayers’ Funds
For the year ended 30 June 2019

2018
Actual
$000
 Notes2019
Actual
$000

Unaudited
2019
Main Estimates $000

Unaudited
2019
Supp. Estimates $000
Unaudited
2020
Forecast
$000
             
15,091 Balance as at 1 July   15,091 15,091 15,091 15,091
935 Total comprehensive revenue/expense   1,112 1,171 0 0
             
  Owner transactions          
(935) Return of operating surplus to the Crown 10 (1,112) (1,171) 0 0
             
15,091 Balance as at 30 June   15,091 15,091 15,091 15,091

Explanations of major variances against the original 2019 budget (2019 Main Estimates) are provided in Note 15.
The notes to the accounts form part of and are to be read in conjunction with these financial statements.

Statement of Cash Flows
For the year ended 30 June 2019

2018
Actual
$000
 2019
Actual
$000

Unaudited
2019
Main Estimates
$000

Unaudited
2019
Supp. Estimates
$000
Unaudited
2020
Forecast
$000
           
  Cash flows from operating activities        
  Cash was provided from:        
  Supply of outputs:        
21,296 —Crown 20,576 22,223 22,493 21,723
288 —Departments 290 200 200 200
2 —Other 10 0 0 0
21,586 Subtotal 20,876 22,423 22,693 21,923
           
  Cash was disbursed to:        
  Produce outputs:        
(10,374) —Personnel (10,458) (10,362) (10,894) (11,199)
(7,098) —Operating (6,681) (6,484) (6,936) (6,792)
69 —Net GST paid (103) 0 0 0
(905) —Capital charge (905) (905) (905) (905)
(18,308) Subtotal (18,147) (17,751) (18,735) (18,896)
3,278 Net cash flows from operating activities 2,729 4,672 3,958 3,027
           
  Cash flows from investing activities        
  Cash was disbursed to:        
(69) Purchase of property, plant, and equipment (424) (40) (436) (40)
(808) Purchase of intangible assets (1,048) (2,790) (3,166) (2,790)
(877) Net cash flows from investing activities (1,472) (2,830) (3,602) (2,830)
           
  Cash flows from financing activities        
  Cash was disbursed to:        
(926) Payment of net surplus to Crown (935) (1,223) (935) 0
(926) Net cash flows from financing activities (935) (1,223) (935) 0
           
1,475 Net increase/(decrease) in cash held 322 619 (579) 197
1,708 Add opening cash brought forward 3,183 178 3,183 2,604
3,183 Closing cash to carry forward 3,505 797 2,604 2,801

Explanations of major variances against the original 2019 budget (2019 Main Estimates) are provided in Note 15.
The notes to the accounts form part of and are to be read in conjunction with these financial statements.

Statement of Commitments
As at 30 June 2019

2018
Actual
$000
 2019
Actual
$000
     
  Non-cancellable operating lease commitments  
729 Less than one year 713
712 One to two years 695
1,999 Two to five years 1,304
0 Over five years 0
3,440 Total non-cancellable operating lease commitments 2,712

There are no capital commitments (2018: nil).

Reserve Bank office lease: This lease is for the rental of office space on floors 4, 12, and 13 in the Reserve Bank building. The lease has a make-good provision where the lessee can either surrender the fit-outs and alterations to the lessor or remove these and make good. This lease is non-cancellable. There are no escalation clauses on the office lease.

Reserve Bank car park lease: This lease is for the rental of car park spaces in the Reserve Bank building. This lease is cancellable on the anniversary date. The amounts stated above do not include the car park lease as the value of the commitment is less than $10,000 dollars.

There are no contingent rents on the above leases; they are all fixed term. There are no restrictions imposed by the lease arrangements.

The Reserve Bank office lease for level 4 has an expiry date of 30 April 2020.

The Reserve Bank office lease for levels 12 and 13 has an expiry date of 14 May 2023.

The Reserve Bank car park lease has an expiry date of 15 April 2020 and is automatically renewed unless a notice to cancel is provided.

The notes to the accounts form part of and are to be read in conjunction with these financial statements.

Statement of Contingent Assets and Liabilities
as at 30 June 2019

As at 30 June 2019, there are no contingent assets (2018: nil).

As at 30 June 2019, there are no contingent liabilities (2018: nil).

As at 30 June 2019, there are no guarantees or indemnities given under the Public Finance Act (PFA) 1989 in respect of the activities of the PCO (2018: nil).

The notes to the accounts form part of and are to be read in conjunction with these financial statements.

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Notes to the Financial Statements
for the year ended 30 June 2019

Note 1 Statement of Accounting Policies
Reporting entity

The PCO is a government department as defined by section 2 of the Public Finance Act 1989. For financial reporting purposes the PCO has defined itself as a Public Benefit Entity (PBE).

The financial statements of the PCO are for the year ended 30 June 2019, and were approved for issue by the Chief Parliamentary Counsel on 27 September 2019.

Basis of preparation

The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period.

Statement of compliance

The financial statements of the PCO have been prepared pursuant to the Public Finance Act 1989, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP) and Treasury Instructions.

The financial statements have been prepared in accordance with and comply with Tier 2 PBE accounting standards. This is on the basis that the PCO’s total expenditure being is less than $30 million per annum.

These financial statements comply with PBE accounting standards.

Presentation currency and rounding

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand ($000).

Summary of significant accounting policies
Revenue

Revenue Crown

Revenue from the Crown is measured based on the PCO’s funding entitlement for the reporting period. The funding entitlement is established by Parliament when it passes the Appropriation Acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year and certain other unconditional funding adjustments formally approved prior to balance date.

There are no conditions attached to the funding from the Crown. However, the PCO can incur expenses only within the scope and limits of its appropriations.

The fair value of Revenue Crown has been determined to be equivalent to the funding entitlement.

Capital charge

The capital charge is recognised as an expense in the financial year in which it is incurred.

Leases

Operating leases

All of the PCO’s leases are operating leases. An operating lease is a lease that does not transfer substantially all of the risks and rewards incidental to ownership of an asset.

Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.

Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term.

Cash and cash equivalents

The PCO is only permitted to expend its cash and cash equivalents within the scope and limits of its appropriations.

Debtors and other receivables

Short-term receivables are recorded at their face value, less any provision for impairment.

A receivable is considered impaired when there is evidence that the PCO will not be able to collect the amount due. The amount of the impairment is the difference between the carrying amount of the receivable and the present value of the amounts expected to be collected.

Property, plant, and equipment (PPE)

Property, plant, and equipment (PPE) consists of furniture, office equipment, and leasehold property improvements. The initial cost of PPE is the value of the consideration given to acquire or create the asset and any directly attributable costs of bringing the asset to working condition for its intended use. PPE is measured at cost less accumulated depreciation and impairment losses.

Individual assets, or group assets, are capitalised if their cost is greater than $2,000 (excluding GST).

Additions

The cost of an item of property, plant, and equipment is recognised as an asset if it is probable that future economic benefits or service potential associated with the item will flow to the PCO and the cost of the item can be measured reliably.

Work in progress is recognised at cost less impairment and is not depreciated. The total cost of this work is transferred to the relevant asset category on its completion.

In most instances, an item of property, plant, and equipment is initially recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value as at the date of acquisition.

Disposals

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposal are included in the surplus or deficit.

Subsequent costs

Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the PCO and the cost of the item can be measured reliably.

The costs of day-to-day servicing of property, plant, and equipment are recognised in the surplus or deficit as they are incurred.

Depreciation

Depreciation of property, plant, and equipment begins when the asset is available for use. It is provided on a straight-line basis to allocate the cost of assets, less any estimated residual value, over their useful lives. The charges for each financial year are recognised in the surplus or deficit for that year.

The estimated economic useful lives and associated depreciation rates of property, plant, and equipment are:

  • Computers 3 years
  • Furniture 3 to 10 years
  • Office equipment 3 to 10 years
  • Leasehold property improvements 6 years

The cost of leasehold improvements is capitalised and amortised over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is shorter. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year-end.

Intangible assets

Software acquisition and development

Acquired computer software is capitalised based on the cost incurred to acquire and bring to use the specific software.

Costs associated with maintaining computer software are recognised as an expense when incurred. Costs that are directly associated with the development of software for internal use by the PCO are recognised as an intangible asset. Direct costs include the software development, employee costs, and an appropriate portion of relevant overheads.

Staff training costs are recognised as an expense when incurred. Costs of software updates or upgrades are only capitalised when they enhance functionality or value of the software.

Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. The estimated useful lives and associated amortisation rates of intangible assets are:

  • Intangible assets 5 to 10 years
Impairment

The PCO does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return.

Non-cash-generating assets

Property, plant, and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised as the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or its value in use.

Value in use is the present value of the asset’s remaining service potential. Value in use is determined using an approach based on a depreciated replacement cost approach, a restoration cost approach, or a service units approach. The most appropriate approach used to measure value in use depends on the nature of the asset and availability of information.

If an asset’s carrying amount exceeds its recoverable service amount, the asset is regarded as impaired and the carrying amount is written down to the recoverable amount. The total impairment loss is recognised in the surplus or deficit.

The reversal of an impairment loss is recognised in the surplus or deficit in the year it occurs.

Creditors and other payables

Short-term payables are recorded at their face value.

Employee entitlements

Short-term employee entitlements

Employee benefits expected to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay.

These include salaries and wages accrued up to balance date, annual leave earned but not yet taken at balance date, retiring and long service leave entitlements expected to be settled within
12 months, and sick leave.

A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that it will be used by staff to cover those future absences.

Long-term employee entitlements

Employee benefits that are due to be settled beyond 12 months after the end of the reporting period in which the employee renders the related service, such as long service leave and retiring leave, are calculated on an actuarial basis. The calculations are based on:

  • likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlements information; and
  • present value of the estimated future cash flows.

Presentation of employee entitlements

Sick leave, annual leave, vested long service leave, non-vested long service leave and retirement leave are expected to be settled within 12 months of balance date are classified as a current liability. All other employee entitlements are classified as non-current liabilities.

Superannuation schemes

Defined contribution schemes

Obligations for contributions to the State Sector Retirement Savings Scheme, KiwiSaver, and the Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit as incurred.

Provisions

A provision is recognised for future expenditure of uncertain amount or timing when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for net deficits from future operation activities.

Provisions are measured at the present value of the expenditure and are discounted using market yields on government bonds at balance date with the terms to maturity that match, as closely as possible, the estimated timing of the future cash flows. The increase in the provision due to the passage of time recognised as an interest expense and is included in “finance costs”.

Restructuring

A provision for restructuring is recognised when a detailed formal plan has been approved for the restructure and has either been announced publicly to those affected, or where implementation has already commenced.

Taxpayers’ funds

This is the Crown’s net investment in the PCO. Taxpayers’ funds are measured as the difference between total assets and total liabilities.

Commitments

Commitments are future expenses and liabilities to be incurred on contracts that have been entered into as at balance date. Information on non-cancellable capital and lease commitments are reported in the Statement of Commitments.

Cancellable capital commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are reported in the statement of commitments at the lower of the remaining contractual commitment and the value of those penalty or exit clauses (ie the minimum future payments).

GST

The financial statements are exclusive of GST, except for creditors and payables and debtors and receivables which are GST inclusive. All other statements are GST exclusive. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The amount of GST owing to or from the Inland Revenue Department (IRD) at balance date, being the difference between output GST and input GST, is included in creditors and payables or debtors and receivables (as appropriate).

The net GST paid to, or received from, the IRD, including the GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Income tax

The PCO is a public authority and is exempt from the payment of income tax under the Income Tax Act 2007. Accordingly, no provision for income tax has been provided for.

Statement of cost accounting policies

The PCO has derived the costs of outputs using the cost allocation system outlined below. Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities based on cost drivers and related activities/usage information.

Criteria for direct and indirect costs

Direct costs are those costs directly attributed to an output.

Indirect costs are those costs that cannot be identified, in an economically feasible manner, with a specific output.

Direct costs assigned to outputs

Direct costs are charged directly to outputs. Depreciation and capital charge are charged on the basis of asset utilisation. Personnel costs are charged by actual time incurred. Property and other premises expenses, such as maintenance, are allocated on the basis of floor area occupied for the production of each output.

Basis for assigning indirect and corporate costs to outputs

Indirect costs are assigned to outputs based on a proportion of direct staff costs used for each output.

There have been no changes in cost allocation policies since the date of the last audited financial statements.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are referred to below.

Critical accounting estimates and assumptions

In preparing these financial statements the PCO has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are referred to below.

Useful lives of software

The useful life of software is determined at the time the software is acquired and brought into use, and is reviewed at each reporting date for appropriateness. For computer software licences, the useful life represents management’s view of the expected period over which the PCO will receive benefits from the software, but not exceeding the licence term. For internally generated software developed by the PCO, the life is based on historical experience with similar systems as well as anticipation of future events, which may impact their useful life, such as changes in technology.

Long service leave and retirement gratuities

An analysis of the exposure relating to long service leave and retirement leave liabilities is disclosed in Note 11.

Budget and forecast figures

The 2019 Main Estimates figures are for the year ended 30 June 2019 and were published in the 2017/2018 annual report. They are consistent with the PCO’s best estimate financial forecast information submitted to Treasury for the Budget Economic and Fiscal Update (BEFU) for the year ending 30 June 2019.

The 2020 Forecast figures are for the year ending 30 June 2020, which are consistent with the best estimate financial forecast information submitted to Treasury for the BEFU for the year ending 30 June 2020.

The forecast financial statements have been prepared as required by the Public Finance Act (PFA) to communicate forecast financial information for accountability purposes.

The budget and forecast figures are unaudited and have been prepared using the accounting policies adopted in preparing these financial statements.

The 30 June 2020 forecast figures have been prepared in accordance with PBE FRS 42 Prospective Financial Statements and comply with PBE FRS 42.

The forecast financial statements were approved for issue by the Chief Parliamentary Counsel on 12 April 2019. The Chief Parliamentary Counsel is responsible for the forecast financial statements, including the appropriateness of the assumptions underlying them and all other required disclosures.

While the PCO regularly updates its forecasts, updated forecast financial statements for the year ending 30 June 2020 will not be published.

Significant assumptions used in preparing the forecast financials

The forecast financial figures contained in these financial statements reflect the PCO’s purpose and activities and are based on a number of assumptions on what may occur during the 2020 year. The forecast figures have been compiled on the basis of existing government policies and Ministerial expectations at the time the Main Estimates were finalised.

These assumptions were adopted as at 12 April 2019.

The main assumptions are as follows:

  • PCO activities will remain substantially the same as for the previous year. The primary objective of the PCO is the drafting of Government Bills and publishing legislation.
  • Personnel costs are based on 84 staff positions (78.6 full time equivalents).
  • Operating costs are based on historical experience. The general pattern is expected to continue.
  • Estimated year end information for 2018/19 is used as the opening position for the 2019/20 forecasts

The actual financial results achieved for 30 June 2020 are likely to vary from the forecast information presented, and the variations may be material.

Note 2 Other revenue
2018
Actual
$000
 2019
Actual
$000 
     
288 Other departmental income 258
2 Other third party income 0
290 Total other income 258
Note 3 Personnel costs
2018 Actual $000 2019 Actual $000Unaudited 2019 Main Estimates $000Unaudited 2019 Supp. Estimates $000Unaudited 2020 Forecast $000
9,865 Salaries and wages 9,884 9,795 10,310 10,615
17 Annual, retirement, long service, and sick leave 59 74 126 126
509 Employer contributions to defined contribution plans* 538 493 540 540
(13) Other 21 30 21 21
10,378 Total personal expenses 10,502 10,392 10,997 11,302

* Employer contributions to defined contribution plans include contributions to the State Sector Retirement Savings Scheme, KiwiSaver, and the Government Superannuation Fund.

Note 4 Operating expenses
2018
Actual
$000
 2019
Actual
$000

Unaudited
2019
Main Estimates
$000

Unaudited
2019
Supp. Estimates
$000
Unaudited
2020
Forecast
$000
           
2,208 Consultancy 1,672 1,260 1,350 1350
45 Audit fees for audit of the financial statements 46 45 45 45
763 Operating lease rentals 616 776 639 639
62 Printing expenses 141 115 66 66
1,936 NZL system expenses 1,751 2,200 1,780 1,780
1,072 Computing expenses 1,035 1,091 1,461 1,461
950 Other operating expenses 1,042 967 1,574 1,430
7,036 Total operating expenses 6,303 6,454 6,915 6,771
Note 5 Capital charge

The PCO pays a capital charge to the Crown on its taxpayers’ funds as at 30 June and 31 December each year. The capital charge was $0.905 million (2018: $0.905 million) and the rate for the year ended 30 June 2019 was 6% (2018: 6%).

Note 6 Debtors and other receivables
2018
Actual
$000
 2019
Actual
$000
     
11,045 Debtor Crown 9,962
102 Debtors and other receivables 60
11,147 Total debtors and other receivables 10,022
Note 7 Property, plant, and equipment


 


Furniture
$000


Computers
$000

Office
equipment
$000
Leasehold
property
improvements
$000

Work in
progress
$000


Total
$000
             
Cost or valuation            
Balance at 1 July 2017 422 393 171 1,553 0 2,539
Additions 22 0 0 47 0 69
Balance at 30 June 2018 444 393 171 1,600 0 2,608
             
Balance at 1 July 2018 444 393 171 1,600 0 2,608
Additions 0 424 0 0 0 424
Balance at 30 June 2019 444 817 171 1,600 0 3,032
             
Accumulated depreciation and impairment losses            
Balance at 1 July 2017 (20) (378) (65) (122) 0 (585)
Depreciation expense (83) (5) (20) (261) 0 (369)
Balance at 30 June 2018 (103) (383) (85) (383) 0 (954)
             
Balance at 1 July 2018 (103) (383) (85) (383) 0 (954)
Depreciation expense (83) (148) (20) (269) 0 (520)
Balance at 30 June 2019 (186) (531) (105) (652) 0 (1,474)
             
Carrying amounts            
At 30 June 2017 402 15 106 1,431 0 1,954
At 30 June 2018 341 10 86 1,217 0 1,654
At 30 June 2019 258 286 66 948 0 1,558
Assets held for sale and impairment

The PCO does not have any items of property, plant, and equipment classified as held for sale. There were no impairment losses incurred during the year.

There are no restrictions on title and no assets pledged as security for liabilities.

Note 8 Intangible assets
 Acquired
intangibles
$000
Work in
progress
$000

Total
$000
Cost or valuation      
Balance at 1 July 2017 20,742 481 21,223
Additions 0 808 808
Transfers from WIP 800 (800) 0
Balance at 30 June 2018 21,542 489 22,031
       
Balance at 1 July 2018 21,542 489 22,031
Additions 0 1,048 1,048
Balance at 30 June 2019 21,542 1,537 23,079
       
Accumulated amortisation and impairment losses      
Balance at 1 July 2017 (19,485) 0 (19,485)
Amortisation expense (890) 0 (890)
Balance at 30 June 2018 (20,375) 0 (20,375)
       
Balance at 1 July 2018 (20,375) 0 (20,375)
Amortisation expense (409) 0 (409)
Balance at 30 June 2019 (20,784) 0 (20,784)
       
Carrying amounts      
At 30 June 2017 1,257 481 1,738
At 30 June 2018 1,167 489 1,656
At 30 June 2019 758 1,537 2,295
Intangible assets—the NZL system

The NZL system is the PCO’s integrated drafting and publishing system for New Zealand legislation. There are no restrictions on title and no intangible assets pledged as security for liabilities.

Note 9 Creditors and other payables
2018
Actual $000
 2019
Actual $000
     
58 Creditors 0
782 Accrued expenses 527
286 GST payable 183
1,126 Total creditors and other payables 710

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. Therefore, the carrying values of creditors and other payables approximate their fair value. With the exception of GST payable all creditors result from exchange transactions.

Note 10 Return of operating surplus
2018
Actual $000
 2019
Actual $000
     
935 Return of operating surplus 1,112
935 Total repayment of net surplus 1,112

The return of operating surplus to the Crown is required to be paid by 31 October 2019. With the exception of the provision for payment of the net surplus to the Crown, the PCO does not hold any non-employee-related provisions.

Note 11 Employee entitlements
2018
Actual $000
 2019
Actual $000
     
  Current liabilities  
63 Retirement and long service leave 67
556 Annual leave 556
10 Sick leave 14
629 Total current portion 637
     
  Non-current liabilities  
70 Retirement leave 85
70 Total non-current portion 85
     
699 Total employee entitlements 722
Employee benefits

The PCO has employees who are members of the Government Superannuation Fund. This is a fully funded Government scheme and, as a result, no liability is recognised.

Treasury guidance was used to estimate the value of long service leave, retirement leave, and sick leave as at 30 June 2019. The major long-term economic assumptions adopted in the valuation process for long service and retirement leave were:

  •  Salary increase rate: 2.92% (2018: 3.10%)
  •  Discount rate: 2.23% (2018: 3.55%)

Sick leave was calculated in accordance with the Treasury guidance and assumes that sick leave is a short-term compensated absence, as defined in PBE IPSAS 25.

Note 12 Related party information
Significant transactions with government-related entities

The PCO is a wholly-owned entity of the Crown.

Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those that it is reasonable to expect the PCO would have adopted in dealing with the party at arm’s length in the same circumstances. Further, transactions with other government agencies (for example, Government departments and Crown entities) are not disclosed as related party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on the normal terms and conditions for such transactions.

The PCO has received management accounting, ICT support and payroll administration services from Parliamentary Service as part of a Service Level Agreement, for the year ended 30 June 2019.

Key management personnel
2018
Actual
 2019
Actual
     
1,196 Remuneration ($000) 1,222
4 Full-time equivalent staff 4

No transactions were entered into during the year with key management personnel.

Remuneration includes salaries and other employee benefits. Key management personnel include the Chief Parliamentary Counsel and three other members of the Senior Management Team.

The above key management personnel disclosure excludes the Minister. The Minister’s remuneration and other benefits are not received only for his role as a member of key management personnel of the PCO. The Minister’s remuneration and other benefits are set by the Remuneration Authority under the Members of Parliament (Remuneration and Services) Act 2013 and are paid under Permanent Legislative Authority, and not paid by the PCO.

Apart from those transactions described above, the PCO has not entered into any related party transactions and there are no conflicts of interest recorded. The PCO has a policy on conflicts of interest and in each Senior Management Team meeting any conflicts of interest are recorded.

Note 13 Events after balance date

The PCO does not have any post balance date events for 2019 (2018: nil).

Note 14 Financial instruments

The carrying amounts of financial assets and liabilities in each financial instrument category are as follows:

2018
Actual
$000
 2019
Actual
$000
     
  Financial assets measured at amortised costs
Loans and receivables
 
3,183 Bank balances 3,505
11,045 Debtor—Crown 9.962
14,228 Total loans and receivables 13,467
     
  Financial liabilities measured at amortised costs  
58 Creditors 0
58 Total financial liabilities 0
Note 15 Major budget variances—actuals against main estimates
Statement of Comprehensive Revenue and Expense

The 2018/19 business activities resulted in a net operating surplus of $1.112 million (2018: $0.935 million).

Other revenue was $0.058 million higher than budgeted due to two PCO staff being seconded to other agencies during the year and one of those secondments was not anticipated at the time the 2018/19 budget was set.

Operating expenses were $0.151 million lower than budgeted mainly due to a reduction in lease costs as the PCO was required to vacate its premises for three months, and a reduction in maintenance and support costs for the New Zealand Legislation system. These were partially offset by an increase in consultant and contractor costs, particularly relating to the Access to Secondary Legislation Project.

Depreciation and amortisation expenses were $0.572 million lower than budgeted due to a reduction in the work programme for the New Zealand Legislation system.

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Appropriation Statements

The following statements report information about the expenses and capital expenditure incurred against each appropriation administered by the PCO for the year ended 30 June 2019.

Statement of Actual Expenses and Capital Expenditure Against Appropriations

For the year ended 30 June 2019

2018
Actual
$000
 2019
Actual
$000
Unaudited
2019
Approved
Appropriation
$000
Unaudited 2019 Supp. Estimates $000Unaudited 2020 Forecast $000Location of
end-of-year
Performance
Information
             
  VOTE: PARLIAMENTARY COUNSEL          
  Departmental Output Expenses          
  Drafting and Access to Legislation—Multi Category Appropriation (MCA):          
14,788 Law Drafting Services 14,303 15,923 15,193 15,923 *
4,790 Access to Legislation 4,336 4,500 4,500 4,500 *
19,578 Total MCA for output expenses 18,639 20,423 19,693 20,423  
  Departmental capital expenditure          
877 Parliamentary Counsel Office—Capital Permanent Legislative Authority 1,472 2,830 3,602 2,830 *
877 Total capital appropriations 1,472 2,830 3,602 2,830  

* End-of-year performance information is located in this Annual Report.

Statement of Expenses and Capital Expenditure Incurred Without, or in Excess of, Appropriation or Other Authority

For the year ended 30 June 2019

There were no expenses or capital expenditure incurred in excess of appropriation, without appropriation or outside the scope or period of appropriation (2018: nil).

Statement of Departmental Capital Injections Without, or in Excess of, Authority

For the year ended 30 June 2019

There were no capital injections during the year without, or in excess of, authority (2018: nil).

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Statement of Performance
For the year ended 30 June 2019

The PCO agreed to provide outputs in 2017/18 to meet the requirements of the Attorney-General in terms of their nature, outcome emphasis, quality and quantity specifications, and cost.

Drafting and Access to Legislation multi-category appropriation

This appropriation is intended to achieve the provision of high-quality legislation that is readily available to all New Zealanders.

Quality

The quality standards for the Attorney-General are that:

  • the electronic database of Acts (both as enacted and with their amendments incorporated), Legislative Instruments (both as made and with their amendments incorporated), Bills, and SOPs is up to date
  • Bills, SOPs, Acts of Parliament, and Legislative Instruments are published to the standard required by Parliament
  • Bills and Legislative Instruments are legally effective, clear, consistent with other legislation, the general law, and international law
  • Bills and Legislative Instruments are consistent with the policy they implement, legal principle, the New Zealand Bill of Rights Act 1990, and the Human Rights Act 1993
  • advice given on matters relating to the provision of legislative drafting services, including advice on legislative drafting, parliamentary procedure, executive government process, and the law, is sound, practical, and clear.

The quality standard for select committees is that:

  • advice given on matters relating to the provision of legislative drafting services, including explaining the changes made by the revision-tracked version of a Bill, is objective, accurate, and sufficient.

 

 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
whether the Attorney-General is satisfied that the quality standards have been achieved the Attorney-General is satisfied the Attorney-General was satisfied the Attorney-General was satisfied the Attorney-General was satisfied
the proportion of select committees we survey that rate the quality standard as 4 or better on a scale of 1 to 5, with 1 being very dissatisfied and 5 being very satisfied 90% 100% satisfaction 50% response rate1 100% satisfaction 42% response rate2 100% satisfaction 46% response rate3

1 In 2018/19, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Governance and Administration; Health; Primary Production; and Social Services and Community.

2 In 2017/18, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Social Services and Community; and Transport and Infrastructure.

3 In 2016/17, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Law and Order; Local Government and Environment; and Primary Production.

Timeliness

The timeliness standard for the Attorney-General is that:

  • Bills, Legislative Instruments, and SOPs are drafted in accordance with time frames set by, or agreed with, the Government, select committees, instructing departments, and agencies.

 The timeliness standard for select committees is that:

  • revision-tracked documents are provided for the select committee in accordance with deadlines set by or negotiated with the committee.

 

 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
whether the Attorney-General is satisfied that the timeliness standard has been achieved the Attorney-General is satisfied the Attorney-General was satisfied the Attorney-General was satisfied the Attorney-General was satisfied
the proportion of select committees we survey that rate the timeliness standard as 4 or better on a scale of 1 to 5, with 1 being very dissatisfied and 5 being very satisfied 90% 100% satisfaction 50% response rate1 100% satisfaction 42% response rate2 100% satisfaction 46% response rate3

1 In 2018/19, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Governance and Administration; Health; Primary Production; and Social Services and Community.

2 In 2017/18, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Social Services and Community; and Transport and Infrastructure.

3 In 2016/17, responses were received from the following committees: Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Law and Order; Local Government and Environment; and Primary Production.

Category—Access to Legislation
Description

Under this category, the PCO delivered a service that provides for:

  • providing free public access to legislation and disclosure statements via the internet
  • supplying Government Bills and SOPs
  • publishing and distributing legislation
  • reprinting legislation with the amendments incorporated
  • ensuring that the drafting system is available to the Office of the Clerk and Inland Revenue Department drafting staff.
Objective

This category is intended to achieve the provision of New Zealand legislation that is readily accessible to the public in a timely manner and in an accurate and authoritative form.

Quantity
 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
free public access to the NZL website is available 24 hours a day, 7 days a week 99% 99% 99% 99%
availability of the drafting tool for the Office of the Clerk and Inland Revenue Department drafting staff 1 99% 99% 99% 99%

1A 100% standard is not appropriate as system outages are required for planned upgrades.

Timeliness
 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
the time taken to make legislation available on the NZL website (target 100% of standard)       all new Government Bills: within 1 working day after introduction met met met
all subsequent versions of Bills: within 1 working day after the printed version is made available to the House met met met
all SOPs: within 1 working day after they have been circulated to Members of Parliament not met1 met met
all Legislative Instruments: within 1 working day after they are notified in the New Zealand Gazette met met met
all Acts: within 5 working days of assent met met met
the time taken to publish legislation in printed and electronic forms (target 100% of standard)   all Government Bills and SOPs: within 5 working days of introduction or release met met not met2
all Legislative Instruments: within 5 working days of being made met met met
all Acts: within 10 working days of assent met met met
amendments are incorporated within 15 working days of the date of effect of the amendment 99% 83%3 95%4 93%5
amendments are incorporated within 30 working days of the date of effect of the amendment 100% 99%6 99%7 -
the time taken to respond to public enquiries  90% within 1 working day of receipt 97% 98% 98%
100% within 5 working days of receipt 100% 100% 100%

1 In 2018/19, the budget standard was not achieved as the circulation email for SOP 168 (which was circulated to Parliament on 12 December 2018) was sent to the PCO’s Publications Unit on 16 January 2019.

2 In 2016/17, one SOP was not published on the NZL website within 5 working days due to the Christmas closedown period of the contracted printer.

3 In 2018/19, the budget standard was not achieved due to an unusually high number of compilations that commenced in November 2018 (365; the monthly average for the rest of the year was 67), which in turn affected compilations commencing in December.

4 In 2017/18, the budget standard was not achieved due to a large number of compilations that commenced on 1 July 2017 (101) and 14 July 2017 (89).

5 In 2016/17, the budget standard was not achieved due to a large number of compilations that commenced on 1 March 2017 (377).

6 In 2018/19, the budget standard was not achieved due to an amendment notice not being sent to PCO for gazettal until more than 2 months after it came into force; and 4 taxation amendments that had their compilations delayed by change requests.

7 In 2017/18, the budget standard was not achieved due to a large number of compilations (62) that came into force between 29 March and 1 April 2018. The most affected were the Goods and Services Tax Act 1985 and the Income Tax Act 2007, which had sizable amendments on both 29 March and 1 April. In the case of the Income Tax Act 2007 there was a further delay caused by the need for a clarification from IRD regarding certain provisions that had contradictory commencement dates.

Financial performanceActualApproved appropriation
(2018/19 Supplementary Estimates)
(Figures are $000s and GST-exclusive) 2019 2019
Total expenditure 4,336 4,500
Category—Law Drafting Services
Description

Under this category, the PCO delivered a service that provides for:

  • drafting of legislation
  • examining and reporting on local Bills and private Bills and drafting amendments to them
  • providing advice on the drafting of legislation and on disallowable instruments that are not drafted by the PCO
  • providing legislative drafting assistance to Pacific Island nations
  • undertaking three-yearly programmes of statute law revision
  • administering  the  Legislation  Act  2012  and  any  other  legislation  the  PCO  is responsible for.
Objective

This category is intended to achieve the provision of high-quality legislative drafting services and advice in a professional, impartial, and responsive manner in delivering the Government’s legislation programme.

Quantity
 For the calendar year
  2018 2017 2016
Measure Standard Actual Actual Actual
all Bills on the annual legislative programme in categories 1 and 2 (both of which are Bills that must be passed in the current year) are drafted 100% 93%1 100% 100%

1 The budgeted standard was not met for 3 Bills: no instructions were received for 2 of these and 1 Bill was drafted but not introduced due to delays in settling the te reo Māori text.

Quality

The quality standard for the Attorney-General is that:

  • in regard to the three-yearly revision programme, all certified revision Bills and their accompanying certificates have been provided to the Attorney-General in accordance with section 33 of the Legislation Act 2012.

 The quality standards for instructing departments and agencies are that:

  • the legislation produced is drafted as clearly and simply as possible
  • the legislation produced is legally effective
  • the instructing agency is satisfied with the final product
  • advice on legislative drafting matters is provided in a professional, impartial, and responsive manner
  • in regard to the three-yearly revision programme, the legislation produced is drafted as clearly and simply as possible, the legislation produced is legally effective, and the revision Bill does not change the effect of the law except as authorised by section 31(2)(i) or ( j) of the Legislation Act 2012.

 The quality standard for Pacific Island instructors is that:

  • advice given on matters relating to the provision of legislative drafting services is objective, accurate, and sufficient.

The quality standards for peer reviewing are that:

  • Government Bills drafted by the PCO are reviewed for their legal effectiveness, workability, compliance, structure, and readability before introduction
  • Legislative Instruments drafted by the PCO are reviewed for their legal effectiveness, workability, compliance, structure, and readability before being submitted to Cabinet.

The quality standards for proofreading legislation are that:

  • Government Bills drafted by the PCO are proofread before introduction
  • Legislative Instruments drafted by the PCO are proofread before being submitted to Cabinet.
 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
in regard to the 3-yearly revision programme, whether the Attorney-General is satisfied that the quality standard has been achieved the Attorney-General is satisfied N/A1 N/A2 the Attorney-General was satisfied
the proportion of instructing departments and agencies we survey that rate the quality standard as 4 or better on a scale of 1 to 5, with 1 being very dissatisfied and 5 being very satisfied 90% 95% satisfaction 58% response rate 99% satisfaction 58% response rate 96% satisfaction 65% response rate
in regard to the 3-yearly revision programme, relevant instructing departments and agencies are satisfied that the quality standard has been achieved relevant departments and agencies are satisfied N/A1 N/A2 instructing departments and agencies were satisfied
whether Pacific Island instructors are satisfied that the quality standard has been achieved Pacific Island instructors are satisfied Pacific Island instructors were satisfied Pacific Island instructors were satisfied Pacific Island instructors were satisfied
proportion of introduced Bills drafted by PCO that are peer reviewed
97% 100% 100% 100%
proportion of Legislative Instruments drafted by PCO and submitted to Cabinet that are peer-reviewed3 97% 100% 99% 99%
proportion of Government Bills drafted by the PCO that are proofread before introduction 97% 100% 100% 100%
proportion of Legislative Instruments drafted by the PCO that are proofread before being submitted to Cabinet 97% 100% 100% 100%

1The revision programme quality standard was not applicable for the 2018/19 year as no revision Bills were passed.

2The revision programme quality standard was not applicable for the 2017/18 year as no revision Bills were passed.

3There are some instances when peer review of Legislative Instruments is not required. These include:

  • single date commencement orders (if not revoking a commencement order and replacing it with a new commencement order)
  • levies and fees if the change relates to figures only
  • Ministerial notices that are pro forma (no choice regarding wording)
  • class notices.
Timeliness

The timeliness standard for the Attorney-General is that:

  • legislation, as outlined in the agreed three-yearly revision programme, is drafted within agreed time frames.

The timeliness standards for instructing departments and agencies are that:

  • drafts of legislation are produced within agreed deadlines
  • in  regard  to  the  three-yearly  revision  programme,  legislation  is  drafted  within agreed time frames.

The timeliness standard for Pacific Island instructors is that:

  • legislation  is  provided  to  Pacific  Island  instructors  in  accordance  with  agreed deadlines.
 For the year ended 30 June
  2019 2018 2017
Measure Standard Actual Actual Actual
in regard to the 3-yearly revision programme, whether the Attorney-General is satisfied that the timeliness standard has been achieved the Attorney-General is satisfied N/A1 N/A2 the Attorney-General was satisfied
the proportion of instructing departments and agencies we survey that rate the timeliness standard as 4 or better on a scale of 1 to 5, with 1 being very dissatisfied and 5 being very satisfied 90% 96% satisfaction 58% response rate 95% satisfaction 58% response rate 98% satisfaction 65% response rate
in regard to the 3-yearly revision programme, relevant instructing departments and agencies are satisfied that the timeliness standard has been achieved relevant departments and agencies are satisfied N/A1 N/A2 instructing departments and agencies were satisfied
whether Pacific Island instructors are satisfied that the timeliness standard has been achieved Pacific Island instructors are satisfied Pacific Island instructors were satisfied Pacific Island instructors were satisfied Pacific Island instructors were satisfied

1The revision programme quality standard was not applicable for the 2018/19 year as no revision Bills were passed.

2The revision programme quality standard was not applicable for the 2017/18 year as no revision Bills were passed.

 

Financial performanceActualApproved appropriation
(2018/19 Supplementary Estimates)
(Figures are $000s and GST-exclusive) 2019 2019
Total expenditure 14,303 15,193

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Independent Auditor’s Report

To the readers of the Parliamentary Counsel Office’s annual report for the year ended 30 June 2019

The Auditor General is the auditor of the Parliamentary Counsel Office (the PCO). The Auditor General has appointed me, John Whittal, using the staff and resources of Audit New Zealand, to carry out, on his behalf, the audit of:

  • the financial statements of the PCO, that comprise the statement of financial position, statement of commitments,  statement of contingent assets and liabilities as at 30 June 2019, the statement of comprehensive  revenue and expense, statement of changes in taxpayers’ fund, and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information;
  • the performance information prepared by the PCO for the year ended 30 June 2019 [Statement of Performance and Strategic Objectives 1 and 2]; and
  • the statements of expenses and capital expenditure of the PCO for the year ended 30 June 2019.

In our opinion:

  • the financial statements of the PCO:
    • present fairly, in all material respects:
      • its financial position as at 30 June 2019; and
      • its financial performance and cash flows for the year ended on that date; and
    • comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Standards Reduced Disclosure Regime.
  • the performance information of the PCO:
    • presents fairly, in all material respects, for the year ended 30 June 2019:
      • what has been achieved with the appropriation; and
      • the actual expenses or capital expenditure incurred compared with the appropriated or forecast expenses or capital expenditure; and
    • complies with generally accepted accounting practice in New Zealand.
  • the statements of expenses and capital expenditure of the PCO are presented fairly, in all material respects, in accordance with the requirements of section 45A of the Public Finance Act 1989.

Our audit was completed on 27 September 2019. This is the date at which our opinion is expressed.

The basis for our opinion is explained below. In addition, we outline the responsibilities of the Chief Parliamentary Counsel and our responsibilities relating to the information to be audited, we comment on other information, and we explain our independence.

Basis for our opinion

We carried out our audit in accordance with the Auditor General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report.

We have fulfilled our responsibilities in accordance with the Auditor General’s Auditing Standards.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of the Chief Parliamentary Counsel for the information to be audited

The Chief Parliamentary Counsel is responsible on behalf of the PCO for preparing:

  • financial statements that present fairly the PCO’s financial position, financial performance, and its cash flows, and that comply with generally accepted accounting practice in New Zealand.
  • performance information that  presents fairly  what  has  been  achieved with  each appropriation, the expenditure incurred as compared with expenditure expected to be incurred, and that complies with generally accepted accounting practice in New Zealand.
  • statements of expenses and capital expenditure of the PCO, that are presented fairly, in accordance with the requirements of the Public Finance Act 1989.

The Chief Parliamentary Counsel is responsible for such internal control as is determined is necessary to enable the preparation of the information to be audited that is free from material misstatement, whether due to fraud or error.

In preparing the information to be audited, the Chief Parliamentary Counsel is responsible on behalf of the PCO for assessing the PCO’s ability to continue as a going concern. The Chief Parliamentary Counsel is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the PCO, or there is no realistic alternative but to do so.

The Chief Parliamentary Counsel’s responsibilities arise from the Public Finance Act 1989.

Responsibilities of the auditor for the information to be audited

Our objectives are to obtain reasonable assurance about whether the information we audited, as a whole, is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of the information we audited.

For the budget information reported in the information we audited, our procedures were limited to checking that the information agreed to the information on Strategic Intentions for the period 1 July 2017 to 30 June 2021 and relevant Estimates and Supplementary Estimates of Appropriations 2018/19, and 2018/19 forecast financial figures included in the PCO’s 2017/18 Annual Report.

We did not evaluate the security and controls over the electronic publication of the information we audited.

As part of an audit in accordance with the Auditor General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

  • We identify and assess the risks of material misstatement of the information we audited, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the PCO’s internal control.
  • We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the PCO.
  • We evaluate the appropriateness  of the reported performance information within the PCO’s framework for reporting its performance.
  • We conclude on the appropriateness of the use of the going concern basis of accounting by the Chief Parliamentary Counsel and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the PCO’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the information we audited or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the PCO to cease to continue as a going concern.
  • We evaluate the overall presentation, structure and content of the information we audited, including the disclosures, and whether the information we audited represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Chief Parliamentary Counsel regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Our responsibilities arise from the Public Audit Act 2001.

Other information

The Chief Parliamentary Counsel is responsible for the other information. The other information comprises the information included in the preliminary matter and Chief Parliamentary Counsel's Overview, Departmental Capital Expenditure, Organisational Health and Capability, Introduction to the Financial Statements, and Statement of Responsibility, but does not include the information we audited, and our auditor’s report thereon.

Our opinion on the information we audited does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon.

Our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the information we audited or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence

We are independent of the PCO in accordance with the independence requirements of the Auditor General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board.

Other than in our capacity as auditor, we have no relationship with, or interests, in the PCO.

John Whittal
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand

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Appendices

Legislative Framework

The PCO is constituted as a separate statutory office by the Legislation Act 2012 (the 2012 Act). The PCO is under the control of the Attorney-General or, if there is no Attorney-General, the Prime Minister.

Under the 2012 Act, the functions of the PCO are to:

  • draft Government Bills and Legislative Instruments
  • publish Bills, Acts, Legislative Instruments, and reprints of legislation in electronic and printed forms
  • prepare reprints of Acts and Legislative Instruments
  • prepare Bills to revise Acts in accordance with the current revision programme
  • advise departments and agencies on the drafting of disallowable instruments that are not drafted by the PCO
  • examine local and private Bills, and Members’ Bills that the Attorney-General directs to be examined
  • advise on and assist with the drafting of all local and private Bills, and draft Members’ Bills on the Attorney-General’s direction.

The Legislation Bill is currently awaiting its second reading. The policy objectives of this Bill are set out above.

From time to time, the PCO also drafts certain other instruments such as Orders in Council establishing commissions of inquiry, instruments made under the Royal prerogative, and other official documents.

The Inland Revenue Department is responsible for drafting certain Bills that will become Acts administered by that department (see Inland Revenue Department (Drafting) Order 1995).

The PCO is not part of the core public service under the State Sector Act 1988, and so is not under the direct control of the State Services Commissioner. However, the PCO is subject to certain provisions of the State Sector Act 1988, including those that relate to setting and enforcing minimum standards of integrity and conduct.

Governance Arrangements and Structure in the PCO

The Chief Parliamentary Counsel is appointed under the Legislation Act 2012 by the Governor-General on the recommendation of the Prime Minister. All other staff are employed by the Chief Parliamentary Counsel.

The Minister responsible for the PCO is the Attorney-General. The Chief Parliamentary Counsel is responsible to the Attorney-General for the operations and management of the PCO.

The organisational structure of the PCO is shown below.

 The PCO has key relationships with a number of other organisations. In particular, the PCO:

  • receives a range of services from the Parliamentary Service, including accounting and financial reporting services, payroll, and the parliamentary core computing network. Service-level agreements are in place to manage the provision of these services
  • works closely with the Office of the Clerk of the House of Representatives and has developed an MOU with that office for processing, printing, supplying, and publishing legislation
  • provides access to the NZL system for the drafting unit in the Inland Revenue Department (IRD), which is responsible under current arrangements for the drafting of tax legislation. The PCO has developed an MOU with that department for processing, printing, supplying, and publishing legislation
  • is working with the IRD to improve the consistency of drafting practices and training support
  • works closely with the Legislation Coordinator in the Cabinet Office, whose role is to provide support to the Government of the day in developing, monitoring, and modifying the legislation programme, and with the Secretary of the Cabinet Legislation Committee
  • has extensive working relationships with all central government departments and agencies in terms of taking instructions from them for drafting new and amending legislation, and providing links and electronic feeds from the NZL website
  • works closely with the offices of the Leader of the House and Deputy Leader of the House in assisting with the progress of Government legislation through the House of Representatives
  • fulfils its obligation to publish printed copies of New Zealand legislation through a contract with Printlink for printing, distributing, and selling printed legislation
  • engages with agencies and bodies that are empowered to make secondary legislation
  • is audited by the Auditor-General. The Auditor-General has appointed Audit New Zealand to perform the PCO audit on his behalf
  • manages contracts with suppliers under the all-of-government contracts relating to syndicated procurement of infrastructure-as-a-service.

Organisational structure

PCO organisational structure

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1Strategic Intentions Parliamentary Counsel Office for the period 1 July 2017 to 30 June 2021 www.pco.govt.nz/statements-of-intent/.
2Vote Parliamentary Counsel - Justice Sector - Estimates 2018/2019: treasury.govt.nz/publications/estimates/vote-parliamentary-counsel-justice-sector-estimates-2018-2019.
3pco.govt.nz/revision-programme.
4pco.govt.nz/plain-language/.
5ssc.govt.nz/open-government-partnership-ogp.

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