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2020 Annual Report

Parliamentary Counsel Office
Te Tari Tohutohu Pāremata

for the year ended 30 June 2020

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

November 2020
Wellington, New Zealand

ISSN 2537-7337

PDF version (1,070KB)

Creative Commons License

Crown copyright ©. The 2020 Parliamentary Counsel Office Annual Report is licensed under a Creative Commons Attribution 4.0 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 2019/20

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 Contingent Liabilities
Notes to the Financial Statements
Appropriation Statements
Summary 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 Annual Report of the Parliamentary Counsel Office for the year ended 30 June 2020.

Fiona Leonard
Chief Parliamentary Counsel
15 October 2020

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CHIEF PARLIAMENTARY COUNSEL’S OVERVIEW

This is the Annual Report of the Parliamentary Counsel Office (PCO) for the 2019/20 year. This report, together with the PCO’s Strategic Intentions1 and the 2019/20 Estimates,2 forms the components of the PCO’s accountability documentation.

The PCO is a non-public service department dedicated to drafting and publishing legislation. The PCO’s vision 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 its purpose is clear, effective, and certain and flexible for the future, and it 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.

2020bigwheel

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 New Zealand public.

In the Law Drafting Services area, the emphasis in the reporting year since March 2020 has been on supporting the Government’s response to the COVID-19 pandemic. This involved drafting 11 Acts and a significant number of notices and legislative instruments. Other areas of focus, particularly for the period before March 2020, have been:

  • drafting Bills on the current revision programme
  • supporting the Legislation Design and Advisory Committee
  • providing supporting information for the PCO’s 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 Secondary Legislation Project.

Organisation-wide, the PCO was able to continue providing its core services throughout all COVID-19 alert levels.

Highlights of 2019/20

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

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

  • The PCO drafted and published 74 Government Bills, 332 Legislative Instruments, and 60 Government Supplementary Order Papers in the 2019 calendar year.
  • In the final four months of 2019/20, the PCO drafted 11 Bills and more than 35 legislative instruments or other secondary legislation relating to COVID-19.
  • The first Bill on the current revision programme, the Partnership Law Bill, was enacted on 21 October 2019.3
  • The Pacific Island Desk drafted large, complex legislation for the Cook Islands (including assisting with urgent COVID-19-related legislation), and helped with legislative drafting for Kiribati.
  • The Secondary Legislation Project made good progress, with the enactment of the Legislation Act 2019 and introduction of the Secondary Legislation Bill.
  • 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 seminars for new instructors during the year.
  • The PCO continued to develop its te reo Māori strategy and has provided its staff with language training.
  • The PCO is providing supporting information for its plain language standard and checklist, publishing this on its corporate website.
  • The PCO advanced its programme of work to standardise drafting practice and supporting guidance in a number of areas.

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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

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 as 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

The PCO drafted 74 Government Bills in the 2019 calendar 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 resulting 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 Legislative Instruments

In the 2019 calendar year, the PCO drafted 332 Legislative Instruments. In general, Acts of Parliament contain the main policy components of a legislative regime. 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 these are submitted for the Governor-General to make in Executive Council.

Drafting Legislative Instruments can give rise to complex legal questions about whether the relevant Act contains power to make the instrument. Parliamentary Counsel are required to certify whether proposed Legislative Instruments are in order for submission to Cabinet. They examine the Instruments to see if there is any ground on which these might be challenged under the House’s Standing Orders 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. The Legislation Act 2019, though not yet in force, recognises the PCO’s stewardship role for New Zealand legislation in a new objective for the PCO.

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 these other participants to ensure 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 Secondary Legislation Project and the Plain Language Initiative are two ways the PCO is fulfilling its stewardship role.

Legislation Act 2019

The Legislation Act 2019 rewrites and will replace the Legislation Act 2012 to:

  • make the legal changes needed to implement the Secondary Legislation Project
  • update and incorporate the Interpretation Act 1999, currently administered by the Ministry of Justice. Under the Legislation Act 2019, 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 Act will be brought into force after the enactment of the companion Bill, the Secondary Legislation Bill. The policy objectives of these two pieces of legislation 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 (see below for further information)
  • 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 parliamentary and public scrutiny.

Another policy objective is to clarify, update, and recast some of the provisions in the Legislation Act 2012 that are being carried forward. This includes:

  • recasting the PCO’s purpose and functions, and reinforcing the PCO’s stewardship over all legislation
  • improving the revision programme powers and procedure
  • updating the standard provisions for incorporating material by reference, to make them more flexible and technology-neutral
  • aligning the PCO’s secondment practices with those of the wider public sector.4
Legislation Design and Advisory Committee

The PCO provides secretariat support to the Legislation Design and Advisory Committee (LDAC)5 (ldac.org.nz).

LDAC engages on pre-introduction Bills principally through subcommittees set up 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.

In the reporting year, LDAC reviewed 35 pre-introduction Bills with departments and made submissions to select committees on five Bills and two inquiries (the Regulation Review Committee’s inquiry into confirmable instruments and the Finance and Expenditure Committee’s inquiry into the operation of the COVID-19 Public Health Response Act 2020).

During the reporting year, LDAC also published its own Annual Report covering the Committee’s operation from 1 July 2018 to 31 December 2019. This 18-month reporting period reflects the Committee’s decision to align its reporting year with the parliamentary calendar and the Government’s annual legislative programme, both of which are based on calendar years. The LDAC Annual Report details the range of issues under its mandate of promoting good quality legislation that LDAC advised on during that 18-month period.

These issues include:

  • the importance of legislation being easy to use, understandable, and accessible
  • assisting departments to identify the policy objective
  • the appropriateness of subject matter for an Act or secondary legislation
  • the relationship between the new legislation and existing law, particularly the need for legislation to explicitly address any conflicts
  • whether a new statutory power should be created, who will hold the power, and the nature of that power
  • choosing the most appropriate tools for enforcing legislation and achieving compliance
  • the way in which the Treaty of Waitangi, Treaty principles, and Māori interests are recognised in the legislation.

The following are the most common issues on which LDAC made submissions to select committees on Bills after introduction:

  • the appropriateness of a matter for secondary legislation
  • whether legislation should empower secondary legislation to amend or override an Act
  • whether the creation of a new statutory power was appropriate and there were enough safeguards.

LDAC has also continued to publish supplementary guidance material to help officials working with the Legislation Guidelines. Three such materials were published during the reporting year:

  • Designing purpose provisions and statements of principle
  • Exposure draft Bills
  • Guidance on commencement clauses.

LDAC provides seminars and workshops on its role and aspects of the Legislation Guidelines. Two seminars were held in the reporting year: one on using the Legislation Guidelines to support good legislative design, and one covering scenarios relating to transitional and savings provisions, backdated secondary legislation, and validating legislation.

Plain Language Initiative

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

To achieve these goals, the PCO is continuing to develop and implement its Plain Language Strategy. The strategy sets out how the PCO will train staff in plain language and sets expectations for meeting its Plain Language Standard. It also sets out how the PCO will support and measure staff in developing their plain language skills. The strategy aims for continuous improvement rather than radical change, and making the emphasis on plain language sustainable over the long term.

The PCO’s current focus under the strategy is on producing supporting documents, which give more detailed information and guidance on how to apply the standard and checklist. As part of the PCO’s broader stewardship goals, the documents are published online as they are developed, so other drafting agencies and the public can use them.

Te reo Māori strategy

During the reporting year, the PCO continued to develop its te reo Māori strategy. This strategy has two strands.

It raises the PCO’s general capability to use te reo Māori and be familiar with tikanga Māori through a range of language classes at different levels.

It builds capability to use te reo Māori effectively 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 second strand is a long-term project that also affects the broader policy and legislative system. The PCO is working with others, including Te Taura Whiri i te Reo Māori (the Māori Language Commission), the Department of Internal Affairs, and the Office of the Clerk, to build these skills and capability into a sustainable model over time. This includes the following actions undertaken in the reporting period:

  • developing a Māori language plan with help from Te Taura Whiri, to be backed by a mahi tahi agreement
  • continuing work on creating internal resources to support the current use of te reo Māori in legislation (including developing a term base of words used in legislation with help from the Department of Internal Affairs’ Translation Unit)
  • developing a draft protocol that agencies can use in accessing expert Māori translation resources and quality assurance for using te reo Māori in legislation.

Next steps will involve providing training to Māori translators on legislation and legislative process and engaging with others to develop the protocol for using te reo Māori in legislation.

Increasing the standardisation of legislation

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, although a significant drafting workload has affected progress. Key areas of progress are:

  • empowering provisions
  • transitional and savings provisions
  • infringement offences.
Treaty Bills

The PCO continues to advance the Bills required to implement Treaty settlements. However, the programme of work has slowed over the reporting period. Reflecting the different needs of Te Arawhiti, its governance board has ceased to have departmental representatives. (The PCO was previously a board member for oversight of the Treaty settlement work programme.) However, standard clauses for matters common to most Treaty settlement legislation continue to be an effective way to advance these Bills.

Assistance to departments and the Government Legal Network

A quarterly newsletter and a dedicated section of the PCO corporate website titled Turning Policy Into Law are designed to help departments work effectively with the PCO, particularly when giving instructions and responding to drafts. In the reporting year, Parliamentary Counsel have presented seminars on the subject to departmental officials and wider audiences. In addition, the PCO and the Office of the Clerk gave a joint seminar for new instructors several times during 2019/20.

The PCO 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 developing 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 further GLN graduate lawyers.

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 help 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 in 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 core work involves drafting legislation for Pacific Island nations to increase their drafting capacity. The desk has focused its help on the Cook Islands, Niue, and Tokelau, the three nations within the Realm of New Zealand. The drafting workload for 2019/20 has been significant: the desk has completed large and complex legislation for the Cook Islands, including helping with urgent COVID-19-related legislation.

The PCO continues to offer help to other Pacific Island nations where resources permit. In 2019/20, the PCO provided legislative drafting assistance to Kiribati and received requests from Tonga and Fiji.

The work also includes providing training, as well as 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. The training for 2019/20 focused on providing specific legal and legislative advice, including advice on how to prioritise Bills for development and consideration by Cabinet.

The PCO has also proactively engaged with other legislative drafting assistance providers around the world, as well as forums and agencies across the Pacific, to coordinate work in the region. Channels include the Pacific Islands Forum Secretariat and the Pacific Islands Law Officers’ Network. In addition, the PCO collaborated with others in the Pacific who provide training and expertise in policy development and legislative drafting.

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 LDAC worked with the Law Commission on the legislative design of its review into the Criminal Investigations (Bodily Samples) Act 1995.

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 number of government Bills drafted and published, Legislative Instruments made and published, and Supplementary Order Papers (SOPs) drafted and published, in the calendar years from 2015 to 2019.

 2020graph1

2020graph2

2020graph3

Significant legislation
COVID-19 legislation

Much of the legislation was drafted and enacted in the fourth quarter of this period in response to COVID-19. This legislation can be viewed on the NZL website. There were 11 Acts, including:

  • the COVID-19 Public Health Response Act 2020, which provided ongoing authority for the Government to implement measures at alert levels 1 and 2, as well as at the border (and will continue to do so if it the country has to go back to level 3 or 4)
  • a number of other remedial or omnibus Acts designed to provide financial, timing, or process relief or to address significant difficulties with existing legislation in response to COVID-19.

There were also more than 35 Legislative Instruments or other pieces of secondary legislation, and amendments to the High Court Rules.

Significant Bills introduced in the reporting year

A selection of the other most significant Bills introduced in this period is set out below. These can be viewed on the NZL website. This list does not include Bills that were enacted in this period but introduced in an earlier period.

Bills introducedSignificance
Abortion Legislation Bill modernises the legal framework for abortion
Arms Legislation Bill reforms the regulatory regime for firearms, including changes to licensing regime, the way shooting clubs are governed, and information-sharing powers
Education and Training Bill consolidates and replaces existing three Education Acts. Makes amendments required to support Government’s response to final report of Tomorrow’s Schools Review Independent Taskforce, as well as consolidating changes made by Education (Vocational Education and Training Reform) Amendment Bill to create a unified, cohesive vocational education and training system
Electoral (Registration of Sentenced Prisoners) Amendment Bill makes changes to Electoral Act 1993 to enfranchise people serving a prison sentence of less than 3 years
Moriori Claims Settlement Bill gives effect to certain provisions of deed of settlement that settles historical claims of Moriori
New Zealand Bill of Rights (Declarations of Inconsistency) Amendment Bill provides mechanism for Executive and House of Representatives to consider and, if they think fit, respond to a declaration of inconsistency made by a court in relation to New Zealand Bill of Rights Act 1990 or Human Rights Act 1993
New Zealand Public Health and Disability Amendment Bill repeals Part 4A of New Zealand Public Health and Disability Act 2000, which excludes certain resident family members from being paid for providing funded family care and support services
Overseas Investment (Urgent Measures) Amendment Bill and Overseas Investment Amendment Bill (No 3) both intended to manage risks posed by foreign investment while better supporting productive overseas investment by reducing regulatory burden of screening process. The Urgent Measures Bill contained those measures Government considered were needed urgently to mitigate economic effects of COVID-19
Public Finance (Wellbeing) Amendment Bill introduces new requirements for Government to report annually on its wellbeing objectives in Budget and for Treasury to report periodically on state of wellbeing in New Zealand
Public Service Legislation Bill replaces State Sector Act 1988 with a new Public Service Act designed to provide legislative framework for more adaptive and collaborative public service, including new types of public service agency
Racing Industry Bill reforms law to provide effective governance arrangements and promote long-term viability of NZ racing industry
Residential Tenancies Amendment Bill increases security of tenure, enhances regulator’s powers, supports tenants’ ability to assert their rights, and modernises Residential Tenancies Act 1986
Resource Management Amendment Bill simplifies and improves Resource Management Act 1991 processes. Also aims to improve freshwater management and outcomes in NZ
Smokefree Environments and Regulated Products (Vaping) Amendment Bill amends Smoke-free Environments Act 1990 to enable it to regulate vaping products much like tobacco products
Taumata Arowai—the Water Services Regulator Bill establishes Taumata Arowai—the Water Services Regulator. Objectives include protecting and promoting drinking water safety and public health outcomes, and effectively administering drinking water regulatory system
Te Ture Whenua Maori (Succession, Dispute Resolution, and Related Matters) Amendment Bill seeks to ensure laws governing Māori land work better for whānau by reducing the complexity and compliance requirements Māori encounter when engaging with courts about their Māori land
Urban Development Bill facilitates urban development by providing mechanism to streamline and consolidate processes for selected urban development projects initiated, facilitated, or undertaken by Kāinga Ora; and providing related powers and functions for Kāinga Ora

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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.

Secondary Legislation Project

The PCO has continued to make good progress with its long-term project to rationalise the law governing secondary legislation and improve its accessibility.

Two significant pieces of legislation create the necessary legislative framework. The Legislation Act 2019 (see above) establishes the new simpler and clearer framework for secondary legislation. The Secondary Legislation Bill complements this by identifying every power across the statute book to make secondary legislation. Developing this Bill has required close collaboration with all Government departments as well as many of the Crown entities and other bodies empowered to make secondary legislation.

The PCO has formal project governance and assurance processes in place including a project board with four external members, a reference group comprising 12 representative agencies, and external independent quality assurance. They have advised the PCO on how best to support agencies in implementing the proposed legislation.

New Zealand Legislation 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 (legislation.govt.nz).

During the reporting year, the PCO worked on upgrading software applications and migrating client agencies that use the system to access it via virtual desktops. By upgrading or replacing technically obsolete components, we ensure 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:

2020graphvisitors

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.

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 and 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 was enacted on 21 October 2019.

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

Disclosure statement website

The PCO publishes legislative disclosure statements to disclosure.legislation.govt.nz, a website separate from NZL. Disclosure statements are published for all government Bills and substantive SOPs introduced or released since 29 July 2013. The Legislation Act 2019 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 later versions)
  • 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.

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Departmental Capital Expenditure

The PCO bought laptops and iPhones in the reporting year to replace existing hardwired computers and desk phones. The new equipment has improved staff mobility in and outside the office. This provided improved resilience during the business disruption related to COVID-19.

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Organisational Health and Capability

Responding to COVID-19

The health and safety of our employees is our top priority. We responded quickly to COVID-19’s arrival in New Zealand, introducing hygiene protocols to protect our staff and limit the threat of the virus. This included enhanced cleaning and social distancing measures.

All PCO staff worked from home during the Covid-19 lockdown. They had remote-access capability and mobile devices so they could perform their roles. Also, staff were provided with extra equipment such as monitors and printers before lockdown. These working arrangements were in place for alert levels 4, 3, and 2. Under alert level 1, all staff returned to the office.

Recruitment and retention of skilled and experienced staff

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

 2019/20 Maximum target turnover2019/20 Actual2019/20 Actual (number)2018/19 Actual2017/18 Actual2016/17 Actual
Parliamentary Counsel 7% 3% 1 8% 6% 8%
Technical staff 12% 5% 1 5% 0% 4%
Corporate staff 10% 13% 3 0% 0% 5%
Total staff turnover 10% 6% 5 5% 3% 5%

Two new Parliamentary Counsel and four non-counsel staff members 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 stress management, 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 Office of the Clerk (OoC), the Ministry of Education, and Crown Law. Staff from OoC, the Ministry for Primary Industries, the Electricity Authority, 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 the performance management system 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 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 2020, the staff gender breakdown was:

 MaleFemaleTotal
Total staff 33 52 85
Senior Management (tier 1 and 2) 2 2 4
Tier 3 managers 6 4 10
Parliamentary Counsel 9 22 31
Other Drafting Services staff 0 4 4
Access to Legislation staff 8 11 19
Corporate Services staff 8 9 17

The above table includes four 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 (the Audit and Risk Committee also reviews major risks—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.

Risk-based approach to simplification and consolidation

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. Where possible, the PCO has 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. In the reporting year, an independent security assessment of the PCO’s IT systems was carried out and an environment-wide penetration test of its systems and websites was conducted. These resulted in a programme of work being developed that is currently being progressed.

Use of ICT Common Capabilities

The PCO had already adopted a number of all-of-government ICT common capabilities, including Infrastructure as a Service, Desktop as a Service, and the Common Web Platform. The PCO continued to use these services with the adoption of Telephone as a Service completed in 2019/20.

Audit and Risk Committee

The PCO’s Audit and Risk Committee met four times during 2019/20. 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

It is imperative that the PCO’s essential services continue or recover quickly during periods of business disruption or emergency. The PCO continued to test, review, and update business continuity plans where necessary. The business continuity plan was activated prior to the COVID-19 lockdown. The PCO’s well-established business continuity practices enabled staff to work from home. The PCO also attended meetings of the Government Sector Business Continuity Group and business continuity-related forums.

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 2019/20 and continued to strengthen the PCO systems’ resilience by housing them 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 Government’s mandatory requirements for protective security
  • develop an appropriate security culture to securely and effectively meet their business goals.

The PCO produced its first solo PSR self-assessment report in 2020. It also attended the PSR forums and undertook risk-assessment training.

FINANCIAL INFORMATION

Financial Statements of the Parliamentary Counsel Office for the year ended 30 June 2020

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 2020, including the Summary 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 2020 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 2021 and its operations for the year ending on that date.

Fiona Leonard
Chief Parliamentary Counsel
15 October 2020

Statement of Comprehensive Revenue and Expense
For the year ended 30 June 2020

2019
Actual
$000
 Notes2020
Actual
$000
Unaudited
2020
Main Estimates
$000
Unaudited
2020
Supp. Estimates
$000
Unaudited
2021
Forecast
$000
             
  Revenue          
19,493 Crown   20,223 20,223 20,223 20,223
258 Other revenue 2 222 200 200 200
19,751 Total revenue   20,445 20,423 20,423 20,423
             
  Expenses          
10,502 Personnel 3 10,910 11,302 10,873 11,173
6,303 Operating 4 7,252 6,771 7,741 7,354
929 Depreciation and amortisation 7/8 1,182 1,445 904 991
905 Capital charge 5 905 905 905 905
18,639 Total expenses   20,249 20,423 20,423 20,423
             
1,112 Net surplus   196 0 0 0
0 Other comprehensive revenue and expense   0 0 0 0
             
1,112 Total comprehensive revenue and expense   196 0 0 0

Explanations of major variances against the original 2020 budget (2020 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 2020

2019
Actual
$000
 Notes2020
Actual
$000
Unaudited
2020
Main Estimates $000
Unaudited
2020
Supp. Estimates $000
Unaudited
2021
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          
3,505 Cash and cash equivalents   3,283 2,801 3,020 3,300
10,022 Debtors and other receivables 6 10,718 6,647 10,022 8,022
255 Prepayments   294 211 255 255
13,782 Total current assets   14,295 9,659 13,297 11,577
             
  Non-current assets          
1,558 Property, plant, and equipment 7 1,205 1,139 1,190 842
2,295 Intangible assets 8 1,735 6,282 2,159 4,346
3,853 Total non-current assets   2,940 7,421 3,349 5,188
             
17,635 TOTAL ASSETS   17,235 17,080 16,646 16,765
             
  Current liabilities          
710 Creditors and other payables 9 979 1,126 710 710
1,112 Return of operating surplus 10 196 0 0 0
637 Employee entitlements 11 872 793 756 875
2,459 Total current liabilities   2,047 1,919 1,466 1,585
             
  Non-current liabilities          
85 Employee entitlements 11 97 70 89 89
             
2,544 TOTAL LIABILITIES   2,144 1,989 1,555 1,674
             
15,091 Net assets   15,091 15,091 15,091 15,091

Explanations of major variances against the original 2020 budget (2020 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 2020

2019
Actual
$000
 Notes2020
Actual
$000

Unaudited
2020
Main Estimates $000

Unaudited
2020
Supp. Estimates $000
Unaudited
2021
Forecast
$000
             
15,091 Balance as at 1 July   15,091 15,091 15,091 15,091
1,112 Total comprehensive revenue and expense   196 0 0 0
             
  Owner transactions          
(1,112) Return of operating surplus to the Crown 10 (196) 0 0 0
             
15,091 Balance as at 30 June   15,091 15,091 15,091 15,091

Explanations of major variances against the original 2020 budget (2020 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 2020

2019
Actual
$000
 Notes2020
Actual
$000

Unaudited
2020
Main Estimates
$000

Unaudited
2020
Supp. Estimates
$000
Unaudited
2021
Forecast
$000
             
  Cash flows from operating activities          
  Cash was provided from:          
  Supply of outputs:          
20,576 —Crown   19,467 21,723 20,223 22,223
290 —Departments   282 200 200 200
10 —Other   0 0 0 0
20,876 Subtotal   19,749 21,923 20,423 22,423
             
  Cash was disbursed to:          
  Produce outputs:          
(10,458) —Personnel   (10,653) (11,199) (10,738) (11,042)
(6,681) —Operating   (7,129) (6,792) (7,753) (7,366)
(103) —Net GST paid   97 0 0 0
(905) —Capital charge   (905) (905) (905) (905)
(18,147) Subtotal   (18,590) (18,896) (19,396) (19,313)
2,729 Net cash flows from operating activities   1,159 3,027 1,027 3,110
             
  Cash flows from investing activities          
  Cash was disbursed to:          
(424) Purchase of property, plant, and equipment   (202) (40) (200) (200)
(1,048) Purchase of intangible assets   (67) (2,790) (200) (2,630)
(1,472) Net cash flows from investing activities   (269) (2,830) (400) (2,830)
             
  Cash flows from financing activities          
  Cash was disbursed to:          
(935) Payment of net surplus to Crown   (1,112) 0 (1,112) 0
(935) Net cash flows from financing activities   (1,112) 0 (1,112) 0
             
322 Net increase/(decrease) in cash held   (222) 197 (485) 280
3,183 Add opening cash brought forward   3,505 2,604 3,505 3,020
3,505 Closing cash to carry forward 14 3,283 2,801 3,020 3,300

Explanations of major variances against the original 2020 budget (2020 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 2020

2019
Actual
$000
 2020
Actual
$000
     
  Non-cancellable operating lease commitments  
713 Less than one year 695
695 One to two years 695
1,304 Two to five years 608
0 Over five years 0
2,712 Total non-cancellable operating lease commitments 1,998
     
  Capital commitments  
0 Capital commitments 0
0 Total capital commitments 0
2,712 Total commitments 1,998

Reserve Bank office lease: This lease is for the rental of office space on floors 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.

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 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 2021 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 Contingent Liabilities
as at 30 June 2020

Contingent Assets

The PCO has no contingent assets (2019: nil).

Unquantifiable Contingent Liabilities

The PCO has no unquantifiable contingent liabilities (2019: nil).

Quantifiable Contingent Liabilities

The PCO has no quantifiable contingent liabilities (2019: nil).

As at 30 June 2020, there are no guarantees or indemnities given under the Public Finance Act 1989 in respect of the activities of the PCO (2019: 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 2020

Note 1 Statement of Accounting Policies
Reporting entity

The Parliamentary Counsel Office 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 2020, and were approved for issue by the Chief Parliamentary Counsel on 15 October 2020.

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 is less than $30 million per annum.

These financial statements comply with PBE accounting standards. The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

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

Property, plant, and equipment consists of furniture, office equipment, and leasehold property improvements. The initial cost of property, plant, and equipment 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. property, plant, and equipment 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 (i.e. the minimum future payments).

Goods and services tax (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 a category.

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

Direct costs assigned to outputs

Direct costs are charged directly to categories. Personnel costs are charged by actual time incurred. 

Basis for assigning indirect and corporate costs to outputs

Indirect costs, including depreciation, capital charge, corporate and management personnel costs, and other operating expenses are assigned to categories based on a proportion of the number of staff in each category.

There have only been minor 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. It 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 2020 Main Estimates figures are for the year ended 30 June 2020 and were published in the 2018/2019 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 2020.

The 2021 Forecast figures are for the year ending 30 June 2021, which are consistent with the best estimate financial forecast information submitted to Treasury for the BEFU for the year ending 30 June 2021.

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 2021 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 March 2020. 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 2021 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 2021 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 March 2020.

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 97 staff positions (92.2 full time equivalents).
  • Operating costs are based on historical experience. The general pattern is expected to continue.
  • Estimated year end information for 2019/20 is used as the opening position for the 2020/21 forecasts.

The actual financial results achieved for 30 June 2021 are likely to vary from the forecast information presented, and the variations may be material.

Note 2 Other revenue
2019
Actual
$000
 2020
Actual
$000 
     
258 Other departmental income 222
2 Other third party income 0
258 Total other income 222
Note 3 Personnel costs
2019 Actual $000 2020 Actual $000Unaudited 2020 Main Estimates $000Unaudited 2020 Supp. Estimates $000Unaudited 2021 Forecast $000
           
9,884 Salaries and wages 10,048 10,615 10,121 10,421
59 Annual, retirement, long service, and sick leave 300 126 181 181
538 Employer contributions to defined contribution plans* 552 540 559 559
21 Other 10 21 12 12
10,502 Total personal expenses 10,910 11,302 10,873 11,173

* 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
2019
Actual
$000
 2020
Actual
$000

Unaudited
2020
Main Estimates
$000

Unaudited
2020
Supp. Estimates
$000
Unaudited
2021
Forecast
$000
           
1,672 Consultancy and contractors 2,129 1,350 2,080 2,080
46 Audit fees for audit of the financial statements 47 45 49 50
616 Operating lease rentals 753 639 745 745
141 Printing expenses 64 66 66 66
1,751 NZL system expenses 2,096 1,780 1,954 1,954
1,035 Computing expenses 1,272 1,461 1,360 1,360
1,042 Other operating expenses 891 1,430 1,487 1,099
6,303 Total operating expenses 7,252 6,771 7,741 7,354
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 (2019: $0.905 million) and the rate for the year ended 30 June 2020 was 6% (2019: 6%).

Note 6 Debtors and other receivables
2019
Actual
$000
 2020
Actual
$000
     
9,962 Debtor Crown 10,718
60 Debtors and other receivables 0
10,022 Total debtors and other receivables 10,718
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 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
             
Balance at 1 July 2019 444 817 171 1,600 0 3,032
Additions 0 62 138 2 0 202
Balance at 30 June 2020 444 879 309 1,602 0 3,234
             
Accumulated depreciation and impairment losses            
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)
             
Balance at 1 July 2019 (186) (531) (105) (652) 0 (1,474)
Depreciation expense (83) (162) (40) (270) 0 (555)
Balance at 30 June 2020 (269) (693) (145) (922) 0 (2,029)
             
Carrying amounts            
At 30 June 2018 341 10 86 1,217 0 1,654
At 30 June 2019 258 286 66 948 0 1,558
At 30 June 2020 175 186 164 680 0 1,205
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 2018 21,542 489 22,031
Additions 0 1,048 1,048
Balance at 30 June 2019 21,542 1,537 23,079
       
Balance at 1 July 2019 21,542 1,537 23,079
Additions 0 67 67
Balance at 30 June 2020 21,542 1,604 23,146
       
Accumulated amortisation and impairment losses      
Balance at 1 July 2018 (20,375) 0 (20,375)
Amortisation expense (409) 0 (409)
Balance at 30 June 2018 (20,784) 0 (20,784)
       
Balance at 1 July 2019 (20,784) 0 (20,784)
Amortisation expense (326) 0 (326)
Reverse amortisation on disposals 0 0 0
Impairment losses 0 (301) (301)
Balance at 30 June 2020 (21,110) (301) (21,411)
       
Carrying amounts      
At 30 June 2018 1,167 489 1,656
At 30 June 2019 758 1,537 2,295
At 30 June 2020 432 1,303 1,735
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.

Work in progress is currently $1.3 million, of which the majority relates to a lodgement portal for legislation. This portal will be the on-going, secure access point for all agencies to maintain and update their secondary legislation catalogue on the NZL website. The development of the portal is on hold until Government decides to complete and fund the work required under the relevant parts of the Legislation Act 2019 which would require the portal to be developed.

Note 9 Other payables
2019
Actual $000
 2020
Actual $000
     
527 Accrued expenses 699
183 GST payable 280
710 Total other payables 979

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
2019
Actual $000
 2020
Actual $000
     
1,112 Return of operating surplus 196
1,112 Total repayment of net surplus 196

The return of operating surplus to the Crown is required to be paid by 31 October 2020. 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
2019
Actual $000
 2020
Actual $000
     
  Current liabilities  
67 Retirement and long service leave 84
556 Annual leave 767
14 Sick leave 21
637 Total current portion 872
     
  Non-current liabilities  
85 Retirement leave 97
85 Total non-current portion 97
     
722 Total employee entitlements 969
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 2020. The major long-term economic assumptions adopted in the valuation process for long service and retirement leave were:

  •  Salary increase rate: 2.72% (2019: 2.92%)
  •  Discount rate: 1.63% (2019: 2.23%)

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 2020.

Key management personnel
2019
Actual
 2020
Actual
     
1,222 Remuneration ($000) 1,240
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 2020 (2019: nil).

Note 14 Financial instruments

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

2019
Actual
$000
 2020
Actual
$000
     
  Financial assets measured at amortised costs
Loans and receivables
 
3,505 Bank balances 3,283
9,962 Debtor—Crown 10,718
13,467 Total loans and receivables 14,001
     
  Financial liabilities measured at amortised costs  
527 Other payables 699
527 Total financial liabilities 699
Note 15 Major budget variances—actuals against main estimates
Statement of Comprehensive Revenue and Expense

The 2019/20 business activities resulted in a net operating surplus of $0.196 million (2019: $1.112 million).

Personnel expenses were $0.392 million lower than budgeted due to timing factors related to the filling of vacant positions. This was partially offset by an increase in annual leave provisions due to COVID-19 as many staff cancelled annual leave that was due to be taken in the 3 months to 30 June 2020.

Operating expenses were $0.481 million higher than budgeted, mainly due to a significant increase in consultant and contractor costs. These costs particularly related to legislative drafting panel members who were engaged to carry out work because of the unfilled drafting roles. Additional costs were incurred as a result of an impairment review of the secondary legislation project. An external contractor also supported the operation of the PCO’s Pacific Desk, and there was an increase in the maintenance and support costs for the NZL system. These were partially offset by a reduction in software licences required in the reporting year.

Depreciation and amortisation expenses were $0.263 million lower than budgeted due to a reduction in the work programme for the NZL system.

Note 16 COVID-19 impact

On 11 March 2020, the World Health Organisation declared the outbreak of Coronavirus (COVID-19) a pandemic. As this declaration was made before the end of the reporting period, the PCO is providing further information to explain the implications of this significant event on these financial statements. The impact on the PCO for the 2019/20 year has been minimal. The PCO continued to provide its core services throughout all COVID-19 alert levels. There was no change in the number of staff employed during the lockdown. There are no changes to staff numbers envisaged due to COVID-19 in the coming year. Revenue for the 2019/20 year was unaffected and is unlikely to be affected in the coming year.

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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 2020.

Statement of Actual Expenses and Capital Expenditure Against Appropriations

For the year ended 30 June 2020

2019
Actual
$000
 2020
Actual
$000
Unaudited
2020
Approved
Appropriation
$000
Unaudited 2020 Supp. Estimates $000
         
  VOTE: PARLIAMENTARY COUNSEL      
  Departmental Output Expenses      
  Drafting and Access to Legislation—Multi-Category Appropriation (MCA):      
14,303 Law Drafting Services 15,069 15,923 15,923
4,336 Access to Legislation 5,180 4,500 4,500
18,639 Total MCA for output expenses 20,249 20,423 20,423
  Departmental capital expenditure      
1,472 Parliamentary Counsel Office—Capital Permanent Legislative Authority 269 2,830 400
1,472 Total capital appropriations 269 2,830 400

 

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

For the year ended 30 June 2020

There were no expenses or capital expenditure incurred in excess of appropriation, without appropriation, or outside the scope or period of appropriation (2019: nil).

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

For the year ended 30 June 2020

There were no capital injections during the year without, or in excess of, authority (2019: nil).

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Summary of Performance
For the year ended 30 June 2020

The PCO agreed to provide outputs in 2019/20 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

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
  2020 2019 2018
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 62% response rate1 100% satisfaction 50% response rate2 100% satisfaction 42% response rate3

1 In 2019/20, responses were received from the following committees: Education and Workforce; Environment; Epidemic Response; Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Social Services and Community; Transport and Infrastructure. The Abortion Legislation Committee was disestablished before the survey began.

2 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.

3 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.

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
  2020 2019 2018
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 62% response rate1 100% satisfaction 50% response rate2 100% satisfaction 42% response rate3

1 In 2019/20, responses were received from the following committees: Education and Workforce; Environment; Epidemic Response; Finance and Expenditure; Foreign Affairs, Defence and Trade; Health; Social Services and Community; Transport and Infrastructure. The Abortion Legislation Committee was disestablished before the survey began.

2 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.

3 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.

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
  2020 2019 2018
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 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
  2020 2019 2018
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 met not met1 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)2 all Government Bills and SOPs: within 5 working days of introduction or release met met met
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% 93%3 83%4 95%5
amendments are incorporated within 30 working days of the date of effect of the amendment 100% 100% 99%6 99%7
the time taken to respond to public enquiries  90% within 1 working day of receipt 98% 97% 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 not sent to the PCO’s Publications Unit until 16 January 2019.

2 The legislative requirement to supply printed copies of legislation was repealed on 29 October 2019.

3 In 2019/20, the budget standard was not achieved due to a) an unusually high number of compilations (133) that commenced on 1 July 2019; and b) a delay in the circulation email for the Subordinate Legislation Confirmation Act 2019, leading to conflict with Christmas leave; and c) multiple taxation Acts coming into force on 1 April 2020.

4 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.

5 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).

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 performance
2018/19
Actual
$000
Financial performance (figures are GST-exclusive)2019/20
Actual
$000
4,500 Revenue Crown 4,500
4,500 Total revenue 4,500
4,336 Total expense 5,180
164 Total net surplus (deficit) (680)
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
  2019 2018 2017
Measure Standard Actual Actual Actual

all Bills on the annual legislative programme
in category 1 (that must be passed or
introduced as a matter of law in the current
calendar year) and category 2 (that must
be passed in the current calendar year) are
drafted

100% 89%1 93%2 100%

1 The budgeted standard was not met for 7 Bills in the 2019 calendar year: the Government decided not to proceed with 4 Bills and deferred introduction of another 3 Bills to the following calendar year.
2 The budgeted standard was not met for 3 Bills in the 2018 calendar year: 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
  2020 2019 2018
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 the Attorney-General was satisfied1 N/A2 N/A3
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% 96% satisfaction 64% response rate 95% satisfaction 58% response rate 99% satisfaction 58% 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 The relevant agency was satisfied N/A2 N/A3
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-reviewed4 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 Partnership Law Bill was passed in the 2019/20 year.

2The revision programme quality standard was not applicable for the 2018/19 year as no revision Bills were passed.

3The revision programme quality standard was not applicable for the 2017/18 year as no revision Bills were passed.

4There 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
  2020 2019 2018
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 the Attorney-General was satisfied1 N/A2 N/A3
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% 95% satisfaction 64% response rate 96% satisfaction 58% response rate 97% satisfaction 58% 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 the relevant agency was satisfied1 N/A2 N/A3
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 Partnership Law Bill was passed in the 2019/20 year.

2The revision programme quality standard was not applicable for the 2018/19 year as no revision Bills were passed.

3The revision programme quality standard was not applicable for the 2017/18 year as no revision Bills were passed.

 

Financial performance
2018/19 2019/20
Actual $000Financial performance (figures are GST-exclusive)Actual  $000
14,993 Revenue Crown 15,723
258 Revenue department 222
15,251 Total revenue 15,945
14,303 Total expense 15,069
948 Total net surplus (deficit) 876

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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 2020

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 liabilities and contingent assets as at 30 June 2020, the statement of comprehensive  revenue and expense, statement of changes in taxpayers’ funds, 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 2020 [Strategic Objectives 1 and 2 and Summary of Performance]; and
  • the statements of expenses and capital expenditure of the PCO for the year ended 30 June 2020.

In our opinion:

  • the financial statements of the PCO:
    • present fairly, in all material respects:
      • its financial position as at 30 June 2020; 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 [Strategic Objectives 1 and 2 and Summary of Performance]:
    • presents fairly, in all material respects, for the year ended 30 June 2020:
      • 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 15 October 2020. This is the date at which our opinion is expressed.

The basis for our opinion is explained below, and we draw attention to the effects of COVID-19 on the PCO. 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.

Emphasis of matter – Impact of COVID-19

Without modifying our opinion, we draw attention to the disclosures about the impact of COVID-19 on the PCO as set out in note 16 to the financial statements.

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 PCO information on Strategic Intentions for the period 1 July 2017 to 30 June 2021 and relevant Estimates and Supplementary Estimates of Appropriations 2019/20, and 2019/20 forecast financial figures included in the PCO’s 2018/19 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 Chief Parliamentary Counsel.
  • 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 on pages 1 to 56, 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: International 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 the PCO does not draft
  • examine local and private Bills, and Members’ Bills as directed by the Attorney-General
  • advise on and assist with the drafting of all local and private Bills, and draft Members’ Bills at the Attorney-General’s direction.

The Legislation Act 2019 rewrites and will replace the Legislation Act 2012. The Act will come into force after its companion Bill, the Secondary Legislation Bill, has been enacted. The policy objectives of these two pieces of legislation 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 (IRD) 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 (Public Service Act 2020 from 7 August 2020), 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 Prime Minister's recommendation. 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 PCO's operations and management.

The PCO's organisational structure 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 and has begun revising its MOU with that office for processing, printing, supplying, and publishing legislation
  • provides access to the NZL system for IRD's drafting unit, which is responsible under current arrangements for drafting tax legislation. The PCO has begun revising its 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 support 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 including 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 to help move Government legislation through the House of Representatives
  • publishes printed copies of New Zealand legislation through a contract with Blue Star 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, who has appointed Audit New Zealand to perform the audit
  • manages contracts with suppliers under the all-of-government contracts relating to syndicated procurement of infrastructure-as-a-service.

Organisational structure

2020organisationalstructure

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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 2019/2020 treasury.govt.nz/publications/estimates/vote-parliamentary-counsel-justice-sector-estimates-2019-2020.
3pco.govt.nz/revision-programme.
4Section 64 of the Public Service Act 2020 refers.
5The LDAC was established by Cabinet in 2015. Its role is to improve the quality and effectiveness of legislation by advising on design, framework, constitutional, and public law issues arising out of legislative proposals and Bills. The LDAC is responsible for the Legislation Guidelines, mandated by Cabinet, which are a tool to guide good legislative practice.

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