New Zealand Productivity Commission Bill — In Committee Third Reading 
Text is incorporated into the Bound Volume 
New Zealand Productivity Commission Bill — In Committee Third Reading 
[Sitting date: 09 December 2010. Volume:669;Page:16350. Text is incorporated into the Bound Volume.] 
New Zealand Productivity Commission Bill 
In Committee 
Part 1 Preliminary provisions 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to speak on Part 1 because although it is headed “Preliminary provisions” it contains some very important matters. 
The first matter is in relation to the interpretation of “productivity-related matter”. I think that provision was improved before the New Zealand Productivity Commission Bill was introduced. The reason it was improved was to try to narrow the focus but in narrowing the actual wording of the interpretation we were trying to expand what could be considered by the Productivity Commission. Leaving the interpretation as “ ‘productivity-related matter’ means any matter relating to productivity or improving productivity in the private sector the public sector or the economy as a whole” enables an incredibly broad brush to be applied to the definition of the word “productivity”. The last thing anyone on this side of the Chamber wants is a narrow approach to something that hopefully will be an important feature of our political and economic landscape for the future. I really hope the Government of the day takes an equally broad-brush approach to the definition of productivity. 
During the Commerce Committee process it was very interesting to hear from Gary Banks who heads the Australian Productivity Commission. He talked about the history of the development of the commission and gave some background as to why its legislation focused on a quite specific but actually quite broad range of items. When one looks at the Australian Productivity Commission legislative provisions one sees that there are environmental regional and social dimensions to its definition of productivity. I think that is because of the background of the commission which has come through various stages in its life. Gary Banks talked about the legislation originally coming from the Tariff Board which is where the industry focus came from. The modern form of the commission came in under the Whitlam Government in 1973 and that was the Industries Assistance Commission. Finally the Productivity Commission took over from that commission. That description helped me understand why it was better to go down the track that we had agreed prior to the introduction of the bill which was to leave the definition very broad and open rather than seeking to define every aspect of productivity that we would want to see applied. But that being said the definition is not an open invitation for the other side to take a narrow view of productivity. If one of the early tasks of the Productivity Commission is to focus on regulatory matters compliance costs and all of those sorts of narrow issues then we will be very disappointed. We want the Productivity Commission to achieve good things for our country. That is why I have tabled a new purpose clause but I will not speak to that now because it comes into Part 2. 
The second thing I want to refer to under Part 1 is the definition of “responsible Minister”. I see that the Minister for Regulatory Reform who is not the responsible Minister is sitting in the chair. I am disappointed that he is not the responsible Minister—[ 
Interruption 
] I knew that was going to excite concern from my colleagues but I do think the Minister for Regulatory Reform ought to be the Minister who takes responsibility for this particular legislation. Then again there are those who argue that the Minister of Finance has a broader sweep and that the reason why we shifted the regulatory impact analysis unit from the Ministry of Economic Development to Treasury was to bring about that whole-of-Government approach. We also wanted a department that was capable of monstering other departments into doing stuff that perhaps they did not want to do so it made sense to shift the unit to Treasury. Maybe that does mean the Minister of Finance is the correct responsible Minister. 
I want to use the opportunity to comment on a couple of things that the Minister for Regulatory Reform has done while he has been the Minister even though deeply involved in the discussions that we had prior to the introduction of this bill—and this bill does come from the agreement between the ACT Party and the National Party in forming the Government. That is to put on record again my deep concern about the decision that the Government took—and the responsible Minister is included in this—to remove regulatory impact statements from the pages at the front of the bill. I find that incredibly disruptive to the process of analysis. It also means that my first reading speeches are nowhere near as good as they would be otherwise because I have always found the regulatory impact statements to be a great source of information about the nature of the problem analysis of the different options and stakeholder engagement as part of the consultation process. Those have all been really important features of regulatory impact statements. Having to find them on the website and download them separately I find very frustrating. I understand having had discussions with the Minister about it why that particular approach has been adopted but I still feel that including even a modified form of the regulatory impact statement that reflected any changes Cabinet had made to the final set of decisions would be preferable. If that analysis were appended to the end of the regulatory impact statement and included with the bill then the issues that the Government has grappled with in this matter simply would not be an issue. I would be very keen to see regulatory impact statements come back into the published versions of bills. I think a very short analysis at the end of the regulatory impact statement to identify any differences that had occurred as a result of the Cabinet process would certainly be extremely helpful. I think it would add to the quality of the debate in the Chamber and certainly to the quality of my own personal contributions to these debates. 
There are a couple of other things that I want to mention in relation to Part 1 because even though it is a very short part it is very very significant. 
Sitting suspended from 6 p.m. to 7 p.m. 
Hon LIANNE DALZIEL 
: I spent the entire dinner break reflecting on what I had said before the break and I have decided that it is correct that the Minister of Finance is the Minister responsible for the New Zealand Productivity Commission Bill. I came to that conclusion because if the Minister for Regulatory Reform undertook the role that would shift the primary focus of the New Zealand Productivity Commission to regulatory matters and Labour does not agree with that. I discussed it with several colleagues over the dinner break and I think we are now of one mind that the Minister that the Prime Minister has selected to be responsible for the bill is in fact the right Minister. 
But it is good to have the Minister for Regulatory Reform in the chair because I know that he and his party were significant driving forces behind this measure. Although I do not agree with the emphasis on regulatory matters I do think the emphasis on growing New Zealand’s productivity enhancing our productivity and looking at all the different aspects of our productivity in order to improve New Zealand’s economic development is good. So it is important to acknowledge the role that Rodney Hide has played in this matter and it is good that he can debate the bill from the chair. It is only Thursday night after all according to the calendar on the wall and I have to say that the House being in urgency does reflect a significantly higher level of productivity than is normal in this place. 
Hon Trevor Mallard 
: Are you sure? 
Hon LIANNE DALZIEL 
: It depends. If people have taken advantage of it and have used the approach my colleague took on the previous bill the Education Amendment Bill (No 2) which was to get the Government to finally concede that the point he had been going on about for quite some time was correct and to fix that little problem then it is amazing how much more productive Parliament can be under urgency; otherwise there is a high risk of a little bit of filibustering. But that is not what Labour members are doing on the New Zealand Productivity Commission Bill. We think it is very important we do want to see it passed and we do want to see the current Government utilise it in the way that we intend to utilise it to get the productivity gains for New Zealand that we need. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is a pleasure to take a—sorry about that noise. It takes me back to my old death metal days at university—a bit of feedback. 
Chris Hipkins 
: He doesn’t like feedback. 
GRANT ROBERTSON 
: No I do not mind feedback; not usually from Mr Hipkins though. 
We strongly support in principle the notion of having a productivity commission as my colleague Lianne Dalziel has said. From my perspective as the spokesperson on State services for the Labour Party it is a good thing. Some eyebrows might be raised on the other side of the Chamber at that statement but I think that productivity in the State sector is a big issue. Obviously I believe that we need a strong healthy State sector that provides high-quality services to New Zealanders and one issue it struggles with from time to time is productivity. 
It is a conundrum for New Zealand as to why we have consistently not been able to lift our productivity rates. Throughout the last 20 or 30 years we have struggled to see productivity rise we have lagged behind other OECD countries and questions have been asked. Productivity was at the heart of the agenda of the fifth Labour Government which aimed to raise skills and improve innovation in order to do the things that we thought would help lift our economy and improve our productivity. I think that a commission like this one is useful. If we look at Part 1 these are obviously the preliminary provisions and the bill goes into more detail in Part 2. 
The particular matter I will discuss is the definition of “productivity-related matter”. As my colleague Lianne Dalziel has said a difficult balance needs to be struck between a definition that enables plenty of scope and one that at same time is not so broad that we cannot have a good mandate for the commission. The definition of “productivity-related matter” in Part 1 is “any matter relating to productivity or improving productivity in the private sector the public sector or the economy as a whole”. It is very important that we have managed to break out the private sector public sector and the wider economy in that interpretation. Members on this side of the Chamber are very attracted to the kinds of reports that the Australian Productivity Commission has made. It has made a very wide range of reports including some on issues that people might not have traditionally seen as being about productivity but about how the Australian economy and society are developing. We think there is potential for the New Zealand Productivity Commission to do that. 
“Productivity-related matter” in clause 4 “Interpretation” has been defined pretty widely. From our point of view that is a good thing but the issue with our having done that with regard to the commission is that each Government that comes along may have a different view on exactly how it will interpret a definition that is fairly wide. 
Obviously Labour has its own concerns—which we will be raising in Part 2 when we come to talk about the Productivity Commission in detail—including the fact that we already have someone appointed to run the commission at this time. That person is Murray Sherwin. He is a respected public servant of many years’ standing but in all honesty from a personal perspective I do not see his appointment as being particularly ambitious for this commission. 
Hon Trevor Mallard 
: Not very exciting. 
GRANT ROBERTSON 
: Not very exciting at all I say to Mr Mallard. That is correct—not ambitious not exciting. Murray Sherwin is a competent public servant; he is not the kind of person in my opinion who would drive the Productivity Commission to be the thing that it could be. It has the potential to harness a lot of different views from across the community the private sector and the public sector and to bring them together to face the challenge. My colleague Shane Jones has often asked what it is about the New Zealand economy that needs to be picked up and kick-started and I am sorry to say that Murray Sherwin—as competent a man as he is—will not be doing that leaving aside the question of whether having someone appointed before we have even gone through this process is appropriate. 
I would like to think that what will come out of the House tonight will be an enduring agreement about the importance of having a productivity commission. Certainly in terms of National and Labour there is consensus that this is a good idea. Mr Hide has been championing it as part of the coalition agreement between ACT and National. Its time has come but the interpretation clause tells us that there is a lot of room for manoeuvre when it comes to what constitutes a productivity-related matter. Members on this side of the Chamber certainly look to the Australian Productivity Commission. We look to some of the issues it has looked at including issues in the environmental space which are very very important. I am not so sure that Mr Hide would see those things as being quite as important but Labour can support this part. 
Hon SHANE JONES (Labour) 
: 
 Kia ora anotatou Mr Chair. Such is the importance attached to the New Zealand Productivity Commission Bill that it requires attention that is likely to take us into Sunday which will still be Thursday. This modest contribution is to reward the hard-working members on this side of the Chamber and to alert the members on the other side of the Chamber that when they play loose and fast with the rules of the House they can expect to suffer. 
I direct members’ attention to clause 3 “Purpose” which states that “The purpose of this Act is to—(a) establish the Commission as a Crown entity for the purposes of section 7 of the Crown Entities Act 2004;”. A number of commissioners will be created under the Crown Entities Act 2004. My colleague Grant Robertson has already drawn the Committee’s attention to the fact that one of the favoured sons of the failed ideologues of the 1980s and 1990s has already been appointed to lead what runs the risk of turning into a discredited organisation in very much the same way as Don Brash’s exercises with Dr Bryce Wilkinson and others have brought a great deal of opprobrium to those who are associated with trying to sensibly and credibly boost productivity and lessen the gap between us and our Australian cousins. 
The Productivity Commission derives its powers from the Crown Entities Act and it is evident from a cursory glance at that Act that commissioners are able to secure additional assistance—that is through associate commissioners—or secure resources to undertake studies or examinations that might be called for from time to time. When we think about the purpose of the Act we need to think about the people who will be there to give life meaning and form to the purpose. Under the current administration it is evident that the narrow cast of ideological activists that it will draw from makes us doubt whether this organisation will achieve very much at all. At the end of the day productivity is about people and to date there has been a huge degree of disinterest on that side of the House in actually investing in people. 
We have seen cuts—I mean hypothetical—but I ask whether productivity can be increased at the same time as starving the most vulnerable group of New Zealanders—that is the future workforce and their families—of the resources to ensure that they are suitably educated. How can we advance productivity whilst at the same time squeezing and starving resources from those avenues of the State’s resource base that are directed towards giving very good literacy and numeracy skills civic skills and social relations skills? All of that is actually being deprecated at the moment. It is a joke to think that we can create the Productivity Commission whilst at the same time not focusing on the building blocks of what is the greatest asset our country has. There is no productivity unless we invest in people. 
The nature of our people is changing. The school-age population is getting browner with more Pasifika tangata whenua Maori kids and Kiwis of Maori descent. There are also more children of Asian descent and more children from other ethnic minorities. I only hope that when the Minister moves forward with the Productivity Commission—fortunately it will be for a mercifully short period of time; the results of the next election will rescue us from this narrow-mindedness—he will take into account in terms of the qualities of the appointees such things as ethnicity and the experience of working at different levels of the economy not just at the big end of town. It is the big end of town—characters who thought they were masters of the universe especially in the financial community—that has brought us to our knees. When I hear the media raging about the most recent lapse of judgment in our world the Maori world I like to remind them that the last time I checked the $7 billion worth of wealth meltdown I did not see any runanga or hapu involved in that. 
Hon Lianne Dalziel 
: Did anyone say sorry? 
Hon SHANE JONES 
: No. Well they are unlikely to utter that because that requires a level of humility and modesty that we do not ordinarily associate with that end of town. 
Anyway I come back to isolating the point that when we establish a commission we have to focus on the quality and the range of skills that those people have. We need those who know about the emergence of entrepreneurialism and how to feed the culture of entrepreneurialism. We need those who are skilled in capital formation but most of all we need those who are skilled in what enables people to find a reservoir of enthusiasm eagerness and tenacity to continue to learn. 
When we look at some firms and companies—because we will need to take a micro look not a macro look—we will see that productivity-related matters will go down and we will have to consider the culture that exists between the owners of the firm and the providers of the capital. When we have a set of toxic labour relations and a set of rules that are squeezing further and further and increasing the pain on the labour force whilst not focusing on the obligations and the duties of the owners of the capital or the directors of firms we cannot perpetually make more miserable the providers of labour and imagine that we are to grow wealthier. 
We have seen a level of belligerence and hostility towards the leaders of the labour movement in New Zealand. We have seen it recently in terms of the treatment dished out to Helen Kelly in the recent episode to do with the give-away to the Hollywood billionaires. It is a timely reminder that a Productivity Commission will only be as good as the spread of people who occupy the positions. They must command respect in the eyes of the Ministers of the future. 
It would appear that the Savings Working Group comprising a number of notable New Zealanders has already lost a fair degree of confidence in the Minister of Finance the Prime Minister and other senior Ministers of the current Government because issues that it ought to be looking at—that is notions of compulsion types of obligations etc. in savings—have already been written out of the script. This suggests that this Government hears sees and senses something that does not immediately fit with its plan—and of course we all know that there is no plan. 
The Prime Minister I acknowledge was a successful currency trader and a pragmatist. So there is no coherent plan; there is just a haphazard set of disconnected events where the Government takes a position closes out and rapidly moves on to the next position. Unfortunately exercising stewardship over the economy as Mr Mallard and other members more senior than me will point out requires an overarching vision a strategy a narrative and whether or not we like it a plan. 
This commission will not advance any plan because we already know that the types of things it will look at come from a very narrow ideological straightjacket—that is that the State is bad and it must be shrunk. How do we shrink the State? We know that the Productivity Commission will be charged at looking at whether the State should be shrunk by shrinking revenue. Then once revenue in a macro sense is decreased the State has fewer options to take an activist role where the economy might be suffering from market failure inject a degree of public investment or ensure that the public interest is addressed. 
If the people who come into this organisation are disconnected from the way the vast bulk of small to medium sized firms operate and the way the vast bulk of New Zealand families live then we can rest assured that it will be a continual story of a narrow range of ideas being forced upon us and our families and that will just not do. 
In relation to what defines a productivity-related matter the Productivity Commission will look at private sector productivity issues public sector productivity issues and the economy as a whole. Well the economy as a whole cannot be understood by focusing just on economic rationalism because people are not just economic utility-maximising rats. At the same time they are social creatures so it is important when we look at productivity—and this will depend on the quality of the people coming forward—to take account not only of human capital but of natural capital. 
Part 1 agreed to. 
Part 2 Substantive Provisions 
The CHAIRPERSON (Lindsay Tisch) 
: Debate on Part 2 includes the schedule. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to start the contributions on Part 2 of the New Zealand Productivity Commission Bill for a number of reasons. Obviously I have been involved in the discussions on the legislation establishing the Productivity Commission and I chaired the Commerce Committee and had the opportunity to hear submissions. 
I place on record again my disappointment at the number of people who actually submitted on the bill. Everyone on both sides of the House has agreed that this legislation is quite important yet 13 submissions were received and we heard seven of them. I was very disappointed that Business New Zealand did not want to be heard because I had asked the select committee clerk to arrange for the Council of Trade Unions and Business New Zealand to get half an hour each one after the other so that we could actually engage with both and get a real sense of where their points of commonality are. They had been working very closely together on productivity for a number of years when Labour was in Government and I felt that that work would flow through into a really good discussion at the select committee. Then I found out that Business New Zealand did not want to be heard. Unfortunately I have to report to the House that it gave quite a narrow submission. I was disappointed. The Council of Trade Unions gave a very good submission and really talked about what made a difference in terms of looking at productivity. 
As a result of that submission I have three amendments to Part 2 one of which relates to the purpose of the commission. The first amendment is to rewrite the purpose clause. I do not know why—and I actually kick myself now because I cannot understand why—we used the word “principal”. Clause 7 states: “The principal purpose of the Commission …”. I have rewritten it to say: “The purpose of the Commission is to facilitate policy development practical activities and research which will boost productivity on a sustained basis in order to support the overall well-being of New Zealanders through the development of a high wage high skill sustainable economy that delivers benefits on an equitable basis to New Zealanders having regard to a wide range of communities of interest and population groups in New Zealand society.” 
Anyone who has read the original bill will know that that amendment not only picks up a lot of the language we had within that clause but also starts to define what we are trying to achieve. There is no point looking at productivity in a narrow sense if we do not get that benefit shared on an equitable basis. We might see a productivity improvement and a greater disparity in terms of the sharing of wealth in our nation and we know that that would minimise or reduce our productivity over time because the outcomes would be so inequitable. I think we have to recognise New Zealand for what it is and what communities of interest make up New Zealand. We also have to recognise that productivity has a very broad definition. 
The second set of changes relate to subclause (1) of clause 9 “Commission’s functions”. This provision extends the commission’s functions. The two functions in the bill as reported back are “(a) … to hold inquiries and report to the referring Ministers about productivity-related matters; and (b) on its own initiative to—(i) undertake and publish research about productivity-related matters; and (ii) promote public understanding of productivity-related matters.” Going back to my amendment in terms of the purpose I have talked about practical activities and research as well. 
The practical activities that I am seeking to add under clause 9(1) are: “(c) support initiatives which develop practical productivity projects and provide an overview of the range of tools/models available to maximise multifactor productivity in workplaces;”. I did think after having reflected on what the New Zealand Council of Trade Unions said in its submission that workplace productivity is an important component of the total view. If the Productivity Commission is to provide some grunt in this area it really needs to lead the way. A range of tools are available and they differentiate between the public sector and the private sector. There are different drivers in both sectors and I think they need to be reflected in the way in which the Productivity Commission operates. I think that part of the reason for specifying these initiatives as an activity of the Productivity Commission is to ensure that it becomes the single point of entry—the Government portal to productivity. I think that is a hugely advantageous position in terms of the credibility of the organisation long term. That is the first paragraph of the amendment. 
I seem to have called the second paragraph of the amendment “(e)” instead of “(d)” but that is just a little typo. It states: “(e) run inclusive events/workshops on productivity and have educational tools and other information on its website;”. Again that kind of brings it together as a portal where people can go for a one-stop shop approach to productivity. 
The next paragraph of the amendment states: “(f) organise events and activities as appropriate with the Australian Productivity Commission;” Everyone knows that I am a huge admirer of the Australian Productivity Commission and I have this hope that one day it will be an Australia - New Zealand Productivity Commission. The idea of putting it in legislation so that those events and activities are authorised by statute appealed to me so I thought that was a very good amendment. 
The final paragraph is to “(g) produce an annual report on productivity”. Unless we actually require the Productivity Commission to annually report on these matters where are the benchmarks? Where are the measures against which we will look for the success that we believe this model could bring? 
My final set of amendments is on the terms of reference. I would specifically put into the terms of reference in clause 12 a new (1B) which states: “In setting the terms of reference for an inquiry the referring Ministers must first consult with Business New Zealand”—it does not deserve that consultation because it did not front but there we go—“and the New Zealand Council of Trade Unions to ensure that the concept of social partnership is embedded in the work of the Productivity Commission.” 
I think that language signals a really important aspect of the difference between the 1990s and today. In the 1990s the concept of social partnership was completely lost. The Employment Contracts Act took the word “union” out of legislative being so industrial relations were to operate without the word “union” being included. Collective bargaining was around contracts not agreements and there was no real understanding of how important these things were to the concept of productivity. Without embedding that relationship into the work of the Productivity Commission I cannot see any other way of ensuring that we get to the best in terms of our workplace contribution to that productivity growth. 
I played with the idea of locking this concept of social partnership into workplace productivity issues but the more I thought about it the more I thought that I would take workplace productivity out of it. The social partnership is fundamentally critical to all issues relating to productivity. I hope the Minister looks at that amendment and thinks very carefully about whether it might improve the way in which the Productivity Commission may operate. 
Finally I propose to add to clause 12 a new subclause (4): “Ministers and the Commission shall ensure that terms of reference require a range of models to be used in any research and analysis.” The Minister may well say that that is taken for granted in the way in which we have changed the legislation as it has gone through the Commerce Committee. I would really like to know as a matter of law that the commission will be required not to take a narrow focus on various models of measuring productivity and productivity gains over time. 
The final thing will say in this contribution—and I may want to come back to it after listening to my colleagues’ contributions—relates to the process around selecting the members of the commission. I follow on from a comment that my colleague Shane Jones made. I do not believe that the selection of the chair-designate was a very good process. We were informed by letter on the Thursday before the appointment was made finally and we were advised that this was the appointment the Government was going to make. It is not an appointment that I would have chosen but that is by the by; I am talking about the process. 
I hope that going forward the Government thinks very seriously about getting a more balanced approach to the commission. I think that would sustain it through changes in the Government over time. I also think that if this process is adopted it will not be sustainable over time. I hope the Government takes that particular comment on board in determining who else will be on the commission. 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I will respond to those amendments proposed by the member. I thank the Hon Lianne Dalziel for her work as a Minister and her commitment to improving New Zealand’s productivity and also her work as the chair of the Commerce Committee and the contribution that she made there. I pick up first of all her proposed amendment to clause 7. The member will appreciate that the purpose clause is couched very broadly to enable the Productivity Commission to conduct inquiries and research into any productivity-related matters that will improve the welfare of New Zealand. It encompasses everything that the member’s proposed amendment includes. The proposed amendment is just another way of skinning the same cat; it does not actually change anything and therefore the Government will not be agreeing to that. 
Let me now deal with the Hon Lianne Dalziel’s suggested changes to clause 9(1) which relate to the functions of the commission. The first of these subclauses would appear to give the Productivity Commission new hands-on support for workplace productivity improvement projects. That would fundamentally change the character of the Productivity Commission which is to provide independent analysis and advice on productivity-related matters. I should also note that this is specifically not a function of the Australian Productivity Commission. It would be a new and novel approach. Proposed paragraphs (e) (f) and (g) of clause 9(1) would appear to specify activities that the Productivity Commission is already able to undertake through existing clause 9(1)(b)(ii) which is to promote public understanding of productivity-related matters. The Government does not see any need to provide this level of specification in the bill. 
In respect of the proposed amendment to clause 12 the bill enables the Productivity Commission to consult widely. Clause 13(1A)(b) states that the commission may “consult with any persons bodies organisations and agencies it considers necessary to ensure that a wide range of views is available to the Commission to assist it in preparing its reports.” The expectation is that as an independent body it will identify those who are likely to have a particular expertise or contribution that may assist it in relation to specific inquiries referred to it. Identifying two specific bodies in the bill such as this proposed amendment would do is not consistent with the philosophy of widespread consultation and engagement. 
In relation to proposed subclause (4) of clause 12 the Productivity Commission model is predicated on the commission having the requisite expertise to make a call on the appropriate methods and the models for its inquiries and the approach that it takes will be amply tested through consultation that the commission may undertake including through consulting on draft reports. This is an aspect of the bill that was strengthened by the select committee for which I do thank the honourable member. I thank her very much for the contribution. 
Hon MARYAN STREET (Labour) 
: 
 In recent times I have come to the House and railed against bits of legislation. I have been saying in particular that this is no way to run a country. The New Zealand Productivity Commission Bill however I am really pleased to speak to because I think it is a good way to run a country. I think the bill will provide for the possibility of independent and contestable advice being given on one of the issues that has dogged us for at least the last decade and a half as we have wrestled with New Zealand’s underperforming productivity. 
This is an area that I have been involved in intimately in my life before I came into Parliament. We were constantly looking at how to make the provision of services in the health sector in that instance more efficient and effective and more productive by the association jointly of employers and employees in the workplace: by the association of professional health practitioners service providers and the managers of the district health boards or the entities that preceded them. 
The issue of productivity has been vexing this country for some time and no Government has been able to crack it in a sustainable way. That is why we are pleased to join with the Government on this bill especially as it has now had its purpose expanded by the work of the Commerce Committee. I commend all members of the select committee including my colleague the chairperson who has put a lot of work into making sure that this legislation hits all the right buttons. This model is a very good one for working through issues that are beyond political tribalism. I can be as tribal as the next person. I know where my politics come from; I know what I believe. But this is one of those things one of those moments where it is entirely possible and not beyond the wit of this Chamber to come up with a system and a process that benefits New Zealand and has the fundamental well-being of New Zealand at heart. 
The fact that the purpose of the New Zealand Productivity Commission was expanded by the select committee is a good thing. Notwithstanding the Minister’s comments just now on my colleague Lianne Dalziel’s amendment to clause 7 it is good that the purpose has been expanded to include the words “having regard to a wide range of communities of interest and population groups in New Zealand society.” I think also that there is merit in my colleague’s amendment that states: “in order to support the overall well-being of New Zealanders through the development of a high wage high skill sustainable economy that delivers benefits on an equitable basis to New Zealanders …”. I think the addition of those words would simply strengthen the legislation and strengthen the purpose of the commission. 
Beyond that given that I understand that the Minister has signalled that that amendment will not succeed I ask that he looks at my colleague Lianne Dalziel’s amendment to clause 12. Here we come to the heart of the matter. Lianne Dalziel has proposed a new subclause (1B) which states: “In setting the terms of reference for an inquiry the referring Ministers”—not the commission I say to the Minister but the referring Ministers—“must first consult with Business New Zealand and the Council of Trade Unions to ensure that the concept of social partnership is embedded in the work of the Productivity Commission.” This is where we get to why this is a particularly good model. If we have peak organisations in this country that equally have a vested interest in productivity why do we not combine their efforts and their common interests in what has been since the 1980s called social partnership? 
The previous Labour Government attempted to embed a modus operandi in our 9 years in Government of social partnership. I commend it to the National Government not because it is something we supported but because it is something that would benefit and create some stability for all New Zealanders. There are some issues where we do not need to have policy swings from one end of the spectrum to the other with any change of Government and this is one of them. We are as concerned about New Zealand’s productivity as the members opposite. I do not doubt their concern about it and I hope that they do not doubt ours. If we are to ensure that the greatest productivity can be extracted for the best possible outcome—that is the well-being of and the equitable distribution of the benefits of productivity across New Zealanders for the sake of everybody’s advancement—then this legislation is a tool that will allow that to happen if we understand that it does embed principles of social partnership. 
The principles of social partnership are very easy. They are simply respectful ones. They involve the recognition that there are communities of interest in New Zealand that deserve to have representation at the highest level. And in that representation they deserve to have their views and their interests spoken about and to be engaged with so that areas of commonality can be found as there were over the 9 years that we were in Government. There were substantial areas of commonality between Business New Zealand and the Council of Trade Unions. Let me give one example of that: skills training. This Government abolished the Skills Strategy and has done very little in that space since it came into office but the Skills Strategy is exactly the area of common ground that one could characterise as the best kind of social partnership. So embedding the notion of social partnership has very practical outcomes. Not only can it be applied in the upskilling of the labour force which is clearly required by all evidence to date and clearly required if New Zealand is to become more productive but it can also provide greater stability for moving forward in this country. 
Productivity does not need to be something that is addressed by tribalism; it can be addressed jointly. If we are mature enough in fact to have a Productivity Commission that will provide contestable and independent advice to Ministers then we are mature enough to embed in our processes and our legislation the notion of social partnership. This is not a quaint left-wing notion; this is about moving modern mixed economies forward and whatever pedigree the notion may have had does not matter now. What matters is that this bill and the amendments that my colleague Lianne Dalziel has put forward really serve to embed the idea of a cooperative social partnership that can benefit in this case the productivity of this country. 
There are extremely practical issues here that would have very practical effects. Upskilling is one of them. Also the promotion of the idea that events and workshops on productivity and educational tools and things of that sort might be paraded around the country in a jointly sponsored effort by the major social partners in this endeavour to increase New Zealand’s productivity is a very sensible suggestion directed towards achieving that end. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I will take a short call on Part 2 of the New Zealand Productivity Commission Bill and echo the comments that have already been made about the way our Commerce Committee has worked on this particular bill. There was a lot of agreement as to the direction of productivity in this country—one of the major issues certainly that our country faces going into the future. 
I will refer specifically to the amendments from the member Lianne Dalziel. Although I agree with most of the comments of the Minister in the chair the Hon Rodney Hide I must say that Lianne Dalziel’s amendment to clause 7 would fundamentally change that purpose clause. The amendment adds the words “the development of a high wage high skill sustainable economy that delivers benefits on an equitable basis to New Zealanders”. I contend that we cannot have that type of provision because she is suggesting by this amendment a guaranteed equality of outcome. I suppose that one of the fundamental differences between members on that side of the Chamber and those on this side is that this is not about guaranteeing equality of outcomes; it is about guaranteeing equality of opportunities. There is no way that we can guarantee that all the benefits derived from certain productivity advances will deliver benefits across the board so I think that that amendment goes too far. 
We made an amendment to clause 7 in order to have regard to “a wide range of communities of interest and population groups …”; I think that that was sufficient to suggest that the commission did not take on board one particular model of productivity. I thought we worked well on that clause. I do not think that the additions to the clause add anything; I think they actually detract from that purpose clause. 
I move to clause 9(1). As the Minister has already said some of the member’s suggestions for new paragraphs (e) (f) and (g) of clause 9(1) can actually happen regardless of whether they are inserted in a clause. I do not think it is appropriate to insert those specific provisions in the clause because the role of the commission is not to run workshops. I do not believe that the commission will have the resources for those types of operational matters. If we go back to the first principles of the bill we see that the role of the commission will be to promote research do the research do the analytical work work according to the terms of reference and produce work that will advance productivity and policy-making both in the private and public sectors so that amendment would not be helpful to that. 
Finally the amendment that would insert new clause 12(1B) requires Ministers to “consult with Business New Zealand and the New Zealand Council of Trade Unions …”. Again there is specificity in the clause but what happens if the New Zealand Council of Trade Unions no longer exists? What happens if Business New Zealand no longer exists? 
Hon Lianne Dalziel 
: That will always exist; don’t worry! 
PESETA SAM LOTU-IIGA 
: That is the member’s contention but I think that if we start demanding or at least requiring in a clause that a Minister consults directly with certain organisations it makes that clause unworkable. We should think again about whether we should demand a social partnership. That is not to say that we disagree with a social partnership; I think that that is important. But to require it in legislation specifically I think is going too far. 
We do not agree with these amendments. We think the bill as it came out of the select committee was a good bill and we look forward in the third reading to speaking about our bill. 
Hon SHANE JONES (Labour) 
: 
 Kia ora Mr Chairperson. It actually is necessary to inject a wee bit more of a positive tone into this debate after that rather impoverished contribution from the member currently representing Maungakiekie. 
Hon Lianne Dalziel 
: The soon-to-be former MP. 
Hon SHANE JONES 
: Well Maungakiekie is a proud tangata whenua name blighted at the moment by—but let me come back to the New Zealand Productivity Commission Bill. I would like to pick up one of three things that the Minister in the chair the Hon Rodney Hide has said. A key part of the Minister’s narrative has been the reduction of red tape and unblocking the bureaucratic imbroglios that stop firms and investors from achieving the sorts of outcomes that he would like to see. I acknowledge that that is the rhetoric and the political narrative that this Minister has. But to do that it is necessary to focus in a very very sharp way on what some of the problems are and what some of the snarl-ups are. 
How the commission develops its procedures will depend on whom the Minister the Government and the Crown appoint. We are starting with a rather dismal view not really directed in a personal way at the character who is going to be the initial leader of the organisation as we know that he will not become separated or dislocated from this ideological baggage. We know that to be a fact but we are going to have to deal with that burden. But if we are going to consult in terms of clause 13(1A)(b) “consult with any persons bodies organisations …” I think it would be good if the Minister and his colleagues dedicated some attention to finding people who can actually liaise with a wide array of organisations. 
I have in mind here our Maori organisations because this is a Government that is only too happy to parade its rhetoric up and down the country about how the emerging Maori economy represents something of a positive platform to grow the overall economy. That will happen when they are no longer as disengaged as they have become under this Government and its lacklustre partners in the Maori Party. It is going to increase the level of importance that we have the right woman or man capable of building bridges into that area because there are some significant institutional problems there not the least of which has to do with the land tenure system with access to capital and with the importance or forming the right partnerships. 
It seems that the Minister of Agriculture David Carter has presided over the allocation of grants and capital into the agricultural sector in a wretched way. According to my colleague from the West Coast Damien O’Connor it almost looks as if vested interests are being—yet again—rewarded. It is important that the Productivity Commission has people who can turn their attention towards the sector. Without the introduction of science-based capital innovation and clever research that is designed to meet the specific distinctive institutional problems in that small segment of our economy I think the commission could turn into something too ideologically narrow or too full of puffery. 
One of the redeeming features of the terms of reference concerns the commission working jointly with other agencies including overseas agencies. I imagine that is an opportunity for the Productivity Commission to focus on what is happening in Australia. We already have enough of our Kiwis in Australia enriching the Australian economy. We need to get the right blend of people on the Productivity Commission and emulate in our economic thinking what Australia has been able to do. The Australians do not deprecate or marginalise representatives from the labour movement but integrate their perspectives into a broad plan to build the people as they build the economy. The member from Maungakiekie is quite entitled to speak against the very sensible amendment from my colleague the Hon Lianne Dalziel the chair of the Commerce Committee but what he reflects is a very parched view about the underlying accord that we think is very very important. 
Hon Member 
: Bleached and parched. 
Hon SHANE JONES 
: Yes the word parched does strike me at this hour of the night but it is still Thursday—it is still Thursday etc. I think I might need it at about 5 to 12 actually. Anyhow underlying what the member from Maungakiekie was saying was the view that there cannot be meshing together of the perspectives of those who are in control of capital and the perspectives of those who are proxies for the voices of labour—the voices of people. Yes those people who are making investment decisions have to bear in mind the rights of shareholders. We have learnt about and seen a less atomistic approach being taken in Australia. It is less divisive than what we are seeing from our colleagues on the other side of the House. 
So in that sense when the commission may be working jointly with other agencies including overseas agencies concerned with improving productivity it will come down again to who and how many people—people who are not captives or cheerleaders for that narrow range of vested interests who do not want to see a Productivity Commission—challenge the growing gap of haves and have-nots in New Zealand. In that sense when there is a dismissal and a jettisoning by our colleagues over there of that very useful contribution made in the form of an amendment then we have every right to be concerned. 
The commission’s work will actually not deliver any serious change unless the Government or the politicians of the day have faith and confidence in the quality of their work. Although Mr Wilkinson and Don Brash are hewn out of similar ideological matter as represented on the other side of the House they have been tossed aside. So we can see that National is prepared to throw even its own to the sharks. It reminds me of a great white shark coming out of the sea where there is a placid seal moving on the top of the ocean. Out comes the great white shark and snaps open its jaws and down its gullet goes the seal. That is what happens to people such as Helen Kelly who bring forward suggestions and contributions. I think she would be a fantastic contributor in that organisation. It is evident that those prospects are very narrow because personal agendas are likely to intrude in terms of the kinds of characteristics a person will be expected to show and also in relation to the areas of concern to productivity that will be focused on. That is a matter of some concern to us. 
I want to come back to what I said before which is that the commission has the ability to grow beyond three or four members in the sense of appointing associate commissioners. I hope that those discrete projects flow from what firms population groups and communities of interest are telling the commission and that they do not flow from the brainwaves of the current Minister or some of his colleagues. [ 
Interruption 
] I want to be positive. I feel that I will be able to make a better contribution with a negative connotation at 1 minute to 12. I think I will reserve it until 1 minute to 12—on Thursday. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I want to talk about Part 2 of the New Zealand Productivity Commission Bill and having given a relatively positive speech on Part 1 I will now do the opposite of my colleague Mr Jones and be a little bit more negative about this part. As we have gone through the debate and Lianne Dalziel has put forward her amendments the Minister in the chair the Hon Rodney Hide has responded to them largely in a negative way which has highlighted my concern. We have an agreement in principle that the Productivity Commission is a good thing and we think it will be very useful for the future of New Zealand but its usefulness will be in part about its durability in terms of being able to cope with the changing fortunes of political parties and some of the different agendas pursued by political parties. I think that the changes Lianne Dalziel has brought forward in particular the change to clause 12 are examples of where the durability of the Productivity Commission could be enhanced and that is through the notion of effectively developing the idea of social partnership within the Productivity Commission’s terms of reference. 
On this side of the Chamber we find it quite surprising that the current Government has not chosen to pursue the tripartite work that was going on in the skills area. Obviously the Skills Strategy which Business New Zealand and the New Zealand Council of Trade Unions have worked on with the Government was a successful strategy. It was an example of social partnership in action skill development and the enhancement of skill. As my colleague Shane Jones has said productivity is about people. One of the key drivers to productivity is enhancing skills and increasing training. Why this Government has chosen not to invest further in the Skills Strategy and indeed in keeping the skills forum going is a great surprise to us. From our point of view this amendment to clause 12 is actually about ensuring that there is some durability and that there is some inclusion and involvement of the key participants—the New Zealand Council of Trade Unions and Business New Zealand—in terms of in this case workplace productivity and productivity generally in New Zealand. 
It is of great concern to members on this side of the Chamber that the Government is not prepared to pick up this kind of idea. It makes us wonder about the scope of the commission and how it will be used. There is an awful lot of power in the hands of the responsible Ministers. Of course that is as it should be. Parliament is sovereign and Ministers of the executive come to us and we hold them to account. Elected representatives should be controlling the direction of this work. But we want the commission to be able to work as broadly and as inclusively as it can and we want the commission to be able to challenge the Government and to challenge all the ideas and concepts that any Government is putting forward and in particular the Government of the day. So it is disappointing from our point of view that there has not been a willingness in the Government to pick up the amendment to clause 12. But perhaps we should not be surprised. We should not be surprised because the Government has largely ignored things in the skills area where that social partnership programme was working really very well indeed. 
Of course there have been other issues around skill development—the cuts in adult and community education for instance and the restriction on tertiary education places. None of that bodes especially well for a commitment to the core element of productivity which is that of raising skills. But the opportunity is here for the Government to pick up Lianne Dalziel’s amendment and get Business New Zealand and the Council of Trade Unions on board. I do not buy Sam Lotu-Iiga’s argument that somehow or the other this could be difficult because the names might change or something like that. We change things all the time in law when that takes place. This is about embedding social partnership in the Productivity Commission and it is very disappointing that the Government has chosen not to pick that up. 
I want to go back from clause 12 to the whole question of the membership of the commission in clause 10 which has been alluded to by a number of members. I draw on the example of the Treasury board that was recently put in place by Secretary to the Treasury John Whitehead no doubt talking with the Minister of Finance Bill English. There was a great palaver about how this would be an excellent example of how Treasury would be able to reflect the community’s interests and those affected by the fiscal policies and the overall policy framework that Treasury is responsible for. The names of those on the Treasury board came out and it was just the usual suspects. It was the usual board members the professional board members and we had concerns about one of them in particular and that person’s links with the broader National Party. Generally the people who were appointed represented a very narrow range of people. They certainly did not represent the broader community. 
Our concern when we look at clause 10 on the membership of the commission as others have said is that Mr Sherwin’s early appointment does not bode well. He reflects a particular ideological mindset but more than anything else I think he represents a narrow idea of what this commission could do. As with the Treasury board and the commission we should be thinking broadly. I remember thinking when the Treasury board was being appointed “What about appointing someone like Diane Robertson the Auckland City Missioner?”. What about saying that we actually care about the impact of Treasury’s policies on real people as Shane Jones said—not the big end of town; the other end of town? I really would encourage the Minister as we go forward in this process to find a way of getting a commission that is reflective of the very broad nature of productivity that we have been talking about tonight. Again it does not bode well that the question of social partnership is dismissed so quickly because I am quite sure that when we look at the commission’s membership it will be a concern. That has been a concern for a number of members of the Labour caucus. We support the idea in principle but we have concerns about the way it will be implemented and certainly Mr Sherwin’s appointment is a very bad start in that regard. We want to make sure as the commission is appointed in full that it does not fall into that trap. 
I will refer in my remaining time to the other amendments that Lianne Dalziel has put forward particularly on the purpose of the commission. She is correct to identify the area of practical activities and I think that the commission could usefully take that up. There has been some very good work done by the partnership resource centre out of the Department of Labour in the last few years. It was an initiative set up by the fifth Labour Government and has drawn together the skills of people from the union movement and from the private sector around how to improve workplace productivity. 
Jonathan Young 
: There’s nothing on the website though. 
GRANT ROBERTSON 
: I will have to have a look at that. I can certainly introduce Mr Young to some of the people who have been involved in it. There are some private sector outfits. I know that Air New Zealand and one or two others have been involved and have really enjoyed their links with the partnership resource centre. Let us broaden out this definition so that the practical activities which are like pilot projects that the partnership resource centre undertakes around productivity could actually be part of the commission’s work. I think Lianne Dalziel is on to the right point there and—again—with the amendment that comes in under clause 9 on productivity projects. This is where the commission could have a more detailed mandate and a more detailed and practical ability to take on those projects. I think it is unfortunate that the Minister has ruled out accepting those amendments because I think they broaden out the definition. Yes we absolutely want research and obviously we want the inquiries done but we need to start moving a little beyond those to some practical projects that could be taken up. 
To conclude my contribution at this time on Part 2 I say that it contains some very good points but there are a number of clauses that could be enhanced. If we do not get this right then the Productivity Commission runs the risk of being seen as pursuing a particular agenda. I hope it is not Mr Sherwin’s old agenda—it should not be because we all believe that this is a good idea. We need to give the framework to ensure that the Productivity Commission can be durable across Governments and has the ability to undertake practical work in developing social partnerships. That is missing from Part 2 at the moment and that disappoints me because in general this is a very very good idea. 
KATRINA SHANKS (National) 
: 
 I move  
That the question be now put 
. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to go back to the Minister’s comments when he ruled out the changes to clause 12(1B) that I am promoting because I think he has misunderstood what the clause was. He went on to refer to clause 13 of the bill which talks about who the Productivity Commission consults with. The reason I have moved clause 12(1B) is to make sure that it is the referring Ministers who consult with Business New Zealand and the New Zealand Council of Trade Unions when they are setting the terms of reference for an inquiry. There is a very important reason for this and it goes to the regulatory impact statement which of course I have downloaded off the website now that it is no longer available in the bill as introduced. It says this about the consultation that was done on this bill: “Discussions were held with a small number of New Zealand senior public servants current and past politicians and informed commentators from consultancies and academia. Discussions were also held with the APC VCEC and Australian Treasury.” 
Grant Robertson 
: So that’s John Whitehead Don Brash and Michelle Boag. That’s it. 
Hon LIANNE DALZIEL 
: Is that not a really good start to social partnership! That is the reason I want the concept of social partnership embedded in the setting of the terms of reference. Of course the Productivity Commission will talk to the Council of Trade Unions and Business New Zealand—that is a given. Everyone knows that it will do that. I am not seeking for any parameters to be put on who the Productivity Commission consults with. It will be putting out discussion documents and hearing submissions. It will then put out a draft report as the Australian commission does it will hear further submissions on that and it will be ultimately reporting to the Minister after in-depth consideration and inquiry into these matters. 
If the social partners and if our trade union movement those who represent the workforce and Business New Zealand which represents those who run our businesses are not somehow embedded in the very proposals for the terms of reference for the inquiry then what are we going to get out of it? That is what concerns me. The consultation on this legislation has not been as inclusive as it should have been. In fact we are told in the regulatory impact statement that the consultation confirmed the Australian experience—which is not surprising since more Australians than New Zealanders were consulted—and it was judged that further consultation in New Zealand would quickly reach diminishing returns. I think that is a little bit of an insult given the huge contribution that both the Council of Trade Unions and Business New Zealand made to productivity development in the entire period that we were in Government. For 9 years they were regarded as partners that sat at the table and were engaged in ongoing consultations with a range of Ministers. I was one of the Ministers they were engaged in discussions with. I think it is very unfortunate that the Minister dismisses the amendment on the basis of the commission’s procedures that have nothing to do with the clause that I am seeking to amend. 
The other thing I would really like the Minister to do is talk about the contributions from the different Government agencies that have been selected for contributing to the costs of setting up the commission and its ongoing running. When one looks at the level of contribution the largest contribution comes from Treasury which is not surprising; the Ministry of Economic Development which is not surprising; and the Department of Labour. Why is the Department of Labour the other large contributor? Because workplace productivity is one of the major drivers of productivity. It is not the only one and it is not supposed to be the only focus. But even the contributing ministries make it absolutely clear that the Government itself sees workplace productivity—I mean it is micro and macro but the micro is the workplace and the Government itself has said that this is one of the three top contributors from departmental budgets for the setting up of the commission and its ongoing running costs; it is so obvious that the Government itself sees workplace productivity as a key driver to our productivity gains over time. So why on earth would the social partners not be included as part of the setting of the terms of reference? 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Rick Barker) 
: I think that is a fair question. The question is that the question be now put. Members of that opinion will say Aye of the contrary opinion will say No. The Ayes have it. The question will be put. 
Hon Trevor Mallard 
: Party vote; come on. 
The CHAIRPERSON (Hon Rick Barker) 
: I gave the member the opportunity to call for a party vote. I said the question will be put. I declare the vote and if the vote is not challenged immediately for a party vote we move on. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Lianne Dalziel to clause 7 be agreed to: 
to omit this clause and substitute the following clause: 
7Purpose of Commission 
The purpose of the Commission is to facilitate policy development practical activities and research which will boost productivity on a sustained basis in order to support the overall well-being of New Zealanders through the development of a high-wage high-skill sustainable economy that delivers benefits on an equitable basis to New Zealanders having regard to a wide range of communities of interest and population groups in New Zealand society. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 25 
New Zealand Labour 20; Green Party 4; United Future 1. 
Noes 62 
New Zealand National 58; ACT New Zealand 4. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: I say to members there is a very good reason for votes to be conducted in silence. I know it is difficult to constrain oneself when severely provoked. 
The question was put that the following amendment in the name of the Hon Lianne Dalziel to clause 9 be agreed to: 
to add to subclause (1) the following paragraphs: 
(c)support initiatives which develop practical productivity projects and provide and overview of the range of tools/models available to maximise multifactor productivity in workplaces: 
(d)run inclusive events/workshops on productivity and have educational tools and other information on its website: 
(e)organise events and other activities as appropriate with the Australian Productivity Commission: 
(f)produce an annual report on productivity. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 24 
New Zealand Labour 20; Green Party 4. 
Noes 63 
New Zealand National 58; ACT New Zealand 4; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendments in the name of the Hon Lianne Dalziel to clause 12 be agreed to: 
to insert “Subject to section 12(1B)” at the beginning of subclause (1A); 
to insert the following subclause after subclause (1A): 
(1B)In setting the terms of reference for an inquiry the referring Ministers must first consult with Business New Zealand and the New Zealand Council of Trade Unions to ensure that the concept of social partnership is embedded in the work of the Productivity Commission.; and 
to add the following subclause after subclause (3): 
(4)Ministers and the Commission shall ensure that terms of reference require a range of models to be used in any research and analysis. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 24 
New Zealand Labour 20; Green Party 4. 
Noes 63 
New Zealand National 58; ACT New Zealand 4; United Future 1. 
Amendments not agreed to. 
Part 2 agreed to. 
Schedules agreed to. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon RODNEY HIDE (Minister of Local Government)  
on behalf of the Minister of Finance 
: 
 I move  
That the New Zealand Productivity Commission Bill be now read a third time 
. This bill establishes a new institution to undertake analysis and provide advice to the Government on matters that are of vital importance to the welfare of New Zealand and New Zealanders. Improving our productivity performance is a necessary condition if we are to maintain current standards of living let alone improve them. Paul Krugman of Princeton University made the observation that “Productivity isn’t everything but in the long run it’s nearly everything.” 
New Zealand’s economic performance over the last 6 decades has been poor compared with that of most other OECD countries. In 1950 New Zealand was ranked as third among the OECD countries in terms of GDP per capita. In 2009 New Zealand’s GDP per capita was ranked as 22nd out of the 32 OECD member countries. This indicates a decline in New Zealanders’ living standards relative to those of people in other OECD countries. Following substantial reform New Zealand’s growth has been closer to but still less than the OECD average since the early 1990s and New Zealand does not appear to have been as badly affected by the current global financial crisis as many other developed countries although substantial risks remain. 
The gap in GDP per capita between New Zealand and wealthier OECD countries essentially reflects a difference in labour productivity which stems from New Zealand’s relatively low levels of both capital intensity and multi-factor productivity. Growth in New Zealand’s labour productivity has generally lagged behind that of other countries although there has been a significant variation in labour productivity growth across sectors and industries. 
Closing the GDP per capita gap with other advanced countries represents a formidable challenge. For example closing the gap with Australia within 15 years would require New Zealand to exceed Australia’s average GDP per capita growth over that period by around 2 percentage points. On the basis of the OECD’s baseline projections that would require New Zealand’s average GDP per capita growth to be about 4 percent which is more than twice New Zealand’s average rate over the last two decades. 
We will not meet the productivity challenge without an injection of new ideas. These ideas must be built on a solid foundation of evidence and analysis. It also requires those who undertake the analysis to engage fully with the community. Engagement with the community is important for a number of reasons. The first is that an evidence-based policy requires a deep understanding of what the real world is like for firms entrepreneurs employers workers and citizens. Second the community can be a source of ideas. Third the significant change that may be required to meet our productivity challenge affects the community and it is important that those who may be affected have the opportunity to have their views heard and taken into account and that the need for change is carefully and fully explained. 
With this bill we are establishing the legislative framework for an institution that will be a credible source of evidence-based policy. In creating this framework we have been guided by Australia’s experience with the Australian Productivity Commission which at the state level has been repeated in the Victorian Competition and Efficiency Commission. The New Zealand Productivity Commission will meet the key tests for an effective institution as demonstrated by the Australian institutions. The commission will be given inquiries by the Minister of Finance in conjunction with portfolio Ministers. Terms of reference for inquiries must be made public. The commission’s reports must be tabled in this House. Both of these requirements add up to a highly transparent process. As an independent Crown entity the commission will have statutory independence. This will encourage analysis and thinking that is unfettered by the policies and preferences of the Government of the day. It will be headed by three to four commissioners who will lead inquiries as well as set the overall tone of the commission. The commission will conduct its inquiries in public. It must consult widely and it must take a broad range of perspectives into account. It will not be an ivory tower unconnected with the real issues and opportunities faced by New Zealanders. 
An important part of the inquiry process which was emphasised strongly by the chairman of the Australian Productivity Commission Gary Banks is the release for consultation of a draft report. This provides a rigorous test process for the analysis undertaken by the commission. Although the bill does not make this step in the process an absolute requirement there is an expectation that the commission will consult publicly on draft reports. The commission is also able to initiate and publish its own research which is an essential function for an institution that will be seen as a centre of excellence on productivity-related matters. I fully expect that the commission will become a focus for productivity-related research and debate in New Zealand with strong links to Government agencies academics and thinktanks. In effect having a specialist commission should lift the tide on productivity-related research in New Zealand. There will also be cooperation between the New Zealand and Australian commissions further boosting capability and providing a foundation for work on strengthening the single economic market between New Zealand and Australia. 
The commission will be a unique institution in New Zealand that fills a gap in the current sources of policy advice. It meets the three critical criteria of having independence competence and community engagement. It can take the policy debate into areas where Government departments are not able to go bringing new ideas to the table and testing conventional wisdom. It is destined to play an important role in charting the future of New Zealand’s productivity performance. 
Finally I thank the Commerce Committee chair Lianne Dalziel and the other members of that committee for their work on the bill. In some important respects the committee clarified what the commission is intended to be and strengthened the statutory processes that underpin its open transparent and consultative character. I am very pleased and honoured to commend the bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Labour will be supporting the passage of the New Zealand Productivity Commission Bill. We sought to make amendments to it during the Committee stage but they were not supported by the Government. I still believe that they would have strengthened the legislation but so be it—you win some you lose some. What I want to do is focus on an important aspect of this law that the Minister of the Local Government just referred to in his address where his comments almost exclusively focused on the role of workplace productivity. 
I refer back to a joint paper that Business New Zealand and the New Zealand Council of Trade Unions put together on productivity under the previous Government. Under our Government they worked together in a social partnership. They worked in a triumvirate way with the Government. We had the Government at the table we had Business New Zealand and we had the Council of Trade Unions representing the workforce. That triangle approach was a very strong approach because it provided protection for those who work within an industry from the kinds of excesses that we saw in the 1980s and in the 1990s—so I will not reflect on Governments of any particular colour in this regard. It is very easy to think that productivity improvements can be imposed by cutting the cost of production through making the workers carry that cost. That was the experience of both the 1980s and the 1990s and I do not think New Zealand has ever fully recovered from the serious impact that the Employment Contracts Act had on our workforce. 
I will refer to the joint paper where we had Business New Zealand working with the Council of Trade Unions on the definition of workplace productivity and on the issues that accompany it which are infrastructure and education and skills. We cannot get improvements to workplace productivity without talking about the lot. They all go together hand in hand. This is what that paper said. It stated: “At a macro level debates about productivity inevitably weave into the overall drivers for economic growth and therefore include tax inflation capital formation population global connectedness adequacy of infrastructure size of workforce relative to population amount of capital goods relative to the workforce degree of competitiveness research and development incentives as well as the importance of education and innovation.” That is the macro-level perspective. “There is a need to build a consensus around how to grow tomorrow’s jobs based on investment in skill technology and good workplace relations to create high wage employment producing quality goods and services.” That is why I moved in the Committee stage that we change the purpose of the commission to look specifically at boosting productivity on a sustained basis in order to support the overall well-being of New Zealanders through the development of a high-wage high-skill sustainable economy. 
What those organisations highlighted as critical among these issues were “The relative contributions of physical capital financial capital human capital and total factor productivity (or multifactor productivity);”—and that is the one element that the Minister chose to address in his comments. But there are also “Particular capacity issues on infrastructural enablers—physical capital investment in power/energy waste water broadband transport etc;”—those sorts of physical infrastructural enablers as they describe them. “Drivers of high quality physical capital investment at enterprise level;”—and of course we know that productivity improvements can be found through capital investment as well. “The contribution of ICT; Lags between technological progress and productivity increases; Learning across boundaries—networks and clusters;”—that is businesses operating together regions operating together and industries operating together. “Knowledge generation diffusion and adoption in the production of valued commodities; Gaining a critical mass of skills; Literacy and numeracy; Worker scepticism towards productivity proposals based on their experiences;”. Anyone who lived through the 1990s will know perfectly well what that period meant by way of productivity improvement. They paid the price. They paid the price in lower wages. 
Grant Robertson 
: The wage gap extended out as well. 
Hon LIANNE DALZIEL 
: When did the wage gap extend between Australia and New Zealand my colleague chips me to ask. It happened in the 1990s. Comparative wages between Australia and New Zealand were almost identical at the end of the 1980s. The 1990s were the period that produced the gap. Who was it who said that we could bring that gap down? Well I think the Government engaged Don Brash in a 2025 Taskforce. Did members know that he is so productive that he spent 3 years of his salary in 1 year? That is pretty amazing. The Government set aside a certain amount to fund his salary as the head of the 2025 Taskforce and he managed to spend it all in 12 months. Well that is very productive from his point of view but no one else’s. 
The next question is immigration policy and practice and we all know that that is directly relevant. The there is “Measuring productivity in the service sector …”. That is a serious challenge. How do we measure a teacher’s output compared with that of a dairy worker for example? They are difficult questions but all of these issues were put on the table by the Council of Trade Unions and Business New Zealand when they were working collaboratively with our Government. 
Next are “Productivity and the level and type of employment; The role of intermediate inputs (materials business services leased capital); Links between R&D and commercialisation;”. What did this Government do to research and development in this country? It completely gutted it. It took away the research and development tax credit that Labour had provided and it also destroyed the Fast Forward fund which would have seen some major productivity gains in our primary sectors. 
Next are “The role of institutions; The role of unions; Management styles; Organisational structure; Attitudes to business success and failure; Cyclical factors; Cultural factors; Distribution of productivity gains; The role of social development; and Robustness of assumptions in models.” The point is that the Government simply has not been prepared to listen to the combined voice of Business New Zealand and the Council of Trade Unions because it has this absolute shuttered view of the engagement that is required in order to bring about these changes. 
I put forward three amendments. One was about the definition of well-being being extended into the wider area of equity and another was seeing the Productivity Commission as the portal through which anyone can enter the productivity realm from the micro level to the macro level. I thought the Government would have seen that as a major advantage rather than as a disadvantage. And the final one was to embed those principles of social partnership into the work of the Productivity Commission. I was criticised for the amendments on the basis that they sought to narrow the focus of the commission. But in fact it was the opposite. I sought to ensure that the importance of the workplace was not lost. I have a real fear that the Government only speaks to it and that it never ever is able to deliver on it because it just cannot let go of its old-fashioned view of what is an important part of the equation which is the workplace. 
Process is important. I turn to the process of the appointments so far. There has been only one appointment to this commission. Before the legislation has even gone through we already have a chair-designate of the Productivity Commission. That process does not engender confidence on this side of the House. I will not comment on the individual himself but he is not somebody I personally would have chosen. I hope the remainder of the appointments do ensure balance and reflect that concept of social partnership because I believe that it is absolutely critical to the success of the Productivity Commission. But to receive a letter on a Thursday telling us that the Government will announce an appointment on the following Tuesday is simply intolerable and does not reflect very well on the Government’s process. 
Finally I again place on record my thanks to Gary Banks for travelling to New Zealand and for providing such a good analysis for us to consider of how the Australian Productivity Commission has developed into an independent authoritative voice on productivity. I think his ongoing support and offer of cooperation across the ditch is very welcome and it is welcome on both sides of the House. When Labour is in Government we will take him up on his offer and we will ensure that the New Zealand Productivity Commission works as collaboratively as possible with the Australian Productivity Commission. I still believe that it will be possible to merge the two operations at some point. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to support the third reading of the New Zealand Productivity Commission Bill. After listening to the previous speech by Lianne Dalziel one would think that member was voting against the bill. The Commerce Committee broadly agreed with the general principles of the direction of the bill although some amendments were proposed tonight that were sent from the union headquarters to Ms Dalziel and went against a lot of what was discussed at the committee. 
This bill is about providing analysis and advice on productivity-related matters in New Zealand. The Productivity Commission will be tasked with bringing that to bear in terms of not just workplace productivity but also issues wider than that. It is about processes and systems it is about technology and it is about people. We listened tonight to the speakers opposite and we heard a lot about social partnerships. But no this is about productivity. We took a general approach to clause 7 “Purpose of Commission” recommending that the clause be amended by adding the words: “having regard to a wide range of communities of interest …”. That would mean that there would not be one model that we would rely on. Everyone agreed upon that yet we had an amendment tonight. 
The committee looked at the functions of the commission and removed the emphasis on regulation. We placed more emphasis on holding inquiries and reporting to the relevant Ministers. The commission will be tasked with more than just workplace productivity. 
The biggest amendment that we considered as a committee was in respect of the terms of reference relating to consultation between the relevant Minister and the commission. It would not include the unions and it would not include Business New Zealand because it is about getting the terms of reference that are important. 
I commend this bill to the House. It will increase productivity and it is another step in the right direction for this Government. Thank you. 
Hon SHANE JONES (Labour) 
: 
Tena koe Mr Assistant Speaker Barker. I preface this 10-minute speech by reminding members on the other side of the House and in particular Tau Henare of a famous proverb from where we both hail from: “Small though the dogfish may be large is its volume and wake inversely related to the multitudes”. 
I speak on behalf of the 20 members. I alert the House and those New Zealanders who were watching the previous speaker Peseta Sam Lotu-Iiga that his seat is Maungakiekie. To Ngapuhi “kiekie” is the cry of the morepork. A certain sort of sleepy tired jaded character is reflected in the faces of our fellow colleagues on the other side of the House. 
I see Simon Power sitting there. We know that shortly he will be looking at productivity. I have no doubt that while he is away he will contemplate what can be done to improve Gerry Brownlee’s conception of productivity. What can be done to improve his numeracy in terms of how to count days during the months in the entire year’s calendar so that we do not have this pile-up at the end of the year which is something of an outrage in the context of productivity? 
An important part of productivity which this bill in its far-ranging writ will have the chance to study is the impact on our constitution and its relationship with the economy. This evening the constitution has been upheld as a consequence of members from that side of the House remaining here in Te Upoko o Te Ika Wellington right up to 10 or 20 past 9. I am sure that when future statisticians look at metrics for defining how extensive productivity has been tonight— 
Hon Trevor Mallard 
: Just till the plane’s gone. 
Hon SHANE JONES 
: Ha ha! Before I finish talking about the connection between the constitution and productivity I will look at productivity statistics in the airline industry and whether there is scope for the airline industry to delay the departure of flights out of the head of the fish to the tail of the fish. I wonder whether the industry will build into its cost measures a reward for the members on that side of the House who are unwilling to challenge the foolishness of their Leader of the House and have along with a number of us enjoyed a Saturday right into the wee hours since Thursday. That Thursday will always be memorialised by the connection between my relation Tau Henare and a banana. 
Hon Tau Henare 
: Ha ha! 
Hon SHANE JONES 
: I want it noted that that laugh is not an accurate reflection on the glum expression from the other side of the House. 
Hon Trevor Mallard 
: Well I think it’s a question of where he put the banana. 
Hon SHANE JONES 
: No after my year I will not go in that direction. 
Simon Power just stood up. I want the House to know about Simon Power’s township of Marton. Whenever he misbehaves we will give the Maori name for his township which is Tutaenui and let him know that a lot of his korero and a lot of his behaviour may actually be informed by the Maori name for that township. 
Anyhow I come back to some of the reasons why this side of the House will vote for the New Zealand Productivity Commission Bill. We want Rodney Hide to take this bill forward and make a success of it because no one on that side of the House is actually generating a fresh set of ideas that will create jobs incentivise investment or pick up the young people leaving school or polytech and place them in the labour market so they can get some practical skills to begin earning a living. Under current policies not only will they struggle to generate enough earnings from a substandard education but they are unlikely ever to own their own homes. 
I have just seen a vision of two mangrove berries in the face of the member from the Hauraki district; that is actually inversely related to productivity. 
Another thing we are hoping the Minister will pick up on is that when the members of the new Productivity Commission are chosen they will have tenacity they will show resilience and they will be prepared to turn up for work day after day hour after hour minute after minute and ensure that the integrity of this institution—the highest court in Parliament—is actually upheld and that speeches are made that consume the last possible minute so that not a skerrick or a sliver of the time allotted is squandered. That is why we will be supporting this bill pertaining to productivity. 
We will also be looking forward to see whether some members on the Government side of the House will actually be looking for jobs on the Productivity Commission after the next election. I am prepared to appeal to Mr Mallard given that he is likely to be the responsible Minister appointing the characters to the Productivity Commission. I am prepared to appeal on behalf of some. [ 
Interruption 
] Well I have to tell the member from the Coromandel district that Hosea’s tongue looks a lot better than that. When he does the haka one can actually see that it is an icon of cultural prestige. 
That member from Coromandel looks as if she is sitting too close to the Minister of Agriculture who needs a dose of productivity. That man has enraged the most powerful and frightening businessman in Auckland who is known as Michael Stiassny. The Minister has gone out of his way to potentially ruin the international meat export industry by focusing his finicky level of interest on unnecessary rules and harsh regulations and he has alienated the community that Michael Stiassny comes from. Not only has he caused the Crown to incur a bill that is somewhere near $400000 or $500000 but he is living proof of why this Productivity Commission is needed. Virtually every agricultural thing he has become involved in—horticultural as well—will need a massive dose of productivity. 
We look forward to working constructively with our colleagues on the other side of the House and being open and candid with them so they know our views about the types of people who ought to be appointed to the Productivity Commission. We do not really want to conceal any information from them. We do not want to obfuscate; we do not want to mislead them so that they may think their prospects are worse or better. All Mr Mallard has done is isolate the number of people who have waited this late in the evening to contribute to the debate. We are suitably impressed to see Mr Quinn and a host of others here at this fatefully late hour. 
Coming back to the New Zealand Productivity Commission Bill we look forward to seeing the types of reports that will lie upon the Table of the House of Representatives after they have been commissioned and come via the responsible Minister. We hope a number of those reports are generated from firms and actual investors in the economy because they need an avenue to bring forward their concerns given that the ears of the current Ministers are blocked. They know that jobs are not emerging that debt remains a problem and that capital formation is still a weakness in the economy. 
That may be possible through this Productivity Commission which we have helped to come into being by ensuring that a large number of the Government Ministers and Government members of the House have remained here for this 72-hour Thursday. We are particularly impressed with their tenacity. Although they may entertain rather uncharitable thoughts about how many of us have remained on I just finish by reminding them—in particular my relation Tau Henare—of the korero “Small though the dogfish the pioke may be large is its volume and wake as it makes progress”. Progress does not depend on multitudes of numbers. Kia ora tatou. 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. I must say it is a pleasure to speak to such a full House this evening and some could unkindly suggest that such a good turn-out from Government members suggests they might have too few opportunities for entertainment on a Saturday night and too little else to do with their lives. But I am sure that that is not the case. 
The New Zealand Productivity Commission Bill is a bill that the Green Party would have liked to support but there are two compelling reasons why we could not. One of those was that the bill particularly in its original drafting was clearly intended to be a tool of the Minister of Finance a creature of the Minister. It was clear from the language about the direction or the frame of the terms of reference that the notion of independence would have not been real. To be fair the bill has improved in that regard considerably. 
For the second and I think compelling reason not to support this bill one can reflect on the last contribution from the chair of the Commerce Committee Lianne Dalziel. In 10 minutes she gave a very succinct and very powerful analysis of many of the reasons for low productivity in this country. The reality is that we actually know the reasons and we know the problems and we also have a handle on some of the potential solutions so arguably the last thing we need is another Government body to do research. That might be a useful addition at some point but there are a great many things we could do in the meantime that do not require $5 million a year 25 public servants and extended investigations to do. 
It has been noted that there is some irony in the fact that the solution to the perceived problem of lack of productivity has been a legislative—or indeed a bureaucratic—solution to what is seen as an economic or social problem. It is just ironic that that has come from the party that is so overtly the party of pro-business anti-Government one might say. 
One of our major concerns with the wording and content of the bill is the lack of prescription about what the Productivity Commission ought to do. That is a two-edged sword. The lack of prescription the very broad-brush statements about the purpose and capacity of the commission could be a form of freedom and it could indeed create an opportunity for the commission to do wide work across a wide range of topics and a wide range of communities; it could do a great deal of innovative and creative work. But in the absence of any requirement for it to do that the very breadth of those statements the very breadth of the purpose could equally as well make this commission the creature of the Minister. 
Nowhere in the bill unlike in the Australian example—and we have heard a great deal about the extent to which this commission and this legislation is modelled on the Australian example—do we see reference to regional development. Critically we see nothing about ecological sustainability which is one of the requirements in front of the Australian Productivity Commission. There are statements in the Australian legislation that talk about overcoming indigenous disadvantage about ecological sustainability and about promoting the understanding of issues bearing on community living standards. 
Those are serious and major issues which could as well be confronted and dealt with in New Zealand as the Australian commission is required to deal with them. It would be a very brave and a very well-resourced commission that would undertake investigation into something like overcoming indigenous disadvantage in New Zealand. It would require significant resources. It would require the blessing of the Minister at least. We feel very strongly that in the realpolitik world no such mandate would be given no such capacity would be allowed to the commission to do that necessary and useful work. 
It is interesting that there is no definition of productivity in the bill and we know that that word is amenable to a whole range of definitions. In the briefing papers made available to the select committee there was a notion that productivity was intended to be defined broadly to capture effectiveness efficiency and innovation. Clearly innovation is a critical factor in turning round our economy in creating more well-being and in getting some sustainable growth. Productivity is one of the issues that will inform that. Innovation can come from large organisations. It very often comes from quite small very tight well-driven and well-managed organisations. There are lots of examples of it within the small-business enterprise sector. 
John Hayes 
: Get on with it. 
DAVID CLENDON 
: I tell Mr Hayes that 10 minutes has been allotted. I understand his enthusiasm to leave but I ask him to please bear with me. 
There are some inspired tinkerers in this country. We have the likes of Mr John Britten the late-lamented Mr Britten. There have been numerous examples where very talented individuals have created opportunities have created work and have created benefits in this country. 
In talking about the need for the commission it is interesting to reflect on some of the statistics about labour productivity that came from Statistics New Zealand earlier this year. It is interesting to note that between 1986 and 2008 New Zealand’s labour productivity overall grew faster than Australia’s to the extent that New Zealand over that time saw something like 2.5 percent growth in labour productivity whereas in Australia it was 2.1 percent. 
When one drills down into those numbers a little one finds the trap of “averaging” of course. We know that New Zealand’s productivity grew 3.2 percent a year compared with Australia’s 2 percent between 1986 and 1996. The situation reversed somewhat from 1996 to 2008 where New Zealand’s labour productivity dropped to 1.9 percent and grew in Australia to some 2.3 percent. We can engage with some of the potential explanations for that turn-round and they have been touched on earlier this evening—for example the fact that in the 1980s we saw massive unemployment emerge in this country. That is one way to increase productivity but it is not a useful way it is not a sustainable way and it is not a way we ought to emulate or go back to. 
Peter Maire former chief executive of Navman one of New Zealand’s major technology company successes has identified the value of and the fact that the old Public Service the old much-maligned Public Service actually had a major role in providing skills for the economy. A great many of the people we now find working on superyachts and in the manufacture of high-quality superyachts in New Zealand owe their basic training to the Navy. There are still people in senior positions in Telecom in Gen-i who did their basic training with the old Post Office. Nowhere in our economy have we got those same large-scale training grounds. That is leading to a fall-off in our skills base especially in the technology area. 
In the 1990s in New Zealand—about the point that the relative growth in productivity changed between New Zealand and Australia—there was a deliberate and sustained effort to drive down incomes in New Zealand to cut salaries wages and benefits. At the same time Australia invested heavily in labour programmes and in easing out and building strength into the economy in a way that did not happen in New Zealand. 
I have made the point that we know what some of the solutions to the problem are already. We do not need long-winded investigations. At this point it is hard to see the necessity to establish an organisation that is dedicated to finding out what the problem is. We already know what many of the problems are. Under-investment in research is a major difficulty in this country. We continue to be burdened. Our education sector has a millstone around its neck which is called the Performance-based Research Fund. It rewards academics who do research that can get published in esoteric international journals but it positively punishes academics who do work that is of practical value here in New Zealand. Academics who undertake practical grounded research that informs practice in New Zealand are not rewarded whilst academics who do esoteric research get published in a journal that may be read by 20 people around the world—that is being rewarded in a way that other things are not. 
I will comment briefly on the appointment of the chair of the commission. We do wonder why the Government would appoint a chair before the legislation has been passed. That man has a long and honourable career; he has a 35-year career in the Public Service. But one wonders why the Government would put at the head of a commission that will require new thinking innovation and engagement critically with the private sector and with the business sector a person who is heading towards the end of his career with 35 years in the Reserve Bank Treasury and briefly in the Ministry of Agriculture and Forestry. Where is the skill set that will develop a culture of innovation of challenge? Because that critically is what a Productivity Commissioner will need. It will need someone who will push the boundaries—who will break the boundaries. With all due respect to a long and honourable career in the Public Service that is not where I would have gone searching for such a leader. For those many reasons we will not support the bill. 
HILARY CALVERT (ACT) 
: 
 It is with great pleasure that I rise on behalf of the ACT Party to support the New Zealand Productivity Commission Bill. This bill is a direct result of the confidence and supply agreement between ACT and National. I look forward to seeing this bill pass and the commission begin its work in 2011. 
KATRINA SHANKS (National) 
: 
 It is with pleasure that I commend the New Zealand Productivity Commission Bill to the House tonight. Thank you. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is an honour to be here in front of such an appreciative audience tonight. It is quite interesting from this side of the House to reflect upon which National members are here tonight. I know that I cannot reflect upon who is not here tonight but it is quite interesting to reflect upon who is here tonight and where they might fit in certain different factions within that party. We also have those sitting on the front bench which is perhaps a window to the future of the National Government. Sandra Goudie finally has been recognised and promoted to the front bench—it has finally happened. At the other end of the front bench we have Tau Henare. Finally his merit and effort have been recognised once more. He is in Judith Collin’s seat on the front bench. He is replicating Judith’s hard-hitting fighting style. No he is actually dead—oh no he is alive. There he is he has come back. 
With regard to the Productivity Commission I must say what a productive Opposition we are tonight. If we look at Labour’s input on this side versus our output we see that we are a very productive Opposition. I am not sure about the Government members over there though; there are a lot of people there. I understand that for those members of the Government who have to stay in Wellington tonight and are not able to get home there is a party at Chris Finlayson’s house. A party is happening at Chris Finlayson’s house tonight as it is every night. That is what is happening tonight. 
I am very pleased to speak on the New Zealand Productivity Commission Bill— 
Hon Tau Henare 
: We’ve got families to go home to. 
GRANT ROBERTSON 
: So have I I say to Mr Henare—so have I. I tell Mr Henare that I can speak very slowly for a very long time. This bill is excellent legislation. On this side of the House we are very proud to support it. I give credit in particular to the Ministers involved Rodney Hide and Bill English and to my colleague Lianne Dalziel the chair of the Commerce Committee. They have done an excellent job in bringing this bill before the House. 
There is much in this bill that I would like to see changed. But in principle the idea that we might have a Productivity Commission in New Zealand is a very good one because productivity challenges have bedevilled this country for a very long time. Despite setting up a Productivity Commission—I ask Mr Henare whether there is any gin in the glass he has just given me; I also ask whether those members over there have blankets—there is still no plan for productivity though is there? There is still no plan for productivity from this Government. There is still no plan to increase skills. There is still no plan to invest in research. 
The Government has managed to get the commission up and running but there is nothing for the commission to do is there if it is about the agenda from that side of the House. Members on this side of the House proposed amendments tonight that would have improved this commission. They would have put a social partnership model in the bill. That would have had Business New Zealand and the Council of Trade Unions at the table but those amendments were rejected tonight by the National Government. The amendments were rejected because those members are not here for a social partnership. They are not here to build the productive economy with those people at the table. It is the big end of town or no one if it is from that side of the House. 
This Productivity Commission deserves a durable model. It deserves to have a model a mandate and terms of reference that will survive the inevitable end of this Government and the arrival of a Labour Government. That is what this Productivity Commission should look like. At the moment it lacks some key elements. It lacks an ability for social partners to be at the table. It lacks the broad mandate it needs to allow it to undertake practical productive projects. 
Hon Hekia Parata 
: We’re talking about the bill now. 
GRANT ROBERTSON 
: I am talking about the bill I say to Ms Parata. That is right I can do this all night. The Productivity Commission is indeed a great idea but it lacks the mandate and the terms of reference that would allow it to undertake practical projects in the productivity area. 
The Productivity Commission also lacks the mandate to spread out to look at a range of issues beyond those that members on that side of the House might want it to look at at the moment. I share the concern that David Clendon raised about the lack of a focus on environmental sustainability. 
Chester Borrows 
: You don’t sound concerned. 
GRANT ROBERTSON 
: The sow crate is outside I say to Chester. It is OK; the member can go out there now. We on this side of the House also have the concern that the Productivity Commission needs to be able to look at issues of environmental sustainability. The Australian Productivity Commission is the model and that is what it is able to do. It has produced a series of independent reports. That is exactly what the New Zealand body should be able to do. 
Labour has concerns about the membership of the commission. We have concerns about that because as Lianne Dalziel has pointed out the process for the appointment of the chair has not been a good one. Murray Sherwin is a very competent public servant but he is not the person who will be ambitious for New Zealand—he will not be the person to drive the economy forward and close the wage gap with Australia. The National Government needed to be far more inventive than that. 
Hon Tau Henare 
: Who is? Andrew Little? 
GRANT ROBERTSON 
: Well it will not be Tau Henare. One thing I can say is that it will not be Tau Henare. This commission needs people on it who are reflective of New Zealand and New Zealanders beyond the big end of town bringing the social partners to the table. That is what will make this Productivity Commission work. 
Members on this side of the House can support the bill and say that yes this is a good idea. This is something that Rodney Hide and Lianne Dalziel have worked on extensively together; this is something that we can all believe will do good things for us. But to be a durable model—to be something that will survive changes of Government—it needs a broader mandate. It needs to be an inclusive commission and we will be watching very closely to make sure that happens. 
In conclusion I say that it has been a rare pleasure to be greeted by the National caucus in such great numbers tonight. Those members’ enthusiasm for the Productivity Commission— 
Hon Trevor Mallard 
: Spirited. 
GRANT ROBERTSON 
: —that is right—knows no bounds whatsoever. Even Paul Quinn has woken up. This has been a fine occasion a fine evening and as the clock ticks past 9 o’clock Labour has achieved its goal. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I think that a very productive speech should be of high quality and delivered in a short period of time. The previous speaker Grant Robertson failed on both but he did try hard. This is a great bill. I commend it to the House. Thank you very much. 
A party vote was called for on the question  
That the New Zealand Productivity Commission Bill be now read a third time. 
Ayes 81 
New Zealand National 58; New Zealand Labour 18; ACT New Zealand 4; United Future 1. 
Noes 4 
Green Party 4. 
Bill read a third time. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Members before I close the House I am sure you would all like me to say thank you on your behalf to the Hansard reporters the Clerk’s officers the messengers Bellamy’s staff security officials and everyone else. On behalf of the presiding officers I would like to thank all members for their good humour and perseverance. I wish you all a safe trip home.