Carter David: New Zealand Productivity Commission Bill — Second Reading 
Carter David: New Zealand Productivity Commission Bill — Second Reading 
[Volume:669;Page:15786] 
Hon DAVID CARTER (Minister of Agriculture) 
 on behalf of the  
Minister of Finance 
: I move  
That the New Zealand Productivity Commission Bill be now read a second time 
. This bill establishes a new institution to undertake inquiries and research into matters of vital importance to the future prosperity of this country. New Zealand’s overall welfare is dependent on improving our productivity performance in both the private and the public sectors. Improving New Zealand’s long-run productivity requires challenging conventional thinking and requires new ideas. These ideas need to be grounded in evidence and widespread community engagement. The institution that this bill establishes will be given the statutory independence required to think outside the box and the mandate and resources to provide evidence-based policy and engage widely in the course of carrying out its work. 
I would like to thank the chair and members of the Commerce Committee for delivering a timely and unanimous report. The report confirms our shared objective of setting up a New Zealand Productivity Commission that will assist future Governments with the provision of independent advice on productivity-related matters to support the overall well-being of all New Zealanders. I am informed that all submitters supported the establishment of the commission and that they provided useful suggestions and comments. It has always been our objective to ensure that the purpose of the commission is to promote the overall well-being of New Zealanders. The amendment to clause 7 clarifies our objective by ensuring that the commission be open to a wide range of perspectives in undertaking its functions. The committee’s proposed changes to strengthen this objective are therefore supported by the Government. 
In relation to the focus of the commission I want to clarify that the intention of this Government is to allow the commission to cover a very broad range of productivity-related matters. Some submitters were concerned that the references to regulation in the functions gave undue emphasis to the commission’s role of considering productivity issues that arise out of how we regulate. Clearly improving regulatory quality is an important objective of this Government. Regulation that stifles productivity and growth must be reformed and we expect that the commission will be asked to undertake inquiries into regulatory matters from time to time. However opportunities to improve New Zealand’s productivity performance will arise in a wide range of areas and for that reason the Government supports the select committee’s recommendation to specify only the commission’s general inquiry function in clause 9(1)(a) to remove any misconceptions that the commission is primarily focused on regulation. 
The Government will determine what inquiries the commission will carry out although the commission can on its own resolve undertake research and promote public understanding of productivity-related matters. Although inquiries are determined by the Government the commission is independent regarding how it carries them out. That balance which is the key feature of the Australian Productivity Commission on which the New Zealand Commission is modelled is seen as a major contributing factor to the success of this type of institution. The committee has proposed some amendments to the bill in particular a requirement that the responsible Minister consult the commission in the draft terms of reference. We agree with this recommendation as it reflects what we expect would happen in any event and reinforces the balance that we wish to strike. The committee has also recommended that the bill include an explicit ability for the commission to issue draft reports. Again we expect that the commission would do that in any event as the experience with the Australian Productivity Commission is that that is an important part of the inquiry process. We agree that giving the commission an explicit ability reinforces an expectation that it will issue and receive submissions on draft reports wherever practical. 
The report of the Commerce Committee clearly demonstrates the widespread community support for the establishment of a New Zealand Productivity Commission. Since the bill was referred to the Commerce Committee the Government has selected Mr Murray Sherwin as chair designate. In his role as chair designate Mr Sherwin will be assisting officials with the establishment of the commission and he has chaired the appointment panel for the remaining commissioners. Progressing the appointments process in parallel with the legislation ensures that the commission will be operational on 1 April 2011. Once again I thank the select committee members for the work they have done on this bill. We look forward to the passage of the bill and the establishment of the Productivity Commission.