Clendon David: New Zealand Productivity Commission Bill — First Reading 
Clendon David: New Zealand Productivity Commission Bill — First Reading 
[Volume:665;Page:12637] 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. The establishment of the Productivity Commission which we are debating in the New Zealand Productivity Commission Bill’s first reading today has been proposed by the Government in fulfilment of its confidence and supply deal with one of its support parties the ACT Party. It is entirely appropriate that the Government should honour a promise to a support party. We are told that the proposal will initially cost something over $2 million to establish and there will be an ongoing cost of some $5 million annually. From our view it is difficult to assess how expenditure at that level would generate much value to taxpayer of New Zealand given the proposed structure purpose and functioning of this commission. Regrettably we do not share the expectation or the hope expressed by the Labour Party that this bill could be amended and melded into something that would achieve some value purpose or positive outcomes for the taxpayer. 
Clause 7 tells us that the purpose of the commission will be to provide advice to the Government on improving productivity in a way that is directed to supporting the overall well-being of New Zealanders. It is a very short purpose that perhaps obscures as much as it reveals unlike the equivalent Australian body the Australian Productivity Commission which has been referred to. That body is tasked with fulfilling a much more comprehensively stated and better-developed purpose. This proposed organisation could simply be used as a mechanism to stifle some important regulatory change before parliamentary consideration. It could serve to actively promote cutbacks to Government spending with very little reference to long-term social economic or environmental cost. It could reinforce outmoded destructive and well-discredited neo-liberal approaches to economic growth. In the absence of a much more clearly defined purpose this bill will ironically simply create a new bureaucracy—a bureaucracy that could become little more than a publicly funded think tank for ACT Party policy and the advancement of that policy. 
In our darker moments we in the Greens considered whether it would be a good thing to have a well-funded well-resourced think tank with some millions of dollars from the public purse to further develop and advocate for Green Party policy. However our moral compass would deny us such a thing. It would preclude such an abuse of proper process and so too it should exclude the establishment of this proposed commission. We are told by Treasury in the summary to this document that the need for the Government to receive advice on productivity-related matters is not questioned and that the question is solely whether the source of that advice should be a new agency that is statutorily independent. The question of independence is a troubling one in the context of this bill. 
We are told that the design of the commission has been heavily influenced by the Australian Productivity Commission. There are certainly similarities but there are also some significant and interesting omissions from the current bill. For example the Australian Productivity Commission is obliged to recognise the interests of the community generally and all of those likely to be affected by its proposals. That is quite a powerful constraint on the Australian Productivity Commission obliging it to be much more focused than a New Zealand commission charged only with a quite amorphous and undefined obligation to support something called “overall well-being”. The Australian Productivity Commission is required to promote regional employment and development. Although a similar expectation might be implied from the text of this bill there is nothing that requires it to specifically address regional or provincial opportunities or concerns. 
A list of some 20-odd matters is described in the explanatory note to the bill that the commission may investigate or look into and natural resources including sustainability is one of those. The word “sustainable” does not otherwise appear in this legislation. If we contrast this with the Australian Productivity Commission we see that amongst its key policies and core principles it is obliged to “ensure Australian industry develops in ecologically sustainable ways”. Rather than having a very cursory passing reference to sustainability that is more about form than substance in the Australian example there is an absolute imperative to consider ecological sustainability. The Australian commission is also obliged and required in all its reports to provide a variety of viewpoints and options representing alternative means of addressing the issues in the report. That would give reports from such a commission some real value and substance. It would present a range of options and views that are well supported well researched and well presented. Nothing in this bill indicates that we can expect any such a broad view such an engaged view from this proposed commission. 
As I said we are told that this is to be an independent agency but the provisions of the bill suggest that it must be working to a very peculiar definitional view of what constitutes independence. The three or four commissioners who would head the commission would be appointed by the Governor-General on the recommendation of the Minister of Finance. Clearly they will be beholden to the Minister for their positions as the heads of the commission. Clause 9 tells us that the functions of the commission are to carry out a range of tasks and they will be carried out on referral to the commission by the responsible Minister in conjunction with relevant portfolio Ministers. So we have an organisation set up—manned by the Minister if you like or “personed” by the Minister—that will be given its marching orders by the Minister in terms of what it ought to investigate. We are told in clause 11 that the commission must perform its functions in accordance with a work programme which again is determined by the Minister. In the terms of reference in clause 12 the commission in carrying out its functions must act in accordance with the terms of reference set by the referring Ministers for each inquiry review and regulatory impact assessment. I fail to see any independence in a body established by the Minister when its agenda and work programme are set by the Minister and it responds to terms of reference that are also set by the Minister. 
We have heard some discussion from Mr Cunliffe about defining productivity which is a well-known well-rehearsed concept in economic terms. Interestingly though this bill does not seek to offer any definition of productivity so I ask which of the multiple definitions of productivity will it work towards. Our own statistics department which is clearly responsible for gathering information about productivity in New Zealand and for comparing and contrasting us with other countries has an interesting analysis. It offers a definition of productivity then quite usefully offers some statements about what productivity is not. The department states that productivity is not a measure of value for money. The concept is also not a measure of effectiveness it is not a measure of competitiveness or profitability and it is not a complete performance management tool. It is a very constrained a very limited mandate and a very limited definition and the commission would have an equally limited mandate—which returns us to my original point. We see this as being a very managed controlled thinktank that would be invited to present only very predictable and one-sided views. 
Rather than productivity which is a useful but also a very limited concept something we think would be of much more value and interest would be to assess the performance of our economy under the framework of sustainability. It is well proven and it is multifaceted. It is a framework that allows us to interrogate and evaluate the operation of the economy in terms of everything from the efficient use of resources through to the appropriate application and development of people skills and attitudes. It is a framework that allows us to look very closely at procurement which was mentioned earlier in the House this afternoon. It would allow us to generate whole-of-life costings rather than simply looking for the cheapest buy on any given day. It would allow us to incorporate measures and valuations of natural capital without which the rest of our economy would fail. In the absence of any consideration of the effect of economic activity on natural capital we would generate nothing but problems for ourselves. 
There is much more to be said and no doubt it will be said because it is apparent that this bill will be referred to a select committee given the support that it is getting from the House. It will be interesting to see whether the support from parties other than those in Government will be sustained when we see the final shape of this legislation. Kia ora koutou.