Robertson Grant: New Zealand Productivity Commission Bill — First Reading 
Robertson Grant: New Zealand Productivity Commission Bill — First Reading 
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GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Like other Labour speakers I note that we will be supporting the New Zealand Productivity Commission Bill being referred to a select committee. That is the extent of our support at this time and I want to go into why we are limiting our support and also to talk about some ideas for how we might be able to promote a productivity commission bill that we would support being passed all the way through the House. 
Ideally the three key elements that we need to talk about are an independent Productivity Commission a well-resourced Productivity Commission and a broadly mandated Productivity Commission. Those are the three areas where I have concerns about the current proposal. But overall Labour members want to support this bill because we share the view that has been expressed around the House today that improving the country’s productivity is critical to the future well-being of New Zealanders. 
It was interesting that in 2003 the OECD in one of its reports on New Zealand—it was looking back over a period in which both National and Labour had been governing—stated: “The mystery is why a country that seems close to best practice in most of the policies that are regarded as the key drivers of growth is nevertheless just an average performer.” The OECD went into various areas to talk about property rights the relatively small public sector compared with the rest of the world low levels of corruption low labour costs a flexible labour market and the ease of doing business in New Zealand being the second-best or best in the world through that period. All of those situations were in place in New Zealand but seemingly we could not get past what has been called by some academics as the “productivity paradox”. There are a number of reasons for that which have been talked about subsequent to that report. They are some of the kinds of issues that I think a Productivity Commission would need to take on. So this is an important aspect of the Government’s programme. 
It is somewhat ironic that a bill to create some new bureaucracy is driven by the ACT Party. Having previously heard from the ACT Party about the evils of backroom public servants and indeed from National as well it is ironic that we stand here today to promote a bill to create a new bureaucracy. Clearly backroom public servants have something to offer and I am sure we will all appreciate the work that will go into that from the Public Service. 
On that point I have some concerns about the question of resourcing. I appreciate the fact that nobody wants to add a great deal more cost on to the taxpayer to create a Productivity Commission. But simply by shuffling the money around from other agencies I am concerned about what will now not be done by those agencies and whether the Productivity Commission will be sufficiently resourced. With a budget of around $5 million to do that work as the Minister of Finance said at the start today that is questionable. David Clendon on behalf of the Greens asked whether the Productivity Commission would be able to do the things that we all want it to do. I think we need to ensure that we invest in creating a Productivity Commission that is able to undertake inquiries able to undertake studies and able to provide independent advice. We need to make sure it is resourced to do that. We cannot penny-pinch on that at the beginning because in the end it will not deliver to us in the way that we all want it to. 
A number of people have mentioned the importance of the Australian Productivity Commission its role and the breadth of its mandate. When we look at the bill and the Productivity Commission’s functions it is interesting to note that the second and third functions mentioned are all around the question of regulatory matters and they were the ones that the Minister of Finance highlighted today. 
It is vitally important that we put on the record of the House today that if this Productivity Commission is simply an exercise in deregulation and creating a smaller public sector—all of the messages that we hear consistently from the ACT Party—then it is not something that this side of the House can support. It must have a broad definition of what productivity is. 
Some people say that productivity is just output divided by hours worked—that will show how productive we are. I know that kind of definition is not the one that is understood by most people in the House today. But if we allow ourselves to be narrowed down we get drawn into debates about things that in the long term will not drive forward the economy. They will not make the economy more productive. That is understood inside the New Zealand Public Service. Both the Department of Labour and Treasury have their own areas of productivity that they believe that New Zealand should be working on. It is interesting to note that a couple of the really important areas that are picked up on by both Treasury and the Department of Labour are innovation and skills. 
I will talk about the skills matter now because the absence of a skills strategy from this Government has been one of the yawning gaps in attempts to drive forward the economy. We must have the people who are going to do that. We need a proper skills strategy and proper investment in skills and training. I would like to think that the Productivity Commission will look at the question of skills and training as one of its earlier tasks. I would like to think that it will look at workplace training the tertiary sector and secondary schools and about how we are developing a skilled workforce because that is now recognised as being one of the key drivers of productivity. We need to make sure that is included in the bill as well. 
Innovation I think is a particularly important part not only innovation in the workplace but the general place of innovation research science and technology in New Zealand. David Parker has already talked about that today. 
So those are elements of productivity that are much broader than the question of regulation. They are much broader than the question of how to shrink down the size of the State sector or the public sector. They are actually the drivers and the important issues that need to be addressed by the Productivity Commission. 
I have a concern that the level of independence of this commission as written down in this bill is not sufficient. I hope that is something that a select committee will take some time to look at to ensure that it will be able to act independently. Obviously somebody has to appoint the commissioners and that is likely to be the Government of the day. But I urge the Government of the day which is putting this bill through to ensure that a truly independent Productivity Commission is created. In order to do that it needs a broad mandate a flexible mandate— 
Hon David Parker 
: Don Brash. 
GRANT ROBERTSON 
: It will not be Don Brash at all I say to Mr Parker. 
But the Government also needs to make sure that the people who are picked as commissioners are people who are broadly acceptable to this Parliament. If the Productivity Commission is going to mean anything it needs to be able to have the confidence of this Parliament that it is truly independent. 
As my colleague Mr Parker said before it is hard to look at this bill and not see the background of the ACT Party and deregulation as its centrepiece. The Productivity Commission must be far broader than that. If we look at the Australian Productivity Commission’s instructions—my colleague Lianne Dalziel mentioned one or two of these but they bear repeating—we see that yes the Productivity Commission is to improve the productivity and economic performance of the economy and reduce regulation. But then the instructions go on to talk about efficient and internationally competitive Australian industries adjustment to structural change and regional employment and development. That is a critical element that needs to be discussed more and more in New Zealand. Under Jim Anderton’s watch regional development was given a real focus under the fifth Labour Government but that has slipped away with Gerry Brownlee’s role as the Minister for Economic Development. Trade policies are included in the instructions but here is the really interesting one: the last of the instructions ensures that Australian industry develops in ecologically sustainable ways. I echo the comments of David Clendon that we have to include that definition of sustainability and we have to debate how New Zealand can go forward as a country that continues its clean green reputation and to actually make that real. 
Hon David Parker 
: How do you do that when ACT doesn’t believe in climate change? 
GRANT ROBERTSON 
: Well that is right. There is yet again another risk of this being dominated by the ACT Party’s ideological agenda around regulation. 
This Productivity Commission needs a mandate that is both broader and more specifically outlined in law. We cannot afford to progress this bill through Parliament while leaving the definition of “productivity” and the functions as they are now. That is what Labour will focus on in the select committee. 
I conclude by saying that productivity in the State sector which will be a major focus for the Productivity Commission is not easily measured. It is pretty difficult to tell a nurse at Christchurch Hospital in the accident and emergency department to be more productive or to tell a teacher in front of a classroom to be more productive. When we look at the State sector we have to ensure that we are realistic that the outcomes we are looking for as a country—the health outcomes the education outcomes—cannot always be measured in hard-dollar terms. They cannot always be measured in ways that would suit the ACT Party. We need to have a Productivity Commission that supports and enhances New Zealanders’ well-being. 
On this side of the House we accept that a Productivity Commission is a good idea and we admire the Australian model whereby there is a broad set of areas that the Australian Productivity Commission can look into and that it is instructed to look into. We want an independent Productivity Commission that can continue to provide advice and provide advice to Government’s of all colours. But what we must not do is narrow down the agenda to that of deregulation and one party’s ideology.