Dalziel Lianne: New Zealand Productivity Commission Bill — In Committee Third Reading 
Text is incorporated into the Bound Volume 
Dalziel Lianne: New Zealand Productivity Commission Bill — In Committee Third Reading 
[Sitting date: 09 December 2010. Volume:669;Page:16355. Text is incorporated into the Bound Volume.] 
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.