Dalziel Lianne: New Zealand Productivity Commission Bill — First Reading 
Dalziel Lianne: New Zealand Productivity Commission Bill — First Reading 
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Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I rise to advise the House that the Labour Opposition will support the New Zealand Productivity Commission Bill going to a select committee. However we will use this first reading debate to indicate to the Government the changes that we would like to see occur with the legislation in order for us to support it beyond a select committee. I hope we are able to achieve the changes that we want to see occur with this legislation because as the Minister of Finance stated in his introductory comments those of us on this side of the House who have played a role in economic policy commerce policy and regulatory responsibility have taken the view that one of the areas of commonality between New Zealand and Australia that we could use as a platform for mutual growth is a shared productivity commission on a trans-Tasman basis. The Australian Productivity Commission is something that I hold in very high regard. I have said on more than one occasion that I would have liked to see that as a core focus of any Government’s agenda and build up that relationship into a single focus on how we engage with our closest neighbours on improving productivity right across the board. 
This bill has an underlying flaw and that is probably in its genesis. When the Prime Minister stated after the last election in his promise to be ambitious for New Zealand that we should catch up with Australia I think there were some people who felt that that actually lacked ambition in its own right. But here we have an opportunity to catch up with Australia and we are missing the boat a wee bit in that regard. 
The Prime Minister agreed as part of the confidence and supply agreement with the ACT Party to look at the concept of a Productivity Commission. I think justifiably the Minister of Finance has paid tribute to the Hon Rodney Hide as the Minister for Regulatory Reform for promoting this as part of the confidence and supply agreement and then delivering on that in joint signatures to Cabinet papers with the Minister of Finance. I do not think it is fair to not give him full credit for that because I do not think that the Government would have introduced this legislation without the work of the Hon Rodney Hide. I certainly pay tribute to him for that. 
The 2025 Taskforce on the other hand which is led by Don Brash was given the task of the “catch up with Australia” part of the deal. It seemed a rather odd appointment to me. I do not know whether anyone else thought it was strange that one would appoint to that role the person who was the Governor of the Reserve Bank at the time that the gap was created. Why one would put him in charge of the 2025 Taskforce to reduce the gap between New Zealand and Australia seemed absolutely bizarre to me. 
When we look at all of the proposals that have been put forward in the first report to the Government from the 2025 Taskforce led by Don Brash we see that it is even more surprising because they are designed to take us further and further away from catching up with Australia. So it was not surprising to me when I read the Cabinet papers behind this bill that I found a very clear distancing between the proposal to have a Productivity Commission and the 2025 Taskforce. We are told in the Cabinet papers that they are in fact quite different. Let me quote the first Cabinet paper: “This work is distinct from the 2025 Taskforce. It is envisaged that a possible New Zealand Productivity Commission would be a permanent institution that carries out reviews and inquiries (and potentially other functions identified in the further analysis) based on a work plan agreed by the Government. The taskforce is an independent group of experts appointed for a three-year term to advise the Government on policies and institutions that will assist in closing the income gap with Australia by 2025.” 
The distinction that they are drawing is between having a work plan agreed by the Government which means that the Government gets to set the agenda for the Productivity Commission but the task force can do or say anything it likes and the Government can completely ignore it. Of course the Government is doing exactly that and I think I know why. When I picked up the  
Dominion Post  
last week on 16 July 2010 I found this headline: “Brash blows fees budget”. That is because he does not know anything at all about productivity. He has managed to spend the entire 3-year budget for his meeting fees in just 1 year. I do not know—how good is that! Don Brash is in this role and his meeting fees budget has been absolutely blown to smithereens in the first year. It is four times the amount earmarked for his first year on the task force. I do not think that this man can teach us anything about productivity which is probably not surprising given the contribution that he made to the mess that this country found itself in after his period as the Reserve Bank governor. 
If this bill has anything to do with catching up with Australia—I would like to think that it does—why is it narrower than its Australian counterpart? That is the question we have for the Government. We do not agree with the Minister who introduced the bill that this bill has a broader mandate. In fact we are absolutely clear that it has a much narrower mandate than the Australian mandate. In that regard this is a bill that lacks ambition. It is not ambitious for New Zealand. 
Let me run through the commission’s legislative instructions in Australia—this is for the Australian Productivity Commission: to “improve the productivity and economic performance of the economy;”—there is an understanding in Australia that productivity is not a narrow aspect of the work that a Government is required to have input into; it is very broad—“reduce unnecessary regulation; encourage the development of efficient and internationally competitive Australian industries;”— well I would love the Government to have a view on encouraging the development of efficient and internationally competitive New Zealand industries—“facilitate adjustment to structural change; recognise the interests of the community generally and all those likely to be affected by its proposals; promote regional employment and development; have regard to Australia’s international commitments”—read New Zealand’s commitments—“and the trade policies of other countries;” and “ensure Australian”—read New Zealand—“industry develops in ecologically sustainable ways.” Those are the terms of reference that this side of the House would like to see for a Productivity Commission for New Zealand. I want us to catch up with Australia but I actually would like us to have a slightly more ambitious target than that. We were caught up with Australia before Don Brash was the Governor of the Reserve Bank and other changes happened. 
I conclude by going to the regulatory impact statement; Minister Rodney Hide knows how much I love regulatory impact statements. I just remind this House of the problem definition that the Government formulated in order to justify the establishment of a Productivity Commission. It said: “Currently the Government seeks advice on productivity-related matters from Government departments … taskforces”—not very good ones in this case—“commissions of inquiry and international organisations”. But something was needed. There was “a gap for a new and independent institution with specialised internal investigative capacity and a mandate to actively survey the views of a range of stakeholders” and “to undertake inquiries … The case for such an agency is made in the context of New Zealand’s current economic challenges. These include: regulatory settings that are believed to be constraining investment and limiting productivity growth; R&D expenditure that is below the OECD average; future limits on resource use in relation to freshwater supply marine space fisheries and the assimilative capacity of the atmosphere soil waterways and groundwater; relative low rates of participation in education and training amongst some population groups (eg some age groups socioeconomic groups and Maori and Pacific Island peoples); inadequate infrastructure in some areas and; low domestic savings and shallow equity and bond markets.” That is the aspirational level of work that we want to see for a Productivity Commission and when this bill matches that aspiration we will support it.