Productivity Commission in place next year

A commission charged with finding ways to boost productivity and economic performance will be in place from next year, the Government has announced.

Finance Minister Bill English and Act leader Rodney Hide said the Productivity Commission would have a set up cost of $2.35 million and a budget of more than $5 million a year from 2012.

It was expected to conduct three reviews a year into issues including the impact of regulations on the economy and the performance of regulatory agencies.

It would be funded by drawing on the budgets for productivity-related work already being done by 29 government departments, and would have four part-time commissioners and a staff of around 21.

Mr English said decisions on who would be appointed as commissioners were yet to be finalised, but most of the staff were likely to be seconded from departments.

The commission – which National agreed to consider as part of the confidence and supply agreement with Act - will be independent from the Government and legislation setting it up would be in place by the end of this year. It will report to Parliament, but the Government would not be required to act on any of its recommendations.

As Fairfax reported last week, the commission would be closely modelled on the Australian body of the same name, which has been operating since 1998.

But it appears it will have a more narrow brief than the Australian commission, which conducts research and reviews into social and environmental issues as well as economic.

Mr English said the New Zealand version would cover the whole economy, including the public sector, and its work would include reporting on measures to boost economic growth and create jobs.

“This will require work across the board – and that’s why the Government will give the commission wide scope in terms of the issues it directs it to consider.”

Mr Hide said the New Zealand commission would work closely with the Australian one, drawing on relevant research done across the Tasman and at times cooperating in Australasian-wide reviews.

Figures out from Statistics NZ this week showed Labour productivity – the ratio of production to hours worked – fell by 1.5 per cent in the year to March 2009.

- © Fairfax NZ News