Cautious backing for productivity commission

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A productivity commission that will run the ruler over government departments has been given a cautious welcome by the public servants' union.

Details of how the commission will work have yet to be thrashed out, but Finance Minister Bill English's office said it would be based on the Australian commission that has operated since 1998.

That body covers the whole economy, but has a specific role in preparing regular reports on efficiency, effectiveness and service delivery in government agencies.

Public Service Association national secretary Brenda Pilott said a similar body in New Zealand would help monitor performance, but would need a clear definition of how state sector productivity should be measured.

"You can look at a company that produces machines ... you can't apply that in the same kind of way to the state sector, where there are more complicated outputs and outcomes that they're looking to deliver, and they're not necessarily looking to produce things at the cheapest rate."

The Government is poised to announce the creation of the commission – part of a confidence and supply agreement with ACT – this month.

Mr English's office said it would support "the goals of higher productivity growth across the economy and improvements in the quality of regulation".

It would "work closely with and be closely modelled on" the Australian commission, which is a research, advisory and performance monitoring agency that covers economic, social and environmental issues.

Prime Minister John Key said on Monday the commission in New Zealand would be mostly focused on the public sector, suggesting it will play a role in looming reforms.

The Government is considering merging agencies and sharing more back office services between departments, but has yet to determine how much money will be saved or how many jobs lost.

Final decisions are expected on Monday.

Ms Pilott said the commission could fill a gap in how public sector productivity was measured, something the PSA had been lobbying for.

Labour finance spokesman David Cunliffe said there was merit in having a commission, but Labour would want to carefully scrutinise what it was measuring and how.

- © Fairfax NZ News