New Zealand Productivity Commission Bill

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.

I will respond to those amendments proposed by the member. I thank the Hon Lianne Dalziel for her work as a Minister and her commitment to improving New Zealand’s productivity, and, also, her work as the chair of the Commerce Committee and the contribution that she made there. I pick up, first of all, her proposed amendment to clause 7. The member will appreciate that the purpose clause is couched very broadly to enable the Productivity Commission to conduct inquiries and research into any productivity-related matters that will improve the welfare of New Zealand. It encompasses everything that the member’s proposed amendment includes. The proposed amendment is just another way of skinning the same cat; it does not actually change anything, and, therefore, the Government will not be agreeing to that.

Let me now deal with the Hon Lianne Dalziel’s suggested changes to clause 9(1), which relate to the functions of the commission. The first of these subclauses would appear to give the Productivity Commission new hands-on support for workplace productivity improvement projects. That would fundamentally change the character of the Productivity Commission, which is to provide independent analysis and advice on productivity-related matters. I should also note that this is specifically not a function of the Australian Productivity Commission. It would be a new and novel approach. Proposed paragraphs (e), (f), and (g) of clause 9(1) would appear to specify activities that the Productivity Commission is already able to undertake through existing clause 9(1)(b)(ii), which is to promote public understanding of productivity-related matters. The Government does not see any need to provide this level of specification in the bill.

In respect of the proposed amendment to clause 12, the bill enables the Productivity Commission to consult widely. Clause 13(1A)(b) states that the commission may “consult with any persons, bodies, organisations, and agencies it considers necessary to ensure that a wide range of views is available to the Commission to assist it in preparing its reports.” The expectation is that as an independent body it will identify those who are likely to have a particular expertise or contribution that may assist it in relation to specific inquiries referred to it. Identifying two specific bodies in the bill, such as this proposed amendment would do, is not consistent with the philosophy of widespread consultation and engagement.

In relation to proposed subclause (4) of clause 12, the Productivity Commission model is predicated on the commission having the requisite expertise to make a call on the appropriate methods and the models for its inquiries, and the approach that it takes will be amply tested through consultation that the commission may undertake, including through consulting on draft reports. This is an aspect of the bill that was strengthened by the select committee, for which I do thank the honourable member. I thank her very much for the contribution.

In recent times I have come to the House and railed against bits of legislation. I have been saying, in particular, that this is no way to run a country. The New Zealand Productivity Commission Bill, however, I am really pleased to speak to, because I think it is a good way to run a country. I think the bill will provide for the possibility of independent and contestable advice being given on one of the issues that has dogged us for at least the last decade and a half, as we have wrestled with New Zealand’s underperforming productivity.

This is an area that I have been involved in intimately in my life before I came into Parliament. We were constantly looking at how to make the provision of services in the health sector, in that instance, more efficient and effective, and more productive, by the association jointly of employers and employees in the workplace: by the association of professional health practitioners, service providers, and the managers of the district health boards or the entities that preceded them.

The issue of productivity has been vexing this country for some time, and no Government has been able to crack it in a sustainable way. That is why we are pleased to join with the Government on this bill, especially as it has now had its purpose expanded by the work of the Commerce Committee. I commend all members of the select committee, including my colleague the chairperson, who has put a lot of work into making sure that this legislation hits all the right buttons. This model is a very good one for working through issues that are beyond political tribalism. I can be as tribal as the next person. I know where my politics come from; I know what I believe. But this is one of those things, one of those moments, where it is entirely possible, and not beyond the wit of this Chamber, to come up with a system and a process that benefits New Zealand and has the fundamental well-being of New Zealand at heart.

The fact that the purpose of the New Zealand Productivity Commission was expanded by the select committee is a good thing. Notwithstanding the Minister’s comments just now on my colleague Lianne Dalziel’s amendment to clause 7, it is good that the purpose has been expanded to include the words “having regard to a wide range of communities of interest and population groups in New Zealand society.” I think also that there is merit in my colleague’s amendment that states: “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 …”. I think the addition of those words would simply strengthen the legislation and strengthen the purpose of the commission.

Beyond that, given that I understand that the Minister has signalled that that amendment will not succeed, I ask that he looks at my colleague Lianne Dalziel’s amendment to clause 12. Here, we come to the heart of the matter. Lianne Dalziel has proposed a new subclause (1B), which states: “In setting the terms of reference for an inquiry the referring Ministers”—not the commission, I say to the Minister, but the referring Ministers—“must first consult with Business New Zealand and the Council of Trade Unions to ensure that the concept of social partnership is embedded in the work of the Productivity Commission.” This is where we get to why this is a particularly good model. If we have peak organisations in this country that equally have a vested interest in productivity, why do we not combine their efforts and their common interests in what has been, since the 1980s, called social partnership?

The previous Labour Government attempted to embed a modus operandi, in our 9 years in Government, of social partnership. I commend it to the National Government, not because it is something we supported but because it is something that would benefit and create some stability for all New Zealanders. There are some issues where we do not need to have policy swings from one end of the spectrum to the other with any change of Government, and this is one of them. We are as concerned about New Zealand’s productivity as the members opposite. I do not doubt their concern about it, and I hope that they do not doubt ours. If we are to ensure that the greatest productivity can be extracted, for the best possible outcome—that is, the well-being of, and the equitable distribution of the benefits of productivity across, New Zealanders for the sake of everybody’s advancement—then this legislation is a tool that will allow that to happen, if we understand that it does embed principles of social partnership.

The principles of social partnership are very easy. They are simply respectful ones. They involve the recognition that there are communities of interest in New Zealand that deserve to have representation at the highest level. And in that representation, they deserve to have their views and their interests spoken about, and to be engaged with, so that areas of commonality can be found, as there were over the 9 years that we were in Government. There were substantial areas of commonality between Business New Zealand and the Council of Trade Unions. Let me give one example of that: skills training. This Government abolished the Skills Strategy and has done very little in that space since it came into office, but the Skills Strategy is exactly the area of common ground that one could characterise as the best kind of social partnership. So embedding the notion of social partnership has very practical outcomes. Not only can it be applied in the upskilling of the labour force, which is clearly required by all evidence to date and clearly required if New Zealand is to become more productive, but it can also provide greater stability for moving forward in this country.

Productivity does not need to be something that is addressed by tribalism; it can be addressed jointly. If we are mature enough, in fact, to have a Productivity Commission that will provide contestable and independent advice to Ministers, then we are mature enough to embed in our processes and our legislation the notion of social partnership. This is not a quaint, left-wing notion; this is about moving modern, mixed economies forward, and whatever pedigree the notion may have had does not matter now. What matters is that this bill and the amendments that my colleague Lianne Dalziel has put forward really serve to embed the idea of a cooperative social partnership that can benefit, in this case, the productivity of this country.

There are extremely practical issues here that would have very practical effects. Upskilling is one of them. Also, the promotion of the idea that events and workshops on productivity and educational tools and things of that sort might be paraded around the country, in a jointly sponsored effort by the major social partners in this endeavour to increase New Zealand’s productivity, is a very sensible suggestion directed towards achieving that end.

I will take a short call on Part 2 of the New Zealand Productivity Commission Bill, and echo the comments that have already been made about the way our Commerce Committee has worked on this particular bill. There was a lot of agreement as to the direction of productivity in this country—one of the major issues, certainly, that our country faces going into the future.

I will refer specifically to the amendments from the member Lianne Dalziel. Although I agree with most of the comments of the Minister in the chair, the Hon Rodney Hide, I must say that Lianne Dalziel’s amendment to clause 7 would fundamentally change that purpose clause. The amendment adds the words “the development of a high wage, high skill, sustainable economy that delivers benefits on an equitable basis to New Zealanders,”. I contend that we cannot have that type of provision, because she is suggesting, by this amendment, a guaranteed equality of outcome. I suppose that one of the fundamental differences between members on that side of the Chamber and those on this side is that this is not about guaranteeing equality of outcomes; it is about guaranteeing equality of opportunities. There is no way that we can guarantee that all the benefits derived from certain productivity advances will deliver benefits across the board, so I think that that amendment goes too far.

We made an amendment to clause 7 in order to have regard to “a wide range of communities of interest and population groups …”; I think that that was sufficient to suggest that the commission did not take on board one particular model of productivity. I thought we worked well on that clause. I do not think that the additions to the clause add anything; I think they actually detract from that purpose clause.

I move to clause 9(1). As the Minister has already said, some of the member’s suggestions for new paragraphs (e), (f), and (g) of clause 9(1) can actually happen regardless of whether they are inserted in a clause. I do not think it is appropriate to insert those specific provisions in the clause, because the role of the commission is not to run workshops. I do not believe that the commission will have the resources for those types of operational matters. If we go back to the first principles of the bill, we see that the role of the commission will be to promote research, do the research, do the analytical work, work according to the terms of reference, and produce work that will advance productivity and policy-making, both in the private and public sectors, so that amendment would not be helpful to that.

Finally, the amendment that would insert new clause 12(1B) requires Ministers to “consult with Business New Zealand and the New Zealand Council of Trade Unions …”. Again, there is specificity in the clause, but what happens if the New Zealand Council of Trade Unions no longer exists? What happens if Business New Zealand no longer exists?

💬 Hon Lianne Dalziel: That will always exist; don’t worry!

That is the member’s contention, but I think that if we start demanding, or at least requiring, in a clause that a Minister consults directly with certain organisations, it makes that clause unworkable. We should think again about whether we should demand a social partnership. That is not to say that we disagree with a social partnership; I think that that is important. But to require it in legislation specifically, I think, is going too far.

We do not agree with these amendments. We think the bill as it came out of the select committee was a good bill, and we look forward in the third reading to speaking about our bill.

Kia ora, Mr Chairperson. It actually is necessary to inject a wee bit more of a positive tone into this debate after that rather impoverished contribution from the member currently representing Maungakiekie.

💬 Hon Lianne Dalziel: The soon-to-be former MP.

Well, Maungakiekie is a proud tangata whenua name, blighted at the moment by—but let me come back to the New Zealand Productivity Commission Bill. I would like to pick up one of three things that the Minister in the chair, the Hon Rodney Hide, has said. A key part of the Minister’s narrative has been the reduction of red tape and unblocking the bureaucratic imbroglios that stop firms and investors from achieving the sorts of outcomes that he would like to see. I acknowledge that that is the rhetoric and the political narrative that this Minister has. But to do that it is necessary to focus in a very, very sharp way on what some of the problems are and what some of the snarl-ups are.

How the commission develops its procedures will depend on whom the Minister, the Government, and the Crown appoint. We are starting with a rather dismal view not really directed in a personal way at the character who is going to be the initial leader of the organisation, as we know that he will not become separated or dislocated from this ideological baggage. We know that to be a fact, but we are going to have to deal with that burden. But if we are going to consult in terms of clause 13(1A)(b), “consult with any persons, bodies, organisations, …”, I think it would be good if the Minister and his colleagues dedicated some attention to finding people who can actually liaise with a wide array of organisations.

I have in mind here our Māori organisations, because this is a Government that is only too happy to parade its rhetoric up and down the country about how the emerging Māori economy represents something of a positive platform to grow the overall economy. That will happen when they are no longer as disengaged as they have become under this Government and its lacklustre partners in the Māori Party. It is going to increase the level of importance that we have the right woman or man capable of building bridges into that area, because there are some significant institutional problems there, not the least of which has to do with the land tenure system, with access to capital, and with the importance or forming the right partnerships.

It seems that the Minister of Agriculture, David Carter, has presided over the allocation of grants and capital into the agricultural sector in a wretched way. According to my colleague from the West Coast, Damien O’Connor, it almost looks as if vested interests are being—yet again—rewarded. It is important that the Productivity Commission has people who can turn their attention towards the sector. Without the introduction of science-based capital, innovation, and clever research that is designed to meet the specific, distinctive institutional problems in that small segment of our economy, I think the commission could turn into something too ideologically narrow, or too full of puffery.

One of the redeeming features of the terms of reference concerns the commission working jointly with other agencies, including overseas agencies. I imagine that is an opportunity for the Productivity Commission to focus on what is happening in Australia. We already have enough of our Kiwis in Australia enriching the Australian economy. We need to get the right blend of people on the Productivity Commission, and emulate in our economic thinking what Australia has been able to do. The Australians do not deprecate or marginalise representatives from the labour movement, but integrate their perspectives into a broad plan to build the people as they build the economy. The member from Maungakiekie is quite entitled to speak against the very sensible amendment from my colleague the Hon Lianne Dalziel, the chair of the Commerce Committee, but what he reflects is a very parched view about the underlying accord that we think is very, very important.

💬 Hon Member: Bleached and parched.

Yes, the word parched does strike me at this hour of the night, but it is still Thursday—it is still Thursday, etc. I think I might need it at about 5 to 12, actually. Anyhow, underlying what the member from Maungakiekie was saying was the view that there cannot be meshing together of the perspectives of those who are in control of capital and the perspectives of those who are proxies for the voices of labour—the voices of people. Yes, those people who are making investment decisions have to bear in mind the rights of shareholders. We have learnt about, and seen, a less atomistic approach being taken in Australia. It is less divisive than what we are seeing from our colleagues on the other side of the House.

So in that sense, when the commission may be working jointly with other agencies, including overseas agencies concerned with improving productivity, it will come down again to who and how many people—people who are not captives or cheerleaders for that narrow range of vested interests who do not want to see a Productivity Commission—challenge the growing gap of haves and have-nots in New Zealand. In that sense, when there is a dismissal, and a jettisoning by our colleagues over there of that very useful contribution made in the form of an amendment, then we have every right to be concerned.

The commission’s work will actually not deliver any serious change unless the Government or the politicians of the day have faith and confidence in the quality of their work. Although Mr Wilkinson and Don Brash are hewn out of similar ideological matter, as represented on the other side of the House, they have been tossed aside. So we can see that National is prepared to throw even its own to the sharks. It reminds me of a great white shark coming out of the sea where there is a placid seal moving on the top of the ocean. Out comes the great white shark and snaps open its jaws, and down its gullet goes the seal. That is what happens to people such as Helen Kelly, who bring forward suggestions and contributions. I think she would be a fantastic contributor in that organisation. It is evident that those prospects are very narrow, because personal agendas are likely to intrude in terms of the kinds of characteristics a person will be expected to show, and also in relation to the areas of concern to productivity that will be focused on. That is a matter of some concern to us.

I want to come back to what I said before, which is that the commission has the ability to grow beyond three or four members, in the sense of appointing associate commissioners. I hope that those discrete projects flow from what firms, population groups, and communities of interest are telling the commission, and that they do not flow from the brainwaves of the current Minister or some of his colleagues. [Interruption] I want to be positive. I feel that I will be able to make a better contribution with a negative connotation at 1 minute to 12. I think I will reserve it until 1 minute to 12—on Thursday.

I want to talk about Part 2 of the New Zealand Productivity Commission Bill, and, having given a relatively positive speech on Part 1, I will now do the opposite of my colleague Mr Jones and be a little bit more negative about this part. As we have gone through the debate, and Lianne Dalziel has put forward her amendments, the Minister in the chair, the Hon Rodney Hide, has responded to them largely in a negative way, which has highlighted my concern. We have an agreement in principle that the Productivity Commission is a good thing, and we think it will be very useful for the future of New Zealand, but its usefulness will be in part about its durability in terms of being able to cope with the changing fortunes of political parties and some of the different agendas pursued by political parties. I think that the changes Lianne Dalziel has brought forward, in particular the change to clause 12, are examples of where the durability of the Productivity Commission could be enhanced, and that is through the notion of effectively developing the idea of social partnership within the Productivity Commission’s terms of reference.

On this side of the Chamber we find it quite surprising that the current Government has not chosen to pursue the tripartite work that was going on in the skills area. Obviously, the Skills Strategy, which Business New Zealand and the New Zealand Council of Trade Unions have worked on with the Government, was a successful strategy. It was an example of social partnership in action, skill development, and the enhancement of skill. As my colleague Shane Jones has said, productivity is about people. One of the key drivers to productivity is enhancing skills and increasing training. Why this Government has chosen not to invest further in the Skills Strategy and, indeed, in keeping the skills forum going is a great surprise to us. From our point of view, this amendment to clause 12 is actually about ensuring that there is some durability and that there is some inclusion and involvement of the key participants—the New Zealand Council of Trade Unions, and Business New Zealand—in terms of, in this case, workplace productivity and productivity generally in New Zealand.

It is of great concern to members on this side of the Chamber that the Government is not prepared to pick up this kind of idea. It makes us wonder about the scope of the commission and how it will be used. There is an awful lot of power in the hands of the responsible Ministers. Of course, that is as it should be. Parliament is sovereign, and Ministers of the executive come to us and we hold them to account. Elected representatives should be controlling the direction of this work. But we want the commission to be able to work as broadly and as inclusively as it can, and we want the commission to be able to challenge the Government, and to challenge all the ideas and concepts that any Government is putting forward, and, in particular, the Government of the day. So it is disappointing from our point of view that there has not been a willingness in the Government to pick up the amendment to clause 12. But perhaps we should not be surprised. We should not be surprised, because the Government has largely ignored things in the skills area where that social partnership programme was working really very well indeed.

Of course, there have been other issues around skill development—the cuts in adult and community education, for instance, and the restriction on tertiary education places. None of that bodes especially well for a commitment to the core element of productivity, which is that of raising skills. But the opportunity is here for the Government to pick up Lianne Dalziel’s amendment and get Business New Zealand and the Council of Trade Unions on board. I do not buy Sam Lotu-Iiga’s argument that somehow or the other this could be difficult because the names might change or something like that. We change things all the time in law when that takes place. This is about embedding social partnership in the Productivity Commission and it is very disappointing that the Government has chosen not to pick that up.

I want to go back from clause 12 to the whole question of the membership of the commission in clause 10, which has been alluded to by a number of members. I draw on the example of the Treasury board that was recently put in place by Secretary to the Treasury, John Whitehead, no doubt talking with the Minister of Finance, Bill English. There was a great palaver about how this would be an excellent example of how Treasury would be able to reflect the community’s interests and those affected by the fiscal policies and the overall policy framework that Treasury is responsible for. The names of those on the Treasury board came out and it was just the usual suspects. It was the usual board members, the professional board members, and we had concerns about one of them in particular and that person’s links with the broader National Party. Generally the people who were appointed represented a very narrow range of people. They certainly did not represent the broader community.

Our concern when we look at clause 10 on the membership of the commission, as others have said, is that Mr Sherwin’s early appointment does not bode well. He reflects a particular ideological mindset, but, more than anything else, I think he represents a narrow idea of what this commission could do. As with the Treasury board and the commission, we should be thinking broadly. I remember thinking when the Treasury board was being appointed “What about appointing someone like Diane Robertson, the Auckland City Missioner?”. What about saying that we actually care about the impact of Treasury’s policies on real people, as Shane Jones said—not the big end of town; the other end of town? I really would encourage the Minister as we go forward in this process to find a way of getting a commission that is reflective of the very broad nature of productivity that we have been talking about tonight. Again, it does not bode well that the question of social partnership is dismissed so quickly, because I am quite sure that when we look at the commission’s membership it will be a concern. That has been a concern for a number of members of the Labour caucus. We support the idea in principle but we have concerns about the way it will be implemented, and certainly Mr Sherwin’s appointment is a very bad start in that regard. We want to make sure, as the commission is appointed in full, that it does not fall into that trap.

I will refer in my remaining time to the other amendments that Lianne Dalziel has put forward, particularly on the purpose of the commission. She is correct to identify the area of practical activities and I think that the commission could usefully take that up. There has been some very good work done by the partnership resource centre out of the Department of Labour in the last few years. It was an initiative set up by the fifth Labour Government and has drawn together the skills of people from the union movement and from the private sector around how to improve workplace productivity.

💬 Jonathan Young: There’s nothing on the website, though.

I will have to have a look at that. I can certainly introduce Mr Young to some of the people who have been involved in it. There are some private sector outfits. I know that Air New Zealand and one or two others have been involved and have really enjoyed their links with the partnership resource centre. Let us broaden out this definition so that the practical activities, which are like pilot projects that the partnership resource centre undertakes around productivity, could actually be part of the commission’s work. I think Lianne Dalziel is on to the right point there, and—again—with the amendment that comes in under clause 9 on productivity projects. This is where the commission could have a more detailed mandate and a more detailed and practical ability to take on those projects. I think it is unfortunate that the Minister has ruled out accepting those amendments, because I think they broaden out the definition. Yes, we absolutely want research, and obviously we want the inquiries done, but we need to start moving a little beyond those to some practical projects that could be taken up.

To conclude my contribution at this time on Part 2, I say that it contains some very good points, but there are a number of clauses that could be enhanced. If we do not get this right, then the Productivity Commission runs the risk of being seen as pursuing a particular agenda. I hope it is not Mr Sherwin’s old agenda—it should not be, because we all believe that this is a good idea. We need to give the framework to ensure that the Productivity Commission can be durable across Governments and has the ability to undertake practical work in developing social partnerships. That is missing from Part 2 at the moment, and that disappoints me because in general this is a very, very good idea.

I move, That the question be now put.

I want to go back to the Minister’s comments when he ruled out the changes to clause 12(1B) that I am promoting, because I think he has misunderstood what the clause was. He went on to refer to clause 13 of the bill, which talks about who the Productivity Commission consults with. The reason I have moved clause 12(1B) is to make sure that it is the referring Ministers who consult with Business New Zealand and the New Zealand Council of Trade Unions when they are setting the terms of reference for an inquiry. There is a very important reason for this, and it goes to the regulatory impact statement, which of course I have downloaded off the website, now that it is no longer available in the bill as introduced. It says this about the consultation that was done on this bill: “Discussions were held with a small number of New Zealand senior public servants, current and past politicians and informed commentators from consultancies and academia. Discussions were also held with the APC, VCEC and Australian Treasury.”

💬 Grant Robertson: So that’s John Whitehead, Don Brash, and Michelle Boag. That’s it.

Is that not a really good start to social partnership! That is the reason I want the concept of social partnership embedded in the setting of the terms of reference. Of course the Productivity Commission will talk to the Council of Trade Unions and Business New Zealand—that is a given. Everyone knows that it will do that. I am not seeking for any parameters to be put on who the Productivity Commission consults with. It will be putting out discussion documents and hearing submissions. It will then put out a draft report, as the Australian commission does, it will hear further submissions on that, and it will be ultimately reporting to the Minister after in-depth consideration and inquiry into these matters.

If the social partners and if our trade union movement, those who represent the workforce, and Business New Zealand, which represents those who run our businesses, are not somehow embedded in the very proposals for the terms of reference for the inquiry, then what are we going to get out of it? That is what concerns me. The consultation on this legislation has not been as inclusive as it should have been. In fact, we are told in the regulatory impact statement that the consultation confirmed the Australian experience—which is not surprising, since more Australians than New Zealanders were consulted—and it was judged that further consultation in New Zealand would quickly reach diminishing returns. I think that is a little bit of an insult, given the huge contribution that both the Council of Trade Unions and Business New Zealand made to productivity development in the entire period that we were in Government. For 9 years they were regarded as partners that sat at the table and were engaged in ongoing consultations with a range of Ministers. I was one of the Ministers they were engaged in discussions with. I think it is very unfortunate that the Minister dismisses the amendment on the basis of the commission’s procedures that have nothing to do with the clause that I am seeking to amend.

The other thing I would really like the Minister to do is talk about the contributions from the different Government agencies that have been selected for contributing to the costs of setting up the commission and its ongoing running. When one looks at the level of contribution, the largest contribution comes from Treasury, which is not surprising; the Ministry of Economic Development, which is not surprising; and the Department of Labour. Why is the Department of Labour the other large contributor? Because workplace productivity is one of the major drivers of productivity. It is not the only one, and it is not supposed to be the only focus. But even the contributing ministries make it absolutely clear that the Government itself sees workplace productivity—I mean it is micro and macro, but the micro is the workplace, and the Government itself has said that this is one of the three top contributors from departmental budgets for the setting up of the commission and its ongoing running costs; it is so obvious that the Government itself sees workplace productivity as a key driver to our productivity gains over time. So why on earth would the social partners not be included as part of the setting of the terms of reference?

I move, That the question be now put.

The CHAIRPERSON (Hon Rick Barker): I think that is a fair question. The question is that the question be now put. Members of that opinion will say Aye, of the contrary opinion will say No. The Ayes have it. The question will be put.

💬 Hon Trevor Mallard: Party vote; come on.

The CHAIRPERSON (Hon Rick Barker): I gave the member the opportunity to call for a party vote. I said the question will be put. I declare the vote, and if the vote is not challenged immediately for a party vote, we move on.

Motion agreed to.

The question was put that the following amendment in the name of the Hon Lianne Dalziel to clause 7 be agreed to:

to omit this clause and substitute the following clause:

7 Purpose of Commission

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.