New Zealand Productivity Commission Bill

I move, That the New Zealand Productivity Commission Bill be now read a third time. This bill establishes a new institution to undertake analysis and provide advice to the Government on matters that are of vital importance to the welfare of New Zealand and New Zealanders. Improving our productivity performance is a necessary condition if we are to maintain current standards of living, let alone improve them. Paul Krugman of Princeton University made the observation that “Productivity isn’t everything, but in the long run it’s nearly everything.”

New Zealand’s economic performance over the last 6 decades has been poor compared with that of most other OECD countries. In 1950 New Zealand was ranked as third among the OECD countries in terms of GDP per capita. In 2009, New Zealand’s GDP per capita was ranked as 22nd out of the 32 OECD member countries. This indicates a decline in New Zealanders’ living standards relative to those of people in other OECD countries. Following substantial reform, New Zealand’s growth has been closer to, but still less than, the OECD average since the early 1990s, and New Zealand does not appear to have been as badly affected by the current global financial crisis as many other developed countries, although substantial risks remain.

The gap in GDP per capita between New Zealand and wealthier OECD countries essentially reflects a difference in labour productivity, which stems from New Zealand’s relatively low levels of both capital intensity and multi-factor productivity. Growth in New Zealand’s labour productivity has generally lagged behind that of other countries, although there has been a significant variation in labour productivity growth across sectors and industries.

Closing the GDP per capita gap with other advanced countries represents a formidable challenge. For example, closing the gap with Australia within 15 years would require New Zealand to exceed Australia’s average GDP per capita growth over that period by around 2 percentage points. On the basis of the OECD’s baseline projections, that would require New Zealand’s average GDP per capita growth to be about 4 percent, which is more than twice New Zealand’s average rate over the last two decades.

We will not meet the productivity challenge without an injection of new ideas. These ideas must be built on a solid foundation of evidence and analysis. It also requires those who undertake the analysis to engage fully with the community. Engagement with the community is important for a number of reasons. The first is that an evidence-based policy requires a deep understanding of what the real world is like for firms, entrepreneurs, employers, workers, and citizens. Second, the community can be a source of ideas. Third, the significant change that may be required to meet our productivity challenge affects the community, and it is important that those who may be affected have the opportunity to have their views heard and taken into account, and that the need for change is carefully and fully explained.

With this bill, we are establishing the legislative framework for an institution that will be a credible source of evidence-based policy. In creating this framework we have been guided by Australia’s experience with the Australian Productivity Commission, which at the state level has been repeated in the Victorian Competition and Efficiency Commission. The New Zealand Productivity Commission will meet the key tests for an effective institution, as demonstrated by the Australian institutions. The commission will be given inquiries by the Minister of Finance, in conjunction with portfolio Ministers. Terms of reference for inquiries must be made public. The commission’s reports must be tabled in this House. Both of these requirements add up to a highly transparent process. As an independent Crown entity, the commission will have statutory independence. This will encourage analysis and thinking that is unfettered by the policies and preferences of the Government of the day. It will be headed by three to four commissioners, who will lead inquiries as well as set the overall tone of the commission. The commission will conduct its inquiries in public. It must consult widely, and it must take a broad range of perspectives into account. It will not be an ivory tower unconnected with the real issues and opportunities faced by New Zealanders.

An important part of the inquiry process, which was emphasised strongly by the chairman of the Australian Productivity Commission, Gary Banks, is the release for consultation of a draft report. This provides a rigorous test process for the analysis undertaken by the commission. Although the bill does not make this step in the process an absolute requirement, there is an expectation that the commission will consult publicly on draft reports. The commission is also able to initiate and publish its own research, which is an essential function for an institution that will be seen as a centre of excellence on productivity-related matters. I fully expect that the commission will become a focus for productivity-related research and debate in New Zealand, with strong links to Government agencies, academics, and thinktanks. In effect, having a specialist commission should lift the tide on productivity-related research in New Zealand. There will also be cooperation between the New Zealand and Australian commissions, further boosting capability and providing a foundation for work on strengthening the single economic market between New Zealand and Australia.

The commission will be a unique institution in New Zealand that fills a gap in the current sources of policy advice. It meets the three critical criteria of having independence, competence, and community engagement. It can take the policy debate into areas where Government departments are not able to go, bringing new ideas to the table and testing conventional wisdom. It is destined to play an important role in charting the future of New Zealand’s productivity performance.

Finally, I thank the Commerce Committee chair, Lianne Dalziel, and the other members of that committee for their work on the bill. In some important respects, the committee clarified what the commission is intended to be and strengthened the statutory processes that underpin its open, transparent, and consultative character. I am very pleased and honoured to commend the bill to the House.

Labour will be supporting the passage of the New Zealand Productivity Commission Bill. We sought to make amendments to it during the Committee stage, but they were not supported by the Government. I still believe that they would have strengthened the legislation, but so be it—you win some, you lose some. What I want to do is focus on an important aspect of this law that the Minister of the Local Government just referred to in his address, where his comments almost exclusively focused on the role of workplace productivity.

I refer back to a joint paper that Business New Zealand and the New Zealand Council of Trade Unions put together on productivity under the previous Government. Under our Government, they worked together in a social partnership. They worked in a triumvirate way with the Government. We had the Government at the table, we had Business New Zealand, and we had the Council of Trade Unions representing the workforce. That triangle approach was a very strong approach, because it provided protection for those who work within an industry from the kinds of excesses that we saw in the 1980s and in the 1990s—so I will not reflect on Governments of any particular colour in this regard. It is very easy to think that productivity improvements can be imposed by cutting the cost of production through making the workers carry that cost. That was the experience of both the 1980s and the 1990s, and I do not think New Zealand has ever fully recovered from the serious impact that the Employment Contracts Act had on our workforce.

I will refer to the joint paper, where we had Business New Zealand working with the Council of Trade Unions on the definition of workplace productivity and on the issues that accompany it, which are infrastructure, and education and skills. We cannot get improvements to workplace productivity without talking about the lot. They all go together, hand in hand. This is what that paper said. It stated: “At a macro level, debates about productivity inevitably weave into the overall drivers for economic growth and therefore include tax, inflation, capital formation, population, global connectedness, adequacy of infrastructure, size of workforce relative to population, amount of capital goods relative to the workforce, degree of competitiveness, research and development incentives as well as the importance of education and innovation.” That is the macro-level perspective. “There is a need to build a consensus around how to grow tomorrow’s jobs based on investment in skill, technology, and good workplace relations to create high wage employment producing quality goods and services.” That is why I moved in the Committee stage that we change the purpose of the commission to look specifically at boosting 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.

What those organisations highlighted as critical among these issues were “The relative contributions of physical capital, financial capital, human capital and total factor productivity (or multifactor productivity);”—and that is the one element that the Minister chose to address in his comments. But there are also “Particular capacity issues on infrastructural enablers—physical capital investment in power/energy, waste, water, broadband, transport etc;”—those sorts of physical infrastructural enablers, as they describe them. “Drivers of high quality physical capital investment at enterprise level;”—and, of course, we know that productivity improvements can be found through capital investment, as well. “The contribution of ICT; Lags between technological progress and productivity increases; Learning across boundaries—networks, and clusters;”—that is, businesses operating together, regions operating together, and industries operating together. “Knowledge generation, diffusion and adoption in the production of valued commodities; Gaining a critical mass of skills; Literacy and numeracy; Worker scepticism towards productivity proposals based on their experiences;”. Anyone who lived through the 1990s will know perfectly well what that period meant by way of productivity improvement. They paid the price. They paid the price in lower wages.

💬 Grant Robertson: The wage gap extended out, as well.

When did the wage gap extend between Australia and New Zealand, my colleague chips me to ask. It happened in the 1990s. Comparative wages between Australia and New Zealand were almost identical at the end of the 1980s. The 1990s were the period that produced the gap. Who was it who said that we could bring that gap down? Well, I think the Government engaged Don Brash in a 2025 Taskforce. Did members know that he is so productive that he spent 3 years of his salary in 1 year? That is pretty amazing. The Government set aside a certain amount to fund his salary as the head of the 2025 Taskforce and he managed to spend it all in 12 months. Well, that is very productive from his point of view, but no one else’s.

The next question is immigration policy and practice, and we all know that that is directly relevant. The there is “Measuring productivity in the service sector …”. That is a serious challenge. How do we measure a teacher’s output compared with that of a dairy worker, for example? They are difficult questions, but all of these issues were put on the table by the Council of Trade Unions and Business New Zealand when they were working collaboratively with our Government.

Next are “Productivity and the level and type of employment; The role of intermediate inputs (materials, business services, leased capital); Links between R&D and commercialisation;”. What did this Government do to research and development in this country? It completely gutted it. It took away the research and development tax credit that Labour had provided, and it also destroyed the Fast Forward fund, which would have seen some major productivity gains in our primary sectors.

Next are “The role of institutions; The role of unions; Management styles; Organisational structure; Attitudes to business success and failure; Cyclical factors; Cultural factors; Distribution of productivity gains; The role of social development; and Robustness of assumptions in models.” The point is that the Government simply has not been prepared to listen to the combined voice of Business New Zealand and the Council of Trade Unions, because it has this absolute shuttered view of the engagement that is required in order to bring about these changes.

I put forward three amendments. One was about the definition of well-being being extended into the wider area of equity, and another was seeing the Productivity Commission as the portal through which anyone can enter the productivity realm, from the micro level to the macro level. I thought the Government would have seen that as a major advantage, rather than as a disadvantage. And the final one was to embed those principles of social partnership into the work of the Productivity Commission. I was criticised for the amendments, on the basis that they sought to narrow the focus of the commission. But in fact it was the opposite. I sought to ensure that the importance of the workplace was not lost. I have a real fear that the Government only speaks to it and that it never ever is able to deliver on it, because it just cannot let go of its old-fashioned view of what is an important part of the equation, which is the workplace.

Process is important. I turn to the process of the appointments so far. There has been only one appointment to this commission. Before the legislation has even gone through, we already have a chair-designate of the Productivity Commission. That process does not engender confidence on this side of the House. I will not comment on the individual himself, but he is not somebody I personally would have chosen. I hope the remainder of the appointments do ensure balance and reflect that concept of social partnership, because I believe that it is absolutely critical to the success of the Productivity Commission. But to receive a letter on a Thursday telling us that the Government will announce an appointment on the following Tuesday is simply intolerable and does not reflect very well on the Government’s process.

Finally, I again place on record my thanks to Gary Banks for travelling to New Zealand and for providing such a good analysis for us to consider of how the Australian Productivity Commission has developed into an independent, authoritative voice on productivity. I think his ongoing support and offer of cooperation across the ditch is very welcome, and it is welcome on both sides of the House. When Labour is in Government we will take him up on his offer and we will ensure that the New Zealand Productivity Commission works as collaboratively as possible with the Australian Productivity Commission. I still believe that it will be possible to merge the two operations at some point.

I rise to support the third reading of the New Zealand Productivity Commission Bill. After listening to the previous speech, by Lianne Dalziel, one would think that member was voting against the bill. The Commerce Committee broadly agreed with the general principles of the direction of the bill, although some amendments were proposed tonight that were sent from the union headquarters to Ms Dalziel, and went against a lot of what was discussed at the committee.

This bill is about providing analysis and advice on productivity-related matters in New Zealand. The Productivity Commission will be tasked with bringing that to bear in terms of not just workplace productivity but also issues wider than that. It is about processes and systems, it is about technology, and it is about people. We listened tonight to the speakers opposite and we heard a lot about social partnerships. But, no, this is about productivity. We took a general approach to clause 7, “Purpose of Commission”, recommending that the clause be amended by adding the words: “having regard to a wide range of communities of interest …”. That would mean that there would not be one model that we would rely on. Everyone agreed upon that, yet we had an amendment tonight.

The committee looked at the functions of the commission and removed the emphasis on regulation. We placed more emphasis on holding inquiries and reporting to the relevant Ministers. The commission will be tasked with more than just workplace productivity.

The biggest amendment that we considered as a committee was in respect of the terms of reference, relating to consultation between the relevant Minister and the commission. It would not include the unions and it would not include Business New Zealand, because it is about getting the terms of reference that are important.

I commend this bill to the House. It will increase productivity, and it is another step in the right direction for this Government. Thank you.

Tēnā koe, Mr Assistant Speaker Barker. I preface this 10-minute speech by reminding members on the other side of the House, and in particular Tau Henare, of a famous proverb from where we both hail from: “Small though the dogfish may be, large is its volume and wake, inversely related to the multitudes”.

I speak on behalf of the 20 members. I alert the House and those New Zealanders who were watching the previous speaker, Peseta Sam Lotu-Iiga, that his seat is Maungakiekie. To Ngāpuhi “kiekie” is the cry of the morepork. A certain sort of sleepy, tired, jaded character is reflected in the faces of our fellow colleagues on the other side of the House.

I see Simon Power sitting there. We know that shortly he will be looking at productivity. I have no doubt that while he is away he will contemplate what can be done to improve Gerry Brownlee’s conception of productivity. What can be done to improve his numeracy, in terms of how to count days during the months in the entire year’s calendar, so that we do not have this pile-up at the end of the year, which is something of an outrage in the context of productivity?

An important part of productivity, which this bill in its far-ranging writ will have the chance to study, is the impact on our constitution and its relationship with the economy. This evening the constitution has been upheld as a consequence of members from that side of the House remaining here in Te Upoko o Te Ika, Wellington, right up to 10 or 20 past 9. I am sure that when future statisticians look at metrics for defining how extensive productivity has been tonight—

💬 Hon Trevor Mallard: Just till the plane’s gone.

Ha, ha! Before I finish talking about the connection between the constitution and productivity, I will look at productivity statistics in the airline industry, and whether there is scope for the airline industry to delay the departure of flights out of the head of the fish to the tail of the fish. I wonder whether the industry will build into its cost measures a reward for the members on that side of the House who are unwilling to challenge the foolishness of their Leader of the House and have, along with a number of us, enjoyed a Saturday right into the wee hours since Thursday. That Thursday will always be memorialised by the connection between my relation Tau Henare and a banana.

💬 Hon Tau Henare: Ha, ha!

I want it noted that that laugh is not an accurate reflection on the glum expression from the other side of the House.

💬 Hon Trevor Mallard: Well, I think it’s a question of where he put the banana.

No, after my year, I will not go in that direction.

Simon Power just stood up. I want the House to know about Simon Power’s township of Marton. Whenever he misbehaves we will give the Māori name for his township, which is Tūtaenui, and let him know that a lot of his kōrero and a lot of his behaviour may actually be informed by the Māori name for that township.

Anyhow, I come back to some of the reasons why this side of the House will vote for the New Zealand Productivity Commission Bill. We want Rodney Hide to take this bill forward and make a success of it, because no one on that side of the House is actually generating a fresh set of ideas that will create jobs, incentivise investment, or pick up the young people leaving school or polytech and place them in the labour market so they can get some practical skills to begin earning a living. Under current policies not only will they struggle to generate enough earnings from a substandard education but they are unlikely ever to own their own homes.

I have just seen a vision of two mangrove berries in the face of the member from the Hauraki district; that is actually inversely related to productivity.

Another thing we are hoping the Minister will pick up on is that when the members of the new Productivity Commission are chosen, they will have tenacity, they will show resilience, and they will be prepared to turn up for work day after day, hour after hour, minute after minute, and ensure that the integrity of this institution—the highest court in Parliament—is actually upheld, and that speeches are made that consume the last possible minute, so that not a skerrick or a sliver of the time allotted is squandered. That is why we will be supporting this bill pertaining to productivity.

We will also be looking forward to see whether some members on the Government side of the House will actually be looking for jobs on the Productivity Commission after the next election. I am prepared to appeal to Mr Mallard, given that he is likely to be the responsible Minister appointing the characters to the Productivity Commission. I am prepared to appeal on behalf of some. [Interruption] Well, I have to tell the member from the Coromandel district that Hosea’s tongue looks a lot better than that. When he does the haka one can actually see that it is an icon of cultural prestige.

That member from Coromandel looks as if she is sitting too close to the Minister of Agriculture, who needs a dose of productivity. That man has enraged the most powerful and frightening businessman in Auckland, who is known as Michael Stiassny. The Minister has gone out of his way to potentially ruin the international meat export industry by focusing his finicky level of interest on unnecessary rules and harsh regulations, and he has alienated the community that Michael Stiassny comes from. Not only has he caused the Crown to incur a bill that is somewhere near $400,000 or $500,000, but he is living proof of why this Productivity Commission is needed. Virtually every agricultural thing he has become involved in—horticultural, as well—will need a massive dose of productivity.

We look forward to working constructively with our colleagues on the other side of the House and being open and candid with them so they know our views about the types of people who ought to be appointed to the Productivity Commission. We do not really want to conceal any information from them. We do not want to obfuscate; we do not want to mislead them so that they may think their prospects are worse or better. All Mr Mallard has done is isolate the number of people who have waited this late in the evening to contribute to the debate. We are suitably impressed to see Mr Quinn and a host of others here at this fatefully late hour.

Coming back to the New Zealand Productivity Commission Bill, we look forward to seeing the types of reports that will lie upon the Table of the House of Representatives after they have been commissioned and come via the responsible Minister. We hope a number of those reports are generated from firms and actual investors in the economy, because they need an avenue to bring forward their concerns, given that the ears of the current Ministers are blocked. They know that jobs are not emerging, that debt remains a problem, and that capital formation is still a weakness in the economy.

That may be possible through this Productivity Commission, which we have helped to come into being by ensuring that a large number of the Government Ministers and Government members of the House have remained here for this 72-hour Thursday. We are particularly impressed with their tenacity. Although they may entertain rather uncharitable thoughts about how many of us have remained on, I just finish by reminding them—in particular, my relation Tau Henare—of the kōrero “Small though the dogfish, the pioke, may be, large is its volume and wake as it makes progress”. Progress does not depend on multitudes of numbers. Kia ora tātou.

Kia ora koutou. I must say it is a pleasure to speak to such a full House this evening, and some could unkindly suggest that such a good turn-out from Government members suggests they might have too few opportunities for entertainment on a Saturday night, and too little else to do with their lives. But I am sure that that is not the case.

The New Zealand Productivity Commission Bill is a bill that the Green Party would have liked to support, but there are two compelling reasons why we could not. One of those was that the bill, particularly in its original drafting, was clearly intended to be a tool of the Minister of Finance, a creature of the Minister. It was clear from the language about the direction, or the frame, of the terms of reference that the notion of independence would have not been real. To be fair, the bill has improved in that regard, considerably.

For the second, and I think compelling, reason not to support this bill, one can reflect on the last contribution from the chair of the Commerce Committee, Lianne Dalziel. In 10 minutes she gave a very succinct and very powerful analysis of many of the reasons for low productivity in this country. The reality is that we actually know the reasons and we know the problems, and we also have a handle on some of the potential solutions, so arguably the last thing we need is another Government body to do research. That might be a useful addition at some point, but there are a great many things we could do in the meantime that do not require $5 million a year, 25 public servants, and extended investigations, to do.

It has been noted that there is some irony in the fact that the solution to the perceived problem of lack of productivity has been a legislative—or indeed a bureaucratic—solution to what is seen as an economic or social problem. It is just ironic that that has come from the party that is so overtly the party of pro-business, anti-Government, one might say.

One of our major concerns with the wording and content of the bill is the lack of prescription about what the Productivity Commission ought to do. That is a two-edged sword. The lack of prescription, the very broad-brush statements about the purpose and capacity of the commission could be a form of freedom, and it could indeed create an opportunity for the commission to do wide work across a wide range of topics and a wide range of communities; it could do a great deal of innovative and creative work. But in the absence of any requirement for it to do that, the very breadth of those statements, the very breadth of the purpose, could equally as well make this commission the creature of the Minister.

Nowhere in the bill, unlike in the Australian example—and we have heard a great deal about the extent to which this commission and this legislation is modelled on the Australian example—do we see reference to regional development. Critically, we see nothing about ecological sustainability, which is one of the requirements in front of the Australian Productivity Commission. There are statements in the Australian legislation that talk about overcoming indigenous disadvantage, about ecological sustainability, and about promoting the understanding of issues bearing on community living standards.

Those are serious and major issues, which could, as well, be confronted and dealt with in New Zealand, as the Australian commission is required to deal with them. It would be a very brave and a very well-resourced commission that would undertake investigation into something like overcoming indigenous disadvantage in New Zealand. It would require significant resources. It would require the blessing of the Minister, at least. We feel, very strongly, that in the realpolitik world no such mandate would be given, no such capacity would be allowed to the commission to do that necessary and useful work.

It is interesting that there is no definition of productivity in the bill, and we know that that word is amenable to a whole range of definitions. In the briefing papers made available to the select committee there was a notion that productivity was intended to be defined broadly to capture effectiveness, efficiency, and innovation. Clearly, innovation is a critical factor in turning round our economy, in creating more well-being, and in getting some sustainable growth. Productivity is one of the issues that will inform that. Innovation can come from large organisations. It very often comes from quite small, very tight, well-driven, and well-managed organisations. There are lots of examples of it within the small-business enterprise sector.

💬 John Hayes: Get on with it.

I tell Mr Hayes that 10 minutes has been allotted. I understand his enthusiasm to leave, but I ask him to please bear with me.

There are some inspired tinkerers in this country. We have the likes of Mr John Britten, the late-lamented Mr Britten. There have been numerous examples where very talented individuals have created opportunities, have created work, and have created benefits in this country.

In talking about the need for the commission, it is interesting to reflect on some of the statistics about labour productivity that came from Statistics New Zealand earlier this year. It is interesting to note that between 1986 and 2008 New Zealand’s labour productivity, overall, grew faster than Australia’s to the extent that New Zealand over that time saw something like 2.5 percent growth in labour productivity whereas in Australia it was 2.1 percent.

When one drills down into those numbers a little, one finds the trap of “averaging”, of course. We know that New Zealand’s productivity grew 3.2 percent a year compared with Australia’s 2 percent, between 1986 and 1996. The situation reversed somewhat from 1996 to 2008 where New Zealand’s labour productivity dropped to 1.9 percent and grew in Australia to some 2.3 percent. We can engage with some of the potential explanations for that turn-round, and they have been touched on earlier this evening—for example, the fact that in the 1980s we saw massive unemployment emerge in this country. That is one way to increase productivity, but it is not a useful way, it is not a sustainable way, and it is not a way we ought to emulate or go back to.

Peter Maire, former chief executive of Navman, one of New Zealand’s major technology company successes, has identified the value of, and the fact that, the old Public Service, the old much-maligned Public Service, actually had a major role in providing skills for the economy. A great many of the people we now find working on superyachts, and in the manufacture of high-quality superyachts in New Zealand, owe their basic training to the Navy. There are still people in senior positions in Telecom, in Gen-i, who did their basic training with the old Post Office. Nowhere in our economy have we got those same large-scale training grounds. That is leading to a fall-off in our skills base, especially in the technology area.

In the 1990s in New Zealand—about the point that the relative growth in productivity changed between New Zealand and Australia—there was a deliberate and sustained effort to drive down incomes in New Zealand, to cut salaries, wages, and benefits. At the same time, Australia invested heavily in labour programmes and in easing out and building strength into the economy, in a way that did not happen in New Zealand.

I have made the point that we know what some of the solutions to the problem are already. We do not need long-winded investigations. At this point it is hard to see the necessity to establish an organisation that is dedicated to finding out what the problem is. We already know what many of the problems are. Under-investment in research is a major difficulty in this country. We continue to be burdened. Our education sector has a millstone around its neck, which is called the Performance-based Research Fund. It rewards academics who do research that can get published in esoteric international journals, but it positively punishes academics who do work that is of practical value here in New Zealand. Academics who undertake practical, grounded research that informs practice in New Zealand are not rewarded, whilst academics who do esoteric research get published in a journal that may be read by 20 people around the world—that is being rewarded in a way that other things are not.

I will comment briefly on the appointment of the chair of the commission. We do wonder why the Government would appoint a chair before the legislation has been passed. That man has a long and honourable career; he has a 35-year career in the Public Service. But one wonders why the Government would put at the head of a commission that will require new thinking, innovation, and engagement, critically, with the private sector and with the business sector, a person who is heading towards the end of his career, with 35 years in the Reserve Bank, Treasury, and, briefly, in the Ministry of Agriculture and Forestry. Where is the skill set that will develop a culture of innovation, of challenge? Because that, critically, is what a Productivity Commissioner will need. It will need someone who will push the boundaries—who will break the boundaries. With all due respect to a long and honourable career in the Public Service, that is not where I would have gone searching for such a leader. For those many reasons, we will not support the bill.

It is with great pleasure that I rise on behalf of the ACT Party to support the New Zealand Productivity Commission Bill. This bill is a direct result of the confidence and supply agreement between ACT and National. I look forward to seeing this bill pass and the commission begin its work in 2011.

It is with pleasure that I commend the New Zealand Productivity Commission Bill to the House tonight. Thank you.

It is an honour to be here in front of such an appreciative audience tonight. It is quite interesting, from this side of the House, to reflect upon which National members are here tonight. I know that I cannot reflect upon who is not here tonight, but it is quite interesting to reflect upon who is here tonight and where they might fit in certain different factions within that party. We also have those sitting on the front bench, which is perhaps a window to the future of the National Government. Sandra Goudie, finally, has been recognised and promoted to the front bench—it has finally happened. At the other end of the front bench we have Tau Henare. Finally, his merit and effort have been recognised once more. He is in Judith Collin’s seat on the front bench. He is replicating Judith’s hard-hitting fighting style. No, he is actually dead—oh, no, he is alive. There he is, he has come back.

With regard to the Productivity Commission, I must say what a productive Opposition we are tonight. If we look at Labour’s input on this side versus our output, we see that we are a very productive Opposition. I am not sure about the Government members over there, though; there are a lot of people there. I understand that for those members of the Government who have to stay in Wellington tonight and are not able to get home, there is a party at Chris Finlayson’s house. A party is happening at Chris Finlayson’s house tonight, as it is every night. That is what is happening tonight.

I am very pleased to speak on the New Zealand Productivity Commission Bill—

💬 Hon Tau Henare: We’ve got families to go home to.

So have I, I say to Mr Henare—so have I. I tell Mr Henare that I can speak very slowly for a very long time. This bill is excellent legislation. On this side of the House we are very proud to support it. I give credit, in particular, to the Ministers involved, Rodney Hide and Bill English, and to my colleague Lianne Dalziel, the chair of the Commerce Committee. They have done an excellent job in bringing this bill before the House.

There is much in this bill that I would like to see changed. But, in principle, the idea that we might have a Productivity Commission in New Zealand is a very good one, because productivity challenges have bedevilled this country for a very long time. Despite setting up a Productivity Commission—I ask Mr Henare whether there is any gin in the glass he has just given me; I also ask whether those members over there have blankets—there is still no plan for productivity, though, is there? There is still no plan for productivity from this Government. There is still no plan to increase skills. There is still no plan to invest in research.

The Government has managed to get the commission up and running, but there is nothing for the commission to do, is there, if it is about the agenda from that side of the House. Members on this side of the House proposed amendments tonight that would have improved this commission. They would have put a social partnership model in the bill. That would have had Business New Zealand and the Council of Trade Unions at the table, but those amendments were rejected tonight by the National Government. The amendments were rejected because those members are not here for a social partnership. They are not here to build the productive economy with those people at the table. It is the big end of town or no one, if it is from that side of the House.

This Productivity Commission deserves a durable model. It deserves to have a model, a mandate, and terms of reference that will survive the inevitable end of this Government and the arrival of a Labour Government. That is what this Productivity Commission should look like. At the moment, it lacks some key elements. It lacks an ability for social partners to be at the table. It lacks the broad mandate it needs to allow it to undertake practical, productive projects.

💬 Hon Hekia Parata: We’re talking about the bill now.

I am talking about the bill, I say to Ms Parata. That is right, I can do this all night. The Productivity Commission is indeed a great idea, but it lacks the mandate and the terms of reference that would allow it to undertake practical projects in the productivity area.

The Productivity Commission also lacks the mandate to spread out to look at a range of issues beyond those that members on that side of the House might want it to look at at the moment. I share the concern that David Clendon raised about the lack of a focus on environmental sustainability.

💬 Chester Borrows: You don’t sound concerned.

The sow crate is outside, I say to Chester. It is OK; the member can go out there now. We on this side of the House also have the concern that the Productivity Commission needs to be able to look at issues of environmental sustainability. The Australian Productivity Commission is the model, and that is what it is able to do. It has produced a series of independent reports. That is exactly what the New Zealand body should be able to do.

Labour has concerns about the membership of the commission. We have concerns about that, because, as Lianne Dalziel has pointed out, the process for the appointment of the chair has not been a good one. Murray Sherwin is a very competent public servant, but he is not the person who will be ambitious for New Zealand—he will not be the person to drive the economy forward and close the wage gap with Australia. The National Government needed to be far more inventive than that.

💬 Hon Tau Henare: Who is? Andrew Little?

Well, it will not be Tau Henare. One thing I can say is that it will not be Tau Henare. This commission needs people on it who are reflective of New Zealand and New Zealanders beyond the big end of town, bringing the social partners to the table. That is what will make this Productivity Commission work.

Members on this side of the House can support the bill and say that, yes, this is a good idea. This is something that Rodney Hide and Lianne Dalziel have worked on extensively together; this is something that we can all believe will do good things for us. But to be a durable model—to be something that will survive changes of Government—it needs a broader mandate. It needs to be an inclusive commission, and we will be watching very closely to make sure that happens.

In conclusion, I say that it has been a rare pleasure to be greeted by the National caucus in such great numbers tonight. Those members’ enthusiasm for the Productivity Commission—

💬 Hon Trevor Mallard: Spirited.

—that is right—knows no bounds whatsoever. Even Paul Quinn has woken up. This has been a fine occasion, a fine evening, and, as the clock ticks past 9 o’clock, Labour has achieved its goal.

I think that a very productive speech should be of high quality and delivered in a short period of time. The previous speaker, Grant Robertson, failed on both but he did try hard. This is a great bill. I commend it to the House. Thank you very much.

Members, before I close the House I am sure you would all like me to say thank you on your behalf to the Hansard reporters, the Clerk’s officers, the messengers, Bellamy’s staff, security, officials, and everyone else. On behalf of the presiding officers I would like to thank all members for their good humour and perseverance. I wish you all a safe trip home.

The House adjourned at 9.05 p.m. (Saturday)