Unions give cautious backing to Productivity Commission

The Council of Trade Unions (CTU) has cautiously backed the proposed Productivity Commission saying if it is designed properly it could help lift wages and living standards

Finance Minister Bill English and Regulatory Reform Minister Rodney Hide said yesterday ACT and National had agreed to set up a new Productivity Commission with statutory independence and a budget of around $5 million a year, .

It is intended to do research and give advice to help the Government create policy that will assist the economy grow.

The new organisation is modelled on the Australian Productivity Commission though on a smaller scale with three or four commissioners and around 20 staff. The Australian version has almost 200 staff.

CTU Secretary Peter Conway said it looked like the commission would have a measure of independence.

"The Government needs to ensure that the commissioners, in addition to possessing the required skills, reflect a range of perspectives," Mr Conway said.

There were also concerns that the commission would become bogged down in regulatory issues, rather look at measures to lift investment in people's skills, technology and capital.

The ministers envisaged the commission would hold two or three inquiries a year into areas the finance minister was concerned about.

The commission will report to Parliament, but the Government will not be bound by recommendations.

Mr English indicated the New Zealand model would have narrower brief than the Australian version, which has included inquiries into biodiversity, looking at the economy and reporting on measures to boost growth and create jobs.

Mr Hide did not want to suggest possible areas for investigation, saying that might give the impression that the Government had prejudged the commission's agenda, while Mr English suggested it could perform a continuous review of regulations that dragged on the economy.

It will cost $2.3 million to set up by April next year once legislation is passed later this year.

Money and staff taken from 29 departments, mainly from Treasury and the Economic Development Ministry, would be used by the commission, which was expected to work closely with its Australian cousin.

No new money would be allocated to the commission.