4. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: What steps is the Government taking to help improve New Zealand’s productivity?

Hon BILL ENGLISH (Minister of Finance) : Along with the Minister for Regulatory Reform, Rodney Hide, we announced today that a new Productivity Commission will be set up early next year to help boost New Zealand’s economic performance across the public and private sectors. It is one more step in the Government’s programme to lift productivity and increase incomes for New Zealand families.

Peseta Sam Lotu-Iiga: What roles and functions will the new Productivity Commission have?

Hon BILL ENGLISH: The commission has been closely modelled on the successful Australian Productivity Commission, which has been operating for more than 10 years. It will provide advice on ways to improve productivity in areas identified by the Government. The strong independence of the Australian commission has been important to its success and we envisage that the New Zealand commission will operate in the same way. We also envisage that the Australian commission and the New Zealand commission will cooperate in the way that the respective Prime Ministers of Australia and New Zealand indicated last year.

Peseta Sam Lotu-Iiga: How will the new Productivity Commission be funded and staffed?

Hon BILL ENGLISH: The commission has been funded through reprioritising funding from the existing budgets of 29 Government agencies. No extra money will be called upon to fund the commission, and it is expected that up to half of its staff will be seconded from other Government agencies.

Hon David Cunliffe: Does he agree that one of the key drivers of productivity is investing in skills; if so, why did his Government shelve the New Zealand Skills Strategy, cut adult and community education funding, cut research and development tax credits, and cut $98 million from scholarships?

Hon BILL ENGLISH: Despite the recession, the Government is spending record amounts of money on skills and training. We ditched that strategy because it was like all the other strategies that the previous Labour Government produced, in that it was long, vacuous, and did not help anyone make any decisions.

Peseta Sam Lotu-Iiga: Why is it necessary to increase New Zealand’s productivity?

Hon BILL ENGLISH: On Tuesday Statistics New Zealand released the latest figures for productivity growth, part of a series that goes back to 1978. They show that although productivity was modest during the 1980s at 0.7 percent per annum, productivity grew by around 2 percent in the 1990s. Incredibly, since then overall productivity in the last 9 years has been negative, and that is because of a mismanaged economy.

Hon David Cunliffe: I seek leave to table a guide to Australia’s Productivity Commission that reflects its broad mandate, including investing in skills.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

• Document, by leave, laid on the Table of the House.

Hon David Cunliffe: I seek leave to table a document from Australia’s Productivity Commission that sets out the full range of determinants of productivity, none of which appear in the Minister’s press release—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

• Document, by leave, laid on the Table of the House.