Hon Rodney Hide

Minister for Regulatory Reform

20 May 2010

Funding confirmed for Productivity Commission

The Government’s new Productivity Commission will boost New Zealand’s economic performance and provide a steady stream of independent policy advice, Regulatory Reform Minister Rodney Hide says.

The Budget confirms the Government will provide $2.4 million in 2010/11 for the Productivity Commission - $1.85 million operating spending and $500,000 capital spending – and rising to $5 million by 2012/13.

The Commission is funded through contributions from reprioritising money from within existing budgets of 29 Government agencies. The most significant contributions come from Treasury, the Department of Labour and the Ministry of Economic Development

“No extra money will be called upon to fund the Commission and its activities,” Mr Hide says.

The Commission is to be set up early next year as part of the ACT Party’s confidence and supply agreement with National. It is designed to help boost New Zealand’s economic performance across the public and private sectors.

It will provide independent policy advice based on sound research and engagement with the community. As well as undertaking and publishing its own research, it will promote public understanding of matters relating to productivity.

“Productivity is the biggest determinant of wages and living standards and is critical to closing the income gap with Australia,” Mr Hide says.

“This income gap is one of the main reasons we lose so many talented, hard-working New Zealanders every year. The Government is committed to taking a number of steps to close the gap with Australia. Establishing the Commission is one concrete step towards arresting New Zealand’s productivity slide.”

It will be an Independent Crown Entity headed by three or four Commissioners, with about 20 staff. It will cooperate with its Australian counterpart, the Australian Productivity Commission, on matters of mutual interest.

The Commission’s primary functions include:

• Inquiries into productivity-related matters and reporting back to Ministers.

• One-off reviews of existing regulations.

• Reviews of the efficiency and effectiveness of regulatory agencies.

• Regulatory impact analysis of some proposed new regulations.

• Research into productivity-related matters to build up its institutional knowledge

• Promote public understanding of productivity-related issues.

“This is yet another step on the path to boosting New Zealand’s productivity, raising our standards of living and ensuring a brighter future for all Kiwis,” Mr Hide says.

ENDS

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