Productivity Commission inquiry topics announced

The new Productivity Commission's first two inquiries will be into housing affordability and international freight services – two areas that affect New Zealand's international competitiveness, Finance Minister Bill English and Regulatory Reform Minister Rodney Hide say.

The Ministers also announced the appointments of Sally Davenport and Graham Scott as commissioners, working alongside New Zealand Productivity Commission chairman Murray Sherwin.

Ministers will initially refer two topics for inquiry to the Productivity Commission:

• Housing affordability – to be reported back by 1 February 2012.
• International freight transport services – to be reported back by 1 April 2012.

“The Productivity Commission is another step in the Government’s programme to lift New Zealand’s economic performance in both the public and private sectors,” Mr English says.

“Both of these topics have a bearing on New Zealand's export competitiveness. That is important as we seek to rebalance our economy away from excessive borrowing, consumption and government spending towards savings, investment and exports.

“New Zealand experienced a sharp rise in house prices over the past decade, resulting in declines in housing affordability and home-ownership rates and large increases in household debt.

“That accumulation of debt has made the New Zealand economy more vulnerable to external shocks like the global financial crisis. It has also most likely contributed to higher interest and exchange rates, raising the cost of capital for businesses and reducing exporters' returns,” Mr English says.

The inquiry into international freight transport services will look at the effectiveness and efficiency of the existing infrastructure and regulatory regimes for international freight transport services.

“International freight issues are vitally important to us as a nation of exporters, located a long way from major world markets," Mr Hide says.

“Increasing our international trade is a critical part of achieving better productivity growth and ensuring New Zealanders maintain and increase their standard of living.

"The two new commissioners bring a good mixture of research and commercial skills to the commission. I’m very pleased that people of such high calibre will join Mr Sherwin and his team looking into major issues for our economy,” Mr Hide says.

The commission, which formally starts work tomorrow, has a wide-ranging brief to inquire into productivity-related matters. It is funded through reprioritised contributions from the existing budgets of 29 government agencies.

Terms of reference for its first two inquiries are available at:

www.treasury.govt.nz/publications/informationreleases/productivitycommission

 

New commissioner biographies

Dr Sally Davenport is the head of the Victoria Management School, at Victoria University. She is also an affiliate researcher for the MacDiarmid Institute for Nanotechnology and Advanced Materials. She has an extensive research and evaluation background, focusing on commercialisation, innovation and productivity. Since 2007, she has been leading a research project; ‘Building Our Productivity: Understanding Sustainable Collective Productivity in New Zealand Firms’, which is centred on the food and beverage sector and biotechnology sector.

Dr Graham Scott is the executive chair of Southern Cross Advisers Ltd, a company specialising in advising globally on public sector reform. He is also a consulting director of Sapere Research Group (formerly LECG Asia Pacific), which provides independent economic, forensic accounting and public policy services. He has worked for a wide range of clients in New Zealand and overseas, including The World Bank, The IMF, and various Australian and New Zealand government agencies. Dr Scott was Secretary to The Treasury from 1986-1993.