31 Jan 2024

Legislative year begins with ending Productivity Commission

From The House , 6:55 pm on 31 January 2024

The first piece of legislation that Parliament has been looking at in 2024 is the Productivity Commission Act Repeal Bill, which is being debated under urgency. It found some MPs scratching their heads at the end of an independent Crown entity whose work they applaud.

Since its inception in 2011, the Commission has conducted research and inquiries in order to provide recommendations to government on ways to improve productivity - not so much regarding workplace or individual productivity - it has more of a focus on the effectiveness of laws, policies, regulations and institutions. 

Act Party Co-leader David Seymour speaks during the response to the Governor-General's statement on the passing of Queen Elizabeth II, 13 September 2022.

Act Party Co-leader David Seymour speaks during the response to the Governor-General's statement on the passing of Queen Elizabeth II, 13 September 2022. Photo: Johnny Blades / VNP

The Commission, which has around twenty staff, was created as a condition of the ACT Party supporting the National Party government led by John Key on confidence and supply. Now ACT wants to disestablish it, although its leader David Seymour was at pains to point out that “this is not, in any way, an indictment on the quality of the work of the Productivity Commission”.

‘Tremendous work’

“The Productivity Commission has done some tremendous work over the past decade or so, and that work will remain available as an asset or a taonga for New Zealanders to be a guide for policy formation,” Seymour said while introducing the bill last night.

“I just make the case that if you look at the five most prominent inquiries according to Treasury, they are things such as housing affordability. I remember reading that report as a young staffer in a ministerial office here in Parliament when it came out in 2012. It remains very good advice for any Government wishing to improve housing affordability. Another one… regulatory institutions and practices; more effective social services, 2015; new models of tertiary education; New Zealand firms reaching for the frontier. 

“If you look at some of these subjects, they are clearly areas where, despite the best advice, Governments over the past decade, including those members opposite who have recently been retired from the Government benches by the voters, have failed to implement the policy process. The case I make is that we are much better at this point in time to retain the assets that the Productivity Commission has generated in its various pieces of policy advice and make sure that we do a better job of implementing them.”

New ministry

Another impetus at play here is a campaign against red tape, and the creation of a new ministry which Seymour will be the minister responsible for. He explained that the new Ministry of Regulation would be partly funded by the funding that would have gone on to the Productivity Commission, approximately $6 million each year.

Seymour said it was being designed “to ensure that we finally do proper analysis of new regulatory initiatives; something that we have paid lip service to but failed to do with the cost measured not only in the compliance costs of things people do but also the things they don't do and also the long-term cost of our culture being eroded—the so-called can-do Kiwi attitude being overwhelmed by a culture of no because there's always a rule saying you can't do that or it would cost too much to proceed”. 

The Minister for Climate Change James Shaw speaks to a motion declaring a climate emergency at Parliament

The Minister for Climate Change James Shaw speaks to a motion declaring a climate emergency at Parliament Photo: VNP / Daniela Maoate-Cox

There was unanimity among MPs debating this Bill that the Productivity Commission has done useful work, hence an incredulity among opposition members regarding the intent of the legislation to dismantle this independent Crown entity.


Green MP James Shaw said the Commission should remain in place, but with some simple reforms introduced, including making a statutory requirement for the government of the day to respond to Commission reports.

“So I do think that we should reject the bill, and to retain the Productivity Commission, but I do think we should do so with the intention to make those improvements.” Shaw said, before outlining his proposals:

“(1) that we retain the Productivity Commission; (2) that we create an independent nominating committee to de-politicise appointments; (3) that we require the Government to respond to each of the recommendations within a reasonable time frame, including justifications for why the Government disagrees with any recommendations. That would enable us to have a high-quality institution which gets a great deal more traction than it has been able to over the course of the last 10 years or so.”

These suggestions could have been considered at a select committee, had this Bill not been going through under urgency.

Duncan Webb in the House

Duncan Webb in the House Photo: ©VNP / Phil Smith

Meanwhile Shaw added that if the new Regulation Ministry’s aim was to reduce Government spending, then the savings that the new ministry was able to achieve should pay for itself, and shouldn't require the disestablishment of the Productivity Commission to get going.


The Labour MP Duncan Webb raised questions over how much the new Ministry of Regulation will cost, and the rationale behind it.

“The absolutely Kafkaesque attributes of disestablishing a Productivity Commission to set up a commission for red tape—to set up a commission which is to overlay the work of the Legislation Design and Advisory Committee, the Parliamentary Counsel Office, select committees, ministries and departments, and the Attorney-General's office because we need another look.

“Now, if you wanted to put yet another barrier in the place of good and effective legislation, you're doing a good job, David Seymour. The fact of the matter is that that is a vanity project and it will have absolutely no effect,” Webb said.

The Bill is on course to have its third and final reading tomorrow.

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