Productivity archive at Grant Robertson

Archive for the 'Productivity' Category

Productivity Commission

March 21st, 2010

Its nice to be able to say that I support a government policy, albeit with some caveats. I think there is considerable value in a Productivity Commission. One of the main reasons is that it will ensure there is some critical long-term thinking about government policy.

Productivity is a crucial indicator. In its simplest form it is assessing the rate of outputs produced to inputs used. However the key to whether the focus on productivity is the nature of the inputs that are measured. To give an example, using pretty narrow measures of productivity, the 1990s could look like a productive period for New Zealand. The reason for this- the cost of labour (represented by wages) dropped in the 1990s with the impact of the Employment Contracts Act. This is the period in which the wage gap with Australia accelerated, and from which we have never recovered.

As David Cunliffe has noted the principal concern about the commission announced here is the breadth of their mandate. From the early indications it looks as though the mandate will be somewhat narrower than the Australian one. I think that is a mistake. Using a broader measure of productivity is essential for the commission to have a positive influence. For example, the Australian commission has recently done a report on the role of the not for profit sector in terms of productivity. I am not sure that would fit in the terms of reference for NZ. It should, if it is to give us some clear long term benefits to our wealth and well-being.

There are a number of critical issues that I would like to see a Commission look into. One of the real drivers of productivity is to increase the skill level of the workforce. The current government has not shown much interest in this area, ditching the Skills Strategy, and cutting funding to Polytechnics. I think an early project of the Productivity Commission could be to look at workplace training. The ITOs have been doing great work, but it is patchy. Research and Development is another critical area to investigate and encourage.

We need a commission with an independent and broad focus. This can not be just about regulation and short term issues. I believe if we get the mandate right (and it has support across the political spectrum) it could play a vial role in our development as a country.

Posted in Public Services and Productivity. | 1 Comment

Key Government: All Map, No Compass

November 30th, 2009

If I was a betting man (which in fairness I am at the races from time to time) I would put my money on John Key going to Copenhagen. As Audrey Young points out

Attendance of leaders has become a matter of symbolism, a symbol of commitment to a positive outcome. Key looks like that is not important to him.

But that will be the only reason he goes. Not because he believes that the world desperately needs to come together to address a major environmental issue, or that for the future of New Zealand and our region we desperately need to be part of a positive solution. Goodness, earlier in the week Murray McCully was complaining about climate change taking too much time at CHOGM. Earth to Murray, its kinda the biggest show in town right now.

My prediction is that Steven Joyce will tell Key the optics look bad, and he had better get over there. I am sorry to sound so cynical but this is a bit of a pattern.

Today John Key has dismissed the 2025 taskforce report, in part on the basis that National needs to keep its promises to the electorate on keeping Labour programmes such as Working for Families and Interest Free Student Loans. Great, but we all know what Key and National actually think of those programmes- “communism by stealth” anyone? Its not that Key actually believes this is socially responsible policy, he’s just stuck with it.

Returning to Copenhagen the risk for New Zealand is that all this naked pragmitism is going to be seen as just that. Again to quote Audrey Young

No one will give Key credit for parachuting in for a photo-op once others have done the hard work

Therein lies the problem for New Zealand. Beyond any straight environmental motives, from an economic point of view being dragged kicking and screaming to Copenhagen is a terrible look for an isolated trading nation that has prided (and marketed) itself on its clean green image. Its probably already too late on that score.

I accept that John Key’s pragmatism is playing well with New Zealanders at the moment. Its all very well having good political anntennae, but the long term future of New Zealand suffers if you don’t have a plan as to where you are going. All map, no compass is a very bad recipe for New Zealand.

Posted in Economics, Productivity, Climate Change and Education. | 0 Comments

Now, that’s a stimulus plan

October 7th, 2009

Barack Obama is facing all kinds of issues in the US at the moment- healthcare reform, whether to put more troops into Afghanistan, climate change, you name it. All the while, he faces huge expectations on the left and visceral anger on the right.

But one thing he can point to is a stimulus package that has made some big investments in covers green jobs, extensive social assistance and research. The stimulus package included $21.5 billion in funding for research and development, particularly in leading edge genetic research. The money has been spread around the US, and is having a great effect in encouraging research where private sector funding has dried up.

This is the kind of long term thinking that has been missing from NZ’s response to the recession. Of course we don’t have $21 billion to do this, but our government has set on the sidelines, and worse still pulled back from research funding. If we want to improve productivity and develop a new economy, we need large scale investment. On this issue, the Obama administration is showing the way. (Hat tip: Lloyd Morrison)

Posted in Productivity and Science. | 0 Comments