The ACT Party thinks its own favoured child, the Productivity Commission, has proven a disappointment to its parent.
The party says the Commission has been "hijacked" and its current leadership is not right for the job.
The Productivity Commission was set up by the John Key Government in 2011 on the insistence of the ACT Party.
The party, which was led by Rodney Hide at that time, refused to support National on confidence and supply without getting the Commission established.
The current ACT leader, David Seymour, says the Commission has done some useful research which his party can draw on.
"But I think the Productivity Commission has frankly been hijacked," he says.
"The way the Productivity Commission has been staffed and directed in the past five years means I think that it is an open question about whether you would actually continue it."
The Commission was formerly led by a former deputy governor of the Reserve Bank, Murray Sherwin, but he was replaced three years ago by Ganesh Nana, an economist from Business and Economics Research Limited (BERL).
Seymour initially declined to name personalities, but then indicated Nana was not the right man for the job.
"I wouldn't have appointed Ganesh Nana as the Productivity Commissioner. That is basically due to a difference of view about what economic priorities New Zealand should have."
"I haven't thought about appointing (another) person, I am just thinking about the policy goals we have."
Seymour made no further comment on Nana, but the two have very different histories. Nana once told Stuff that New Zealand was "sold a lemon" on Rogernomics. His organisation also produced a report on economic disadvantage for some people and castigated New Zealanders' unwillingness to "shift the dial."
By contrast, Seymour is a child of Rogernomics.
Other Productivity Commission reports have looked at a wide variety of subjects, such as a low carbon economy, trade, housing affordability, local government and advocated moving away from an "ad hoc" immigration policy.
The Commission is declining to comment on Seymour's criticism.
It says agencies like itself with a statutorily independent role will often need to continue to perform that role through pre-election and post-election periods, and should undertake their role in a way that does not involve entering the political debate.
51 Comments
From it's title, I would have thought that the Commission might have spoken out on productivity and other things related to that. It would appear to have opinions on all sorts of things which have nothing to do with encouraging Kiwis to be more productive. That is obviously a leadership problem. The boss's opinion on Rogernomics is of no interest to anyone, and David Seymour is exactly right to express reservations about his leadership.
It was like that from right at the start. It's first review was on housing affordability (kinda related to productivity), it saw through the specuvestors and oligopolies, and saw the councils as having the smoking gun because of land supply. Was a very convenient finding for the government of the day.
Productivity is really energy-efficiencies - as this reporter has been told.
The energy in a barrel of oil - $80 US? - is equivalent to 4.5 years hard human yakka. That means labour is noise, statistically.
But still we peddle the myth, and still report it unchallenged.
EROEI has peaked and is falling; energy per head peaked in 1980; efficiency gains run into diminishing returns and Thermodynamic limits - so surprise, surprise, they've plateaued.
Ask the question, Eric.
Yes and no. I would suggest vested interests have hijacked the dialogue. Plenty are asking the question, and getting answers the vested interests don't want discussed.
But i think PDK is too vested in the physics to see and understand the politics. I find it ironic that the article describes Seymour as a 'child of Rogernomics' and cites Nana as saying 'NZ was sold a lemon in Rogernomics'. I find myself in agreement with Nana, and surprised that Seymour cannot see that NZ was most productive when the banks were highly regulated, and now when they are relatively unregulated, are at our least productive. How then does he see a solution to the productivity problem?
To me it is very clear that banking regulation must return to what we had before the gold standard was dumped. Where banks are not allowed to create money, especially without restraint. There is much more to this but really beyond the scope of this debate.
Edit; I note Luxon in an interview saying his response to productivity is Kiwis working harder, which suggests to me he doesn't understand either. I would suggest working smarter is the need, not harder.
Seymour’s view of productivity is too narrow.
Sure, we can have a really productive economy by having slave labour and further subsidising businesses, extracting more fossil fuels and using the environment as a sewer.
However in a grown-up country, Productivity has to seek to improve wellbeing (net economic+social+environmental outcomes) per capita, not have just a narrow neoliberal view focused on gdp per capita.
There are many productivity issues in NZ, like lack of capital, too many small businesses, banks with too much risk weighting towards housing, and many capital lazy monopolies and oligopolies, and no population strategy. We need to get on and address these issues.
"However in a grown-up country, Productivity has to seek to improve wellbeing (net economic+social+environmental outcomes) per capita, not have just a narrow neoliberal view focused on gdp per capita."
GDP pc is what pays for everything else. It's not a "narrow neoliberal view" it's the wellbeing foundation.
Better yet, compare/contrast GDP per capita rankings with Happiness Index rankings.
Here's a teaser;
2023 US GDP per capita USD$63,953; US Happiness Index ranking #15th
2023 NZ GDP per capita USD$46,936; NZ Happiness Index ranking #10th
GDP you can measure, happiness is subjective and depends on who, when and how you ask and what they mean by happiness. A wealthy country has more opportunities and facilities, as well as better services so people should on average be happier I.e. disabled services are better in the US then sub Saharan Africa. Sort so similar to wellbeing….what does it actually mean and how do you measure it?
Happiness is subjective, but it's also usually binary (you're either happy or you're not), and a lot less related to opportunity and services than we like to assume.
I'm of the opinion that happiness declines with abundance. Mostly through observation mind, but it does seem like the wealth of choice in our culture makes happiness more fleeting than the opposite.
The fear of it is a threat to your happiness.
But if you're talking western countries, they've never been safer. Yet anxiety is at an all time high.
Obviously if you're somewhere war torn or ravaged by hunger, you have material suffering, making happiness harder to come by. But in general terms, the resources we in our culture deploy to make life that teeny tiny little bit better, have a diminishing return on happiness.
The happiest people I come across are generally semi-agrarian people, with strong cultures and a lack of material abundance.
HSL. They deploy a very sophisticated model in calculating the Happiness Index - check it out - all very quantitative in its approach. Looks across many, many indices. Not subjective (i.e., surveying individuals) at all (again, last time I looked). Example, suicide rate per capita is an indices (last time I looked) - incarceration rate per capita - educational achievement stats, etc. etc.
Then again, they chomp down anti depressants like they were peanuts.
I can’t say NZ is a lot different in that regard as anti-depressants are dished out like tic tacs here. Having see many of my age group have them through teen years and 20’s the effectiveness is questionable.
kknz - no, GDP in NOT repeat NOT the foundation for wellbeing.
GDP is added to if a war demands activity; GDP increased when they 'rebuilt' Christchurch - back to where it was before. Any REAL count would have been negative, then come back to zero. GDP was invented for a short-term reason, and it always had issues. Why so many folk worship it, is beyond me.
Supply of resources, and energy, per head - is the only measure of wellbeing. The rest is wishful thinking...
Except this is a really inane example. I don't know about you, but I spend my money only on things that make me better off. If I spend $20 I expect to receive at least $20.01 in subjective benefits from it, or I wouldn't do it. This is the whole basis of voluntary exchange.
That party is done, resources squandered, sense of entitlement exploded, but planet Earth same size. Every living thing on this planet has had to collapse to make room for human overgrowth, many providing essential ecosystem services. Excepting domestic livestock,pets, rats and roaches etc. There's only a handful of options left now. None attractive. Personally I prefer sizing the human super organism to the planets yearly solar energy budget and rate of natural resource replenishment. Getting there will require pain, but at least we can choose. The others, collapse and extinction and the Borg collective techno utopian attempt to become separate from our biology in a metal encased pseudo existence, which will resemble hell, on the journey to collapse.
Sheesh.
But that aside, if that is their measure - then has it increased or decreased since they have been in existence?
If not, have government(s) ignored some/most of their recommendations?
Surely these are the question to be asked in measuring their worth - not what the perceived ideology of the head honcho is.
DS needs to think smarter and beyond ideology.
.
really i find small farmers are less productive because they are less likely to outlay funds to by new technology farter just keep on doing things the way they have always been done, i can say this as a shareholder in 2 diary farms down the bottom of the south island , rather than forgo a few years of profit to invest in a wintering shed like they use in scandinavian countries we truck some of our herd up to the top of the SI .
the numbers show we would pay it off in 5 years of no profit but that is the way we have always done it so we will carry on that way
You are not corporate then, so could be considered 'small'. How about sheep and beef. The family owned holding less efficient than the corporate owned? I think not.
Id also suggest you 'big' farming model is unhelpful and shows the destructive side of 'big'. Dairy killed off many family owned farms in Southland. Beef, lamb, venison, wool, velvet producing diversified family farms killed off by a dairy invasion (along with the waterways). Farms suited to the environment.
Have family with a small business. It can murder the big boys on price, quality, service - every point, and does. However the threat of the big boys noticing forever looms. These big boys show no innovation, do the job same way year after to year and are light years behind - but will crush a competitor if they choose.
So I don't buy the too many small business thing. These small businesses are gold.
That's exactly right. If governments had done most of what the productivity commission have been suggesting over the past 20 years, we wouldn't have had a massive productivity drought. Instead they have almost completely ignored all their recommendations and, unsurprisingly, ended up with low productivity.
Seymour is a hack for libertarian interests that believe productivity can only be achieved by business. When in fact most large technological changes of the past 100 years have gone through universities or been government funded (space/internet/microchips/medical advances etc). Companies only tend to make incremental changes to things that already exist, important, but not the major source.
Of course technical changes are most likely to originate in universities. (Universities with STEM departments). All but the smallest countries have universities but developing technical ideas into profitable businesses occurs in just a few places. Britain invented many technical improvements for cars that were then adopted by German and Japanese companies; Britain invented and built the first computers but the profits were made in America. Geoffrey Hinton the god-father of AI studied in Cambridge and Edinburgh but the money in AI goes to America and China. NZ should be doing more stealing ideas from foreigners - for example the profitable Kiwi fruit was once a Chinese gooseberry.
Pretty sure Geoff Simmons, former leader of TOP, until recently worked at the Productivity Commission. This is a guy who in all seriousness believes that the way to encourage more productive use of assets is to tax said assets on an annual basis, because the asset owners will then be better incentivised to use the assets in a way that generates more income in order to cover the tax burden. INSANITY.
The Productivity Commission should be dissolved and then rebuilt as a fit for purpose entity. Sounds drastic, but I really think it is necessary.
All assets. When Geoff was leader I asked if I would be taxed for my boat. The answer was that if the boat was over a certain value it would be taxed. This was a few years ago, they have subsequently dropped this policy.
Also, land is not special, it is an asset just like any other. Georgism is a backwards cult with a very small number of very vocal and very obsessed adherents.
You got it all wrong.
An asset tax will drive investment into productive assets, lighten the tax burden on the productive sector and discourage those such as land bankers.
Or put it another way - rid NZ of the scourge of property flipping and speculation in non productive asset owning activities.
You stated that that an “asset tax will drive investment into productive assets” and then have the gall to tell me that I’m the one making no sense?
Explain to me how you think a tax on assets, which under TOP’s prior policy included factory machinery, would drive productive investment. Geoff’s view was that if you tax people on their factory equipment they will be forced to use it more efficiently to earn more money and cover the tax burden. This is nonsense.
He advocated for this when he worked at the Morgan Foundation too, referring to it as a Comprehensive Capital Tax (CCT). Read “The Big Kahuna”.
I actually agree with you that a capital tax on everything would be dumb and have negative effects.
Where I disagree is lumping in land with those other assets you listed like factory machinery and technology. We can create factory machinery, tools, and technology but we fundamentally cannot create more land, it holds a natural monopoly, and the land was here well before we were, and will be there long after we are gone, it's not a product of human creation or ingenuity it's more akin to air or water, and as fundamental to human life as those two are.
With our current ownership structure and tax setup, taxing it wouldn't have the negative effects we would see with other assets as you can't destroy it, remove it from the country, or change its utility. An LVT creates no deadweight losses and doesn't have the same negative effects other taxes have (e.g GST, Income taxes, property taxes, etc.)
Murray Sherwin was a deputy governor of the RBNZ - possibly a civil servant 'slug' as you suggest?
Ganesh Nana was a research director of BERL, a private sector economics firm.
Perhaps their differences (if there were any) were in methodology.
Funny thing is, Rodney Hyde of ACT always railed against QUANGOS, but in this case, he established a new one!!!
The differences are more to be found in political persuasion, with blindspots acceptable to the mainstream parties orientations. Labour's appointment of Nana was criticised by more than a few at the time.
Hey Productivity Commission, leave 'social justice' alone | Stuff.co.nz
Apart for generating endless reports that have been ignored by governments of all stripes, what has the Productivity Commission actually achieved?
It might be that most of parliament and the public service simply don't understand the idea of productivity: it's a blind measure of how efficiently we do things, and the things done can be beneficial, green, prosocial and all the rest: it is not an inherently malign measure.
An illustrative example: a few weeks back on the AM show, a minister was asked: "what are you doing to improve productivity?"
The minister's response was: "we've increased the minimum wage!" with a big smile.
To the repeated question the answer was the same, with a certain hardening of the minister's expression, while the host looked increasingly nonplussed at the gulf of understanding about a such a simple question.
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