Productivity watchdog to be in action by next year

A "productivity commission", modelled on the Australian one, is expected to be up and running by April next year, the Government says.

Long sought by business lobby groups, it was a feature of the confidence and supply deal between National and Act, and one of the recommendations of the Don Brash-chaired 2025 taskforce.

The Australian model is a think-tank, funded by and reporting to the Government, but widely regarded as independent and a source of high-quality analysis adding value to the public policy process.

The New Zealand version will be much smaller, with a staff of up to 21 compared with Australia's 190 and a budget of $5 million carved from existing departmental budgets.

As well as inquiries into "productivity-related issues" it will review existing regulations and the effectiveness of regulatory agencies and analyse the impact of some proposed regulations.

Labour finance spokesman David Cunliffe said his party had been cautiously supportive of a productivity commission along Australian lines.

"We still have an open mind but on the material released so far the National/Act version appears to fall well short.

"It looks like a regulatory razor gang which would either replicate or replace the work already done by the regulatory impact advisory unit [in] the Treasury."

Its mandate was too narrow and too focused on regulation and the public sector, Mr Cunliffe said. "Lifting productivity is not just a matter of sacking people, and making the rest work harder so that output per hour goes up. It is about skills, technology and capital.

"The Australian commission has a broad view of what productivity is all about and it has a very different look and feel from what has so far been released."

Finance Minister Bill English said it was important the commission was seen to be independent and earned respect across the political spectrum by the quality of work, as the Australian one had.

Act leader Rodney Hide expected it would operate like the Australian one, which issues draft reports and consults widely before coming to a final view.