2011: NZ Productivity Commission

September 11, 2020

By AHNZ

The New Zealand Productivity Commission was created by National 5.0, established on April Fools Day 2011. True paternity belongs with that Government’s coalition partner, the ACT Party of Rodney Hide¹.

The Productivity Commission is the naive Libertarian’s idea that Governments have New Zealand’s best interests in mind and would do the right thing if only they got good advice. Actually, all Governments are simply opportunistic parasitical organisms out for all they can get.

Their concern is to cut off money and power to their foes and channel it into their friends and will say and do whatever it takes to make sure the people don’t awaken and rebel. If New Zealanders really knew what was going on with their Government there would be a revolution in the streets! As it is, the Kiwi resembles the sleeping and prone character in the Milton Bradley board game Operation. While the New Zealander sleeps, the politicians carefully extract his organs while trying very hard not to raise the alarm!

Successive Governments don’t even listen to their own treasury advice or science advice or statistical evidence unless it suits them politically to do so. If the advice does suit it’s probably because that Government has appointed some well-funded consultants to say what the party wanted New Zealanders to hear (my favourite example of this was when Labour 6.0 had National 5.0’s concern for Methamphetamine undone.)

The Productivity Commission with their $5 million annual budget have been doing deep-dive economic analysis into New Zealand economic productivity for the past decade. It provides a few jobs for economics graduates and for some graphic designers such as the ones who came up with their nice box-and-whisker logo. They basically write joke book sheets and make satirical videos at taxpayer’s expense the same way the CATO Institute or NZ Initiative do for free. Only politicians and Anarchists understand it’s all a joke though. Their entire body of work resembles a council parking warden trying to get James Bond to pay a $20 ticket for parking wrongly in Act 1, Scene 1, of any of his films. Meanwhile, numerous buildings and vehicles and lives have been destroyed spectacularly but..they want to issue their parking ticket!? Farcical and pointless!

Labour 6.0 would happily ditch the Productivity Commission but why should they? It costs too little to bother them, is easily ignored, and cancelling something called “productivity commission” would only bring them bad press. So, this little quango lingers on and keeps on spitting into the wind out in political Siberia.

Productivity Commission and COVID-19

The PC economists were pulled away from their make-work tasks to pitch in and help Treasury give advice to Labour 6.0 about the impact of COVID-19 when it struck early in 2020. The result was a report on the economic impact that was released in August 2020. It was written in May 2020, buried by Government who probably hardly read it, then finally released to the public due to an Official Information Act request…

“One reviewer noted that, according to the media and his own straw polling, there has been generally strong support for the 5-day extension. How can that be if the cost is so large? The reviewer noted that many of his friends and acquaintances have continued to work or are retired, and the extra 5 days has cost them little, while they receive extra assurance that they remain safe from COVID-19. Those continuing to get paid while not working may be in a similar position. The wage subsidy has driven a wedge between private returns and social returns under lockdown.”- A cost benefit analysis of 5 extra days at COVID-19 alert level 4; Dave Heatley, NZ Productivity Commission (2020)

[This is an important observation. To put it another way, the Lockdown hurts people who make money but is like a vacation to those in our society who make the money.]

“Similar, but perhaps greater, uncertainties apply to the norms, rules and institutions that contribute to social capital. From one perspective, mandated social distancing limits freedom of association and freedom of movement, thus reducing social capital. Taking another perspective, the “we’re all in this together” nature of the Government and public response are making a positive contribution to social capital. I am unclear how to quantify such factors individually, and even less clear how
they might be appropriately weighted.”- ibid

[Dave, the economist, doesn’t know how to quantify the difference between authentic human-made Social Capital and that manufactured by Government propaganda campaigns. Poor guy honestly thinks that all those ‘Be Kind’ and yellow stripy Public Service Announcements might actually give Kiwis enough ‘Utils’ of happiness to offset having their freedom of association and movement removed! Economics is the Dismal Science all right, and this economics is a joke to we Ancaps!]

The report’s findings were that the costs of the April Lockdown were $740 million more than the economic benefits. Because this information is not of the sort Labour 6.0 want to hear, the Productivity Commission were put on ice and sent back to their busy-work corner to be ignored once again.

“The work, born of discussions with Treasury officials, found the costs of that April extension of hard lockdown were $740 million greater than the benefits; it was designed to show a technique for weighing health benefits against economic costs that could be used in future decision making.  But the early scramble of work now appears to have given way to a surprising measure of slack at the independent, little Crown agency.”

“Dave Heatley, principal analyst at the commission and seemingly the only public servant to undertake an actual cost-benefit analysis of any aspect of New Zealand Covid-19 policy,was essentially ignored. With no interest in follow-up work from the Treasury, Heatley was left to potter off to do some skiing in the Southern Alps followed by a spot of volunteer rat-catching in Fiordland.”- Kate MacNamara: Why productivity at the Productivity Commission seems to be at a low ebb; NZ Herald (11 Sep, 2020)

Of course nobody in Government is listening to what the economists have to say. It takes a Statist to believe that good economic advice is all that is lacking to turn around predatory politicians in their tracks.

Taking Government money to reduce the important work of economics to that of a disowned mutt tied up out back does a disservice to the discipline. No self-respecting economist would really dedicate their work to an April Fool’s joke like the Productivity Commission.

—
1 That same month in 2011, Hide would step down as ACT Leader as the party imploded. They never quite got to enjoy their little quango but, orphaned, it has outlasted them.

Ref. The New Zealand Productivity Commission; Wiki

Image ref. Dave Heatley bio; PC

Update, April 2021:  Here we go, Labour 6.0 are finally making a play…“Minister of Finance Grant Robertson has announced that economist Ganesh Nana will be the next chair of the Productivity Commission…s widely considered to be close to the Labour Party. His firm, BERL, costed Labour’s economic policies..”“The role and nature of the work of the Commission is set to change in light of these pressing challenges.””- Stuff (2020)

“Productivity and wellbeing must be viewed together, not separately. There are some who view wellbeing as a ‘nice to have’, suggesting we need to wait till we can afford improved wellbeing. Thankfully, such a perspective is no longer prevalent.” – Productivity = applying our taonga to deliver wellbeing, Dr Ganesh Nana; Ref. Hey Productivity Commission, leave ‘social justice’ alone, D. Grant, Stuff (Mar 2021)

Ref. NZ Productivity Commission Woked Up, NZB3 (2021)

Update 2023: “ACT’s policy for a Minister for Regulation will be accompanied by the disestablishment of the current Productivity Commission.” Ref. New coalition agreement details at a glance: What you need to know, NZ Herald (2023)

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