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ROB MacCULLOCH: Misuse of public money on Productivity Commission

Ardern's Government misused public money by instructing the Productivity Commission to pursue its own Social Agenda irrelevant to Productivity


The Head of the Productivity Commission, Ganesh Nana writes, "As the year ends, I reflect on the work of the Commission and am proud of what we have achieved. The completion of the A Fair Chance for All inquiry was significant. We ... made insightful recommendations recognizing the strengths of communities already addressing & successfully alleviating persistent disadvantage" and then he finishes with this: "I am proud of the way the team have responded to the news of our disestablishment – with dignity & professionalism".


Therein lies the reason why the Commission was wound up by the new coalition. It wasted taxpayer money. Its mission (& own name) was never about increasing fairness & alleviating disadvantage - it was meant to be about increasing productivity. The Ministry of Social Development writes reports about fairness & disadvantage - it was not the Commission's business. Its mission was to find ways of getting more output - more GDP - for given amounts of inputs, like hours spent working. The Commission's report has a huge focus on well-being, but NZ is ranked in the world's top ten in terms of surveyed measures of well-being, like "life satisfaction", and Māori levels are similar to non-Māori. The Commission's report confuses well-being with income.


Economics has long distinguished between efficiency & equity. Much of the subject is built on the principle that a trade-off exists between the two - namely that increasing equity by increasing taxes reduces the incentive to create wealth. The Commission's job was to focus on efficiency - it focused on equity instead. It "recommends" introducing a "Social Inclusion Act". Not its job. Ardern's government perverted the role of the Commission. Little wonder its legacy has been mistrust. Who'd not be mistrustful when the Productivity Commission became the opposite of its name? Namely, the Fairness, Inclusion and Equality Commission.



Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. Rob blogs at Down To Earth Kiwi

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