Boosting services sector productivity

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The Productivity Commission has completed its inquiry into lifting services sector productivity and presented its final report to the Government. 

The final report follows an issues paper and two interim reports. The Commission considered 56 submissions, met with over 60 interested parties, and surveyed 1 526 businesses. Our thanks to all those who contributed!

Boosting services sector productivity

Timeline

  • Our brief
    1 March 2013
  • Consultation and engagement starts
  • Issues paper
    April 2013
  • Submissions closed 2 May 2013
  • 1st Interim report
    26 July 2013
  • Submissions closed 23 August 2013
  • 2nd Interim report
    29 January 2014
  • Submissions closed 7 March 2014
  • Final report
    5 June 2014
  • Evaluation
    June 2014

The inquiry

New Zealanders deal with services daily, whether they are banking, going online, dining out, or buying and selling a home. As well as accounting for over 70% of New Zealand’s GDP, the services sector is a key enabler of productivity for other sectors through the supply of technical, logistical and other business services. Over 70% of jobs and businesses are in services, ranging from tourism and travel, accountancy, law and ICT, to scientific and technical services.

Given the size, breadth and significance of the sector, improving the productivity of services can have positive effects for the whole economy and for the wellbeing of New Zealanders. The Government asked the Commission to investigate ways to lift the productivity of the services sector.


Key findings

Chair of the Productivity Commission Murray Sherwin shares our key findings and recommendations in the following short video:


Key recommendations

The Commission recommends helping consumers drive competition, enabling the Commerce Commission to make greater use of market studies of competition issues in service markets, and reducing barriers to overseas firms supplying services in New Zealand. We also need to be at the top of our game when it comes to competition law and resolve the long-standing debate around section 36 of the Commerce Act.

Embracing ICT and the opportunities it creates is particularly important for New Zealand’s service firms. The Commissions puts forwards recommendations to improve the supply of ICT skills, for example by enhancing links between business and tertiary education providers. Read about all of our recommendations in the following documents:

Government response

The Government has considered the Commission’s report and recommendations, but no response has been released to date.

The Business Growth Agenda (10 June, p. 55) signalled a review of s36 of Commerce Act on misuse of market power prohibition.


Evaluation

An independent evaluation of the Commission’s performance has been undertaken and the results from the expert review, focus groups and participant survey are available below.