Closing statement from Dr Ganesh Nana

Completion of our work programme

I would like to acknowledge, thank, and record my pride in the staff of the Commission who have over the past several weeks successfully completed and delivered, in a thoroughly professional manner, a range of final work projects.

In particular, Improving economic resilience - our 18th inquiry - builds on findings from previous inquiries. This report stresses the need for cross-silo long-term investments in our people, resources, and institutions to prepare our economy and communities for the potential disruptions ahead.

The theme of cross-silo long-term investments is prevalent in our Looking to the future report. This report is offered to inform the ongoing research and analysis on policy issues that matter for productivity and to support public debate, given the ongoing importance of productivity to our future.

Business by the numbers (BBTN) casts the spotlight on the 48,000 businesses in New Zealand that have 6 or more employees. We interrogate the gold mine of data available in the Business Operations Survey, which can (and should) be used to inform future decision-making. Initially envisaged as a companion piece to our flagship Productivity by the numbers (PBTN). We hope both PBTN and BBTN will also be picked up and continued by interested researchers.

As noted in How inquiries support change, the work of an inquiry is fundamentally an exercise in persuasion, which cannot succeed without finding the underlying cause of an issue. Talking to stakeholders, hearing as many voices as possible, collecting and analysing information and data to draw new insights, and conveying findings and presenting recommendations in a clear and compelling manner are vital ingredients for success. These traits will continue to be necessary for future organisations should any inquiry model be adopted to tackle the range of complex and connected challenges facing Aotearoa New Zealand in the 21st century. 

Several working or research papers have also been published and these can be viewed on our website.

Wind-down

Alongside this effort, staff have arranged for the orderly wind-down of an organisation under the most constrained timeline peppered with considerable uncertainties. As part of these wind-down efforts, we have done our best to ensure all inquiries and research completed by the Commission since its inception will continue to be available following it's disestablishment.

After 29 February our website will become the responsibility of the Treasury. We are thankful to the Treasury for its assurance that access to the full suite of the Commission's research, data, evidence, analysis, reports and information through our website will continue to be available to all.

All this work has been successfully completed and delivered by staff while under the cloud of incredible stress following the news their positions were about to be made redundant.

Process of disestablishment

I wish to comment on the manner in which the Commission was disestablished and the process that was followed.

To hear via a public announcement to media that the organisation you work for is to be closed, without even a courtesy heads up beforehand, was incredibly thoughtless and unnecessarily cruel to the Commission’s staff. This did not reflect well on those who decided and chose this process.

As most business and management courses would stress, communications are critical when implementing any decision. There was no formal notice given to us until the Minister’s Letter of Expectations dated 19 December. This was some 17 working days following the public announcement and just three days before our scheduled Christmas break closure.

Further, between the public announcement and receipt of the Letter of Expectations we were not given the opportunity – despite repeated requests – to present or discuss options for a transfer of staff and the knowledge, expertise and investments that resides within them.

I stress here that I am not contesting the disestablishment decision. A new Government (any Government) has a right to make such a decision. However, the process followed showed a clear lack of knowledge and understanding of the basic principles that underpin good employment practice or, indeed, good business relationships.

Despite this lack of respect shown to staff of the organisation, they committed to deliver and have completed high-quality work projects as noted above. I am not only incredibly thankful for the professionalism of my staff, but also their general demeanour and support of each other in such a trying time.

Most frustrating for myself is that the outcome could have been so easily achieved with much less collateral damage. All it required was a simple phone call. It’s called communication.

Indeed, had such a phone call been made, I am sure that arrangements could have been made to ensure the staff, their knowledge and their expertise would not now be searching for a home. That collective knowledge and expertise is now at risk of being lost to the productivity agenda and challenge that remains in front of us all.

The productivity agenda

I wish to comment on that productivity agenda.

I have been Chair of the Productivity Commission, Te Kōmihana Whai Hua o Aotearoa, since January 2021. The Commission is an Independent Crown Entity, with a purpose as per its original 2010 legislation of “providing advice to government on improving productivity in a way that is directed to supporting the overall wellbeing of New Zealanders”. It is the totality of this kaupapa that drew me to this position.

I applaud this coalition Government’s stated commitment to “lift New Zealand’s productivity and economic growth to increase opportunities and prosperity for all New Zealanders”.

I fear though the minimal understanding of productivity and its drivers and a lack of appetite for the long-term investments, and policy, behaviour, and attitude changes required.

Bluntly, productivity should not be confused with making more and more stuff. It is the how (it is made) that matters. Making more and more stuff, with more and more workers, working for more and more hours, for less and less pay is NOT improved productivity. We must understand that productivity goes beyond a primitive understanding of increased revenue, or exhortations to spend more in retail stores and on-line sales – or, spurious commentary on the state of the real estate market.

More critical (and sometimes mischievously) is the conflation of productivity with profitability. The productivity of an economy is not measured by the profitability of its businesses.

Reducing costs on business may improve profitability, but this does not always increase productivity. Moreover, reducing direct costs to business (for example, through less regulation) does not necessarily eliminate the costs. The burden of these costs may rather be shifted to another group in our community to be borne by them, or to the environment and so to future generations of businesses, people and communities.

Rather, productivity is reflected in the quality and sustainability of the productive resources available to businesses and community. And, importantly, available to future generations to produce and deliver goods and services that are valued and are valuable.  It is about making more effective use of those resources, whether they be labour, skills, plant, buildings, machinery, technology, land, our natural environment and resources, or the goodwill and social cohesion of our society.

Making more and more stuff in a manner that extracts, exploits, erodes, deplenishes, or depletes such productive resources in a way that leaves some in present-day or future communities worse off is NOT productivity enhancing. 

While the Commission may now be gone, facing up to the productivity challenge remains ever present.

Papatūānuku is overheating and several planetary boundaries have already been overshot. The lasting impacts from a global pandemic should not be under-estimated. Persistent disadvantage is being embedded across generations, geo-political tensions are rife, impacting global trade relationships, and people and their communities are feeling increasingly disconnected from the centres of economic power and decision-making. The social cohesion and social licence of businesses to operate, that have been taken for granted for so long, are now visibly threadbare.

Pursuing productivity in isolation with short-term “interventions” within models that perpetuate siloed thinking, have not served us well; and they will do even more harm in the future. Marginal and peripheral policy and regulatory changes ignore the all-encompassing and simultaneous nature of the polycrisis we face. Recognising, embracing, preparing, and responding to these connected influences require shifts in thinking, approaches, models, and behaviours. It requires an openness to novel and innovative methods.

The Commission’s body of work since its inception has provided a consistently positive agenda for change focused on lifting productivity and improving wellbeing. This agenda for change was built on wide engagement with those outside Wellington and excellent empirical research and evidence.

The Low Emissions inquiry continues to be influential; its thinking inspired the Zero Carbon Act and the creation of the Climate Change Commission. The Regulatory Institution and Practices inquiry continues to be an important touchstone. Yes, it may not be an easy read given the subject matter, but it provides a host of causes of regulatory failure and pathways to improvement for those who aim to make people’s lives better through regulatory stewardship.

Laying down the wero

In recent times the Commission has had a real focus on innovation, science, and R&D to lift the performance of frontier firms and illustrated a pathway to economic diversification.

Embracing innovation is also at the heart of recognising and build on the strengths of communities. Advocating for better access to education and training and associated services through a nimble public service that allows communities to tailor solutions to their communities and provide that fair chance for all that is very much part of the Kiwi DNA.

Models and methods that put people and communities at the centre stand the best chance of acceptance and success – alongside standing to protect and assist those most unable to withstand the impacts of these challenges.

Throughout our work the connections between productivity, people, and place have been central.

We have observed throughout the range of our inquiry investigations that Aotearoa has strong business, community, and institutional foundations from which greater productivity can be achieved. We have dedicated people with an incredible sense of pride and da esire to contribute to their communities and to this nation. But seizing this opportunity demands listening and hearing their voices, alongside foresight, a long-term commitment to change, and a steady political will.

The increasing uncertainty posed by the myriad of challenges facing the communities of the 21st century, reinforces the need for a more integrated approach to lift productivity and deliver for all. In this way we can be aspirational – not just for the current, but also for the future, residents of Aotearoa.

I encourage all to pick up this wero so that we can indeed be proud of the legacy we leave to future generations.

And finally, once again, my thanks for the opportunity to lead this organisation; and to staff and Commissioners. I am grateful for their strength and their support in helping make my time here an enjoyable and fulfilling one.

Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.

Dr Ganesh Nana
Chair
New Zealand Productivity Commission | Te Kōmihana Whai Hua o Aoteroa