Productivity
Very interesting session on the economy, with a focus on how to increase productivity. The guest speaker highlighted five issues:
- Changing the balance of exposed and sheltered sectors, as exposed sectors tend to have higher productivity
- The behaviour in the sheltered sector and how it imposes costs on the exposed sector
- Market and Government failures
- Capacity constraints
- Random luck, culture
There was an in depth look at the health and electricity sectors. The health sector has had a huge decline in productivity. Now it was acknowledged that some of this is simply having to pay higher wages to retain staff. But reference was made to an upcoming study which is looking at outputs per medical staff, and that the findings are quite depressing – something like a 15% decline. There are real structural problems in health.
Also of concern was the detail of how the Health Ministry has stopped publishing much of its data, and how they tried to charge $12,000 under the OIA for supplying some productivity data. The speaker advocated amending the OIA to force more info into the public domain, and also amending the Statistics Act to increase the power of the Government Statistician to force Govt Depts to supply info for statistics they feel are of public interest.
The role of the Electricity Commission was also focused on, and the mounting evidence that it has been removing transparency with caving into private pressure from Ministers and, in turn, applying pressure to generators to put prices up (so backup supply can be triggered) and then pressuring them to put prices down again. I am leaning towards the view the Commission can not be reformed, and should simply be abolished. For $90 million a year it is not adding value.