Productivity Commission

[22:12]

CHAIR: I welcome Mr Mike Woods and officers from the Productivity Commission to Senate estimates. Do you have an opening statement, Mr Woods?

Mr Woods : With your permission, I would like to table an opening statement. It goes through the normal process of what we have done since we last saw you and what new projects have come on board.

CHAIR: Thank you, Mr Woods; so tabled. We will circulate that to members.

Senator CORMANN: This is the first meeting since the previous chair, Mr Banks, left the commission and it is the first meeting since the appointment of Mr Harris. He will join the commission, I gather, on 11 March. Is that right?

Mr Woods : Indeed, that is correct.

Senator CORMANN: This is probably more appropriately a question for you, Minister. Could you talk us through the appointment process that was followed for the appointment of the new chair of the Productivity Commission?

Senator Wong: I will have to take that on notice, if you want detail on it. It is a cabinet-level appointment. I am not the minister who dealt with this. I am representing the Treasurer, so I will take it on notice.

Senator CORMANN: Sure, but if you are going to take it on notice you need to know what I am interested in so I will read that into Hansard. That might be useful.

Senator Wong: Sure.

Senator CORMANN: I am interested to know how long the process took, how many candidates applied for the position and how many candidates were short-listed for interview. I suspect you will not tell us this, but how many candidates were interviewed? Were any other Commonwealth departmental secretaries considered and/or interviewed? Were any departmental secretaries of state governments interviewed? Did any of the candidates interviewed come from the private sector or from academia? Being a key economic institution, with a responsibility to fight for greater productivity and reform, what was the key skill set or skill sets that helped Mr Harris succeed in this position above any other candidates that may have been considered? Can you take those questions on notice?

Senator Wong: I will take that on notice. We will give you the same sorts of responses that Mr Costello used to give.

Senator CORMANN: I am happy for you to pursue this commentary—

Senator Wong: I am just letting you know.

Senator CORMANN: We will see. In relation to the work that the Productivity Commission has done, I was interested in your productivity policies to-do list. Can you talk to us through that and give us a bit more detail about the productivity policies to-do list, the way you see the status at present?

Senator Wong: Is this the speech by Mr Banks after the—

Senator CORMANN: That is right.

Senator Wong: Which we had a discussion about at the last estimates.

Senator CORMANN: November 2012, so that was after the last estimates. I am talking about a paper that the commission released after we last met in October.

Mr Woods : The paper was the speech provided by the former chairman at a forum. That speech in effect drew on a number of the commission's reports and constructed them into a range of themes.

Senator CORMANN: It is not very helpful telling me that there was a paper that touched on a range of themes. Can you be a bit more specific? What were the key points? I could have told you there were a range of themes—I mean, please.

Senator Wong: Then why are you asking the question?

Senator CORMANN: Because that is not an answer to the question.

Senator Wong: Is there a question other than us at 10:15 at night reciting a speech that is publicly available? We can read it out if you would like. It would be useful use of the department's time!

Senator CORMANN: I think Mr Woods is finding the document.

Senator Wong: He can read the speech, if you like.

Senator CORMANN: I am interested in what the Productivity Commission is proposing to do in relation to the productivity policies to-do list.

Senator Wong: That is a different question. What on the to-do list are you proposing to do: is that the question?

Senator CORMANN: Hang on. I started off with what is the status of it. Obviously, the next question is: what are you proposing to do about the to-do list? Obviously, Mr Banks has left. What are the current priorities of the Productivity Commission in relation to the to-do list inheritance he has left behind for you?

Mr Woods : As I was pointing out, that to-do list comes from a speech that draws on matters that the commission has raised in previous reports and inquiries. It is not for the commission to self-initiate activity on that list. As you are aware, we receive our terms of reference from the Treasurer or the Assistant Treasurer, which comes either from the Australian government or from the Council of Australian Governments. Our work program in terms of inquiries and commission research is prioritised by those bodies. We currently have a work program that deals with those terms of reference that we have received.

Senator CORMANN: Let me go to some specifics. This is a Productivity Commission paper, of course, which Mr Banks presented at the Economic and Social Outlook Conference in November last year. It states on pages 9 to 11:

… Australia has undergone successive rounds of reform directed at opening up industries to both domestic and foreign competition … It is therefore of concern that progress has stalled or even reversed in some policy areas. The ‘to do list’ among Commission recommendations is still a fairly long one.

…   …   …

Reviews need to target the more significant restrictions on competition … Priorities include:

…   …   …

coastal shipping protection, which has recently been strengthened—raising costs to user industries and weakening inter-modal competition—without being subjected to a public interest test

Can you talk us through what is meant by this statement?

Mr Woods : That is a statement embedded in that speech that identifies a number of areas that the commission has worked on previously in which the conclusion has been drawn by the commission that there remains activity that can be pursued that may enhance productivity—that was the recommendation in the reports at the time. To date, some of those matters have not been fully addressed and there are opportunities, should governments wish, to give us terms of reference that would allow us to examine those in further detail.

Senator CORMANN: But the government so far has not given you any terms of reference to that effect.

Mr Woods : The terms of reference that we have before us at the moment do not deal us with the specific issues that are in that list, no.

Senator CORMANN: In fact, it sounds to me as if the comment that Mr Banks made about progress stalling or even reversing in some policy areas—and the specific example was coastal shipping protection being ramped up—is a not very veiled criticism of what Minister Albanese would call his shipping reform package, which was legislated in 2011-12 at a cost to the budget of $254.5 million over the forward estimates. Is that the package that you were concerned about in the context of productivity?

Mr Woods : That is one item on a large list that is incorporated in this speech for which the reforms announced by government are not fully in accord with some work that was previously done by the commission. But of course the commission makes recommendations to the government of the day and it is up to the government of the day to decide on what actions it will take.

Senator CORMANN: What particular elements of that package are inconsistent with the recommendations that the Productivity Commission has previously made?

Mr Woods : We have not done a detailed analysis, and we do not do such analyses of government decisions. We receive a term of reference. We provide recommendations in accordance with that term of reference. The decisions made by government in relation to the report that we provide are matters for government and we do not therefore do detailed analyses of the extent and the consequences of government decisions. I would point out that in the shipping one the reforms that the government announced are not in direct response to a particular report of the commission. It is just that we have dealt with that topic previously.

Senator CORMANN: What are the user industries that are impacted by a reversal of direction in policy impacting on productivity?

Mr Woods : Which particular issue are you referring to?

Senator CORMANN: What are the user industries of the coastal shipping service that the Productivity Commission is concerned would be adversely impacted by lower productivity?

Mr Woods : That has not been the subject of a particular inquiry that we have before us, so we are not able to give you a detailed answer on that.

Senator CORMANN: But you previously said that you have done work on this.

Mr Woods : On that topic of coastal shipping in relation to part—

Senator Wong: You are asking him a question about a government policy.

Senator CORMANN: I am asking a question about previous analysis undertaken by—

Senator Wong: No. You asked him about the impact of the government's policy announcement.

Senator CORMANN: We have moved on from that, Minister.

Senator Wong: No.

Senator CORMANN: I was asking who the user industries are—

Senator Wong: Yes, you were asking about the—

Senator CORMANN: No, it was—

Senator Wong: Can I finish, or shall we just have a chat?

Senator CORMANN: I am happy to have a chat, too, but not now.

Senator Wong: My point is that I have let this go because I understand the point that Senator Cormann is making. But to then ask Mr Woods to comment, given his previous analysis and given this government policy, on which are the industries impacted is probably a little unfair. If you have an issue about—

Senator CORMANN: Based on your previous work—

Senator Wong: If you have an issue about the policy, you probably should direct your questions to the appropriate portfolio.

Senator CORMANN: Sure. But based on your previous work in this area—so I am asking you a factual question about your previous analysis—what are the sorts of user industries that are impacted by lower productivity in shipping?

Mr Woods : The previous report, in fact, was an industry commission report, so it was done a very long time ago. I am not able to tonight bring forward to my memory what that industry commission said on this topic.

Senator CORMANN: 'I cannot bring forward to my memory'? Sir Humphrey could have come up with that!

Senator Wong: Come on, Senator Cormann.

Senator CORMANN: He is saying he cannot remember the report.

Mr Woods : It was a report done more than 15 years ago.

Senator Wong: He is not a politician. You do not need to behave like that.

Senator CAMERON: There is an old saying that there is nothing as ex as an ex-chairman of the Productivity Commission!

Senator Wong: Maybe ex-politicians. We are more ex than that.

Senator CAMERON: I am probably cheapening the Productivity Commission! One of my critiques of the Productivity Commission over a long period of time has been this underpinning of ideology in your reports. That seems to be kept going by former chairman Banks in his last speech. Do you think that under the new chair you will have a more evidence based approach than an ideological approach on certain issues?

Mr Woods : You and I have had exchanges on ideology in another parliamentary committee. At that time, I made the point that we are evidence based. That is what drives our analysis. As required under our act, we develop recommendations that we consider are in the best interests of the Australian community as a whole. When you look at the diversity of our reports, whether they be on disability, aged care, chemicals and plastics legislation or some of the industry assistance, I do not think that you would be able to discern an ideology beyond evidence based analysis.

Senator CAMERON: That is debatable. That might be your point of view, but that is debatable.

Mr Woods : We have had these debates. I would argue that when you look at the diversity of the reports you would see issues of equity and efficiency entering equally into a number of them. The commission is proud to stand by those recommendations.

Senator CAMERON: Have you prepared an incoming brief for the new chairman?

Mr Woods : We are in the process of preparing briefs on what activities we are currently undertaking and what is likely to come up in the near future in terms of publication of reports. There will be discussions with the incoming chair when he arrives.

Senator CAMERON: Could you provide a copy of that brief to the committee.

Mr Woods : I will take that on notice.

CHAIR: Thank you, Mr Woods. I thank your officers for being of assistance to the committee this evening.

Committee adjourned at 22:27