The Government asks the Commission to undertake inquiries into current issues to provide independent policy advice that can lead to improved productivity.
In this reporting period we received the Government’s interim response to our Immigration: Fit for the future inquiry report, which was completed in the previous financial year. We completed our inquiry into economic and social inclusion with the publication of our final report A Fair Chance for All: Breaking the cycle of persistent disadvantage, and we started work on a new inquiry into improving Aotearoa New Zealand’s economic resilience to persistent supply chain disruptions.
Although not a full inquiry, we also completed work on the Government’s request for a follow-on review to the New Zealand Firms: Reaching for the frontier inquiry.
Immigration: Fit for the future
We received an interim response from Government to our Immigration: Fit for the future report on 3 April 2023. The response highlights general agreement with the 24 recommendations made in our final report.
In its interim response, the Government discussed a range of changes for future work needed based on our recommendations, including the role of Te Tiriti o Waitangi in immigration and the development of a government policy statement on immigration.
The Government said that our report illustrated the importance of the correct immigration settings and the need to improve the public’s understanding of our goals.
The response summarises the major reforms being undertaken to drive a more coordinated, connected, and longer-term approach to workforce planning and development, as well as the further work that’s needed based on our recommendations.
- 32 findings
- 24 recommendations
A Fair Chance for All: Breaking the cycle of persistent disadvantage
The Government asked the Commission to conduct an inquiry into economic inclusion and social mobility – a fair chance for all – focusing on the drivers and underlying dynamics of persistent disadvantage (within people’s lifetimes and across generations). We were asked to develop recommendations for actions and system changes to break or mitigate the cycle of persistent disadvantage.
We adopted a new approach for this inquiry, engaging with agencies, organisations, and the public prior to having the terms of reference agreed. We continued to engage extensively with stakeholders throughout the inquiry process – many of which were organisations and groups that we had not engaged with previously.
We undertook novel quantitative analysis in-house to look at how disadvantage persists through time, using Census and Stats NZ survey data.
We also commissioned speciality research to contribute to our final report, including:
- public accountability settings (NZIER) and system learning and improvement (FrankAdvice)
- system mapping to deepen our understanding of the systemic barriers and drivers of persistent disadvantage and interconnections with the public management system (Deliberate)
- changes in family incomes from 2007 to 2020 and family resources across the early life course and children’s development (Victoria University).
This supplemented research that we commissioned for earlier stages of the inquiry, which included:
- a synthesis report of lived experience of disadvantage
- a review of joined-up social services to assess their effectiveness and identify barriers and enablers
- a report to develop our understanding of persistent disadvantage for Māori and Pacific people by exploring the relationship between colonisation, racism and wellbeing from Haemata
- an analysis of data from the Growing Up in New Zealand study hosted by University of Auckland, which looked at the relationship between household resources and wellbeing outcomes for children.
Our final report, released on 31 May 2023, contained 20 findings and 20 recommendations, including some for substantial change at the public management system-level. We published a companion report, A quantitative analysis of disadvantage and how it persists in Aotearoa New Zealand, containing a detailed definition for how we measured disadvantage, and our in-depth empirical findings.
In its interim response on 7 September 2023 to our recommendations in this inquiry, the Government signalled its support of a strong focus on addressing disadvantage.
The Government expressed interest in pursuing particular recommendations, including introducing new legislation (a Wellbeing of Future Generations Act), establishing a Commissioner for Future Generations, the establishment of a social floor that measures levels of both material and non-material wellbeing necessary for social inclusion and the Commission undertaking a follow-up inquiry in three years’ time.
We are expecting to report on the full response in the next annual report.
A post-inquiry evaluation including a survey of participants in the inquiry was completed. The results from these have been used in the performance measures for the inquiry in this report. A full copy of the results of the post-inquiry evaluation will be published on our website.
- 149 engagement meetings
- 154 submissions received
- 20 findings
- 20 recommendations
Frontier Firms Follow-on review
The Government asked the Commission to undertake a follow-on review of progress on the Government’s policy settings, workstreams and initiatives following our 2020–2021 inquiry on New Zealand Firms: Reaching for the frontier.
This was the first time the Government has requested a follow-on review of a completed inquiry.
As part of our review to assess the progress on the recommendations made in the 2021 report we met with stakeholders and undertook a “helicopter-level assessment” of whether the Government’s reform agenda is having the intended effects.
The final report recommended that focused innovation policy was vital to lifting national productivity and wellbeing. To help lift the wellbeing of New Zealanders, frontier firms in Aotearoa New Zealand need to raise their performance closer to the global frontier, and they need to grow larger and diffuse innovation through the rest of the economy. Policy needs to support the development of focused innovation ecosystems in which these frontier firms will grow and thrive.
We recommended a package of six actions to improve the chances of success.
Along with our final report we also published a supplementary report with detailed observations on what progress we found had been made on the recommendations in the original report for the Frontier Firms inquiry.
As this review fell outside of our usual inquiry criteria, we didn’t undertake a formal post-inquiry evaluation. Performance measures for the follow-on review are not included in this report but have been covered as part of the overall reporting against our impact indicators.
The Government’s response to the Commission’s report Follow-on Review – Frontier Firms on 28 August 2023, noted that the “follow-on report provides useful insights into New Zealand’s progress towards a more sustainable, inclusive and productive economy.”
The Government agreed with our finding that the National Research Priorities process should “not be a top-down exercise led by government, but rather a broad and collaborative process where we partner with industry, researchers, workers, Māori, and education and training providers to understand emerging innovation possibilities.”
We will continue to take this advice into account in future work. We appreciate the Commission’s considered response and the evidence it brings to support its recommendations. Hon Grant Robertson, Minister of Finance
- 60 stakeholder meetings to assess progress on our 2021 recommendations
- 20 findings
- 6 recommendations
Improving Economic Resilience – ongoing inquiry
The Commission began work on an inquiry to identify policies and interventions that can enhance the resilience of Aotearoa New Zealand’s economy and living standards to persistent supply chain disruptions.
An issues paper was published in February 2023 for public consultation. We worked closely with economists Brian Easton and David Skilling in the development of the issues paper. The findings of their research were published in parallel with the issues paper, and both can be found on our website.
We engaged extensively with stakeholders as part of our consultation to inform our findings and recommendations for the final report.
We undertook research into Aotearoa New Zealand’s trade vulnerabilities building on work undertaken by the Australian Productivity Commission. We also commissioned Motu economic and public policy research to undertake two research projects to examine:
- the impact of a series of representative shocks on the economy using computable general equilibrium (CGE) modelling
- involuntary layoffs and the impact of the local labour market on employment and earnings of those who were involuntarily laid off.
Alongside these we commissioned Haemata to undertake a series of wānanga and engagement meetings to gain an insight on Māori and iwi views to guide the findings and recommendations for our final report.
The report from Haemata detailing the results of three wānanga involving 50 participants from a range of stakeholder groups has been integral to ensuring we bring a te ao Māori perspective on resilience, considering He Ara Waiora dimensions and how it applies not only within Māori businesses and communities but also for wider Aotearoa New Zealand. Our final report for this inquiry is due to be delivered to Government in February 2024.
The performance measures for this inquiry will be reported in the next reporting period, following completion of the final report.
- 80 engagement meetings with 50 organisations
- 59 submissions on the issues paper so far