Boosting services sector productivity - Productivity Commission inquiry material 2013 - 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 recommendations#

The Commission recommended 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. New Zealand needs to be at the top of its 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 Commission put forward recommendations to improve the supply of ICT skills, for example by enhancing links between business and tertiary education providers.

Government response#

The Government considered the Commission's report and recommendations, but no response was received, however, 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 was undertaken with inputs from expert review, focus groups and participant survey.

Timeline#

• Terms of reference - 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
   

Key documents#

Final report and Government response#

Terms of reference and issues paper#

Interim reports#

Submissions#

Public submissions on issues paper - Boosting productivity in the services sector

Evaluation#