What is the Productivity Commission?

Issue 
Peter Harris, chairperson of the Productivity Commission.

On ABC’s Q&A on September 19 rock legend Jimmy Barnes said he had been lost for words when he heard the Productivity Commission had recommended copyright protection for authors be drastically reduced from the current period of 70 years following the death of the author.

Barnes said something like: “If I knew what the Productivity Commission was I would write to them.”

So what is the Productivity Commission and why does it keep popping up on the news recommending this and that?

The Productivity Commission (PC) was created by the Productivity Commission Act of 1998. It is a direct descendent of the Trade Board, the Industries Assistance Commission and the Industry Commission. It is based in Canberra and has a staff of about 160 federal public servants. The ruling body of the PC is a chairperson and 4 to 11 commissioners who are appointed by the Governor-General for 5-year periods.

The PC operates within the Treasurer's portfolio and responds to references from the Treasurer, who can commission a study or public inquiry into microeconomic policy and social and industrial issues. The PC can also self-initiate research on industry or productivity issues. It accepts submissions from the public and online comments. Its governing act says the government of the day cannot tell the PC what to write and its reports are to be tabled in federal parliament.

The current chair is Peter Harris, who was behind the decision to set up Victoria's $6 billion desalination plant and the $1.5 billion MYKI public transport ticketing system. Under Prime Minister Kevin Rudd, Harris was responsible for overseeing the roll-out of the National Broadband Network.

Harris was an odd choice as chairperson as the PC has been critical of the cost-benefit analysis used to justify the $37 billion roll-out of the NBN as well as being critical of the cost of the Victorian desalination plant. The PC called the plant a “misdirected investment”.

So, what has the PC done lately? Well, it has criticised the building of the much discussed submarines, saying that building locally in South Australia would be more expensive than building overseas. Clearly the PC sees no point in giving Australians work when it can be done more cheaply overseas.

On industrial relations it has been very active. While it has stopped short of recommending the introduction of slavery, the PC has recommended cutting Sunday penalty rates for entertainment, retail, restaurant and cafe workers. It wants the Sunday rates aligned to Saturday rates. The PC also recommends modest pay rises for minimum wage earners, but warns that significant wage increases can pose a risk to employment. Clearly we cannot have lowly paid workers paid too much or the economy will collapse.

The PC also recommends employees only receive compensation for unfair dismissal if it is found an employee has been dismissed without reasonable evidence of persistent under-performance or serious misconduct. It also wants the reinstatement provisions of an employee following an unfair dismissal to be removed from the Fair Work Act. Unfair dismissal or not, the PC would prefer a sacked worker to stay sacked.

On the positive side, the PC recommends that measures be put in place to encourage migrants to report any exploitation.

The PC wants copyright protection for intellectual property to be reduced to 15 or 20 years. Currently books, songs, plays, letters, poems, photographs and films are protected by copyright for 70 years after the authors' death. However, the PC says songs have a short life, say 5 to 6 years, and should not be protected for such a lengthy period. The PC recommends copyright be reduced to 20 years after creation, irrespective of the health of the author. Clearly this is what upset Barnes, as his songs, and the songs of others, are still popular many years after their release.

The PC’s main remit seems to be giving advice on cost savings, which is at odds with its annual budget. The upkeep and functioning of the PC costs taxpayers about $33 million a year.

Just think what could be done with that $33 million? Think what could be saved. The salaries of up to 10 commissioners for a start.

The next project for the PC should be a report on itself. But would the PC be bold enough to recommend its own demise?

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