Productivity Commission to study housing affordability, intl freight services

The new Productivity Commission's first inquiries will look at housing affordability and international freight services – two areas that affect New Zealand's international competitiveness, Finance Minister Bill English and Regulatory Reform Minister Rodney Hide said.

The Ministers also announced the appointments of Sally Davenport and Graham Scott as commissioners, working alongside New Zealand Productivity Commission chairman Murray Sherwin.

Ministers will initially refer two topics for inquiry to the Productivity Commission: Housing affordability – to be reported back by 1 February 2012.· International freight transport services – to be reported back by 1 April 2012.

“Both of these topics have a bearing on New Zealand's export competitiveness. That is important as we seek to rebalance our economy away from excessive borrowing, consumption and government spending towards savings, investment and exports," Mr English said.

“New Zealand experienced a sharp rise in house prices over the past decade, resulting in declines in housing affordability and home-ownership rates and large increases in household debt.

“That accumulation of debt has made the New Zealand economy more vulnerable to external shocks like the global financial crisis. It has also most likely contributed to higher interest and exchange rates, raising the cost of capital for businesses and reducing exporters' returns,” Mr English says.

The inquiry into international freight transport services will look at the effectiveness and efficiency of the existing infrastructure and regulatory regimes for international freight transport services.

“International freight issues are vitally important to us as a nation of exporters, located a long way from major world markets," Mr Hide said.

“Increasing our international trade is a critical part of achieving better productivity growth and ensuring New Zealanders maintain and increase their standard of living.

The commission, which formally starts work tomorrow, has a wide-ranging brief to inquire into productivity-related matters. It is funded through reprioritised contributions from the existing budgets of 29 government agencies.

Terms of reference for its first two inquiries are available at: www.treasury.govt.nz/publications/informationreleases/productivitycommission