Economic Development Commission set up

Press, 17 July 1986, Page 3

Economic Development Commission set up

By

MARTIN FREETH

in Wellington A new Economic Development Commission will be set up to give advice, in public, to the Government on the costs and benefits of various policy options.

The commission is intended to play a fundamentally different role from the Treasury and k other departments because of the public nature of its work. If the Government accepts recommendations now before it, the commission will also have substantial independence. It will have the power to Initiate its own research, as well as be directed by the Government, and the latter will have to say publicly why it rejects any advice from the commission. It will also have the ability to recommend any combination of policy measures available to the Government and have wide access to official information. The Associate Minister of Finance, Mr Caygill, said yesterday that the commission’s reports would be published and it would be able to examine any issue relevant to economic development, independently and objectively. Mr Caygill asserted that the need for the commission was clear in view of the high level of ongoing investment being made in New Zealand. It was crucial that investment was channelled where it could be the most productive for New Zealand, and the Government always profoundly influenced that, Mr Caygill said. “We see the E.D.C. as analysing the issues, describing the options and trade-offs available to the Government, and making thoroughly researched recommendations,” he said.

Formation of the commission has been announced after the Government received a report from a steering committee, chaired by Professor Bruce Ross, an economist at Lincoln College.

The six-member committee also included two leading trade unionists: Messrs Ken Douglas and Barry Tucker; two prominent businessmen, Messrs Bruce Hancox and Peter Shirtcliffe; and a Wellington economist, Mr Rob Cameron. Their report is expected to be made public next week. Mr Caygill said some of the members favoured the commission’s having authority to allocate its own funds, rather than rely on Government budgetary action.

“We will have to think about that,” Mr Caygill said.

Most of the committee; has recommended the commission have a firstyear budget, of about $1 million.

“That seems about right to me,” Mr Caygill said. The concept of the commission has changed

radically since it was first mooted in Labour’s 1984 election manifesto. Then, a new Industrial Development Board, with public and private sector representatives, was proposed, to make recommendations to the Government on which industries should receive financial help.

Mr Caygill said the newcommission would fulfil the manifesto’s undertaking to set up a board, although the committee had recommended that its role be extended to cover all economic issues.

The Opposition attacked the commission yesterday, asserting that it simply showed the Government was desperate for ideas. “The Labour Party has lost its way and is resorting to its old trick of setting up a committee to try to solve the problem, or at the very least to take the blame,” said the Leader of the Opposition, Mr Bolger. The Treasury was the proper body to determine the allocation of Government resources, and the

private sector was capable of making those decisions itself, Mr Bolger said.

He said that the commission represented a reversal of the Government’s market policies, back to a role for its "picking winners.” Mr Bolger also ridiculed a separate announcement by the Minister of Justice, Mr Palmer, that the commission’s first job would be to take over the Government’s review of regulations dnd quangos.

Mr Palmer, the Government’s “famous quangokiller,” was now out to defend the creation of a new quango, Mr Bolger said.

Mr Palmer said Governments had passed new regulations at an average rate of 200 to 300 a year since the- 19305.

“They have resorted often to regulations of very broad and sweeping power when more creative thought could have given us better precision and better-quality answers,” he said.