Productivity Commission told to focus on climate, energy

The federal government says it’s time for the Productivity Commission to play a bigger and more constructive role in the climate and energy policy space.

Danielle Wood

Treasurer Jim Chalmers this week announced the government will release the first Statement of Expectations for the Productivity Commission in its 25-year history.

The statement will be released publicly before the new Chair Danielle Wood commences on November 13.

“It will make clear that guiding our country towards a successful net zero transformation will be one of the key focus areas for a revamped and renewed Productivity Commission, Mr Chalmers told the an industry event in Melbourne on Thursday.

Under-utilised resource

The expectations will include that the commission provide “more practical and relevant advice” to complement the work of other institutions, like the Climate Change Authority, to make sure the economic potential of the net zero transition is realised.

“We want more practical and relevant advice here as a priority –so that we can secure the productive and prosperous transformation of our economy,” Mr Chalmers told the ABC.

Mr Chalmers said the Productivity Commission has been an under-utilised resource.

“If we care about productivity and progress and prosperity more broadly  … then we need to really get it engaged in a bigger, more constructive way with this energy transformation, because the energy transformation is one of the biggest challenges and opportunities that we face,” he said.

“It’s really important because we want to put the energy transformation front and centre in our economic reform efforts.”

Unusual step

Government statements of expression are common with regulators like APRA and other economic institutions, but it’s never been done with the PC before.

Mr Chalmers said the government wasn’t dictating how the Productivity Commission should do its work. Rather, the statement of expectations represented an “agreed partnership”.

“It’s not designed to get in the way of the independent work of the commission,” the Treasurer said.

“On the contrary, it’s designed to put a structure around that, it will clarify that, it will endorse that, but it will also tell the Australian people the sorts of things that we expect the PC to focus on.”

It’s not designed to get in the way of the independent work of the commission.

Treasurer Jim Chalmers

Mr Chalmers declined to provide more details about what else the statement of expectations might include ahead of its release.

However he said “I think people know the sorts of things that I have been interested in revamping and refocusing and renewing the Productivity Commission for”, such as the adoption of new technology and getting human capital right.

“People can expect to see that reflected in the Statement of Expectations, but the energy transformation and our prospects as a renewable energy superpower will be absolutely front and centre,” he said.

It comes after the Commission in March released the findings of a five-year productivity inquiry which made 71 recommendations for reform in areas including workforce issues, harnessing digital technology, innovation and securing net-zero at least cost.

At the time of its release, Mr Chalmers said the report showed that productivity had flatlined and the government was committed to a range of productivity-enhancing investments and reforms.

It also follows the recent release of an independent review that uncovered a culture of sexual harassment, bullying, discrimination and a failure of leadership at the Productivity Commission.

Mr Chalmers has said the commission will undergo “significant workplace reform” in response to the report.

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