The Productivity Commission was created as an independent authority by the Productivity Commission Act 1998, an Act of the Australian Parliament.
The Commission operates within the Treasury portfolio and its core function involves responding to references from the Treasurer, which can request a commissioned study or a public inquiry. References to the Commission stipulate the length and terms of the project and may cover any sector of the Australian economy; address a particular industry or cut across industry boundaries; and involve wider social or environmental issues.
Most projects are specified for nine or twelve-month duration, although some may be six or fifteen months. Both studies and inquiries accept submissions from members of the public and involve the public release of a draft and final report, although inquiries are additionally required (under the Act) to undertake formal public consultations.
In addition, the Commission acts as the secretariat to the intergovernmental Review of Government Service Provision, and produces regular reports on Overcoming Indigenous Disadvantage and Indigenous Expenditure that contribute to a better understanding of the effectiveness of government services provided to Indigenous Australians.
The Commission can also self-initiate research on industry and productivity issues, and operates as the Australian Government's competitive neutrality complaints mechanism.
Productivity Commission reports often form the basis of government policy. However, the Commission does not administer government programs or exercise executive power and governments are not required to act on its recommendations; although in practice more recommendations have been accepted than rejected.
The Commission traces its lineage back to the Tariff Board, which was established in the 1920s. On 1 January 1974, the Tariff Board became the Industries Assistance Commission and then in 1989 it became the Industry Commission.
The Productivity Commission was created as an independent authority in April 1998 by the Productivity Commission Act 1998, and replaced the Industry Commission, the Bureau of Industry Economics and the Economic Planning Advisory Commission. These three bodies were amalgamated on an administrative basis in 1996.
The Commission’s remit may extend beyond Australia, such as when the Commission worked jointly with the newly formed New Zealand Productivity Commission on a study into Trans-Tasman Economic Relations in 2012.
|Gary Banks||17 April 1998 – 11 March 2013|
|Peter Harris||11 March 2013 –|
The Commission is headed by a Chairperson and between 4 and 11 other Commissioners, who are appointed by the Governor-General for periods up to five years. Associate Commissioners can be appointed by the Treasurer on a full or part-time basis. Commission staff are Commonwealth public servants. The average number of employees in the 2015–2016 financial year was 165.
The Commission reports formally through the Treasurer to the Australian Parliament, where its inquiry reports are tabled. Final inquiry reports must be tabled in Parliament within 25 sitting days of the Government receiving the report.
What makes the Commission unusual, if not unique, among public sector institutions around the world, is the combination of three core principles which it embodies: