The Productivity Commission is the Australian Government's principal review and advisory body on microeconomic

Microeconomics

Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

 policy and regulation. It is an independent statutory authority in the Treasury Portfolio

Treasury Portfolio

In Australia, the Treasury Portfolio refers to the eleven organisations that nominally fall under the auspices of the Australian Treasurer. The agencies undertake a range of activities aimed at achieving strong sustainable economic growth and the improved well-being of Australians...

 and responds to references from the Treasurer. For example, its work includes: researching the economic implications of ageing in Australia, reviewing the gas access regime, the effects of the disability discrimination act

Disability Discrimination Act 1992

The Disability Discrimination Act 1992 was an act passed by the Parliament of Australia in 1992 to promote the rights of people with disabilities in certain areas such as housing, education and provision of goods and services...

, and the economic effects of removing tariff

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

s on goods from least developed countries

Least Developed Countries

Least developed country is the name given to a country which, according to the United Nations, exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world...

.

The reference from the Treasurer may require a commissioned study or a public inquiry. In a public inquiry the Productivity Commission (PC) will accept submissions from any member of the public, and will usually issue a 'draft' report on which further submissions are accepted. The PC also has responsibility for assessing the application of safeguard measures under the World Trade Organisation guidelines.

The guiding principles of the commission are to be independent of government and industry, and open to public participation. Its reports often form the basis of government policy. However, the Treasurer and government are not required to act on Productivity Commission recommendations and may give no response or refuse to act.

History

The Commission traces its lineage back to the Tariff Board which was established in the 1920s. Asserting the independence which was always dormant within the Tariff Board's Act, the Board was transformed into a crusader for economic rationality by its Chairman in the 1960s, Alf Rattigan after whom the Commission's Melbourne hearing room is named. On 1 January 1974 the Tariff Board became the Industries Assistance Commission. It became the Industry Commission in the late 1980s and the Productivity Commission in April 1998 by legislation. The PC was the almagamation of three bodies which joined to form the new Commission - the Industry Commission, Bureau of Industry Economics and Economic Planning Advisory Commission. The three bodies were amalgamated on an administrative basis in 1996.

The Commission has been criticised by Australian Manufacturing industry for being too theoretical in its approach, biased towards outdated free-trade views that fail to reflect trade realities and having pre-determined views that dissuade key industry participants from making public submissions to its inquiries.

In late 2009, a major Productivity Commission recommendation on parallel importation of books was overturned by the Australian Government.

Operation

The Governor-General of Australia

Governor-General of Australia

The Governor-General of the Commonwealth of Australia is the representative in Australia at federal/national level of the Australian monarch . He or she exercises the supreme executive power of the Commonwealth...

 appoints commissioners for periods of up to five years. Associate Commissioners are appointed by the Treasurer. The Chairperson is a commissioner and heads the commission. The commission also has a public-service staff.

The Commission has reported on a very wide range of subjects and industry. Due to the in-depth nature of its analysis and influence over government policy, the Productivity Commission is often a useful starting point for information on the Australian economy

Economy of Australia

The economy of Australia is a developed, modern market economy with a GDP of approximately US$1.23 trillion. In 2011, it was the 13th largest national economy by nominal GDP and the 17th largest measured by PPP adjusted GDP, representing about 1.7% of the World economy. Australia was also ranked...

or specific Australian industries.