• Robert MacCulloch

If the Productivity Commission doesn't care about how much NZ produces, shouldn't it be abolished?

Could the following Tweet from Ganesh Nana, the Head of the Productivity Commission, whose job it has been, at least traditionally, to help design policies to increase GDP per hour, end up being the undoing of the government (especially since his appointment symbolized its' priorities)?

"Please remember GDP is not really a great measure of anything useful”

GDP measures the value-added of firms, aggregated up into a total. The Commission was established to help find ways to increase that value added, for given inputs. Does the Productivity Commission actually not care about value added, in which case, shouldn't it be abolished?

One should, of course, remember that countries with higher GDP per capita have more funds to devote to medical care, nutrition and workplace safety. These factors all contribute to help them achieving higher life expectancies, lower infant mortality and better health than countries with low levels of GDP per capita. Rich countries also have more resources to devote to a clean environment. They generally have better air and water qualities, even though they produce more output. High GDP per capita also means that the citizens of a country can have more leisure time, more interesting jobs and better education. It also allows for more funding for arts and culture.

Oh, and by the way, well-being is strongly positively correlated with a country's level of GDP per capita.