Vision of inclusion

The new chairman of the Productivity Commission

The old model of companies focusing solely on their bottom line profits is broken – they are part of their community and ignore their social licence to operate at their peril, says new Productivity Commission chairman Ganesh Nana.

The 61-year-old, appointed to the role in late January after more than 20 years at economic consultancy Berl, says the corporate sector has evolved away from a ‘‘very insular’’ model where the focus was very much on their own bottom lines.

‘‘There has been a recognition, probably from the GFC (global financial crisis) onwards, that perhaps the model is a bit broken and isn’t quite delivering what we want, and a recognition from corporates that they are part of a community,’’ Nana says.

Nana says it is an evolution that is gaining recognition from global institutions like the OECD, the International Monetary Fund, and the World Bank as well as governments and communities – that we are part of a bigger system rather than in our own silos.

‘‘We can’t expect government to step up all the time, whether it’s bailing us out of the GFC, or whether it’s making sure we get through a pandemic, and then not expect anything in return,’’ he says.

‘‘If we are going to be part of that system, then we have actually got to, dare I say it, pay it forward and recognise that there is a social licence there.’’

Many businesses do understand that they are part of the community, he says.

‘‘The ones that are thriving recognise they have a social licence. It is part of their assets, and it’s also part of their risk because if they lose that social licence, that is a risk to them continuing.’’

Nana says environmental, social and governance models for business are not going to go away.

‘‘They are going to become even more important into the future,’’ he says. ‘‘Businesses cannot operate in a silo and say, ‘no, we are just in the finance space, and we’re just going to maximise our shareholder value. If we mess up the environment that’s for someone else to fix up, or if we employ people at minimum wage, that’s for someone else to fix it’.

‘‘That model is not going to last for much longer, it’s not viable, it’s not sustainable.’’

Demands are already being placed on companies to report on their climate change risk and environmental impact and that is likely to expand to also include the social impact of their activities, Nana says.

‘‘Some businesses felt that recently when they stood in the queue for the wage subsidy. Many of them did play by the rules and good on them, that’s great.

‘‘But some of them got caught out taking the wage subsidy, pocketing it, and then delivering to their shareholders. I suggest that they need to question themselves because, you know, that might be OK this time around, but think about next time around when you have to rely on the social subsidy to survive.’’

Nana says many businesses ‘‘rightly so’’ relied on the Government to see them through the Covid experience.

‘‘That’s the Government playing its role, as it should have, and that’s businesses recognising that role. But that comes with an obligation to pay back. I would say that in the uncertain world going ahead, we ignore that at our peril.’’

Nana says the issue is connected to wider productivity.

‘‘If we are serious about productivity, we have to look after our people, and we have to look after the communities in which we operate,’’ he says.

The clincher for Nana joining the commission was its focus on lifting productivity to improve wellbeing.

He says he would not have joined had its kaupapa, or underlying principle, been solely about GDP per capita, which he sees as a narrow measure of how a country is doing.

Productivity has a negative connotation for some who see it as just working more hours, he says.

‘‘Some groups in our community either don’t want to know, or aren’t interested in the word productivity because it has been given a bad label,’’ he says. ‘‘For some people it’s just businesses trying to screw workers yet again.

‘‘There are some that don’t get why productivity is important or are not willing to listen because it’s just turned them off because they have been burnt in the past. We need to bring them back to the table.’’

Nana wants to improve understanding about productivity across a broader audience in the community and wants the commission’s recommendations to the Government to be informed by the lived experiences of people, not just textbooks.

The people who have been hurt the most by our failure in productivity are the lowerpaid, he says.

‘‘They are the ones with the burden of our bad productivity. They are the ones who are being forced to work 60 hours a week at the minimum wage just to put food on the table. They shouldn’t have to. That’s a reflection of our collective failure in terms of productivity and I think that’s what we need to ram home,’’ he says.

Nana is one of four sons of a young immigrant Indian couple who moved from their village to Upper Hutt and ran a grocery shop.

‘‘You could call us a stereotypical Indian migrant family. We knew we were different. In Upper Hutt, we were about the only immigrant Indian family back then.’’

With little formal schooling themselves, his parents were very focused on education for their children.

‘‘The importance of education was just so critical and that’s what they imbued in us,’’ he says.

Nana describes himself as a ‘‘stereotypical geek’’, who enjoyed the logic and reasoning of maths and sometimes helped his father count the store takings at the end of the day.

He went to Upper Hutt School, Maidstone Intermediate and Heretaunga College before studying commerce at Victoria University where he was drawn to economics, with its mix of policy, people and numbers.

Nana has lived in Newtown, Wellington for the past 40 years, and says he values people, family and community rather than financial wealth. Like him, his two children attended local schools, and they are now on the cusp of entering the workforce.

The commission’s first inquiry under his leadership will look at how to break the cycle of long-term disadvantage.

Persistent, inter-generational disadvantage represents lost opportunities through economic and social exclusion and significant loss of wellbeing. The lost potential flows through into substantial fiscal costs such as welfare payments and health costs and affects the country’s productivity and economic potential.

‘‘We want the 21st century Aotearoa New Zealand to be a lot more inclusive than it has been, so let’s think about that challenge in front of us,’’ Nana says.

‘‘We can learn a lot from what we have done in the past, but actually we might have to do things a bit differently into the future because we have tried a whole lot of stuff and it actually hasn’t quite worked.

‘‘We are going to have to do some courageous things.’’

‘‘We want the 21st century Aotearoa New Zealand to be a lot more inclusive than it has been.’’

Ganesh Nana Productivity Commission chairman