Rodney Hide and Bill English. Pic: NZPA

Wellington March 18 NZPA - ACT and National have agreed to set up a new Productivity Commission with statutory independence and a budget of around $5 million, Finance Minister Bill English and Regulatory Reform Minister Rodney Hide said today.

The new organisation is modelled on the Australian Productivity Commission though on a smaller scale with three or four commissioners and around 20 staff.

Money and staff from other agencies, mainly Treasury and the Economic Development Ministry, would be used to set up the commission which was expected to work closely with its Australian cousin.

The ministers envisaged it holding two or three inquiries a year into areas the finance minister was concerned about.

Mr Hide said it was important that the body was set up in law to ensure independence and credibility.