The coalition agreement signed between NZ First leader Winston Peters and Prime Minister Jacinda Ardern promised a review of measures of unemployment. Statistics NZ had defended its methodology and warned it may not implement whatever the review says.

Statistics New Zealand has defended its methodology and warned it may not implement any findings of a Government-ordered review into unemployment measures.



The Labour-NZ First coalition agreement promised to conduct a review of the official measures of unemployment "to ensure they accurately reflect the workforce of the 21st Century".



Although there has been no comment on the nature of the review, it appears to stem from Winston Peters' often repeated criticism that someone working one hour a week could be considered employed.



While Peters' claim is correct, the quarterly Household Labour Force Survey delves much deeper into the job market than his statements would suggest, including measures of the extent to which people want to work more hours than they currently do.

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Officially, Statistics NZ is welcoming the review, but the organisation has taken a number of steps which appear to question the need for it.

CAMERON BURNELL/STUFF Dr Eric Crampton, chief economist at the New Zealand Initiative, said Statistics New Zealand already calculates underutilisation in the labour force, which appeared to be central to Winston Peters' concerns about unemployment measurements.

This included an unusually lengthy explanation of the features of the Household Labour Force Survey when the quarterly survey was released on Wednesday, and publicly defending its measures in the context of the review.



"Stats NZ produces the most comprehensive and reliable measures of labour market data available, following current best practice and standards set by the International Labour Organisation," Government Statistician Liz MacPherson said in a statement.



MacPherson promised the organisation would play "a full part in any review".



Diane Ramsay, labour market and household statistics manager, said in 2016 the department undertook a "rather major" review of the Household Labour Force Survey, which saw it implement requests from the International Labour Organisation.

As a result, Statistics NZ added measures on the number of people who were working but wanted more hours, among other things, to help provide a "broader view of the labour market", Ramsay said.

This would allow observers to gain the necessary insight into the state of the job market, she said.

CAMERON BURNELL/STUFF National Party finance spokesman said Statistics New Zealand has statutory independence and it would be concerning if it changed its methodology as a result of political interference.

"I don't see any issues with that at all. Our methodology is consistent with international standards, set down by the ILO."

Ramsay said Statistics NZ had no more information about the review apart from what was in the coalition agreement.

"Nothing at this point. No content at all."

Asked if she was concerned the report could damage the organisations credibility, Ramsay said: "We do hold the independence of the Government Statistician very, very much at heart."

Any review would be "open and transparent", and Statistics New Zealand may not make any changes, she said.

"We do the review. We don't necessarily have to implement anything that's there. That's the process we would work through."

Neither Statistics Minister James Shaw, Labour nor NZ First have responded to requests for comment on the review.

'A BIT NONSENSE'

Dr Eric Crampton, chief economist at the New Zealand Initiative, said the review was "a bit nonsense" because the concerns expressed by Peters about the unemployment rate were already covered elsewhere in the survey.

"They've already got a measure of underemployment in there, which counts people who are working less than full time who would like to be working more hours," Crampton said.

"They're already tracking this. If it's something you care about, you should be tracking the underemployment measure."

Crampton said it was important that the Government Statistician not be seen to be making changes at the request of her political masters.

"They shouldn't be under any pressure to redefine measures with a change of government."

Former Reserve Bank special advisor Michael Reddell said the merit of existing measurements was the fact they can be compared internationally "and that isn't something to sacrifice lightly".

Reddell said the current measures covered underutilisation, but in any case, most different measures of unemployment moved together, meaning as unemployment rises, so do measures of underemployment.

"From a macro policy perspective, it usually doesn't matter much which measure one uses - they all usually (but not always) move quite similarly cyclically - and so people like the Reserve Bank will sensibly prefer the series with the longest run of data (current official measure)."

CHECKS AND BALANCES

National finance spokesman Steven Joyce said while as a minister he "didn't always like" the figures Statistics NZ came up with, he understood the employment measures were based in international best practice methodology.

If the department changed its methodology as a result of government pressure it would be "very concerning", Joyce said.

"There's a reason why these statistics organisations have statutory independence. It's so the world can have faith in the statistics that are produced.

"You never like them all the time, and certainly governments don't like the figures Statistics New Zealand comes up with all the time, it's just the way it is.

"But they are independent and they measure things independently and it's one of the checks and balances on our government system."