The Productivity Commission is a bit like the judiciary. It gets barbs and insults flung at it on a regular basis but rarely responds. A pity really, because if it were not for the foresight of Paul Keating who back in 1987 turned the Industries Assistance Commission into the body we have today, the Australian economy would still be mired in protectionist self interest.

Over recent months the Australian publishing industry and some of their client authors have been castigating the Productivity Commission for suggesting that the current ban on the importing of Australian published titles by booksellers is not in the consumers’ interest.

Yesterday Louise Adler of Melbourne University Press took the opportunity of Paul Kelly’s book launch to accuse the Productivity Commission of being run by “neo-liberals and economic fundamentalists.”

The terms “neo liberals” and “economic fundamentalists” are of course labels of abuse used by the protectionist left and right.

The global uniqueness of the Productivity Commission lies in the fact that its work is of consistently high quality, empirically based and very hard to argue against on any grounds other than economic self-interest.

It issues discussion papers, holds hearings, roundtables and consultations, and produces a draft report before it goes to a final version.

As economist Andy Stoekel noted last year, The Productivity Commission’s way of working identifies “what is in the national interest … Such reviews expose vested interests and weaken their influence.” That is why politicians like the Productivity Commission because it makes their job of reforming much easier — they can point to the Commission’s findings in selling the need for reform.

Back in 1987, Keating had the Productivity Commission’s predecessor, the Industries Assistance Commission (it became the Industry Commission in 1989), transferred into his Treasury portfolio. And over the next few years it produced reports that identified the high cost of regulation in the Australian economy and why the Commonwealth and the states needed to urgently cut red tape, slash business regulation, and inject much needed competitive principles into government utilities in areas like electricity and water.

The work of the Industry Commission during the late 1980s and early 1990s allowed for reformist premiers like New South Wales’ Nick Greiner, Tasmania’s Michael Field and Queensland’s Wayne Goss to work on a series of major commonwealth-state reforms, and for the Keating government to commission Fred Hilmer to draw up a blueprint for a National Competition Policy which saw the end to monopolies in areas as diverse as lawyers’ conveyancing and bus routes.

Over the past decade the Productivity Commission has blown the lid on corporate and government economic self-interest. Take its 2005 report on smash repairs and insurers — the findings ended the practice of “funny time, funny money”, where insurers would agree to extending the amount of time taken to repair a car because of the low hourly rate it paid repairers.

More than ever, Australia needs a Productivity Commission because it is one of the few organisations in the government sphere that owes nothing to anyone.

It is prepared to take on sacred cows like the Howard government’s baby bonus by arguing that it will not have a long term impact on the fact that we are an ageing population with limited resources to meet the fiscal challenge that presents.

In May this year it told the Rudd government that drought assistance for farmers does not help “improve their self-reliance, preparedness and climate change management.”

Louise Adler might not like that but Australia would not have the competitive and liberal economy that makes it superior to its subsidised European counterparts so beloved of the economic left, if it were not for the influence of the Productivity Commission and its predecessors on our political establishment.