Our 2011 election manifesto - Labour Party

MAKING GOVERNMENT PROCUREMENT WORK FOR OUR
ECONOMY
What is government procurement and why is it important?
Every year the New Zealand government spends billions of dollars of taxpayer funds to
deliver public services and infrastructure. The government awards contracts across a wide
range of areas including IT development and support, and railway carriage construction. The
way government chooses to spend that money can make a real difference to the prospects
of Kiwi firms.
While some aspects of government procurement are helpful to Kiwi firms, in many ways
government procurement policy is inadequate and doesn‟t meet the needs of Kiwi firms or
the New Zealand economy. This sets New Zealand apart from many countries we are often
compared with.
For instance, the US altered procurement policy to assist economic recovery after the global
financial crisis; Singapore‟s policy has a number of elements that are mandatory; Australia
has strong policy at the Federal level, augmented by additional policy at the state level. All
such policies are consistent with WTO rules.
If New Zealand is to achieve its goal of closing the gap in wages and economic growth with
Australia, we need policies that demonstrate a commitment to our economic development.
Under the current government, New Zealand‟s procurement policy has worsened because it
has specifically signalled that its agencies should pay attention to cost (and quality) alone.
In other words, New Zealand does not officially acknowledge wider economic
considerations.
It is also the case that there are other benefits to New Zealand which offset the final cost of a
product or service. These include the maintenance of a core capability in engineering, ICT
and other services.
For example rail engineering skills that translate into the fire fighting industry, and software
development that has enormous potential to provide efficiencies and innovation across
government agencies, providing better services to New Zealanders and with strong export
potential.
What‟s wrong with the current policy?
In the past, Government procurement policy has tended to be focussed on defence
contracts (eg the ANZAC frigates) where economic development is concerned. That
needs to change and government departments and agencies need to be sufficiently
attuned to the abilities of Kiwi firms.
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