Procurement to promote jobs, Māori and Pasifika businesses and sustainability

As part of the COVID-19 recovery, the Government has strengthened its procurement rules to ensure its annual $42 billion spend creates more jobs, uses more sustainable construction practices and results in better outcomes for Māori and Pasifika, Government Ministers announced today.

Economic Development Minister Phil Twyford says the $42 billion annual spend on goods and services by government departments and agencies is a significant amount that can be directed into businesses and practises which can improve the wellbeing of our whanau, workers, communities and climate.

“The economic impacts of COVID-19 are being felt nationwide. The pandemic has created uncertainty for many businesses and is likely to lead to more job losses. But government has the spending power to channel its resources into where they are needed most.

“Cabinet last week agreed on a new rule that when procuring goods or services, 138 departments and agencies must consider how they can create quality jobs, particularly for displaced workers and traditionally disadvantaged groups such as Māori, Pasifika, people with disabilities and women. 

“Cabinet has also agreed that when constructing new buildings, mandated departments and agencies will be required to assess the greenhouse gas emissions resulting from the materials and construction processes used. Agencies should choose those which have the lowest upfront carbon emissions.

“There will also be an accelerated procurement process in sectors such as construction to help get projects up and running quickly to generate economic stimulus as soon as possible.

“The construction sector will play a big part in New Zealand’s COVID-19 recovery and departments and agencies will now need to consider the use of more sustainable building materials.

“The use of raw materials such as wood offers a chance for the government to reduce its carbon emissions, boost our wood processing sector, create jobs in the regions and utilise a sustainable resource – our forests,” Phil Twyford said.*

Māori Development Minister Nanaia Mahuta says international evidence shows increasing the diversity of government contracts held by indigenous small to medium companies (SMEs) helps increase innovation, builds greater economic resilience and creates regional opportunities.

“In countries such as Canada, Australia, the United Kingdom, the United States and South Africa this has resulted in increased wealth, financial stability and employment opportunities, as well as wider social and community wellbeing benefits for indigenous peoples.

“We know Māori businesses and workers, particularly Māori women in the hospitality and tourism sectors, have been hit hard by the impacts of COVID-19. Government procurement of goods and services offers the economic stimulus to boost Māori SMEs and help create a resilient Māori economy.

“Māori businesses already have strength across food and fibre industries and tourism. Expanding into manufacturing processes, ICT, or pivoting into new markets will provide jobs and support new enterprise, as well as building business capability and increasing skill levels

“Te Puni Kōkiri is working with the Ministry of Business Innovation and Employment to prototype social procurement approaches over the next two years to reduce barriers to engaging with government procurement processes and support Māori businesses to compete for contracts,” Nanaia Mahuta said.

Pacific Peoples Minister Aupito William Sio says work is already underway to support Pacific businesses gain work by effectively bidding for procurement contracts following a $6.25 million investment over four years in Budget 2020.

“The Pacific Business Procurement Support initiative is helping Pacific companies build their capability so they can survive the immediate impacts of COVID-19 and over time grow their companies. 

“To boost Pacific procurement, the Government is partnering with the Pacific Business Trust who will work across a range of key business networks nationwide. They will identify and access the professional services Pacific SMEs need to help them grow,” Aupito William Sio said.

* This builds on the Building for Climate Change programme announced by Building and Construction Minister Jenny Salesa in July: https://www.building.govt.nz/about-building-performance/news-and-updates/all-news-and-updates/building-for-climate-change-programme-gets-underway/