A Labour Government will use major government contracts to back NZ firms instead of exporting jobs offshore.
We want people to stay in New Zealand and develop and use their skills. We want industries that are productive. And a Labour Government will invest in that.
Phil Goff announced Labour’s new procurement policy in Dunedin last night coinciding with the grim news of 18 forced redundancies at Hillside Rail. Skilled jobs. Tradespeople.
44 jobs in all have been lost at Hillside. That’s a quarter of the workforce. Possibly up to $5 million a year in lost wages, and flow on spending into the local economy.
44 families potentially on the unemployment benefit. And an industry in decline, rather than in growth. All because of a stupid government policy that doesn’t match the policies of almost every other developed economy. The US, Japan, Australia to name a few. And developing ones.
Labour’s new policy will require companies like Kiwirail to consider wider economic benefits when making decisions about contracts, rather than a narrow accounting approach.
Kiwi firms deserve the right to bid for large govt contracts without being locked out on the basis of lowest price.
Government departments and agencies will be required to undertake a wider (economic) analysis of the impact of its preferred provider on the domestic economy, rather than a narrower (financial) analysis when making procurement decisions.
And have an apprenticeship/internship programme in place for NZ workers.
That’s for starters. For the whole policy see here
And for what other countries are doing see here
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. Traditional manufacturing and “making” industries.
New industries. New technology. High tech. Not much commitment to that right now. This government isn’t even sure if it has a procurement policy.
Well Labour does. It’s not rocket science. It makes sense.
It’s about Kiwi jobs, Kiwi skills and Kiwi industries. It’s about our future. Owning our future.
I agree. Any contract by the government has to take wider economic circumstances into account.
Kiwi companies should always be first choice for any such work.
$50m is quite a high threshold but it’s a start.
In the instance that a consortium bids for capital works but the individual components/vendors contract values might be less than $50m (say a large scale public housing development) would the same rules apply?
Also for contracts where offshore expertise is required (niche industry), would foreign registered companies companies be required to domicile a subsidiary in NZ (51% local ownership) or commit to a JV with a NZ company?
so what about the china fta and the cer with australia that requires equal treatment with government contracts clare, are you going to rip those up too?
Good stuff, have you costed the direct or even the indirect costs of NZrail buying locally?
It would be interesting just to see how much is being saved or not saved and what those extra jobs are going to cost
@battleheed Just details!!!!!… public are not interested in details according to Trevor anyway
@battlehead, do those 2 coutrys protect there own interests when it comes to this type of thing?
@ battleheed, try buying some land in China …
@battleheed
They already have such policies so it will be equal treatment but, personally, I’d like to see the FTAs ripped up.
clare why don’t you ask cullen what he thinks, whether kiwirail should have to go with nz companies, wasn’t he chairman of kiwirail at the time of the decision and wasn’t he min finance for 9 years and didn’t have such a policy?
I don’t like policys that are kneejerk reaction to one government decision, it’s reactionary and not good public policy and doesn’t stack up when you did nothing about it last time. Looks to me like you’re so desperate you will say anything, know you won’t have to put it in place because you won’t be government. dtb fair enough if you don’t want ftas, but clare can’t have it both ways, it’s either this policy or ftas but you can’t have both.
Jesus you lot are slow (labour polies that are here) I mean there was a poll yesterday NATS DOWN 5% and what do I see here or in the MSM NOTHING AT ALL. HOW the F&^%$*&K do you expect to win an election when you are not even up to date on the bloody polls WAKE UP.
Good policy. Taking into account the wider economic implications of a purchasing decision by government entities is a good move. Not taking into account the income tax and gst for goods kiwi workers will pay to the govt and possible benefits paid by the taxpayer for those who are out of work but have skills in relevant fields when the entity/department is looking at tenders, the current practice, is just plain dumb.
So would you take less in dividends from soes and give more to government departments to pay for the extra cost? How much have you worked out this is going to cost the government clare, have you included these numbers in your budgets?
@ David H, it seems the only real poll since the Goff CGT launch, once all the facts were laid out and the big tax cuts revealed, is NOT news. I guess it doesn’t fit with the gallery’s mission to get Key and his mates re-elected? We can’t have them running their political ‘opinions’ off message, can we? What would Johnboy say …
jennifer go read the poll, it finished on july 10, before the one news one, with much of the polling period before there was even talk of a cgt, the one news was in the middle of all the discussion of the cgt.
It’s not a kneejerk reaction and, as I’ve pointed out before, not everything can be done all at the same time.
There’s this process called learning where you do something, realise that what you did was wrong and then not do it again. This process takes time and, often, doing something else wrong before getting it right.
This but you didn’t do anything about it last time, WAAAAH!!! from RWNJs is just getting childish now.
China, the US, Australia and several other nations all seem to think that they can. So, why can’t we?
Poor Hillside
draco because you can’t renegotiate ftas once you’ve already agreed them, why would australia agree to a change to the cer, what would they want in return, etc.
Clare hasn’t answered any questions on this, seems to be a policy not to talk about detail of policy which is sad, clare should say how many contracts she expects to be awarded, and of what total value as a result of the policy. If she’s done her homework she should know, but it seems to be a smash and grab announcement that doesn’t have any substance.
Australia already has such policies. If they have it under the CER then so can we. No renegotiation required.
And renegotiation is always possible up to and including unilaterally dropping any present FTAs as the US showed in the 1970s when it unilaterally dropped it’s gold standard which was part of the Bretton Woods agreement. No point holding on to something that’s doing us harm.
Am on the road at the moment and haven’t got much access to technology. Phone reception a bit patchy. Will write another post over weekend addressing your questions.
ok thanks clare look forward to a post addressing the issues, will follow closely have a nice weekend
drac don’t be an idiot there is a big difference between nz and the us, us is the big player in any fta nz is the small player, ftas are more valuable to us than to the other country, if we start locking out china and australia from the contracts then they will lock us out of their markets
australia government must treat nz as australian under cer, they’re not allowed policies giving favoritism to aussie firms over nz ones
Asked if there was a danger that favouring New Zealand companies could end up costing more, Mr Goff said cost and quality would still be the paramount considerations.
“I’m not saying that you should always buy New Zealand regardless of cost.”
A direct quote from Mr Goff….. seems to me that nothing will change, it is just a desperate (another) attempt to garner support!
That must be why they are still trying to block NZ apples huh.
You missed the memo where China has implemented dairy tariffs against NZ at least 7 times since we signed the FTA with them? We really must be stupid for believing that FTAs are about Free Trade.
Labour has a nuanced procurement policy which looks at wider economic benefits for NZ and local communities beyond just upfront price.
I agree that the Government should not buy NZ made if something specific is going to be an inferior product at 10x the price which doesn’t do the job, and no self-respecting NZ company would expect that either.
However, expecting a fair go from Government is what Labour’s policy does. One where the interests of New Zealanders are formally taken into account. This is a clear nation building policy that we need to differentiate from National’s ongoing planless, clueless economic drift.
Phil went down to Hillside, met all the party faithful down there, and told them what he needed to to guarantee their votes. Ever since buying back rail it’s been party policy to find ways to support these loyal members who campaigned hard for the government to take over their company and therefore for them to become state employees. Now they want the government to guarantee their continued employment by giving them work even if it costs more for them to do that work than another company.
I think this is about Kiwirail workers vs any private sector firm, not just china. Because we know the workers oppose contracting out, whether it is contracting work in NZ or overseas. They opposed private ownership of the rail likewise.
So the campaign is really about Kiwirail workers vs anyone else, even in NZ.
Kiwi Jobs?So working in the Hawkes Bay pruning grape vines for less than the min wage some thing that has been going on for years without any body doing anything about, is that one of those jobs?Yea Yea i know if you dont like it get another job,yep that would be fantastic but most of these people are either old or immigrants with not a lot of choice .This lack of choice is exploited not only by the contractors as well as the winery’s.It’s not uncommen to make between $5-$10 per hour before tax and without holiday pay.All so you guy’’s can buy your cheap plonk at the local supermarket.
You missed the bit which said that they already do? They already have policies that preference their industry/businesses over ours.
I suppose you missed the research that showed that Australia’s FTA with the US was costing them $700m/year as well?
Really, if a FTA is harmful to us then we should drop it like a hot rock and a FTA with the US is most likely to be harmful to us not bring us benefits. Hell, a NAct minister has already said that a FTA with the US will do nothing for us so why are we even chasing one?
battlehead, do you consider that China’s lower weekly average wage enables them to provide more competitive pricing than NZ for the same product and this would appear unequal on the face of it.
So, for example, they can produce and supply a train carriage cheaper than NZ (notwithstanding it may be of questionable quality, but only known after delivery)
The US loves FTA’ provided it satisfies 2 things.
1. The US doesnt have to treat foreign companies equally with its own; and
2 Foreign companies MUST treat US companies equally with their own
A free trade agreement with the US would not be free
FTAs generally aren’t about trade at all. They’re about giving rich foreigners direct access to NZs wealth and turning NZers into renters in their own land.
But Draco, you are forgetting they are US, not Chinese (not that we’re racist in NZ)
[...] for the Labour procurement policy itself…what the RMTU later pointed out in a press release was that – unlike similar policies in other [...]