New Zealand Government’s “Progressive Procurement” movement gains legs

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A revolution is being spoken of in New Zealand that has attributed the tag “Progressive Procurement.”

Government Ministers Ministers Stuart Nash (Economic and Regional Development) and Willie Jackson (Māori Development) late last month (May 2022) cut the ribbon on a $26 million package to diversify government spending.

The government has badged it “Progressive procurement”, assigning $14.5 million to be spent in 2022 and $11.5 million next year via the Māori Development budget.

Minister for Māori Development Willie Jackson said the investment enables a scale up of the action underway since 2020, to further build Māori business capability and shift government agency buying practices to be more inclusive.

“This investment in Māori business and workers delivers on a Labour election commitment to better support whānau Māori enterprise, and is part of a wider Budget strategy to focus on economic security in good times and bad,” he said.

“We set an expectation that government agencies will draw on more diverse suppliers with a target of five percent of the total number of mandated agencies’ procurement contracts awarded to Māori businesses.”

The NZ Government spends about $51 billion on procurement annually and the Progressive Procurement Policy was launched in 2020 “to ensure broader economic and social outcomes for New Zealand.” Included is a 5% target for agencies annual procurement spend to be with Māori businesses.

Capability building and support top of the order

The $26 million funding package is earmarked for:

  • scaling up local networks in regions to grow awareness of government opportunities and build capability
  • providing targeted one-to-one support to Māori businesses that are ready to deliver procurement solutions but need to lift capability to navigate and engage effectively in government tender processes
  • development of a centralised Māori business database
  • engage with and build capability of government agencies to achieve long-term change in government procurement processes.

Mr Jackson said the government aims to deliver targeted uplift services for 100 Māori businesses per year.

Bid to drive “high-wage, low-emissions economy”

“Procurement is critical to achieving a high-wage, low-emissions economy. Around the world, governments use procurement to deal with the real challenges we face, like climate change, growing inequality, uneven access to labour market opportunities or productivity tools, and the need for greater innovation and diverse business approaches.

“We need strong communities where we look after each other, as much as we need strong finances and sustainable growth. Government procurement plays a key role in this,” said Stuart Nash.

The NZ Government spends about $51 billion on procurement annually and the Progressive Procurement Policy was launched in 2020 to ensure broader economic and social outcomes for New Zealand. It includes a 5% target for agencies to commit annual procurement spend to Māori businesses.

Read more about the Progressive Procurement movement. 

In Australia, the Victoria is regarded as one of the leading proponents in the world for social procurement. There’s examples of government and corporates unleashing their purchasing power to award contracts to businesses small and medium businesses.  Read about the $15 billion Made in Australia procurement plan. 

The Queensland Government is also making moves to increase its social procurement footprint with a $1 million partnership announced last year with the sector.

 

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PASA (Procurement and Supply Australasia) is the leading provider of information, education and networking opportunities to procurement professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, training, awards and PASA CONNECT membership network. PASA is a trading name of BTTB Marketing Pty Ltd. BTTB Marketing has operated under the BTTB, CIPSA Conferences and PASA names for over twenty years. https://procurementandsupply.com/

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