Nicola Willis: Economic Growth Minister on scrapping requirements in the Government's procurement rule book

The Economic Growth Minister is making it easier for New Zealand businesses to win government contracts. 

Nicola Willis is scrapping 24 requirements in the Government's procurement rule book, including a requirement for the company to pay cleaning, catering, and security staff a living wage. 

She's also adding a new economic benefit test. 

Willis told Mike Hosking they're encouraging agencies to not just choose the cheapest option. 

She says they want the billions of dollars the government spends on these contracts to generate jobs, incomes, and economic benefits. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Back to the procurement business where these local businesses get
some sort of foot up when it comes to bidding
for government work. A lot of rules get dropped, which
is good. Are smaller deals under one hundred thousand k
deal The expectation is the local will get the job anyway.
The Economic Growth Minister Nicolai willis on this good morning.

Speaker 2 (00:15):
And a very good morning to you.

Speaker 1 (00:17):
The price aspect, do are we being gouged? Do a
lot of big international players come in low ball it
and then try and recoup later.

Speaker 2 (00:24):
Look I do hear that from some small businesses who
are trying to get government contracts. Which they also tell
me is look, we seem to sometimes know the price
of everything and the value of nothing, which is to say,
it's all very well and good. The Aussie firm pipping
the key, we firm at the post at a lower price.
But then what about the opportunities that robs from New
Zealanders in terms of jobs, skill development, the building of

(00:48):
a small business into a larger business. And we do
need to take that into account and that's what these
new rules allow us to do.

Speaker 1 (00:55):
Can you are there people who are genuinely any good
at big stuff? I mean the small stuff I'll come
to in a moment. But the big stuff, if you
can go local, are there people to make it local?

Speaker 2 (01:06):
Well, let's think about it. So you think about Datacom.
Actually they are an at scale firm who specialize in
a delivery of digital services. And there are other firms
that are of a similar scale. Are there bigger firms
in Australasia and in Asia? Sure there are. But how
do you become a bigger firm? You actually get a

(01:26):
few big contracts. You build up your skill and your
expertise over time. And that is the case similar in
the construction area or in many other areas. It's actually
getting the big government contracts sometimes that allows a firm
to get to an expert size.

Speaker 1 (01:39):
Okay, so here we are Wednesday morning and you're waving
the patriotism flag. Tomorrow you're going to be saying to
all the international big boys have flown into the country,
come on, and we love you. So how do those
two messages dovetail?

Speaker 2 (01:51):
Well, I only want firms coming to New Zealand to
invest if I can be clear that they're going to
create benefits for New Zealanders. So when international firms come here,
often it's their investment that will allow New Zealand businesses
to expand, to create more jobs, to invest in the
next piece of cast or the next factory that allows

(02:12):
them to pay hire incomes. So this is about the
fact that we're in a race for the world's money,
and international money when it comes to New Zealand can
benefit kiwis. That's the point.

Speaker 1 (02:23):
As far as this procurement thing goes, this value to
New Zealand, who decides that, how's it literally measured?

Speaker 2 (02:31):
So literally, what we're doing is requiring every gauge agency
that's using public money that it must require that their suppliers,
when they're tendering for projects, must demonstrate how they will
deliver economic benefits to New Zealand. And agencies are required
to wait that as at least ten percent of how
they decide on the contract, and they must consider opportunities

(02:53):
like providing skills and training, employing workers here, paying taxes here,
developing New Zealand industry cape abilities, and agencies need to
demonstrate when they've picked those contracts how they measured those things.

Speaker 1 (03:06):
Okay, I just can't work out in a country that's
broke and we hire the cheapest suddenly we're not hiring
the cheapest because we love New Zealander's not that I'm
against it. I'm just wondering whether we're just this has
got a bit more froth and bubble than substance to it.

Speaker 2 (03:21):
Well, as I've said, it includes a minimum weighting of
ten percent for those economic benefits. Of course, cost will
still come into it. You still want people to be
able to get value for money. But it's about the
fact that when you're choosing a contract, you don't just
choose the cheapest one. Your wigh a number of factors.
And it's important for the growth of the New Zealand
economy that these billions of dollars the government spends every

(03:43):
year actually generating some jobs and some incomes and some
benefit for New Zealand, not just lining the pockets of
foreign firms.

Speaker 1 (03:51):
I was watching you yesterday with the debt cost in
the house, and I'm looking at the Wellington lame O
councils and I'm just is this admire of an aptitude
in this country? Do we have the wherewithal to actually
pull our finger out and get our act together.

Speaker 2 (04:08):
I think this should be our wake up call moment.
We went through six years of complacency in which we
allowed the government to tell us every problem could be
solved with more money being spent or the truth is,
we've got to work for it. We've got to earn
for it. And this is an economy that can grow
in which we do have messes of growth potential. We've
got to get a bit of red tape out of
the way. We've got to be more sensible with our

(04:29):
government policies. But we're a reform and government who's making
all of that possible. And I've got huge optimism for
New Zealand. We've got what it takes. We've just been
getting in our own way.

Speaker 1 (04:38):
But you gave them the opportunity in Wellington for infrastructure,
give us a plan, and five of them, however many
there are, couldn't even come up with a plan.

Speaker 2 (04:49):
Oh look, I'm not going to make any apologies for Wellington.
I was so embarrassed by that episode that they couldn't
even put their bickering aside for long enough to come
together and say, hey, this is why our region needs Nicola.

Speaker 1 (05:02):
That's what you're dealing with.

Speaker 2 (05:05):
Well, that's that's Wellington on that episode. But do you
know what I have faith and ratepayers who have the
power of the vote. And come counsel time, Mike, I reckon,
you'll be seeing some changes and wait.

Speaker 1 (05:16):
Well you want to hope, So all right, go well,
appreciate it. Nicola Willis's Economic Growth Minister. For more from
the Mic Asking Breakfast, listen live to news talks. It'd
be from six am weekdays, or follow the podcast on iHeartRadio.