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State sector contracts could hurt the economy, Labour says

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Fuseworks Media
Fuseworks Media

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Wellington, July 22 NZPA - The Government's plan to award lucrative state sector contracts to "a cosy club of multinational suppliers" will cut competition and lock out local businesses, the Labour Party says.

Economic Development Minister Gerry Brownlee announced yesterday the first state sector-wide contract had been signed -- for stationery.

He said Corporate Express New Zealand and OfficeMax had won contracts to form a panel of suppliers of stationery and office supplies to state sector agencies.

It was the first in a series of similar contracts that would save $115 million over five years.

Mr Brownlee said it was about reducing costs by harnessing the collective buying power of the state sector.

Labour's communications and IT spokeswoman Clare Curran said the contracts would disadvantage the local economy under the guise of saving money.

"New Zealand needs a strong government procurement policy which maximises opportunities for competitive local businesses when tendering for large government projects," she said.

"Instead we have a government which is maximising opportunities for large companies based overseas."

Ms Curran said she was going to lodge a member's bill, the Kiwi Jobs Bill, which would establish a Commission of Inquiry to compare government procurement policies in Australia and other comparable jurisdictions to determine whether the Government could have a policy that gave preference to local procurement without breaching international trade obligations.

"The Government currently spends about $30 billion on goods and services. If all those deals are done with overseas-owned companies, what impact is that having on our economy?"

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