The New Zealand Government is increasing its cross-government target for procurement contracts awarded to Māori businesses after the successful achievement of the initial 5% target.
According to an announcement made by Māori Development Minister Willie Jackson, the government will be raising the new goal of government procurement towards Māori businesses to 8%.
Minister Jackson expressed satisfaction with the early success of the initiative, revealing that 90% of government agencies reported awarding 6% of their total contracts to Māori businesses for the year ending June 2022. He also emphasized the importance of recognizing the value of collective buying power, which can result in better outcomes for communities and the Māori economy.
While contracts will continue to be awarded based on merit, government agencies will be encouraged to consider a broader range of benefits beyond just price, contributing to positive social impact and economic growth for Māori businesses.
This inclusive approach to procurement has the potential to yield wider benefits for New Zealand, including increased engagement with small to medium enterprises (SMEs), regional business growth, and the creation of job and training opportunities.
The government recognizes the significant role of procurement spending and aims to address existing inequities faced by Māori through the economic benefits generated for Māori businesses and subsequent employment opportunities.
Minister Jackson highlighted the opportunity to bolster the resilience of indigenous SMEs, following the successful implementation of similar initiatives in other countries.
“Through our capability uplift program, we have supported 18 Māori businesses in securing government contracts worth a total of $8 million,” he said.
Launched in 2020, the progressive procurement policy aims to enhance supplier diversity, which will play a crucial role in the estimated $51.5 billion spent annually on government procurement.
Over the past two years, Te Puni Kōkiri and the Ministry of Business, Innovation and Employment have actively engaged with more than 400 Māori businesses across 25 industries to promote government procurement.
Moving forward, the government will continue to provide targeted support for the businesses, expand local networks, and collaborate with agencies to further enhance supplier diversity.
The new 8% target will undergo review in 2024, while the remaining progressive procurement policy features will be maintained with some refinements to better serve Māori businesses and agencies.