A cross government target for relevant government procurement contracts for goods and services to be awarded to Māori businesses annually will increase to 8%, after the initial 5% target was exceeded, Māori Development Minister, Willie Jackson announced today.
The progressive procurement policy was introduced in 2020 to increase supplier diversity, starting with Māori businesses, for the estimated $51.5 billion spent on government procurement every year.
Minister Jackson said the initiative has had early success, with 90% of government agencies reporting an overall result of 6% of their total contracts being awarded to Māori businesses for the year ending June 2022.
Previous reporting showed 5.7% of government contracts were awarded to Māori businesses between 1 July – 31 December 2021.
“Māori businesses made up 6% of the total of government procurement contracts for the 2021/22 financial year. This meant more than 3,200 contracts were awarded to Māori businesses across the public sector, worth a total value of about $930 million,” he said.
“We know our collective buying power can deliver better value for people and communities. All businesses must still win contracts based on merit but getting agencies to consider benefits other than just price, is making a positive social impact and boosting the Māori economy.
“This creates wider outcomes for Aotearoa such as Government engaging with more small to medium businesses, helping regional business growth and creating jobs and training opportunities.”
Minister Jackson said the government procurement spend was significant and there was an opportunity to address inequities faced by Māori through the economic benefits realised for Māori businesses and subsequent employment opportunities.
“We must utilise this market so New Zealand builds the economic resilience of our Indigenous small to medium enterprises (SME), as other countries have successfully done with similar initiatives.”
Te Puni Kōkiri and the Ministry of Business, Innovation and Employment have engaged with over 400 Māori businesses across 25 industries on government procurement in two years.
Minister Jackson says, “Through our capability uplift programme, we’ve supported 18 Māori businesses to secure government contracts worth a total of $8 million.
“Going forward, we will keep delivering targeted Māori business support, scale up local networks and work with agencies to increase supplier diversity.”
He said the new 8% target will be reviewed in 2024. The other progressive procurement policy features will remain until the review, with some refinements to the services to Māori businesses and agencies.
The progressive procurement initiative is led by Te Puni Kōkiri and Ministry of Business, Innovation and Employment.