Increase to supplier diversity through new procurement target for Maori Business

 Increase to supplier diversity through new procurement target for Maori Business
Māori enterprises are in line for greater opportunities to do business with government agencies under an initiative to spread the benefits of the economic recovery. The Ministers for Māori Development and Economic and Regional Development have announced a new target to encourage public service agencies to cast the net wider when awarding contracts. “The government spends $42 billion a year on procurement of goods and services. We are looking for more ways to use this buying power to accelerate the economic recovery for Māori businesses,” said Māori Development Minister Willie Jackson. “This approach will support Māori businesses to participate in our economic recovery as we build back better.“The new five percent target for public service contracts for Māori businesses is an important step towards a more inclusive and prosperous society. It honours a Labour Election Manifesto commitment to better support whānau Māori enterprise. “Small and medium businesses face significant challenges as a result of COVID-19. That is exactly why targeting Māori businesses and jobs is a priority for the new government. “The target will encourage agencies to use their buying power to create social and economic value.“Indigenous procurement is already successful internationally. In Australia the targets resulted in contracts with Aboriginal and Torres Strait Islander businesses increasing from $6 million to almost $2 billion in just four years,” Mr Jackson says. “The Government moved quickly at the start of the pandemic to provide economic stimulus and support to small businesses through direct financial assistance such as the wage subsidy and interest-free loans,” Stuart Nash says. “This new target for government procurement will further improve cash flow to Māori businesses. It also helps diversify the customer base for Māori businesses and build more resilience into Māori economic activity. “By accessing more of the government’s annual procurement spend, Māori business owners and staff will benefit from greater training and employment opportunities, economic resilience and business growth.“Māori businesses have a strong presence in the primary sector and tourism, in accommodation and the food industry, the retail sector and in the trades. This policy has the potential to further assist with kick-starting of economic activity into other sectors,” Mr Nash said.  

ENDS

Media contacts:

Willie Jackson – Steve Webb 021 830 842
Stuart Nash -Kathryn Street  021 803 707

Notes for Editors

·         For the purposes of procurement, the working definition of a Māori business is one that has at least 50% Māori ownership, or is a Māori Authority as defined by the Inland Revenue Department.

  • Recent work undertaken for Te Puni Kōkiri identified 1,300 businesses as Māori based on Statistics NZ identifiers, with another 8,800 having Māori as majority shareholders.  A further 14,700 were identified as Māori sole traders and 10,200 businesses were classified as larger employers of Māori.
  • The target of 5% is considered aspirational, partly due to a lack of precise data about the scale of Maori business activity. The target is also based on the proportion of the Māori population, data on the Māori economy and the developing social procurement systems in New Zealand.
  • Separate changes announced in October will also give a better picture of the scale of Maori business activity. The New Zealand Business Number Register at the Companies Office will now be able to record data that identifies a business as a Māori enterprise.

·         The Government Procurement Rules were updated in October 2019 to increase access for New Zealand businesses, including Māori, Pacific Peoples and regional business, as well as social enterprises.

·         The new target will enhance work underway by Te Puni Kōkiri and the Ministry for Business, Innovation and Employment to drive more access to government procurement for Māori businesses through a $7.3 million Budget 2020 investment.

·         Te Puni Kōkiri will test new procurement approaches over the next two years to reduce barriers for Māori businesses. TPK will work with third parties to ‘test’ intermediary services and the support services required to help Māori businesses to tender for a variety of government contracts. It will also assist government agencies to implement procurement practices that target Māori businesses.

Ngā mihi,

Stephen Webb |Press Secretary | Office of Hon Willie Jackson MP
Minister for Māori Development | Associate Minister for ACC | Associate Minister of Justice

DDI +64 4 817 8223   | Mob +64 21 830 842 | Email stephen.webb@parliament.govt.nz

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