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Speaker 1: You're listening to a podcast from Newstalk ZB follow this

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Speaker 1: and our wide range of podcasts now on iHeartRadio.

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Speaker 2: Talking about proposed changes to procurement rules to make it

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Speaker 2: easier for New Zealand businesses to excuse me for government tenders.

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Speaker 2: On the phone right now is Catherine Beach. He's the

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Speaker 2: director of Advocacy at Business end Z. Very good afternoon

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Speaker 2: to you, Catherine.

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Speaker 3: Good afternoon, Catherine.

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Speaker 4: How hard is it for a New Zealand company to

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Speaker 4: win a government contract?

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Speaker 3: Look, it can be very challenging, particularly for small to

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Speaker 3: medium sized businesses. And I couldn't tell you how many

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Speaker 3: explorers I've spoken to that I have success internationally in

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Speaker 3: selling their goods and services, but they can't actually sell

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Speaker 3: here to our government at home. So yeah, this is

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Speaker 3: a hugely important move and we're big advocates for it.

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Speaker 4: Is that because you know, the hoops you've got to

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Speaker 4: go through to get one of these contracts is so expensive,

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Speaker 4: take so many people and so long, and only really

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Speaker 4: really giant companies have the bandwidth to do that.

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Speaker 3: Look, that's definitely part of the challenge. It's expensive to

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Speaker 3: enter into tenders and typically if there's just one that's

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Speaker 3: going to take the price, then all the others have

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Speaker 3: put a lot of time and energy into sunk costs

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Speaker 3: really that they can't recover. So that's definitely one of

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Speaker 3: the issues. But I think also, you know, we've we

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Speaker 3: had a bit of a lease cost mentality in government procurement,

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Speaker 3: so you just buy the cheap buy on the cheapest price,

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Speaker 3: and that doesn't take into account quality or local support

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Speaker 3: and servicing. So we've advocated, you know, they should be

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Speaker 3: looking at the whole life value of what they're buying.

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Speaker 2: Clearly is step in the right direction, as you say, Catherine,

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Speaker 2: But going from seventy one rules to forty seven rules,

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Speaker 2: forty seven rules still sounds like a very big number.

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Speaker 2: Is there still more work to do here?

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Speaker 3: Do you think it does sound like a big number,

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Speaker 3: doesn't it? And I think the difficulty with the rules,

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Speaker 3: to be frank is you can have a bunch of

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Speaker 3: rules that say things that we think sound good, but

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Speaker 3: how do you actually get procurement managers at the cold

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Speaker 3: face to interpret those rules and you know, do the

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Speaker 3: right thing by Keeley businesses. So I think the approach

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Speaker 3: that they're outlining looks a lot better to me that

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Speaker 3: a procurement manager would be required to do the economic

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Speaker 3: benefit test, and I think that'll just put it to

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Speaker 3: the front of their mind. You know, what jobs could

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Speaker 3: be created, how much tax will this company pay and

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Speaker 3: sort of factor that into their decision making.

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Speaker 4: Do they need any rules at all?

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Speaker 3: Look, I think you do need some rules, and some

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Speaker 3: of the rules are about just good hygiene factors, you know,

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Speaker 3: so how to be fair and transparent with procurement. And

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Speaker 3: you know, I don't think any of this is intended

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Speaker 3: to shut out international participants in our supply chains, because

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Speaker 3: we need them as well, but it might encourage them

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Speaker 3: to team up with local businesses for that tier two

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Speaker 3: or Tier three level supplier.

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Speaker 2: Do you know how we compare to other comparable countries

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Speaker 2: in terms of those government tenders. Do we make it

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Speaker 2: a lot harder than other countries to support our own businesses?

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Speaker 3: I think absolutely we do. So the team Business New

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Speaker 3: Zealand had a look at some other countries and how

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Speaker 3: they approach it. We looked at Australia, we looked at

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Speaker 3: Canada and the United Kingdom, and they all have much

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Speaker 3: more proactive ways of ensuring that their local businesses get

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Speaker 3: a fair you know, a fair go at winning some

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Speaker 3: of that business. They're much more proactive. I think New

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Speaker 3: Zealand's always you know, probably tilted to the other directions.

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Speaker 3: I think this will be a good change.

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Speaker 4: In terms of how waiting the cost towards New Zealand companies.

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Speaker 4: When you take into account you know, the ability to

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Speaker 4: build you know, build companies in New Zealand, and you

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Speaker 4: know the tax advantages and all that kind of stuff.

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Speaker 4: How much do you think it should be weighted in

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Speaker 4: the cost? Is it ten percent?

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Speaker 3: Look, I think that's be interesting. The submissions are open,

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Speaker 3: and I hope that a lot of businesses put submissions in.

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Speaker 3: We certainly will be I think, you know, maybe ten

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Speaker 3: or twenty I think, you know, you have to be

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Speaker 3: fair to the buying agency and to the taking care

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Speaker 3: of tax payer money, that there has to be a

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Speaker 3: good process that they go through. But I think, you know,

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Speaker 3: giving a ten or twenty percent waiting to the local

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Speaker 3: business will just bring it to the procurement manager's attention.

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Speaker 3: It means that they kind of have to evaluate it.

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Speaker 3: So I think just it's getting getting the business the

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Speaker 3: local businesses on those people's radars. They still have to

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Speaker 3: compete with everybody on the other eighty points or ninety points,

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Speaker 3: So I think that keeps it all on us. But

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Speaker 3: I think it'll just really mean procurement managers have to

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Speaker 3: look at local and at least give them good consideration.

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Speaker 4: As a sort of a chicken and egg thing. We

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Speaker 4: don't support local businesses so they don't have the scale,

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Speaker 4: so then we don't use them.

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Speaker 3: Absolutely. Look, it's fifty one billion dollars spend. I've long

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Speaker 3: argued that how do we grow bigger companies in New

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Speaker 3: Zealand on the five million population. That's super difficult. We

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Speaker 3: need our businesses to get into bigger projects, to have

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Speaker 3: the confidence to invest in people, in plant and equipment.

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Speaker 3: How do you do that? You get them involved in

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Speaker 3: bigger projects. Who does bigger projects? That's central government.

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Speaker 2: Catherine, thank you very much for your time this afternoon.

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Speaker 2: Really appreciate it.

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Speaker 3: Thank you.

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Speaker 2: That is Catherine bed, Director of Advocacy and Business in

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Speaker 2: z More.

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