NZ Gov increases procurement target for Māori businesses

Following the achievement of the initial 5% target, the cross-government goal for the annual award of relevant government procurement contracts for goods and services to Māori businesses will increase to 8%. 

In 2020, a progressive procurement policy was introduced to increase supplier diversity. The policy started with Māori businesses for the estimated $51.5 billion spent on government procurement annually. 

Māori Development Minister Willie Jackson stated that the initiative to increase government procurement contracts awarded to such businesses has shown early success, with government agencies surpassing the initial 5% target by reaching 6% in the first full year of reporting. 

“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.” 

Minister Jackson expressed that the achievement has created wider outcomes for Government to engage with more SMEs, help with regional business growth and create jobs and training opportunities. 

With a significant government procurement spend, Minister Jackson believes that there is an opportunity to address inequities faced by Māori through the economic benefits realised for their 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,” he said. 

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. 

“Through our capability uplift programme, we’ve supported 18 Māori businesses to secure government contracts worth a total of $8 million,” Minister Jackson said. 

“Going forward, we will keep delivering targeted Māori business support, scale up local networks and work with agencies to increase supplier diversity.” 

The new 8% target for the contracts awarded to Māori businesses will be reviewed in 2024, while the other policy features will remain until the review with some adjustments to the services provided.