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Goff launches procurement policy

Written By: - Date published: 7:08 am, July 21st, 2011 - 48 comments
Categories: jobs - Tags: ,

While Key is monkeying around in LA achieving nothing, Labour is pushing ahead with policies that will take this country forward. Last night, Phil Goff announced the party’s procurement policy at a meeting of Kiwirail Hillside workers, who have just experienced the results of government contracting that ignores wider economic impacts on the country.

The detail of Labour’s policy is here.

The logic of a procurement policy that compels government bodies to make decisions on more than a narrow commercial basis is obvious.

The new Auckland railcars could have been built in Dunedin, creating hundreds of jobs, boosting the economy, and ultimately bringing more tax into the government’s coffers. Instead, Kiwirail went for the ‘cheaper’ option: cheaper for it as a company in isolation but more expensive for the government and the country as a whole. Now, another 44 jobs have been lost at Hillside with 16 of the redundancies announced just before Goff arrived.

Kiwirail shouldn’t just be a company that we own, it should be about investing in and building New Zealand.

We can do better by requiring government bodies to consider the wider economic costs and benefits of their contract choices, just as other countries with procurement policies do. Good on Labour for leading the way.


48 comments on “Goff launches procurement policy”

  1. tc 2

    Also the engineering skillets get maintained as all you do when you buy offshore is line someone else’s pockets versus wider local gains such as those mentioned above.

    Govt has a massive role to play here as private will always go for the bottom line with a made in china or similar choice being made.

    Railways workshops produced historically alot of kiwi engineering talent…..we need that more than ever now.

  2. burt 3

    [stop trolling and address the topic of the post. Or comment on open mike. Or get ready for another ban. Eddie]

    • bbfloyd 3.1

      getting desperate burt? sounds like it… you want to be careful about what kind of allegations you make though. libel is still illegal in this country.

      [lprent: IMHO it isn’t because of the wide latitude of defamation law when it comes to politicians. Did you notice that all of the acts are carefully unattributed? Looks more like a new attack line in a usual form from a PR firm. ]

  3. Colonial Viper 4

    Time to re-educate NZ’ers in a form of economic and business case analysis which isn’t strictly and narrowly financial, or simply neo-liberal.

    Jobs, capabilities, skilled industry is what this country needs. Labour recognises that the long term future of the country and our job market relies on this, John Key thinks its about his mythical haven tax financial hub and cycleways.

  4. Zorr 5

    It is nice to see Goff and Labour drawing a line and saying “We’re completely different to National”

  5. uke 6

    This should be a big news story. The procurement policy has broad implications for the NZ economy and retaining existing jobs.
    There was nothing about it on RNZ Morning Report. Nothing in the Herald. And Stuff uses the misleading and negative headline: “Grim news greets Phil Goff in Dunedin”.

  6. felix 7

    Good stuff Labour. More of this please.

  7. Afewknowthetruth 8

    ‘it should be about investing in and building New Zealand.’

    Sounds rather like the early 1970s policies. A large portion of what was bought in NZ was made in NZ -shoes, clothing, electronics, lawn mowers….. The dergualtion, sell-off policies NZ endured from 1984 on have demolished most of it.

    But it is too late to go back to that kind of society. We are living in a post peak oil world, and we are in the early stages of a meltdown of the global economic system; the Kiwi dollar at over 85 cents US, over 53 pence is a sure sign it’s all unravelling.

    Now that the global industrialised food system is starting to crumble it won’t be long before the main thing on people’s minds will be ‘what am I going to eat?’ not ‘how am I going to travel?’

    The other thing, not accepted by any policitian is that development is the problem, not the answer. The more we develop, the further we will fall when the oil stops arriving. And the more we develop, the faster we destroy climate stability via CO2 emissions.

    The real world is too hard for most politicians and most of the general public. So the collapse will continue, with no appropriate strategies -permaculture, powerdown etc.- in place.



    • Draco T Bastard 8.1

      But it is too late to go back to that kind of society.

      Actually, going back to that type of society is inevitable. It won’t be exactly the same as we have reached Peak Oil and the financial system that has robbed the majority of the people for the last 500 years has finally been shown for the rort it is.

      The other thing, not accepted by any policitian is that development is the problem, not the answer.

      No, development is still the answer – just that we will have to develop in another way than what we’ve been doing for the last few centuries.

      So the collapse will continue, with no appropriate strategies -permaculture, powerdown etc.- in place.

      More than likely but as the collapse won’t happen in one shot people will come to realise that we need a different approach and that will, eventually, come to dominate.

      • Afewknowthetruth 8.1.1

        DTB. What I meant was it is too late to go back to the society that existed in the 1970s.

        We will, indeed, return to a self-sufficient economy. But that society will be minus most of the things people currently take for granted. Eventually anything that is made from or made using oil will be unavailable. We may to wait till 2025 to reach that point.

        Most people will not voluntarily give up their present lifestyles; therefore they will be driven, kicking and screaming, to the new paradigms.

        What kind of development do you have in mind? Development of permculture? Development of commnity gardens?

        My greatest fear is that ever-rising CO2 emissions (as promoted by all political parties) will trigger sufficient positive feedbacks to make even permaculture unviable. Just look at the US right now: 29% is suffering extreme drought. Then there’s East Africa. And we’re only 0.8oC above the long term average.

        • Draco T Bastard

          What kind of development do you have in mind?

          Development of an economy that fits within our environment taking into account biodiversity and the ability of the environment to clean up after us (The pollution of our rivers and lakes is because we’ve gone beyond what the environment can handle) as well as use of the natural resources (minerals etc) in such a way so as to ensure that we don’t use them up (What I call the Renewable Resource Base). This will, of course, require a huge amount of study.

          My greatest fear is that ever-rising CO2 emissions (as promoted by all political parties) will trigger sufficient positive feedbacks to make even permaculture unviable.

          I actually think the world is already there but that just means that we’re going to have to be flexible about what we can grow and very strict about how many people we can reliably support (I think NZ is already over populated). Where we are provides numerous advantages even with a changing climate. We’re not about to run out of fresh water even though large tracts of land are going to be drier nor are we going to get too hot like the tropics will and possibly some tracts of Europe. These advantages bring challenges as well – everyone else, as their own land dies about them, will try to come here.

        • Lanthanide

          “Eventually anything that is made from or made using oil will be unavailable. We may to wait till 2025 to reach that point.”

          Oil’s not drying out, it’s simply becoming expensive.

          Plastic is a far better use of a limited oil resource than transportation fuel is. We’ll see plastics around for long after 2025 and you’re kidding yourself if you think we won’t.

          They is also a lot of work being done on making plastics from a variety of bio-sources, saw a documentary on it on Discovery channel last year.

          • lprent

            The value of plastics means we’ll probably find that it will be the main use for both oil and coal over the whole of this century. The energy in the complex carbon bonds means that it will probably be quite some time before it becomes economic to produce it from current bio sources compared to any fossil sources. In other words you can make it, but it really is pretty costly if you have a better prepped feedstock available.

            • Robert Atack

              Iprint “the whole of this century” is a long time.
              Just observing Nature around here at the moment, ‘Cabbage’ Coast just north of Wellington.
              Bumblebees flying around the house, Ducks fucking, horses running around like it is spring, even grape vines budding, …. climate change, I wonder what happens when a cold snap zaps us, will Nature recover, and start budding again, or is that it for this year?
              We are living on a knife edge environmentally as well as economically , There will not be an economy, well not one you could set up a plastic factory and its supply chain, or even maintain most existing factories supply chains, one major contributor to a supply chain is food for all the workers, and some kind of law and order etc, a post peak, nose diving , running out of its life blood, system will turn to Mad Max, long before the available oil, gas and coal is used up.
              Slavery will be more common than anyone can imagine, We all better practice saying “yes sir, master sir” But even then there has to be some sort of economy. Human life is going to become worthless, a bit like the 12 million starving to death at the moment. I’ve just used more energy than most of those 12 million use in one day, just typing this message. We don’t know how lucky we are.
              But hey we got Kiwi Saver lol

    • Lanthanide 8.2

      I guess this is a symbol of oil-fuelled civilization jumping the shark:


      It’s all downhill from here.

  8. Bill 9

    Why are bosses and/or politicians making these decisions anyway?

    Why aren’t the procurement decisions made by the various users and providers of the services or manufactured items?

    ‘Course, aside from being highly democratic, that scenario might see long term social considerations elevated above short term market driven ones. And that would impact on the power and prestige that flows to a ‘knowledgable’ minority who justify their privilege throough succesfully insisting that a narrow market perspective should be the sole or determining factor in making such decisions.

    Protesting that current decision makers should merely moderate their conclusions leaves the foundation of their power and our powerlessness in tact. And allowing politicians to enact policies that effectively round off the sharper edges, also leaves their power and our powerlessness in tact.

    All policies can be reversed.

    Unless the root of the matter is addressed then the next ‘Hillside’…no matter the result…will just be one in a never ending series of battles that ultimately go nowhere. A bit like WW1 trench warfare was.

    P.S. On the policy itself, I couldn’t help but notice the anxiety to satisfy WTO rules. All power to the market then, with a few fluffy obscure ‘feel good’ statements that may have no substance what-so-ever thrown in on the side.

    • Draco T Bastard 9.1

      On the policy itself, I couldn’t help but notice the anxiety to satisfy WTO rules.

      Yeah, I noticed that when, if we were doing what’s best for NZ we’d be dropping out of the WTO.

      • mik e 9.1.1

        NOT true their are provisions in the free trade agreements for local procurments.DTB

  9. Deadly_NZ 10

    Nothing on Stuff, Nothing on the Granny herald, Nothing on Red alert. WTF are all the Labour politicians and their media staff asleep???

  10. Gosman 11

    Just another reason why Governments shouldn’t own commercial enterprises.

  11. mik e 12

    Gosman Singapore govt owns 60% of all businesses they have 17.4% GDP growth . National act can,t even get 1% growth in the last five years that they have governed under borrowing Bill English.Then against your advice they,ve bailed out your fellow hobbits to the tune of $98million Steven MURDOCH Joyces Mediaworks $43million and the cult called Destiny for $880,000. They don,t want to know about the productive sector. The Chinese rail wagons that have been imported earlier are of inferior construction leading to derailment and expensive repairs the extent of inferior construction is so bad kiwirail is covering it up.John Banks minister of Rail sold of NZRail in 1992 for nothing to Wisconson rail and Alan Gibbs Fay Richwhite etc . they have asset stripped it [to the tune off a billion dollars] selling off valuable land and not putting any investment in what so ever back in ,then toll got a bail out[600million dollars] because it couldn,t afford to upgrade the antiquated rolling stock.

    • TightyRighty 12.1

      Hi Mi k e. Aaaah Singapore also has flat tax and no capital gains tax. Will you accept that too?

      • Colonial Viper 12.1.1

        as long as you bring in their land taxes, yeah why not

        Also strong state guidance of virtually all sectors of the economy.

        bring it on

      • millsy 12.1.2

        Don’t Singapore have a massive state housing (obviously its called something else) program as well?

        • Luxated

          It does indeed. 85% of all houses in Singapore are owned by the Signaporian government (HK is similar in that regard with 50% of all houses owned by the state).

          • Colonial Viper

            I see TR is still all for his Singapore idea eh.

            Just remember that NZ was giving them foreign aid through the 1960’s, us being so rich and them being so poor and all.

  12. mik e 13

    NO worries tighty they just have a whopping 40% land tax payable each year which is why it costs $10,000 a month to rent an arpartment

    • Colonial Viper 13.1

      And to think, we were giving Singapore foreign aid through the 1960’s…

  13. Afewknowthetruth 14

    Lanthanide wrote.

    ‘Oil’s not drying out, it’s simply becoming expensive.’

    I suggest you do some study of oil depletion, especially the export-land model. NZ is likely to be down to 20% of current supply by 2025. Oil is not drying out, it is being extracted and converted into CO2 -which is destroying climate stability.

    ‘Plastic is a far better use of a limited oil resource than transportation fuel is. We’ll see plastics around for long after 2025 and you’re kidding yourself if you think we won’t. ‘

    I suggest you research the masive plastics gyres which are destroying the ecosystems of the North Pacific. There is now more plastic in the Pacific than plankton.

    Of course, global financial collapse will occur long before 2025, so we could be thrown into a new stone age sooner than most people realise.

    • Lanthanide 14.1

      “I suggest you do some study of oil depletion, especially the export-land model. ”

      I am familiar with oil depletion and the export land model, thanks.

      “NZ is likely to be down to 20% of current supply by 2025.”

      So you agree with me.

      “I suggest you research the masive plastics gyres which are destroying the ecosystems of the North Pacific. There is now more plastic in the Pacific than plankton.”

      And? This means we’re suddenly going to stop using plastic?

  14. millsy 15

    A feel-good policy that doesnt address the fact that Hillside (and Hutt) has been run down something awful in the past 25 or so years (I recall the NZR workshop system also did non rail work for a diverse range of clients as well).

    I would support this if it went hand in hand with a multi-million dollar investment plan for the KiwiRail workshop systems including the development of a apprenticeship/cadetship scheme for school leavers, etc that would be rolled out across the SOE sector over a number of years, (as part of an overall reconfiguration of post secondary education/training)

    • Colonial Viper 15.1

      Trains millsy, are the way of the future, and if I have my way Labour will be building a shit load of them in NZ, electric running on fully electrified rail.

      Liquid transport fuels are all over as a mass personal transport option in ten or so years. Think $5/L petrol on static wages scenario, $220 to fill a Civic, $350 to fill a Falcon.

      • lulu 15.1.1

        Hey Colonial Viper, a question for you. After you have allowed for regular growth in electricity demand, greater domestic demand from heat pumps and stuff like that plus electric cars what fuel will be used to generate the extra electricity needed to electrify rail?

        • Draco T Bastard

          Properly installed heat pumps decrease demand for electricity. Throw in good insulation and passive solar heating (Yes, it’s possible to heat your house without turning on a heater or lighting a fire) and we could seriously decrease the demand for electricity.

          Electric cars should go the way of the dodo before we even start using them. Way to inefficient.

          • lulu

            Thanks for your reply Draco T. I agree with your observation about heat pumps but BRANZ predict that installation of heat pumps will encourage whole of house heating rather than individual room heating + substitution of other forms of heating + the fact that when consumption cost goes down peoples usage increases back to the same level of cost resulting in massive electricity demand increases overall.
            I agree with your comments re good insulation and passive solar heating but all you are talking about is slightly decreasing otherwise upward sloping demand growth.
            I don’t disagree with your comment about electric cars but they are coming. You can buy fully electric plug in vehicles off car showroom floors in the UK now. They will flood into NZ within 10 years.
            That brings me back to my original question of CV. Based on the inevitability of high rates of electricity demand growth what source of fuel for electricity generation would you prefer?

            • uke

              “…the inevitability of high rates of electricity demand growth…”
              This is not inevitable. People could reduce their demand for electric power and be rewarded for it. There is an amazing amount of latent energy, for example, in most people’s legs.

              • lulu

                If your proposition is that it should not be inevitable because etc etc I agree.
                However the nature of the commercial and regulatory arrangements we have plus our love of convenience combined with the link between electricity demand and economic growth means that high rates of electricity demand growth are simply inevitable whether we like it or not. All of those will change for it to be less inevitable.
                Lanthanide is on to it.
                But still no one wants to comment on where all the energy will come from. Well I will give you a hint. The options we have are few. 15 years from now we will need to produce 25% more than we are producing today. Can’t do new hydro, can’t build enough wind, will exhaust geothermal, not enough commercial gas available and we don’t like coal (even though we rely on it heavily now especially in dry years). The generators will pursue enough projects to meet demand as it grows so not to worry. But here is another thing that is inevitable though, the price of power will be higher.

            • Colonial Viper

              That brings me back to my original question of CV. Based on the inevitability of high rates of electricity demand growth what source of fuel for electricity generation would you prefer?

              Sorry just found this thread again. Recommendations

              1) Shut down the aluminium smelter.
              2) ramp up wind and tidal power. A billion dollars worth of investment a year for the next 20 years.
              3) Massively tighten up building insulation standards, with retrospective requirements.
              4) Require solar water heating for all residences.
              5) Differential electricity pricing for households, first 2000 kWh annually very cheap, next 2000 kWh moderately priced, every kWh after that terrifyingly expensive.


              • lulu

                Now we are talking.
                Items 3, 4 and 5 involve consumers, their comfort and their choices. It doesn’t involve any wanky in house displays expecting them to do something in real time. Aaah.
                Oh but wait… every part of the industry except EECA benefit from more rather than fewer kWh per month being consumed so who would have the conviction and the power to turn this ship around?.

          • Lanthanide

            Jevon’s Paradox shows that increasing the efficiency of something doesn’t actually decrease the consumption of it.

            If you install heat pumps that use less electricity into people’s houses, they’ll still spend the same amount of money on electricity (read: use the same amount), it’s just that their houses will be warmer more of the time. This in itself will generally reduce health issues and hence save money in the health system, though.

      • mik e 15.1.2

        the Tory Govt in England has stopped building Motorways because their to expensive,Actually this Govt is doing one thing right thats making everybody so poor that we can,t afford to drive !so I don,t see their logic in building any more motorways

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