Consultation: Extending the Government Procurement Rules to government entities in the New Zealand public sector
The Ministry of Business Innovation and Employment (MBIE) is undertaking a public consultation to understand the potential benefits, opportunities, and other impacts of extending the Government Procurement Rules to more government entities in the New Zealand public sector.
Transparency International New Zealand (TINZ) supports open transparency in all forms of government spending. The current Government Procurement Rules (4th Edition) spell out the behaviours and principles from which the public sector should operate.
World-leading but limited reach
TINZ considers these are largely world leading. The key challenge is to widen the reach of these Rules across government procurement. Currently they cover approx 135 government entities that make up the core public sector and state services. Their annual $42 billion of procurement spending is only a small portion of overall government procurement.
As the illustration below shows, a significant portion of the New Zealand public and state sector are only ‘encouraged’ to apply the Rules. This includes 2,400 School Board of Trustees and 78 regional and territorial authorities (with annual collective spend of approximately ~$8 billion).
This limits the Government’s ability to influence procurement and implement system-wide improvements to procurement practices, to achieve greater public good from the spend. It also limits the accountability and transparency around the use of taxpayer money across all the New Zealand public sector.
On the flip side, extending these Rules could have the detrimental effect of limiting the ability for some of these government entities to operate independently of central government. In some instances, the Rules directly challenge current statutory obligations. They could provide an additional burden (and cost) around procurement capability, and the capacity to meet more comprehensive reporting obligations.
For further information we encourage you to review MBIE's Discussion document: Extending the Government Procurement Rules to government entities in the New Zealand public sector.
Submissions due 23 November
While we encourage you to submit your feedback direct to MBIE, TINZ will also be providing feedback. For the latter, we welcome your thoughts on the potential benefits, opportunities, and other impacts of extending the Government Procurement Rules to government entities in the New Zealand public sector. This may help shape our response.
Note: Submissions close at 10am on Monday 23 November 2020.
Government Procurement Rules
Required vs. encouraged sectors
Government entities in the Public Service and State Services, are required to apply the Rules. The government entities across the rest of public spending (illustrated in the diagram as State Sector and Public Sector) are only ‘encouraged’ to apply them.
Public Service departments are the core departments and ministries listed in the Public Services Act 2020, Schedule 2.
State Services is the State Services agencies covered by the Whole of Government Direction. These include:
- Crown Agents
- Autonomous Crown Entities
- Independent Crown Entities
- Crown entity companies
- Public Finance Act Schedule 4a companies
* 7 crown research institutes are expected to apply the Rules.
State Sector includes:
- School Boards of Trustees
- Offices of Parliament
- Tertiary Education Institutes
- State-owned Enterprises
Public Sector includes:
- Regional Councils
- Territorial Authorities