Labour MP wants more state work for NZ firms

Clare Curran. Photo / Supplied

Labour wants New Zealand firms to win a far bigger slice of the $30 billion spent by government agencies each year on goods, services and capital works.

Dunedin South MP Clare Curran intends bringing a private member's bill before Parliament that will flag a more interventionist economic policy.

The bill would investigate whether New Zealand should follow Australia and other countries who look to local businesses to win a greater share of contracts without breaching international free trade agreements.

"We need a boost to our local economy. Why aren't we going down this track?" she asked yesterday. The backbench MP said her Kiwi Jobs Bill had been sparked by KiwiRail's reluctance to consider the local manufacture of $500 million-worth of rolling stock for Auckland's electrified network.

However, her measure covered state-funded procurement across the board which a Cabinet paper last year estimated to amount to around $30 billion annually. Clare Curran said her bill - which had the support of senior Labour colleagues - marked a shift in party thinking.

It has emerged as the party floats other initiatives aimed at "rebalancing" the economy, such as giving the Reserve Bank broader objectives than just containing inflation, and removing GST from healthy foods.

The National Government has been reviewing procurement policy after criticism at last year's Job Summit.

However, Cabinet papers show the review was also motivated by the necessity to identify potential cost savings after many government departments had operating budgets frozen by Finance Minister Bill English.

Several Australian states have procurement policies which aim to maximise supply opportunities for local businesses.