Listening to the debate over NZ Aluminium Smelters in Southland made me wonder why the government is prepared to stand up for some parts of the economy but not others.
It seems Hobbits and aluminium are in, but rail engineering is definitely out.
Additionally we have recent statements from Steven Joyce on government procurement who wants New Zealand firms consulted before tender documents are prepared while government is taking a ‘whole of life’ analysis of procurement.
I suppose it’s better late than never. By wearing his economic development minister’s hat, Joyce has finally realised there are plenty of benefits in using government procurement as a lever in the economy.
He certainly didn’t seem to hold this view when he was transport minister.
My union represents rail workers. Nearly a hundred of them lost their jobs from Hillside workshops in Dunedin last year because of a lack of work – driven largely by the attitudes of Joyce and Co that the cheapest price possible should be the driving force for procurement.
We said at the time that the business case for building our trains at home went well past the jobs of Dunedin (and Lower Hutt) workers, but extended to a significant contribution to GDP and the wider engineering cluster industry in and around Hillside.
KiwiRail is owned by New Zealanders and they needed a much stronger steer from their shareholding ministers to back Kiwi jobs and industry, rather than go for the cheapest option, whatever the cost down the line.
They didn’t get that steer. Joyce refused to step in as the shareholding minister and advise KiwiRail to take a ‘whole of life’ analysis with building Auckland’s trains.
Instead they opted for the cheapest products available. They didn’t even make a bid for the electrification of Auckland’s trains or the flat top wagons, and the country lost nearly 100 Dunedin workers. Since then KiwiRail has sold Hillside with the loss of the remaining 143 jobs.
Fast forward to this year, when Joyce announced tentative steps by the government to update its procurement policy to favour local firms.
This is a start, but it’s nowhere near what our competitors are doing.
The Australian government requires contract tenderers to implement Australian Industry Participation Plans for projects over $20 million. These set out much more detail about how local firms can contribute to government contracts. I’d like to think we were moving in this direction too and, yes, I remain hopeful.