Change in Priorities
The government’s recent announcement to remove the progressive procurement targets signals a clear retreat from the focus on Māori business. It’s more than just a policy change - it’s a step backward. It signals a lack of commitment to Māori business growth and undermines the momentum that has been building since the introduction of the progressive procurement policy. It’s a colossal, missed opportunity.
The Māori economy, valued at nearly $70 billion, plays a vital role in New Zealand’s overall economic growth. Removing policies that support Māori business risks stifling growth, job creation, and innovation within Māori communities. It also cripples the economy.
What would the New Zealand economy look like without that $70 billion contribution?
The Policy
Whilst there is limited data on government spend with Māori businesses pre-progressive procurement policy anecdotally, we understand it was less than 1% in many mandated agencies.
Before the policy, Māori businesses were barely getting a seat at the table. However, post policy and with the establishment of mandatory reporting there was a clear uptake in spend with Māori businesses.
After the Policy:
In the 2021/22 financial year, Māori businesses were awarded more than 3,200 contracts across the public sector.
The total value of these contracts was approximately $930 million, representing 6% of total government procurement.
These figures show the direct impact of progressive procurement policies. Far from creating an "uneven playing field," the policy has begun to level it, giving Māori businesses access to opportunities they previously didn’t have. A clear sign that the policy works. It’s not about favouritism, it’s about fixing a system that has broken for years.
International Success of Supplier Diversity Policies
If our government isn’t sold on our own success, then there are plenty of other examples we can look to. Many countries have demonstrated the success of supplier diversity policies, and the numbers speak for themselves:
United States:
Over 95% of Fortune 500 companies have supplier diversity programs.
These companies see a 133% higher return on procurement investments.
The U.S. federal government spends $500 billion annually on contracts, with a minimum of 5% directed toward minority-owned businesses. This has led to increased business growth and innovation, while also reducing inequalities.
Canada:
The Procurement Strategy for Indigenous Business (PSIB) has helped Indigenous businesses secure $3 billion in contracts over the last decade. As a result, 39% of Indigenous businesses reported growth directly tied to government procurement initiatives.
Australia:
Since 2015, the Indigenous Procurement Policy (IPP) has resulted in $9.5 billion in contracts for over 3,900 Indigenous businesses.
First Nations Australians make up less than 4% of the population but have gained substantial opportunities, while Māori businesses (17% of NZ’s population) still struggle for less than 8% of contracts.
The success of supplier diversity in these countries proves a powerful truth: intentional policies benefit not just minority groups but the entire economy. Removing these policies is a massive step backward for New Zealand, undoing the economic progress made through targeted procurement.
Equity not equality
One of the biggest challenges surrounding these policies are the misconceptions around equality vs equity. There is still the idea that they’re about favouritism, they’re not.
Equity means recognising that not everyone starts from the same place. Māori businesses face unique barriers that have long kept them out of public procurement opportunities—whether it’s access to capital, networks, or decision-making platforms. Policies like these supplier diversity programmes are designed to level the playing field by opening the door from the inside thus removing the barrier of entry. While equality suggests everyone is on equal footing, equity ensures everyone has a fair chance to succeed.
David Seymour's argument to focus on “needs, not race” misses this crucial distinction. Systemic disadvantages faced by Māori businesses are deeply tied to historical and socio-economic inequalities. Ignoring race under the guise of "neutrality" pushes a dangerous narrative and fails to address the root of these imbalances. It assumes an equal starting point when in reality, Māori businesses have been excluded from public procurement opportunities for decades due to limited access to networks, capital, and decision-making platforms.
Conclusion
If the government is serious about economic growth and addressing inequities, it must retain and expand these progressive procurement targets. Dismantling them is a step backward, not just for Māori businesses but for New Zealand’s entire economy. Supplier diversity policies are not handouts—they are strategies to level the playing field, foster innovation, and drive inclusive growth.
