Labour’s government-contracts plan has no Pasifika target, Edmonds confirms

Labour's plan to direct 15 per cent of government contracts to small businesses does not include a target for Pasifika businesses, and finance spokesperson Barbara Edmonds will not commit to reporting how many Pasifika firms benefit.

The plan would require a targeted number of government contracts to go to small businesses and start-ups, break large contracts into smaller jobs and reduce repeat paperwork for suppliers.

The government spends "around $50 billion on services and goods annually", Edmonds told William Terite on Pacific Mornings. But she says the 15 per cent target would apply to all small businesses rather than being split by ethnicity.

"This is a policy that is for every business, including Pacific-owned businesses," she says.

Asked why Labour has not set a Pasifika-specific target, Edmonds says she raised the issue while she was Minister of Pacific Peoples.

"I did actually ask my officials whether we should have a Pacific target," she says.

Aerem Environmental. Photo/Pacific Business Trust.

She says officials told her more work was needed to identify Pasifika businesses and understand which industries they operate in.

"We need to know who a Pacific business is," she says.

Edmonds says a Pasifika target would be premature until that work is done, but argues Pacific firms would still benefit from the broader 15 per cent target.

Auckland's Pasifika economy has grown 61 per cent since 2013 to over 5200 businesses generating $3.1billion in sales and employing 21,500 people, with construction leading the surge. Photo/Workforce.nz

Asked whether a Labour government would report the ethnicity of businesses receiving government contracts, Edmonds is non-committal.

"We know Pacific businesses will benefit from this," she says. "It doesn't matter who you are, if you're a small business, you definitely will benefit."

There are at least 5271 Pasifika businesses in Auckland, according to Auckland Council's Quantifying the Pacific Economy report released last year. Pasifika businesses with employees recorded about $3.1 billion in sales and employed about 21,500 people in 2023. The number of Pasifika businesses has grown 61 per cent since 2013, with construction now their largest industry.

That makes access to government contracts particularly significant for Pasifika firms, with the construction sector facing a prolonged downturn. Stats NZ figures show the value of building work has fallen for nine consecutive quarters.

Edmonds says construction is the second-largest employer in her Mana electorate, where about a quarter of residents are Pasifika. Labour would require large firms working on government contracts to pay small suppliers within 15 days, she says, arguing that subcontractors are currently being "used as banks".

The policy would also allow businesses to immediately write off up to $10,000 of tools and equipment against tax.

Watch Barbara Edmonds' interview below.

The absence of a Pasifika procurement target contrasts with the former Māori procurement policy. The government introduced a 5 per cent target for Māori businesses in 2020 and increased it to 8 per cent in 2023, with the Coalition Government scrapping it in 2024. A requirement to report the value of contracts awarded to Māori businesses remains. The Ministry of Business, Innovation and Employment and Te Puni Kōkiri have been approached for comment on the Māori procurement reporting requirement and whether any Pasifika-specific measure has been considered.

For now, Labour's proposal would give Pasifika businesses access to the same 15 per cent small-business pool as other firms, but provide no separate measure of whether they are actually winning government work.