The Government has announced today that it is relaxing the regulations it imposes on itself for awarding contracts to the private sector, worth over $50bn a year. Of course, this loosening of rules is being sold positively as making it easier for New Zealand businesses to get contracts.
The risk of pork-barrelled procurement, or corruption, has just increased significantly. RNZ reports this morning that “Cabinet has now agreed to cut the rules from 71 to 47, and introduce a new ‘economic benefit to New Zealand’ test that measures any wider gains to the country.”
Economic Growth Minister Nicola Willis says the new, looser rules will take effect from 1 December and “apply to all goods, services, and refurbishment contracts worth more than $100,000 and all construction contracts over $9 million”. The Post reports, also, that the changes were lobbied for by BusinessNZ, alongside many other local businesses that wanted the playing field tilted more in their favour.
While the impulse to reduce bureaucracy is often laudable, this move warrants intense scrutiny. The core question is whether this loosening of rules genuinely serves the public interest or simply opens the door wider to political favouritism, cronyism, and corruption. Will these more “laissez-faire arrangements” be utilised with integrity, or will they result in more “jobs for mates” and lucrative contracts for political donors and entities with well-connected corporate lobbyists?
A Case study in pork-barrelled procurement
The Otago Daily Times has a hard-hitting editorial today that suggests the public should be sceptical about such things. The newspaper is commenting on new material released by the Treasury about the Government’s decision to spend millions on a third medical school at the University of Waikato. It turns out that Treasury was strongly against the proposal, and continued to advise the Government not to proceed with it, forecasting inefficiencies and ineffectiveness from National’s sweetheart deal with the University.
The ODT says, “More and more, the decision runs the risk of it appearing to be pork-barrell politics. It is just one of many instances of poor process surrounding the government’s policies and law-making where politicians are not up-front about the background to decisions, leaving the information to dribble out through Official Information Act requests.”
The newspaper also points out today that the “sloppy policy processes” is partly due to public servants being constrained from effectively giving free and frank advice. Here’s their point: “when public servants undertaking this work are asked if they face ‘notable constraints’ on their ability to carry out a ‘normal policy process’, increasingly they find they do. So far in 2025, 59% of responses on this cited notable constraints, compared with 55% last year, 49% in 2023 and 40% in 2022.”
Treasury’s opposition to the Waikato Medical School consistently ignored by National
The Otago Daily Times’ outraged has been caused by one of the biggest procurement controversies of the current government, to which the newspaper has published the just-revealed advice from Treasury on. It turns out that Treasury repeatedly advised the government not to proceed with Waikato proposal, forecasting significant inefficiencies and ineffectiveness.
ODT journalist Matthew Littlewood covers this today in a story titled “Med school push ‘erosion’ of govt decision-making”, in which I’m quoted. I reviewing the newly-released Treasury files, with the newspaper reporting my analysis:
Integrity Institute director Dr Bryce Edwards said yesterday Treasury had been “remarkably consistent” in its advice the Waikato medical school was a “very bad idea… The more they looked at the proposal, the more they seemed to harden against giving it the green light.” Dr Edwards said this case represented a clear breakdown in the relationship between expert advice and political decision-making. “The Treasury documents reveal a government that had already decided its course of action and was simply seeking bureaucratic validation rather than genuine policy analysis… Clearly, the government was determined to stay aligned with the University of Waikato regardless of what evidence came up, while Treasury kept reviewing the evidence and siding with the universities of Otago and Auckland on their superior proposal.”
In another part of the article, I’m quoted again:
Dr Edwards said the process was structured to deliver a predetermined outcome, agencies being relegated to facilitating rather than evaluating the plan. “So this reveals a government unwilling to engage with substantive criticism of its preferred policy, even when that criticism came from its own fiscal watchdog. “This represents a concerning erosion of the traditional role of expert advice in New Zealand’s policy-making process… The coming years will reveal whether that political gamble delivers the hoped-for cure to rural doctor shortages, or validates the Treasury’s warnings in hindsight”.
Political commentator Matthew Hooton is also quoted saying that the Waikato Med School had “always had the stench of the broken-down morgue, so there is nothing surprising about Treasury’s advice”. He claimed that the decision was “about politics and the construction industry” and it was “never about health or education”.
Previously, Hooton has written that the Waikato decision is a procurement one: “the only bureaucratic support for the Waikato proposal comes from MBIE (and the National Party), both of which see it as a useful regional development project for Hamilton and a stimulus and new project for the construction sector once the National Convention Centre in Auckland is finally finished.”
Of course the biggest controversy about this procurement issue – apart from that it doesn’t stack up economically, and isn’t the best way to produce more desperately-need doctors – is that it was dreamed up by Waikato’s Vice Chancellor Neil Quigley in cahoots with the National Party, and sold by lobbyists Neale Jones and Steven Joyce, paid for by the University of Waikato.
Will New Zealand learn the lessons of procurement mistakes?
Under National's loosened procurement rules, should we expect more of the Waikato Medical School debacle? The current government seems determined to ignore any cost-benefit analysis done about procurement if it already has a predetermined political agenda to award a contract to a business.
My warnings on dodgy procurement processes will be dismissed by those in Government as beyond the pale, of course. Back in July when my objections to the Waikato proposal were put to Health Minister Simeon Brown on RNZ’s Morning Report, the minister responded by saying: “That sounds more like a conspiracy theory… If you look back in ten years time, I don’t think that there will be anyone – except maybe Bryce Edwards – who will go back and say it’s the wrong decision”.
Unfortunately for the Minister, we now know that the Treasury was also making warnings about the proposal and recommending it be rejected. Hopefully we don’t end up with hundreds of more mega procurement projects decided by government that just line the pockets of mates.
The High price of pork-barrelled procurement
Although the issue of procurement might sound dry and boring—it’s the state’s contracting, buying goods, and commissioning of services—it has a huge impact on our lives. And when done poorly or corruptly, we all suffer. So the rules and changes to those rules are vitally important. The $50bn spent each year needs some proper guardrails and scrutiny, and unfortunately, we don’t seem to have that sorted in New Zealand.
This was made very clearly in the recent inquiry by the Auditor General into the New Zealand Defence Force procurement practices, which found alarming amounts of gifts and hospitality being offered by commercial suppliers. Auditor-General John Ryan warned, “the practices we have seen… risk the public and Parliament losing confidence in the decisions made to contract with those suppliers”. Similarly, the Serious Fraud Office has recently warned that procurement fraud risks could compromise national security, enabling organised crime.
The Ministry of Business, Innovation and Employment (MBIE) has also recently reported that procurement data is “frequently unavailable, incomplete or low quality”, leading to the astonishing conclusion that “we cannot accurately report how much the Government spends... on what goods and services and with whom that money is spent”. This all means we actually need to tighten up the rules.
What has been announced today is worrying, especially with the Government’s new criteria of “economic benefit” being used in awarding contracts. This creates much more scope for subjectivity. It creates a discretionary space where a politically predetermined preference — for a company in a key electorate, for instance, or one with strong party ties — can be justified after the fact by appealing to a vague and unprovable “economic benefit”.
This is not merely cutting red tape; it is replacing a system of prescriptive, auditable rules with a discretionary framework that is far more susceptible to politicisation. The risk is that billions of dollars in public funds will now be allocated not on the basis of clear value and merit, but on the opaque and unaccountable whims of ministerial fiat.
Pork-barrelling in procurement isn’t just a relic of old politics, it’s a modern threat to democratic trust, where taxpayer dollars flow to favoured regions or allies under the guise of economic growth. As New Zealand loosens its guardrails on $50 billion in annual spending, the Waikato Medical School saga should serve as a stark reminder: without robust, independent oversight, these decisions risk entrenching inequality and inefficiency.
While Prime Minister Christopher Luxon keeps reminding us of the need to spend every dollar wisely, when it comes to public procurement spending, the Government has other plans.
Dr Bryce Edwards
Director of The Integrity Institute
My previous commentary on the Waikato University Medical School lobbying:
Integrity Briefing: Waikato Medical School – A Costly case study in policy capture
Political Roundup: Waikato Med School – National’s zombie “pet project” won’t die
Political Roundup: Lobbying for Waikato’s Medical School causing problems for the Govt
Political Roundup: What’s behind the Med Student cuts?
Further reading:
Matthew Littlewood (ODT): Med school push ‘erosion’ of govt decision-making (paywalled)
Otago Daily Times: Editorial – Ignoring advice costly (paywalled)
Matthew Littlewood (ODT): Treasury warnings over medical school ignored (paywalled)
Anneke Smith (RNZ): Government slashes procurement rules in promised reboot
1News: New Govt procurement rules aim to boost Kiwi businesses
Tom Pullar-Strecker (Post): Rule change should help NZ firms win more government work — Nicola Willis (paywalled)
Bryce, this sort of article is why the status quo are getting at you via Andrea Vance in the Post today. They leaked to her, and she produced the goods for them. When the going gets tough, the tough get going. Keep up your courageous reporting. We have a government, and many of their colleagues, advisors and lobbyists who are devoid of ethics in my opinion.
You’ve asked the right question here Bryce. “Will these more “laissez-faire arrangements” be utilised with integrity, or will they result in more “jobs for mates” and lucrative contracts for political donors and entities with well-connected corporate lobbyists?” My response. The chumocracy will still be hung over from their celebrations.