A call for the Government to give preference to local suppliers when buying goods and services has been rejected by Business New Zealand.
Labour MP Clare Curran has lodged a members' bill calling for a commission of inquiry to determine whether local suppliers can be given preference in Government procurement contracts without breaching international trade obligations.
Ms Curran wants local companies to get a bigger slice of the $30 billion the Government spends each year on buying goods and services.
Her Kiwi Jobs Bill was sparked by KiwiRail's reluctance to have $500 million worth of trains for Auckland's network to be made locally.
The Council of Trade Unions says the government would be helping New Zealand companies and the economy if they spent more with them.
Last year, Levin-based clothing manufacturer Swazi lost a $2 million contract with the New Zealand Defence Force to China. Founder and chief executive Davey Hughes says the Government should, like several Australian states, support local industry.
Business New Zealand chief executive Phil O'Reilly says such protectionist policies would reduce the competitive of New Zealand companies in the long run.
He says giving them special treatment won't fix the root of the problem. Instead, he says, companies tell him they want fair treatment during the Government procurement process.
Mr O'Reilly says the Government needs to work harder at making its procurement policies more business-friendly, and wants officials to consider the cost of a product or service over the life of the contract, rather than just the upfront cost, as he says that's where Kiwi firms often provide better value.
