A Labour Government would adopt an "unashamedly pro-kiwi'' policy to favour New Zealand suppliers when the government buys goods and services Labour Leader David Cunliffe said this morning.

In a speech this morning setting out Labour's policy for the manufacturing sector, Mr Cunliffe announced "a national procurement policy that favours Kiwi-made, so New Zealand manufacturers enjoy the same advantages as their international competitors''.

The policy would ensure an additional $200 million a year worth of work was kept in New Zealand "rather than sending that work overseas''.

"This measure alone will create around 2,000 jobs. Australia, Canada and the United States have all enacted similar policies - it just makes sense.''


Mr Cunliffe said the policy would be enacted in a way that was compliant with World Trade Organisation rules.

"We will also give manufacturers a stronger voice in trade negotiations, and make it a priority for negotiating teams to keep the sector informed. New Zealand manufacturers have legitimate concerns that New Zealand's trade agenda is too dominated by opening markets for commodities.''

"That exposes us to the risk that free trade agreements allow into NZ overseas-made products that are below NZ standards.''

In supporting material, Labour said that would require government bodies take a `NZ Inc' cost/benefit approach when tendering major contracts.

"Rather than merely considering the effect on their own bottom lines, government bodies will have to consider the wider economic and fiscal impacts when choosing suppliers.''

"We will also require that government tenders adhere to New Zealand manufacturing standards.''

Labour said that submitters to its joint manufacturing inquiry last year pointed out that they are frequently undercut when bidding for public contracts by overseas suppliers whose products aren't up to New Zealand standards and, so, cost more in the long-run''.

Mr Cunliffe also said the accelerated depreciation regime already announced for the wood processing sector would also apply to the advanced manufacturing sector.


The policy encourages investment in new plant and equipment by allowing firms to claim tax breaks on the investment faster than they otherwise could.

Mr Cunliffe said that policy would be extended to other sectors "as it can be afforded''.

He told a breakfast meeting this morning in Auckland that Labour's planned introduction of a capital gains tax would also "get investment into productive businesses rather than the housing sector'' and underlined Labour's previously announced policy to introduce research and development tax credits for all sectors.

Finance spokesman David Parker would announce Labour's "upgrade of monetary policy at the end of this month to "help reduce the volatility of our overvalued dollar and help boost exports''.

Labour's union allies welcomed the announcement with the Engineering, Printing and Manufacturing Union's manufacturing industry organiser Louisa Jones saying the party was "standing up to support manufacturers by recognising the importance of manufacturing, buying Kiwi made and taking a grown-up, long-term view on investment and growth''.

Council of Trade Unions economist Bill Rosenberg said his organisation "particularly welcome moves to boost the use of government procurement to support local firms, broaden the objectives and tools of monetary policy, and a capital gains tax''