Investing in Community Wealth: Linking Social and Environmental Procurement to a Sustainable Future

In a world where economic orthodoxy often prioritizes short-term gains over long-term sustainability, the United States’ Inflation Reduction Act of 2022 stands as a beacon of progressive investment. This landmark legislation, which allocates $500 billion towards green transitions, R&D, and support for manufacturing and agriculture, offers valuable lessons for New Zealand. By embracing similar forward-thinking strategies, particularly in social and environmental procurement, we can foster community wealth building and ensure a prosperous future for all.

The Case for Bold Investment

New Zealand’s cautious approach to spending, characterized by a focus on immediate fixes and perceived fiscal shortages (aka austerity), contrasts sharply with other countries’ more ambitious investments in their futures. Despite having a national debt significantly lower than many other developed nations, New Zealand remains hesitant to leverage its balance sheet for transformative projects. This reluctance is akin to a renter avoiding a mortgage, missing out on the long-term benefits of owning an appreciating asset. To build a resilient and thriving economy, New Zealand must shift its mindset and embrace strategic investments in key areas.

Social Procurement: Building Community Wealth

Social procurement involves using purchasing power to generate social value beyond the goods and services acquired. Here in NZ, programmes such as the Southern Initiative, sustainable procurement by local councils (here’s Auckland Transport’s) and the wider Broader Outcomes thrust (since 2019) demonstrates what can be done. By prioritizing contracts with businesses that provide employment opportunities for marginalized groups, supporting local economies, and adhering to fair labour practices, New Zealand can address social inequalities and build community wealth. We know the theory – this is what the practice looks like as jobs, outcomes and generational shifts.

Environmental Procurement: Investing in Sustainability

Environmental procurement focuses on purchasing practices that minimize environmental harm and promote sustainability.

The focus for the current government is getting more people into work.? If we blend that idea with procurement for environmental improvement, we could expand the Jobs for Nature scheme to offer permanent roles that would create meaningful employment while enhancing environmental conservation efforts. This dual benefit of social and environmental impact exemplifies the potential of social procurement to drive positive change.

By investing in better energy management, smarter storage, distributed local power systems and renewable energy projects New Zealand can reduce its carbon footprint and transition faster towards a lower carbon economy. The US’s investment in green transitions under the Inflation Reduction Act serves as a model for how targeted spending can drive significant environmental benefits.

This thinking, combined with a longer-term focus on smarter infrastructure will not only improve our emissions profile, but make us more resilient. Recent comments by the Prime Minister agree. The hydro projects of the 1950s and 1960s and more recently programmes like Contact Energy’s series of geothermal developments, which create jobs, boost the local economy and “build muscle strength” highlight the potential for longer-term environmental procurement to contribute to national and community wealth building.

Education and Infrastructure: Foundations for a Sustainable Future

Investing in education and infrastructure is crucial for long-term economic resilience. By funding training programs for in-demand skills, such as healthcare, engineering, and IT, New Zealand can build a skilled workforce that supports sustainable industries. Additionally, addressing the country’s infrastructure deficit through investments in green projects can create enduring assets that benefit future generations.

A Genuine Wellbeing Economy

To achieve a genuine wellbeing economy, New Zealand must move beyond traditional economic measures and embrace a holistic approach that values social and environmental outcomes. Supporting currently unpaid labour, such as caregiving and environmental conservation, and integrating these activities into economic policy can enhance overall wellbeing.

Conclusion

By linking the principles of social and environmental procurement to community wealth building, New Zealand can create a sustainable and equitable future. Embracing bold investments in education, infrastructure, and green projects, while prioritizing social value in procurement practices, will position the country for long-term success. It’s time to move beyond austerity and small-mindedness and invest in a future that benefits all New Zealanders.