8 June 2015

IRD contract set to benefit US economy not NZ

Profits from work reshaping the IRD’s IT systems will flow offshore given the IRD has chosen an United States based firm for a potentially billion dollar plus contract to design and supply software, the Green Party said today.

American firm Fast Enterprises has won the contract to design and supply the software platform that will run New Zealand’s new tax and social policy administration system. Cabinet has approved $193 million for the project but that is expected to grow to up to $2 billion.

"All throughout the awarding of contracts to rebuild the IRD’s IT systems the IRD has made it next to impossible for the New Zealand IT industry to participate and get the contract,” Green Party Co-leader James Shaw said today.

"If we supported the IT industry here now, they could become major export players and in the long term become an important part of the economy.

“There is a suspicion that the Government’s desire to sign trade deals and please our overseas trading partners is partly responsible for New Zealand firms missing out on big contracts.

“Trade officials want New Zealand to sign up to the Trade in Services Agreement (TiSA).

“Pursuing this trade agreement means the New Zealand Government is hamstrung when it comes to awarding contracts to New Zealand firms.

“We should be assisting New Zealand firms through giving them a chance to compete with overseas firms when it comes to Government contracts,” Mr Shaw said.

“In all likelihood the United States based firm will subcontract large amounts of the work to New Zealand based firms and skim the profits off.

“Taxpayers should also be asking questions of just why the Government is spending such a large amount to rebuild the IRD’s systems.

“This figure was quoted years ago after initial scoping work was done by French based firm Capgemini.

“There is a suspicion that once one set of overseas consultants came up with this huge figure it has become locked in with little thought given to trying to find cheaper options.

“The Green Party will be actively monitoring just why an overseas firm was chosen and why the amount of the contract is so large,” said Mr Shaw.

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