Taxpayers fund cosy cleaning cartel

Rodney Hide

HIDESIGHT

The previous Labour government bought votes left, right and centre.

The two most egregious examples of vote buying were interest-free student loans and Working for Families.  

But votes don’t come cheap. Last year, interest-free student loans flushed away $700 million and Working for Families $2.8 billion.

Worse, the vote-buy is a one off: the policy doesn’t deliver votes at subsequent elections. The cost continues and escalates as more and more recipients come into the net.

The policy then becomes only a vote-loser if a government ever tries to rein in the expenditure.

The previous Labour government also bought support in other subtle and not so obvious ways.

There is an outfit called the Building Service Contractors Association of New Zealand (Inc). I had never heard of it until recently. The BSC is a trade association and illustrates how governments shore up support in ways that stay off the books.

In 2008 the government took the lead in supporting “socially responsible and ethical practices”. I kid you not. The minister responsible was Trevor Mallard. Again, I kid you not.

The result was a deal called the “Principles for a Sustainable Property Services Industry.” The signatories were the New Zealand government, the BSC, the Service and Food Workers Union and the Property Council of New Zealand.  

About ethical standards
Quite why the Property Council would ever sign up to such a thing, and whether its members bother to comply, is a mystery to me.

The agreement is ostensibly about ethical standards, looking after the union and caring for the environment. But the kicker is the signatories agree only to use members of the BSC.

That’s right. The government has kicked a nice little earner to the BSC because only its members can get government work. There’s no need to look after members – the government does that for them.

So who is the BSC? Its membership is made up of only 50-odd of the more than 6000 businesses operating within the cleaning industry.

It’s not a representative trade organisation. Worse, members are precluded from voting for officers of the organisation or on the fee structure.  

The BSC’s rules ensure three overseas-owned cleaning companies, Spotless, OCS  and ISS, dominate and direct the organisation.

A “Council of Management” directs the executive director, who manages and controls the BSC. Corporate members have automatic representation on the council. Local branches have delegatory rights but they, too, are dominated by the three multinationals.

A corporate member is one that has gross revenue over $10 million and operates in 50% or more of the BSC branches.

Cosy club
The officers of the BSC are elected each year by the Council of Management within their own ranks, without consultation or confirmation with the general membership. Fees are set in the same fashion. Unsurprisingly, the fee structure favours the large multinationals.

So the BSC is run as a cosy club. But with the government ensuring only members win government contracts, the cosy club has become a cosy cartel.  

It’s a shocking political rort. The politicians keep the BSC sweet with a sweetheart deal.

The only losers are the taxpayers, who pay over the odds for cleaning government buildings. Oh, and all the other businesses that would do a better job but don’t get a look in.

I have no objection to large multinational companies winning government contracts. But they shouldn’t be given a leg-up over other companies.

It’s easily fixed. The government should stick to its publicly declared procurement rules: all potential suppliers should be given equal opportunity and equitable treatment, and decisions should be based on value for money.

The government would be surprised how much money it can save and, once again, the BSC could be a true trade association, not a government-sponsored cartel.

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22 Comments & Questions

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My goodness what a racket! Is this the same BSC whose members pay the minimum wage and have up to 100% staff turnover pa?

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Precisely...

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my god! Too scary for National to go near!

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And there was no corruption during the Clark-led years!
No way can such a political party ever be let near the Treasury benches again.
Somehow, and hopefully soon, the media will apologise for their part in the promotion of this group and make amends by explaining the economic damage that continuance of the past election bribes, and these under-the-counter agreements, is doing to the country.

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Another Comrade Clark legacy

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And the National govt since 2008 has chosen to turn a blind eye and let this waste of taxpayer money continue unabated. When are the Nats going to get of their complacent backsides to shut down this rort?

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I'll make you an offer you can't refuse......Corruption Clark/Cullen

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I can't comment on this "cleaning scandal", but the first part about vote buying just sounds feeble.

If implementing policies that people want is "vote buying", then surely vote buying is the government's goal - whether it is Labour doing student loans or working for families, or National reducing tax middle class and top tax rates it's all the same.

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Never fear. Jonkey Joyce and Brownlee will get to hear of it and create a new organisation headed by Fletcher, and overseen by Mark Ford.

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Nice writeup, but I see no evidence or proof that would have sealed the deal for me. Can you produce anything to back up the claims made?

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Disgusting!

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It's no wonder Kate Wilkinson had to go. Overseeing a union rort like the BSC while a National minister is nothing short of treason.

The only hope is that Chris Finlayson has the nous to tackle this head on and break the BSC's dodgy grip on government contracts.

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Makes the ophthalmologists who connived to lock out cheaper Australian surgeons performing cataract surgery in Invercargill look rather amateur by comparison. Hence the ophthalmologists got prosecuted and fined by the Commerce Commission for engaging in anti-competitive behaviour.

Does the Crown's active engagement in this cleaning case mean that it is somehow exempt from the Commerce Act by dint of one of the parties having immunity from such mundane instruments?

If not, then it is a clear breach of s27, just like the ophthalmologists.

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I cannot see a Fletcher-run organisation meeting the government's procurement rules of everyone getting a fair go. History says that Fletcher companies will get all the work, or Fletcher will clip the ticket of any outsider. Fair play in this country just does not happen.

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As an owner of a cleaning business that was forced to join the BSC as a result of winning a cleaning tender for a government department, I wholly agree with Rodney's summation of this corrupt organisation. It is a racket that should be dismantled immediately.

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@14 thank you. That's the evidence I was after.

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I think you all need to get the facts straight on many of the comments. I urge you to call the president of the BSCNZ to clarify a few things.

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@16 Like what?

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@16, the general industry and the BSC members themselves are waiting with bated breath for the president's response. His remarkable silence to date and the anticipation of what will erupt from his mouth is excruciating. Probably just getting his union mates to check his spelling!

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I cannot help but think that the letter C seems to indicate corruption, conniving, callous and several other words.
Some surnames starting with C seem to indicate almost treason-type actions in what is being done to OUR country.
Eg, students' interest-free loans - often for obscure/useless courses that will achieve/create nothing except an ongoing cost to the taxpayer.
It is difficult to write "between the lines" so you can read between the lines.

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As a cleaning company who chose not to join this shambles, I am very pleased this has been raised and hope it is taken further! This organisation is a joke. It is large multinationals looking often their own patch.

I have raised this with a government procurement manager and their advise was, should this be a requirement in another government tender, the Minister of Employment and Innovation would take this matter very seriously because it is legislatively illegal.

For those who think we may be unreasonable on this topic, go to the BSC website and see who 90% of the executive committee are - Spotless, OCS and ISS.

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Can't wait to hear what the BSC have to say... Of course they won't say anything! Great comment @18

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