Taxpayers fund cosy cleaning cartel

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.