Friday, April 15, 2011

New Zealand city gets it right

The city council in Dunedin, New Zealand has released a report that recommends dropping the requirement to purchase public vehicles from local dealers because it was costing the city too much money.

It was one of 14 recommendations that together would shave at least 20% off the $921,000 annual bill for vehicles accrued by just one council department, the water and waste services (WWS) unit, the review found.

By the way, that $921,000 New Zealand dollars converts to $730,850.34 American.

What's interesting here is not that limiting the pool of dealerships on average raises the price - that's simple enough to predict - it's the pained reluctance here for the city to take a simple, smart action action.

The review acknowledged an end to the buy-local policy "will be unpopular with local dealerships", as the policy aimed to support the continued viability of Dunedin businesses.

Well yes people. When you have a policy to give special favors to certain businesses, I would expect those businesses to be unhappy when the favors stop.

There are a lot of debates about what is the role of government, but what I don't hear anyone arguing is that that role includes being a customer to residential businesses. No government should fall into the habit of funneling taxpayer money into private businesses at the expense of the public. This has a lot more in common with corruption than good governance.

3 comments:

  1. The City can still get it's vehicles locally. The locals only have to win the bids! It's as easy as that, if those business's don't want to compete to retain customers, they were undeserving in the first place.

    Also, if any of these business's depended on those government purchases to stay afloat, it really doesn't look like the city needs that many of them.

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  2. Exactly, the government shouldn't use tax money to subsidize uncompetitive private businesses

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