Corrupt practices costing taxpayers an estimated $360 million per year

With the government spending around $50 billion dollars every year on goods and services, a new report from the Commerce Commission is highlighting the impact of companies skimming off the top of this through the practice of bid-rigging.

Speaking to rova, Cartel Investigations Manager Grant Chamberlain breaks down exactly what this entails.

“Bid-rigging is when businesses agree who's going to win a contract. For example, let's say a government agency is building roads or houses. They’ll put tenders out, they'll work out who could do the work, and they'll ask for these people to submit a tender. What happens with bid-rigging is when those parties get together and decide who's going to win the bid. Often, they'll work out the prices that are going to be put in as well, and often it involves, in the future, it going round different businesses winning the bids as agreed by them.”

While many New Zealanders might see this sort of behaviour as something that only happens in notoriously dishonest countries, there are signs that it’son the rise. 2025 saw us drop in Transparency International’s Corruption Perception Index, the same year that our first-ever criminal prosecution for cartel conduct was successfully wrapped up in Auckland’s High Court. Grant Chamberlain explains just how big of an impact big-rigging can have just by itself.

“It's ripping off people. It's ripping off taxpayers if it's public procurement, but even businesses, if they’re buying goods or services, then they're not getting the best price. They're being cheated. Often you see overcharges of about 20%. So, in the case of public procurement, that's money that's taken from New Zealand taxpayers and put in the pocket of these businesses. 

“We've recently done some work around how much of an effect there is in public procurement. There's about $50 billion spent a year by the government across public procurement, and with the help of international research, we've estimated that about $360 million of that is affected by bid-rigging each year.

“Importantly, you will often find that people won't put their best foot forward in terms of service, quality, etc. So, there is an associated drop in quality of service and to the person that's bought them.”

With the Commerce Commission swinging its attention to this growing issue, the man in charge of chasing offenders has a message for them.

“People that are involved in this conduct need to come forward and talk to us. You can anonymously report it if you've either not been involved, or if you have been involved. If you've been involved, come and talk to us, because if you're the first person to talk, you may get leniency, and that's really important. The other option is to stay quiet, and then you may get a visit from us with a search warrant.”

Image credit: Thomas Coker on Unsplash