As far as I can tell, there are 2 types of contractors.

The first type, is contracting because they have a set of valuable skills that they can charge a premium for. Because of this, employers will hire them on and pay a premium for it, the contractor has to consider all the extras that are involved, lack of holiday pay, ACC levies, as well as ensuring their own future. It's a choice to forgo job security and in return they can live much more comfortably.

The second type, is contracting because the employer is forcing the issue, or a contracting job is the only thing this person can find, these roles are usually not paid a premium, and these people aren't making a choice of forgoing job security. Instead, they are being short-changed by the employer, who is taking advantage of this arrangement, to avoid having to have these employees on payroll.

ACT mention in the article that this results in lower prices and more choice, the only way this can happen is that the employee gets shafted. In my industry, real contractors are much more costly than FTE's, and is usually only done because they are offering a particular set of skills, or a way around headcounts when the work just needs to get done.