Government Contracts Must Preference Aussie Companies As Part of COVID-19 Response

17 April 2020

Centre Alliance Senator Rex Patrick has called on the Federal Government to leverage its procurement policy to directly support Australian businesses and build national self-reliance in response to the COVID-19 crisis.

"If ever there was a time for the Australian Government to buy Australian and employ Australians, it’s now," said Senator Patrick.

"Prime Minister Scott Morrison’s stimulus packages and wage subsidy measures aim to get Australia through the next six months of the Great COVID-19 Lockdown. Hopefully these measures will sustain something on which we can rebuild our battered economy. However, the Government can do more to support Australian industry and jobs beyond this immediate emergency period."

"As a significant purchaser of goods and services the Federal Government can also use its procurement budget to help reduce the economic impact of the COVID-19 response and support economic reconstruction as we emerge from the crisis."

"In 2018-19 the Commonwealth entered into 78,150 contracts with a combined value in excess of $64 billion. That’s very significant purchasing power and must be a key part of any recovery strategy."

"We must make every effort to ensure taxpayer dollars are recycled through our national economy wherever possible."

"This goes beyond the simple economics of the issue; it’s about building national resilience and greater self-sufficiency."

"The COVID-19 crisis has highlighted Australia’s deep dependence on overseas suppliers for many vital goods and our large exposure to supply chain disruptions."

"These dependencies weaken Australia’s resilience, particularly in times of a crisis, and must be addressed."

The Commonwealth Procurement Rules require ‘Value for Money’ to be obtained as a fundamental goal in Federal Government purchases of goods and services. However, there is also a requirement for procurement officials to assess the ‘Economic Benefit to Australia’ for procurements above $4 million (or $7.5 million for construction services).  

"Most people understand that Value for Money is about more than just the cost; when it’s not it can become the pathway to the situation we’ve just experienced in relation to face masks and other vital personal protective equipment."

With a view to boosting our national economic recovery and building greater self-reliance, I’m calling on the Federal Government to: 

  • Raise the weighting of the ‘Economic Benefit to Australia’ Assessment for Government procurement and establish clear benchmarks to guide procurement officials.
  • Assess all tenders currently on foot (except for those relating to immediate issues of public health, safety, security or military operations) to ensure contracts obtain the best ‘Economic Benefit to Australia’ and are consistent with the post COVID-19 recovery intentions.
  • Extend such requirements to State and Territory Government procurement where Federal funding is provided.
  • Develop and present a national plan for enhancing Australia’s resilience, including the levels of self-sufficiency being targeted, and communicate that plan across Government and Industry.

"Many of the free market philosophies that some in Government have been wedded to must be abandoned in the wake of coronavirus," said Senator Patrick. "The Government must use every tool it has to rebuild the economy, re-employ Australians and build a more self-reliant future for our nation. It has to be Australia first." 

 

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