Centre Alliance calls on federal government to use its purchasing power to support local jobs in corona virus response

April 17, 2020: Centre Alliance Senator Rex Patrick today called on the federal government to give greater weighting to the criteria of Economic Benefit to Australia in existing Commonwealth Procurement Rules so that the benefits of local employment can be fully valued and used to improve opportunities for local firms.

Senator Patrick said that in 2018-19 the Commonwealth entered into 78,150 contracts with a combined value in excess of $64 billion, which is very significant purchasing power that should be a key part of any recovery strategy.

AFTINET has participated in the ongoing debate about the extent to which trade agreements prevent both federal and state governments from giving preference to local firms in government purchasing.

The general trade agreement rule is that purchasing arrangements must be open to global competition to achieve best value-for-money.

But Australia and other countries have exceptions in their trade agreements for defence and other industries and for small and medium sized enterprises of up to 200 employees. They can also take into account broader economic benefits like employment when assessing value-for-money.

One of the barriers to this happening in practice is that these exceptions are not implemented by Australian federal departments.

In 2017 the Joint Select Committee on Government Procurement noted that Australia’s trading partners like the US, South Korea and others had more exceptions and implemented them more extensively that does Australia. It recommended that the Commonwealth Procurement Rules should be clarified and strengthened to encourage Australian suppliers.

Senator Patrick is calling for the government to raise the weighting of the ‘Economic Benefit to Australia’ Assessment for Government procurement and establish clear benchmarks to guide procurement officials in both federal government procurement and joint state-federal projects.

See the full media release here.