ABC AM - government procurement rules





SUBJECTS: government procurement rules.

MICHAEL BRISSENDEN:  South Australian Senator Nick Xenophon has won a significant concession from the government to help protect local industry from foreign completion. For years he and the Finance Minister have clashed over how the Government spends its $60 billion annual procurement bill. But the government arguing that giving local business an advantage in bidding for taxpayer funded contracts would damage Australia’s free trade credentials.  Senator Xenophon has now won that argument extracting a stunning philosophical U-turn from the government as a price for his support of the ABCC legislation.  Political reporter Tom Iggulden has more from Canberra.  

TOM IGGULDEN:  It’s a political master stroke for Nick Xenophon who for a few hours in the Senate last night to affective control of the government’s agenda.

SENATOR XENOPHON: I always feel like the Minister without the pay rise.

IGGULDEN: He has forced the Coalition to give local industry a big advantage in competing for the $60 billion annual government procurement bill covering everything from staplers to submarines. 

XENOPHON: this is a big deal, this is a significant massive change in his country and I absolutely commend the government for going down this path.

IGGULDEN: That’s not exactly how Finance Minister Mathias Cormann put it last night when he casually unveiled the new policy to a surprised Senate.  

CORMANN: I’m pleased to inform the Senate that the Government has agreed on some improvements to the commonwealth procurement rules. 

XENOPHON: The biggest changes to the Commonwealth procurement rules we have seen in many years. 

IGGULDEN:  Suppliers bidding for slice of government work more than $4 million will have to show that they are sourcing locally produced materials contributing to local employment and skills,  benefiting the wider economy and complying with local product standards.

That last one is important and gives locally made steel an immediate advantage over Chinese made steel suppliers who it is argued provide a low quality,  low cost product to the Australian market . The move stunned the Labor party. Shadow Industry Minister Kim Carr who has spent much of his political careers fighting for exactly what Senator Cormann and Senator Xenophon had just unveiled. 

CARR: I congratulate the proponents of this measure. It’s unusual for me to do that. I acknowledge that this is a very significant change which the Labor party supports.

IGGULDEN: And when he examined the details of what suppliers will need to prove to the government he was even happier.

CARR: Whether or not they are ethical employers, occupational health and safety, environmental impacts. These are very good measures.

IGGULDEN: So incredulous was the Labor stalwart that he wondered whether it was all real, or just a draft proposal.

CARR: Is this a decision of government or an intention of government.

IGGULDEN: Senator Cormann assured him that the rules are set in stone and they’ll come in next March.

CORMANN: It is a commitment that the government has made. It is a decision the government has made.

IGGULDEN: The government made the commitment to Senator Xenophon to get his support for its legislation to reinstate the building industry watchdog known as the ABCC. It dearly wants the bill passed by the end of the week.

CARR: The government desperate to find a mechanism by which it can secure a majority in this chamber do over building workers. And this is what disturbs me. These are good measures but why should building workers have to pay for them?


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