By Casey Neill
New rules for how the Federal Government spends $57 billion could be a gold mine for Greater Dandenong manufacturers, Jamie Sturgess says.
The Committee for Dandenong member, from Dandenong’s Macpherson Kelley Lawyers, welcomed changes to procurement policy announced on Wednesday 30 November.
“The major manufacturing state in Australia is Victoria. Well over 50 per cent of manufacturing in this state is done in this region,” he said.
“The biggest state that should benefit out of the $60 billion should be Victoria and the biggest region that should benefit out of this should be the region we’re standing in.”
Federal Finance Minister Mathias Cormann made the announcement and said the changes would come into effect from 1 March next year.
He said the economic benefit to the Australian economy would be considered for any purchases over $4 million, as would Australian Standards compliance and a prospective supplier’s employment practices, occupational health and safety, and environmental impact.
“The danger in it is that in 2004 John Howard came out with something similar,” Mr Sturgess said.
“It has never been enforced with any vigour at all.
“We’re really keen to make sure that the policy is well-written and tight.
“Even more importantly, after they get that right they’ve got to give it some teeth so that all of the government procurement officers actually do it, so that Treasury doesn’t control good government policy.”
Mr Sturgess applauded the move away from awarding contracts based purely on invoice price.
“We’ve got long-term suppliers booted out for imported product based upon price,” he said.
He pointed to Corex in Dandenong South, which lost a contract to produce corflute boxes for Australia Post to an overseas manufacturer who could produce them at a cheaper rate.
“If you want those boxes to last three years, maybe you shouldn’t buy the cheapest. What a pain it is to replace them,” he said.
He said manufacturers in the region had high standards around safety, discrimination and employee benefits.
“If you import it from somewhere in Asia that doesn’t have the same standards… then this is not a level playing field,” he said.
Mr Sturgess also applauded the move to include Australian Standards in assessments.
“The best example of this is the oil and gas rigs in the north-west shelf,” he said.
“When they let that out in terms of procurement, they said that the steel had to be compliant with a European standard.
“Australian manufacturers who complied with Australian standards were shut out.
He said that every job in manufacturing created another five in other industries.
“The flow-on benefit is huge,” he said.
Mr Sturgess said there was bipartisan support for the move, with ALP Senator Kim Carr speaking out in favour.
“It’ll be interesting to see what the State Government does,” he said.
