Business groups sound alarm at Government procurement bill

Ian Bushnell 10 September 2018 1

Industry groups say the bill panders to unions and will drive up costs in the ACT.

A coalition of Canberra business organisations have voiced their opposition to a Government bill they say will increase red tape, the cost of services and conflict with Federal legislation.

The Canberra Business Chamber, Master Builders ACT and Property Council of Australia (ACT Division) have lodged submissions to the Assembly Inquiry into Government Procurement
(Secure Local Jobs) Amendment Bill 2018, which is due to take evidence on Wednesday (12 September).

Collectively representing more than 10,000 local businesses, the industry groups say the new rules will:

  • Increase red tape that will have a detrimental effect on local businesses and local jobs throughout the ACT;
  • Drive up the cost of infrastructure and services because of high compliance costs and reduced competition; and
  • Conflict with Federal Legislation, including the Fair Work Act 2009 and the Code for the Tendering and Performance of Building Work 2016 (the Building Code)

Master Builders ACT CEO Michael Hopkins said the legislation was being introduced because ACT Labor promised the unions in the lead up to the 2016 election they would introduce the legislation,

“Whilst we support the objectives of Government to ensure they are contracting with ethical contractors and suppliers, the legislation is being rushed through with little regard to the
comments made by industry groups or the impact on small and local family businesses,” Mr Hopkins said.

“The laws will give unprecedented access to work sites, employee records and private information to unions. These unions include the CFMEU which, on average, has been penalised $125,000 each and every week this financial year. They simply do not accept that they should follow the laws like they expect everyone else to do.”

Canberra Business Chamber CEO Robyn Hendry said ACT businesses had said for many years that they faced barriers when tendering for local government work, resulting in less local businesses winning ACT Government contracts than the chamber would like.

“The proposed reforms have the potential to now lock them out completely. The majority of businesses in Canberra are small or medium-sized, they are the engine room of our economy. If
introduced in its current form, the legislation will discourage our SMEs from tendering for ACT Government work. Generally, our smaller businesses will not have the resources or ability to sufficiently navigate these processes,” she said.

Mrs Hendry said the proposal would result in decreased competition which will increase the cost of public projects and expenditure, and cost every Canberran.

“This Bill will immediately impact local security, cleaning, construction and traffic management businesses – major local employers – and then the majority of other industries after the first 12 months,” she said.

Property Council of Australia (ACT Division) Executive Director Adina Cirson said that at a time of renewal across the ACT it was critically important that Canberra remained an attractive and
competitive environment to invest and do business in.

She said any reduction of available contractors as a result of the increased red tape associated with tendering for ACT Government contracts would be an extremely poor outcome of this Bill.

“We are concerned that the contractors who will be either willing or eligible to perform work for the ACT Government will be significantly reduced and this is likely to disproportionally
affect small businesses, who contribute greatly to the diversity of the ACT economy and community,” she said.

“In particular, we are worried that this Bill will see a significant reduction in competition which will lead to increasing costs of infrastructure and development at a time when significant investment is required by a growing population.”

Mr Hopkins said that a key concern for local construction businesses is that the new ACT code would introduce obligations which conflicted with the Federal Code for the Tendering and Performance of Building Work.

“This would put local businesses in the unenviable position of having to choose between being compliant with the Federal Code, or compliant with the ACT Code, putting local businesses at a disadvantage if seeking to work for Government in their own backyard,” he said.

The three industry groups are calling on the ACT Government to proceed with caution around the introduction of any legislation that may see local business operators locked out of ACT Government work and is requesting that Government engage in genuine consultation with industry to address the consequences of the laws.

More time was also needed so that thousands of local businesses could undertake audits and apply for Code Certificates to ensure they were compliant by 15 January 2019 when the new
laws are proposed to commence, which left little time for such a major task and for reaching compliance change.

Transitional provisions were also requested to remove the need for businesses to hold separate certificates under existing procurement laws and the new laws simultaneously.

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One Response to Business groups sound alarm at Government procurement bill
zarsof zarsof 9:31 am 24 Oct 18

Labour AKA Unions love big Company’s. Why you may ask. The reason is that they are easier to control with the threat of industrial action or persistent disruption.
Large companies ultimately comply or risk the potential substantial loss in profits or future work. This is especially the case with Union sympathetic Governments such as the ACT. Either become a union company or you will not be able to tender as successfully.
To have such a bias panel assessing ACT Government Tenders (Union consultation), places larger companies in a position where they need to be compliant to Unions.
What government does (in the guise of only having intentions of safely, and human rights etc.), is make running a small business so difficult that its pushed out of the market where it competes with big business.
This is done by making so many hoops to jump through that it is not feasible to pursue that direction any more. The percentage cost for small turnover verses large turn over. The hoops come in the form of Pre- Qualification, Compliance Certificates, Legislation, record keeping etc. Small business do not have the cash for dedicated staff and consultants for contracts worth less than $50000 say on average. Large companies can with bigger contracts already have systems in place.
The end result is the collaboration of large Companies, Union and The ACT Government will elimination small business completion. Larger companies will be able to set their own rates and everyone will be happy that is in that circle of friends.
There is a symbiotic relationship between large companies, Unions and the ACT Labor Government.
I will play the long game and kiss the feet of the UNIONS and Labor Government so I can survive.

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