The Minns Labor Government will support 20 out of 22 recommendations from the NSW Parliament's Upper House inquiry into government procurement practices. The final two recommendations were 'noted'.
The inquiry was established in October 2023 and followed concerns raised by the government about the decrease in local manufacturing and local content over the last decade.
Under the previous Liberal-National Government, major contracts were sent offshore, depriving NSW businesses of billions of dollars in contracts which would have supported thousands of jobs.
Previous research by the McKell Institute found that even though cost savings were often cited as the reason to send contracts overseas these did not consider the broader economic benefits of awarding contracts to local firms.
A string of major contracts procured by the former government - from ferries from Indonesia, trains from South Korea and light rail vehicles from Spain - were also delivered over time and over budget.
The government's response to the inquiry includes:
- Further breaking down barriers for small and medium enterprises to access NSW Government contracts.
- Recognising that government agencies can improve the due diligence and compliance history checks they undertake on suppliers, including relevant standards of behaviour, workplace laws and modern slavery guidelines.
- A commitment to review the definition of, and develop a more robust approach to, 'value for money'.
- Establishing, within the already announced NSW Jobs First Commission, a debarment scheme to define rules and processes to ban suppliers which engage in serious misconduct from doing business with the NSW Government.
- Enhancing data monitoring and reporting for social, sustainability, and environmental procurement outcomes, refining key performance indicators and agency obligations.
- Seeking additional opportunities to support circular economy principles which ensure that reuse, repurposing, recycling, and disposal of goods or assets are planned into the procurement process.
- Building capacity across agencies to ensure adequate assessments of value for money are being undertaken in procurement processes.
From 1 January 2025, the Minns Labor Government's 'If not, why not' direction comes into effect. This mandates agencies must engage with local NSW suppliers before going to tender for projects worth more than $7.5 million.
Changes implemented last year reduced red tape and boosted access for small- and medium-sized enterprises.
The Minns Labor Government is continuing to develop legislation to create a NSW Jobs First Commission to support local jobs and local industry.
Quotes attributable to Minister for Domestic Manufacturing and Government Procurement Courtney Houssos:
"I want to thank the committee for their work in preparing their report.
"There's a consensus across industry, unions and government that more can be done to leverage our precious procurement dollars to support local businesses.
"This report will add to the reforms we've already introduced over the last year and shape our future work as we rebuild the state's manufacturing capability and support local businesses.
"I look forward to continuing to engage with the community prior to legislating the formation of the Jobs First Commission."
