The state parliament has passed legislation today that seeks to guarantee Western Australian businesses a larger share of government contracts, after the auditor general found major flaws in the existing Buy Local policy in a report tabled earlier this week.
The state parliament has passed legislation today that seeks to guarantee Western Australian businesses a larger share of government contracts, with the government saying it addressed major flaws the auditor general found in the existing Buy Local policy in a report tabled earlier this week.
Under the new laws, titled the Jobs Bill, prospective suppliers of government contracts will now be required to submit local participation plans as part of their tender.
These plans will then be incorporated into the contracts of successful suppliers in an attempt to guarantee local businesses a bigger share of contracts.
Premier Mark McGowan said the new laws would provide a boost to jobs in WA.
"The new laws set out this government's expectation that opportunities for Western Australian businesses and workers are maximised when it comes to delivering government goods and services,” he said.
"Each year, the state government spends billions of dollars on goods, services and works for the community.
“The Jobs Bill is all about making sure Western Australian businesses get a bigger share of this work.
"We expect the new laws will create more opportunities for local small businesses and more local jobs.”
The new laws also allow the government to declare a major project one of 'strategic significance for the WA economy' to create more opportunities for local content.
Earlier this week, auditor general Colin Murphy raised concerns with the current policy, citing data collection problems which left agencies unsure if the policy was benefitting local businesses.
Mr Murphy found that government procurement during the past five years had been around $25 billion a year, but a lack of information meant agencies could not demonstrate if the policy had resulted in local employment and sustained business activity.
The policy was introduced in 2002 and aims to sustain and, if possible, increase the share of government contracts going to local businesses.
Mr Murphy found that free trade agreements and other legislation further complicated the situation.
“We found agencies largely comply with the policy, but a lack of clarity in the policy itself and guidance in how to apply it in some circumstances, leads to mistakes and inconsistencies,” Mr Murphy said.
“There is little monitoring of, and no effective consequences for, companies failing to meet their local content tender commitments.
“This means using the policy does not automatically ensure a positive impact for the local community.”
Mr Murphy said the policy did help regional businesses compete for contracts against metropolitan suppliers, but did little to assist WA companies win contracts against interstate and international competition.
“To help agencies and contractors we have recommended that the local content policy and guidelines be reviewed to improve clarity and effectiveness,” he said
“Also that agencies monitor and report local content compliance and outcomes, and this information is publicly accessible.”