South Australian Business Journal — Martin Haese
We are now in full-on campaign mode for the upcoming State Election on 19 March. Here at the South Australian Business Chamber, we reflect on our comprehensive Charter22 series of recommendations for the next State Government. Last week, payroll tax was at the top of everyone’s minds, particularly with South Australia’s regions paying significantly higher rates than neighbouring Victorian businesses. This week, I want to talk about public procurement.
On behalf of our members, I was pleased to recently join the Department of Treasury and Finance’s Industry Advisory Group to advocate for better procurement outcomes for the South Australian business community. This group is a great initiative and we commend the State Government on its formation. It requires a committed government to ensure that agencies plan their procurement, undertake a detailed exploration of their needs and associated costs, then push to ensure delivery of exactly what projects need to be delivered.
The South Australian Business Chamber was also pleased to see that the new Procurement Governance Policy requires public authorities to consider economic benefit of the procurement to the South Australian economy and Value for Money Guidelines will include this guidance. This is consistent with how the South Australian Industry Participation Policy (SAIPP) currently measures economic benefit to the State.
In addition to this, the completion of an ‘Office of the Industry Advocate checklist’ is now a mandated requirement for when public authorities prepare an acquisition plan and for when a purchase recommendation is made to a Chief Executive which requires public authorities to seek least one quote from a local business.
We want to take this one step further and have Chief Executives of South Australian Government Departments sign off on the non-selection of South Australian businesses in State Government tenders. We ask for this because our members have consistently reported missing out on State Government tenders to businesses based outside of South Australia, but have little or no idea why. With over $11b spent by the State Government on the procurement of goods, services and construction per annum, it is crucial to ensure South Australian businesses are competitive.
In 2021, the South Australian Productivity Commission said that almost half of government tenders below
$550,000 were not sourcing the required quotes to keep the process competitive. This is low-hanging fruit for the next government. Let’s shine a light on this practice and ensure that our next state government does much better. Requiring more quotes from local businesses is the perfect way to understand local market capability. It will ensure that government procurement considers the economic impact of their decision-making.
Ensuring that the Chief Executives of State Government Departments have this visibility to procurement decisions will create a shift within the public sector’s approach to the process. The economic opportunity to the State should be front and centre in their decision making. It is not just about bringing in the procurement staff at the 11th hour to ‘make it happen’. It is about including them right from the outset, from as early as the cabinet submission stage. We want decision-makers to see the benefit that these projects can bring to the South Australian economy.
The South Australian Business Chamber would also like to see recently published State Government procurement plans shared with South Australian businesses. Not once, but frequently. The art of effective communication lies in repetition. It is the right of every South Australian business owner to know what their government intends on spending. They should have the best possible opportunity to bid for and win more of these public tenders. It is not about creating an uneven playing field. Instead, it’s about making sure South Australian business owners are prepared and able to demonstrate their local market capability.
Without restricting our State’s ability to grow and prosper in any way, let’s keep as many local dollars as possible within the South Australian economy. After all, it’s our state taxes that are funding many of these projects.
Originally published in The Advertiser’s South Australian Business Journal on Tuesday 1 March 2022
