Speeches

Government Procurement (Judicial Review) Bill 2017 19/9/18

September 19, 2018

DR CHALMERS (Rankin) (13:10): I thank the House for the opportunity speak on the Government Procurement (Judicial Review) Bill 2017 and to indicate to the House that Labor will be supporting this bill. It is part of the enabling legislation to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Absent the connection that it has as an enabling piece for the CPTPP, which is slightly more controversial, I think this bill before us would be largely uncontroversial. What this bill does is implement a more accessible judicial review process to allow suppliers to challenge procurement decisions if and when they feel the rules have not been appropriately followed. It means that small and medium sized businesses are likely to benefit from this new arrangement. For those in the broader community who have expressed their concerns to us, it's important to remember that nothing in this bill will further restrict the Commonwealth's procurement arrangements as they stand.

As I said, the bill will provide suppliers with a more timely, effective, transparent and non-discriminatory review process when it comes to breaches of the Commonwealth Procurement Rules, the CPRs. This might include, for example, where an agency sets a deadline for responses to a tender of less than 25 days, despite the procurement not meeting the conditions for shorter time frames specified in the rules. The bill allows suppliers to ask the Federal Circuit Court to review their case instead of the Federal Court. This is an important change, because, by allowing it to be heard at that level, it's likely to be cheaper, faster and more readily available for suppliers in regional areas. The new review procedure will allow earlier intervention to preserve a supplier's opportunity to participate in a tender process if they feel that they have been inappropriately excluded. And, if a breach does occur, it allows for corrective action before the tender has been finalised or, in some cases, it allows for compensation. While big multinationals have the resources to navigate our current review arrangements before they are changed by this bill, what this change does is gives the small and medium sized opportunities better opportunities to hold the Commonwealth to account, and that's very important.

The amendment that I'm moving to this bill really reflects some of the concerns that we have with the broader procurement process. As I said, we will be supporting this bill because it's expected to benefit Australian businesses, but we do feel that there is a bit of a failure to maximise all of the opportunities of the broader $50 billion a year procurement program. Obviously, as a significant purchaser of goods and services, the Commonwealth should demonstrate best-practice procurement—that's a no-brainer—while ensuring it achieves value for taxpayers' money and also complies with its important international obligations. In that context of the broader procurement rules, we welcome the government's introduction of an assessment of economic benefits in Commonwealth procurement. That does provide an opportunity for a more detailed assessment of value for money.

But the Public Service doesn't yet seem to be embracing the approach as much as it could. So we indicate that we on this side of the House believe that more can be done to ensure that the new test of economic benefit can be maximised and that here in this chamber we are doing all we can to support Australian jobs. That's why I'll be moving the second reading amendment in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House disapproves of the Government's failure to properly maximise the opportunities for Australian businesses in the Commonwealth Government's $50 billion procurement program".

I know that a number of my colleagues will want to speak to that amendment, because a lot of members in this House who represent manufacturing areas or other areas where there are key suppliers—perhaps to the defence industry or other industries—have well-considered and well-formed views about how we can get a bigger slice of the action for Australian companies, particularly in our regional and outer suburban areas, not just in the big cities, so that they can get their chance to participate in the procurement program.

As part of that we also need to fix up the transparency issues in procurement. In my own portfolio this is quite stark in the area of contractors, consultants and labour hire firms. Spending on these categories of tenders has grown in an extraordinary way over the past five years. Labour hire spending has tripled. There's been a big blowout in contractors and consultants. There are a whole range of reasons for that, which I've gone into in other forums. But the point I would make is that when we are spending so much money as a country, as a government, on contractors, consultants and labour hire, we need to do all we can to make sure that the spending is transparent. We need to make sure that Australians know exactly how much money is being spent on external contractors and consultants. That's why we on this side of the House have already indicated that we will ensure that government spending and procurement data is collected in a central database, including contract reporting and consultancy spending, and we will require agencies to keep records of some contractors used. Our intention is to make sure future governments can't hide or obfuscate the spending going on in these areas, in the Public Service in particular.

As I said before, this bill is part of getting our ducks in a row to be part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP. It will have some other benefits in terms of other agreements. The World Trade Organization agreement is another one that is relevant here. In agreeing this, in passing this bill through the House today, we, along with the government, will be doing our bit to make sure that the other pieces of the puzzle are in place for us to join those agreements.

Labor and the labour movement of course have a very strong record when it comes to trade and when it comes to being part of international agreements, which create jobs here in Australia and create prosperity for our people. For example, the tariff reforms of Hawke and Keating are one of the reasons we've had almost 27 years of uninterrupted economic growth. The average Australian household's real income is now $8,448 higher because of these reforms, according to analysis done in 2017. It was Labor who began the negotiations for the original TPP in Melbourne in 2010, if I remember rightly; the trade minister at the time was probably Simon Crean. So these negotiations have been going on for some time. We were there at the beginning. Obviously there have been a number of substantial changes to the agreement and to the parties involved in the agreement, principally the United States, since that starting point eight years ago. The CPTPP will eliminate more than 98 per cent of tariffs in a trade zone spanning the Asia-Pacific, with a combined GDP worth $13.7 trillion. That means that our farmers, our manufacturers and our services exporters will benefit from new market access opportunities in economies that have nearly 500 million consumers, and obviously that's very important.

It's important to also recognise the deal has changed not just in the member countries but also in the inclusions. It now represents 13 per cent of the world's GDP, and some of the more controversial provisions from the original agreement with the Americans in it have been shelved for now, such as for biologics, copyright and other aspects as well. We think that the increased market access to the deal will have noticeable benefits for manufacturers of raw materials like iron and steel, the resource sector, agricultural producers, and the list goes on.

There are a whole range of things that will be said in the broader conversation about the CPTPP. There are a whole range of reasons why we have said that we will support the agreement, but we have some substantial reservations around the ISDS provision and the labour market testing provision and we will seek to change and improve those if and when we come into office. That's an important way that we can not just keep faith with the promised upsides of trade and jobs the agreement can help create but also ensure it's the best possible version of a trade deal. There are some favourable aspects in this deal around the environment and labour protections, but there are those substantial downsides. We have indicated that we will seek to change them at the first opportunity.

I wanted to pay tribute as well to a colleague, the shadow minister for trade, who has also proposed a whole range of other measures which will improve the way that we strike trade agreements in this country so that there is more visibility for the broader community—the union movement, the business community and the NGOs—giving them opportunities, also making sure that we do rigorous economic modelling so that we're arguing not on the basis of ideology but on the basis of credible, reliable, robust modelling so that the parliament can do its job, armed with the full information, as deals move from being prospective deals to deals which a government of either persuasion is asking the parliament to support. We have a whole range of things that we would like to do in the trade area to make sure that we are striking more progressive trade agreements which do more to ensure that we get the upsides of trade without those substantial risks around particularly the labour force.

What this trade agreement doesn't do is restrict Australia's procurement arrangements from any form of preference to benefit small and medium enterprises. It doesn't restrict our procurement from being able to protect national treasures. It doesn't restrict it from implementing measures for the health, welfare and economic and social advancement of Indigenous people. We want to make sure that when the next agreement comes to us—which will be the WTO agreement—it doesn't constrain those things either. We're satisfied here that there is enough room for Australia to do the right thing by its people. We want to make sure that we can say the same thing about the WTO agreement when it's finished as well.

As I said at the outset, Labor will support the bill. We believe very firmly that the Commonwealth could do more to maximise the benefits of the tens of billions of dollars that we spend every year on procurement. We think more could be done to ensure we're investing in local jobs so that the Australian people are getting the economic benefit from the money that we as a government invest. The bill is expected to help small and medium-sized businesses. That's a good thing. A more timely and accessible review process will give them more accessible power and more affordable power when they feel like they have been hard done by under the Commonwealth procurement rules.

The other thing which is important—and another reason why we support this bill—is that strengthening the governance of procurement arrangements around the world will give our country and our businesses the opportunity to participate in procurement elsewhere, confident that there are appeal mechanisms if things go awry. So, for all those reasons, we do support this bill. We have some reservations about the broader program and the CPTPP which we hope to fix, but overall this limited and narrow bill that we're dealing with now is good for Australian businesses, and that's why we're on board.

WE'LL PUT PEOPLE FIRST