Protectionist rules divide Australia

5 July 2009

06 July 2009 | Jake Kanter

A war of words has broken out between Australian politicians over "protectionist" procurement policies tabled in New South Wales (NSW).

The NSW state budget unveiled on 16 June included a "local jobs first" provision, which will give preference to Australian suppliers bidding for AUS $3.9 billion (£1.9 billion) of work on schools and hospitals.

In the budget statement, NSW treasurer Eric Roozendaal said the measures "unashamedly" gave Australian-made goods and services an advantage.

"Government agencies must put local business first, giving preferential treatment to more than 500,000 firms and small businesses in New South Wales."

Trade minister Simon Crean said he was "very concerned" by the "misguided" measures. Speaking at a press conference in Canberra, he added: "Apart from seeming to increase the cost to government, it is also moving in the direction of protectionism and will invite retaliatory action by our trading partners. We have already had significant queries by the EU and the US as to what this means."

Crean wrote to the premier of NSW, Nathan Rees, expressing concerns about the policy. He noted it contradicted Australian commitments to avoid protectionism made at the G20 summit in London earlier this year.

"This is a bad signal to the rest of the world and we have to counter that," Crean said.

But Rees defended the measures in a radio interview last month, claiming they were simply an extension of existing policy.


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