Albanese was sworn in on Monday following his victory over Scott Morrison in the federal election on Saturday © Photo by David Gray/Getty Images
Albanese was sworn in on Monday following his victory over Scott Morrison in the federal election on Saturday © Photo by David Gray/Getty Images

New Labor government to shake up procurement

23 May 2022

Public procurement will see more emphasis on “buying Australian” and spending on green technologies is set to soar under the incoming Labor administration led by Anthony Albanese.

While in opposition Albanese campaigned on making significant changes to government procurement rules and pledged to make sure a greater share of spending went to local firms.

Labor gained a minority victory in Saturday’s federal elections. To what extent it will be able to put its ambitious spending plans into practice depends on whether it secures enough votes to give it an outright majority.

Vote counting is due to continue this week to establish whether Labor can form a majority government or will have to rely on independents and minor parties to support its agenda.

Last October, Albanese unveiled a “10 point Buy Australian Plan” at the New South Wales (NSW) Labor state conference, which he said underlined the principle of “think global, buy local” for federal procurement.

“The way in which governments use their purchasing power reflects how they view the government’s role in shaping the economy,” Albanese said.

The plan revolves around a “Future Made in Australia” office within the Department of Finance, which will lead “a whole-of-government approach”.

The office will be backed by a Buy Australian Act and laws to ensure that Commonwealth Procurement Rules actively support local industry through government purchasing opportunities.

The 10 points in Labor’s plan include maximising opportunities for Australian businesses in major infrastructure projects and ensuring more work goes to SMEs by decoding and simplifying procurement processes.

Labor said an Albanese administration would introduce a “fair go procurement framework” requiring those awarded government contracts to pay their fair share of tax and using government spending to take action on climate change.

“Under this plan, we’ll also be ensuring that the government’s buying power is used to maximise opportunities for regional workers and businesses, and First Nations workers and businesses that do the right thing by their workers and encourage women into the workforce,” Labor said.

Talking to reporters, Albanese added that SMEs would be aided by splitting tenders into multiple packages where possible to enable smaller companies to bid.

New procurement rules are also likely to be supplemented by massive spending commitments focusing on clean technologies and manufacturing.

In his victory declaration, Albanese said: “Together we can end the climate wars. Together we can take advantage of the opportunity for Australia to be a renewable energy superpower.”

Clean energy represents the lion’s share of Labor’s National Reconstruction Fund – which plans to allocate A$15bn (US$10.6bn) in loans, equity and guarantees to key sectors of the economy.

The reconstruction fund includes a A$3bn “powering Australia” fund.

This is expected to invest in green metals, manufacturing of clean energy components and clean fuel technologies, as well as reducing agricultural methane and waste.

Other parts of the fund include an A$1bn critical technologies fund, an A$1bn advanced manufacturing fund, and an A$1.5bn medical manufacturing fund.

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