The changes to government purchasing arrangements announced by Finance minister Katy Gallagher this week are underwhelming. For the tech sector at least, these reforms will do little to improve prospects for local companies winning a bigger proportion of federal contracts.
Small and medium-sized businesses are given mandatory first access to a larger pool of potential contracts. But the difference it will make is marginal, and in effect is a tweak – the regime previously favoured Australian business, but this was not assessed against a definition of what constitutes Australian.
Senator Gallagher announced that lift the threshold for open tendering from $80,000 to $125,000, meaning that only Australian companies are invited to tender for contracts up to $125,000.
This is a good thing and marks the first time the threshold has been lifted in 20 years, although a cynic might say a modest lift in a 20-year-old threshold – albeit mandating that Australian companies be considered first – is literally the bare minimum that could have been done.
The thing that will really shift the dial on local procurement outcomes – and Katy Gallagher is well aware of this – is the way in which the recently adopted definition of what constitutes an Australian company is applied across government in all procurement activities.
In order to meet the ambitious objectives of its Buy Australian Plan, the Albanese government will need to focus on procurement training and to drive cultural change across the APS.
Coupled with the new definition of ‘Australian’ and the government’s desire to use its purchasing power to drive industrial development, cultural change and procurement training inside the public service will be the thing that makes an impact. This is something Katy Gallagher acknowledged at her press conference in Canberra on Wednesday.
The Buy Australian Plan is not focused on SMEs, it aims to improve local procurement outcomes for companies of all sizes.
The other area of procurement likely to see some changes on the single-vendor, whole-of-government purchasing arrangements.
The government currently has WoG contracts with Microsoft, AWS, IBM, Oracle, SAP and Rimini Street worth many billions of dollars in sales, but none with Australian providers.
These simplified contracting arrangements give these suppliers a leg-up in selling to government.
The Digital Transformation Agency has completed a review of these arrangements and Senator Gallagher says the government will have something to say on possible changes to these contracts in the coming weeks.
There has been plenty of other news this week, not least the critical minerals deal signed in the Oval Office between the Prime Minister and US President Donald Trump.
To give context to the arrangements, InnovationAus.com editor Justin Hendry did a podcast interview with Paul Myler, a former deputy chief of mission at the Australian embassy in Washington.
Tech Council chief executive Damien Kassabji announced he would leave the organisation (having earned mixed reviews), while OpenAI’s global affair chief Chris Lehane told a conference that Australia might limit its AI future if there were not changes to copyright law.
Stories we discuss this week:
- SMEs first in line for $2b in govt tech, consulting contracts – InnovationAus
- Canberra urged to drop chip foundry fantasy – InnovationAus [$]
- Australians join global call for AI superintelligence ban – InnovationAus
- Tech Council chief Damian Kassabgi heads for the exit – InnovationAus
- Ex-envoy on US-Australia push to break China’s minerals grip – InnovationAus
- InnovationAus Awards: Speaker line up is locked-in – InnovationAus
- Australia, US sign landmark critical minerals deal – InnovationAus
Don’t forget to book your seats to the 2025 InnovationAus Awards for Excellence at the Sydney Town Hall on November 27 to spend a seriously fun evening of serious networking with 550 fellow industry leaders.
Do you know more? Contact James Riley via Email.