The Federal Government has announced a new official “Australian business” definition for use within the context of the Commonwealth procurement framework, impacting suppliers who seek to win a share of the Commonwealth’s annual $70 billion procurement spend.
The definition, which will be incorporated into the Commonwealth Procurement Rules, means a business – including any parent business – must meet three specific criteria to be considered an Australian business, including:
- Have 50 percent or more Australian ownership, or be principally traded on an Australian equities market
- Have Australian tax residency
- Have its principal place of business in Australia
The long-awaited definition has been supported by the business sector and will provide a number of benefits, says the Government, including boosting transparency, providing better insight into who is winning Commonwealth tenders and introducing more competition within the tendering process.
The Government also released updated guidance on the Consideration of Broader Economic Benefits in Procurement, with changes to the consideration of weightings, priority outcomes and contracting.
Additionally, ICT businesses – which make up approximately 15 percent of Commonwealth procurement commitments – have been issued with “broader economic benefits in ICT sector procurement” planning and engagement guidance, which will assist them in navigating the Commonwealth procurement process.
Minister for Finance Katy Gallagher said Australian businesses have been calling for these changes and the Government has listened.
“Procurement is one of the most important economic levers the Government has – helping to grow our economy, support small and medium businesses, and benefit Australian workers and consumers,” she said.
“Being able to easily identify Australian businesses in tender processes will help make them more competitive, and guide future initiatives to better support them. I’m proud that our government is taking bold and novel steps to support local suppliers, who contribute so much to our economy and workforce.”
Reflecting Gallagher’s enthusiasm, Minister for Industry and Science Ed Husic said this is an Australian Government first.
“When we say we want Australian companies to have a chance to provide goods and services to government, we want genuine, true-blue Australian businesses to do so,” he said.
“This new definition helps give confidence that this is the case – and helps make the job easier for government officials too.
“Government is a big potential customer for lots of businesses, especially in our world-class tech sector. These changes help smaller Australian businesses have a fair crack, providing genuine competition against big multinational firms for government contracts.”
The Buy Australian Plan, which forms part of the Future Made in Australia agenda, aims to improve the way government contracts work and build domestic industry capability through the Australian Government’s purchasing power.
