The Australian Federal Government has been urged to prioritise an ICT procurement policy reform, with new research showing the nation is falling behind its international peers when it comes to supporting local industry.
According to a new 70-page report from leading economic consulting firm Insight Economics, reforms announced in the past two years – such as supporting local R&D and intellectual property creation, tax payments and skilled job creation – are a step in the right direction but don’t go far enough.
The report also highlights the difference between Australia’s approach and that of its major trading partners, pointing out they have been far more explicit and aggressive in their approach to procurement, using it to directly support homegrown technology industries.
Australia has been warned it is in a ‘loss-loss situation’ and at serious risk of becoming reliant on overseas supply lines, which the COVID pandemic exposed as high risk to the economic and social stability of the community.
Nations including the US, Canada and the UK have recognised their ICT industries as fundamental pillars of their national self-reliance and economic growth, according to the research, using procurement to boost them.
A number of recommendations and proposals are put forward in the report, for the purpose of reforming procurement guidelines to ensure the Australian community, economy and taxpayers see the benefit of the nation’s substantial public spend on government procurement.
The paper has been welcomed by a group of leading Australian technology companies, consisting of SaaS ERP provider TechnologyOne, government and critical infrastructure cloud vendor Vault Cloud, cyber security, data centre and ICT business Macquarie Technology Group, custom software development firm Agile Digital, counter-drone defence solutions DroneShield, space technology company Gilmour Space, software & data company Psithur and the Australian Computer Society – the largest professional body in Australia representing the ICT sector.
In line with the recommendations from Insight Economics, the ICT industry is calling for a clear framework for measuring and evaluating procurements based on:
- A weighted scorecard approach, especially for smaller contracts
- A ‘calculator’ to transparently value benefits of medium deals, using standard economic multipliers
- An economic impact assessment for larger deals, making explicit the expected outcomes, for very large procurements, as is commonly done in large non-tech procurements already
TechnologyOne CEO Ed Chung said Australian tech is world-best and has shown it can compete and win in every market in the world, but continually finds itself fighting for recognition and respect with Governments at home.
“All we are asking for is that our contribution is properly valued before taxpayers’ money is spent supporting the pension funds of people in other countries,” he said.
Agile Digital Executive Director David Elliot said Australians are questioning why so much time and taxpayer money goes into large, often unsuccessful, Commonwealth ICT projects, particularly during a cost of living crisis.
“As a country, we need to rethink awarding massive ICT contracts to multinational companies and consider turning to our local industry instead,” he said.
“This report from Insight Economics urges policymakers to learn from our trading partners – and to consider the benefits Australia could gain if our Government were more strategic, focused and sovereign in its ICT procurements.”
“Australian ICT companies are producing world-class innovation,” added Psithur co-founder Felix Barbalet.
“By adopting smarter procurement practices, the government could leverage local expertise to deliver better services and value to all Australians while contributing to economic growth and high-skilled jobs.”
Australia’s ICT sector is an engine for growth in the Australian economy, contributing nearly one in every 10 dollars to GDP. It’s also the source of more than 830,000 highly-skilled, highly-paid jobs, is a major driver of innovation and is Australia’s second largest non-commodity exporting sector.
