The New South Wales Government has, for the first time, proposed legislation to place local businesses at the heart of procurement decisions, describing the move as “the most significant reform to NSW Government procurement in a generation”.
Announced last week, the Local Jobs First Commission legislation requires government agencies to prioritise locally produced goods and services, local jobs and skills development, and support for local small and medium-sized enterprises (SMEs) when awarding contracts.
One of the key features of the proposed Bill is the introduction of a Local Procurement Policy that applies a 30 percent tender weighting for local jobs and skills, local content, and small and medium business participation.
Elsewhere, a newly established Local Jobs First Advisory Board will inform policy to boost local supplier competitiveness, while a Local Jobs First Commissioner will champion the process and monitor outcomes.
The Bill requires Local Procurement Plans for major contracts to lock in commitments to local jobs and local content, and will embed training requirements for apprentices and workers learning new skills on major state government projects.
A supplier debarment scheme is also on the table following recommendations from the Independent Commission Against Corruption’s Operation Hector report, meaning suppliers who have committed serious misconduct would be removed from the government supply chain.
The new legislation follows an extensive consultation process that involved businesses, unions and industry groups, with the government reporting strong, broad-based support for reform.
More than half of the consultation respondents were SMEs, reflecting ongoing concerns about access to government contracting opportunities and competition with larger suppliers.
The reforms build on a series of procurement changes introduced in recent years, including measures designed to make it easier for SMEs to engage with government buyers and the government’s “If not, why not” rule, which requires agencies to actively consider NSW-based suppliers for major procurements.
The NSW Government has called the Local Jobs First Bill a “critical opportunity to activate new support and investment” and has called on Parliament to consider and debate the Bill without delay.
Minister for Domestic Manufacturing and Government Procurement Courtney Houssos said the Bill delivers on an important election commitment, putting local businesses, local workers and local communities at the centre of how the government spends procurement dollars.
“We are backing local industry, supporting small businesses, strengthening local supply chains and building workforce capability,” she said.
“This is a significant reform, made even more important in a time of global economic uncertainty.
“We have consulted widely on this Bill. It is clear there is a strong level of agreement between unions, business and industry on these important measures.
“Local businesses that invest here deserve the opportunity to compete for government work on fair terms.”
Business NSW CEO Daniel Hunter agreed, saying small and medium businesses should have better access to government contracts.
“This bill is a positive step toward lifting local procurement ambition by prioritising local businesses via better tender weightings and targets,” he said.
“It is critical that we make it easier for local suppliers, particularly SMEs, to participate and compete. That means cutting red tape, reducing the time and cost of bidding, and focusing on the real barriers our members consistently raise.
“Done right, these reforms will open more doors for local businesses and ensure taxpayer dollars deliver stronger outcomes for the NSW economy.”
Meanwhile, Secretary of Unions NSW Mark Morey called the Bill “an important turning point”, saying it puts local workers and communities at the front of the queue when government contracts are awarded.
“It means when the government spends a dollar, it is more likely to circulate in our suburbs and towns rather than being siphoned offshore,” he said.
“It’s also an important investment in young workers. The government spends billions of dollars a year, and now more of that will be directed to training the next generation of carpenters, plumbers, fitters, engineers and electricians.
“Workers in manufacturing have watched jobs disappear when contracts went offshore. The Local Jobs First Commission is the mechanism to turn that around by making local content, local skills and local jobs a condition of winning government work.”
