David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

I rise to speak in favour of the Government Procurement (Judicial Review) Bill 2017. After I elaborate on the details of this very sensible bill, I want to make some broader comments about Commonwealth procurement policy. The bill establishes jurisdiction for the Federal Circuit Court of Australia, rather than just the Federal Court of Australia, in regard to matters of dispute within the Commonwealth Procurement Rules. It will vest power with the Federal Circuit Court to grant injunctions and to order payment of financial compensation when the procurement rules are contravened. It comes out of a response to the 2014 Senate Finance and Public Administration References Committee's assessment and recommendations to create an independent and effective complaints mechanism for people supplying to the Commonwealth government and various entities. It also arises out of the need for us to comply with our obligations under World Trade Organization agreements and our free trade agreements.

Australia is also making sure that small and medium enterprises in regional, rural and metropolitan Australia have an avenue through the Federal Circuit Court, which is the only court which has a continuous presence in regional Australia where many of these businesses reside and produce goods which are procured by Commonwealth entities. As I mentioned, the Federal Circuit Court will be able to receive complaints from both local and international suppliers who feel that the Commonwealth Procurement Rules have been breached. And it is that which triggers the ability for them to issue an injunction, correct things or order financial compensation.

In introducing this bill, the government doesn't want to generate a so-called lawyerfest. There are many sensible requirements under the bill for the supplier to engage directly with the Commonwealth entity in the first instance in relation to their complaint and to do it in a timely fashion—within 10 days and in writing. The compensation is limited to reasonable costs for the preparation of the tender and/or the costs related to the challenge. The Federal Circuit Court, as I mentioned, will be much more accessible than the higher court because it does sit regularly around regional Australia, and, as I said, many of the people supplying to Commonwealth entities are based in regional Australia. Their raw products and their production are in regional Australia—not exclusively, of course, but it will be a much better fit. It will make it more accessible and more timely, and it will allow much more transparency because of the time constraints that one has to comply with. Evidence of the breach and evidence of the attempts to resolve the matter with the Commonwealth entity must be provided in these disputes. There is facility and a requirement to do this so that the supplier can continue to supply during this dispute resolution. And the remedies and compensations are going to be the solution, rather than just leaving matters in a continual state of litigation.

I have to state that, to qualify to go before this dispute resolution mechanism through the Federal Circuit Court, contracts have to be eligible. For the procurement contract to be covered by this legislation, both the first and second divisions of the Commonwealth Procurement Rules must apply. There are many exemptions under the Commonwealth Procurement Rules, including on the basis that the procurement is essential for maintaining international peace and security, for human health, or for protecting essential security facilities or national artistic, historical or archaeological treasures. There are exceptions for specific defence procurements and specific free trade agreement conditions. The accountable authority may issue a public interest certificate where the public interest or safety would be compromised by ceasing the procurement—that is, if something is a really important facility or product, say a bit of equipment that is essential, you don't want to have loss of delivery of that just because you're entering into a dispute resolution. In this case, if a public interest certificate is issued, it will allow for the delivery of the goods to continue whilst the issue in dispute is sorted out.

The Commonwealth Procurement Rules set aside 10 per cent of Commonwealth procurement across all entities that must go to small and medium-sized enterprises. I would like to comment on some of these Commonwealth Procurement Rules, because it's hard to separate the rules from this dispute resolution process and the bill that we're discussing today. I think the 10 per cent should be an absolute minimum. I think all Commonwealth entities, whether they're corporate government entities, non-corporate government entities or Commonwealth government departments, should be looking at the value that small and medium-sized enterprises deliver when you look at the holistic value-for-money principle, which is mentioned in the Commonwealth Procurement Rules. I also note that there is a propensity among Commonwealth government departments, corporate and non-corporate government entities to take the easy way out and go straight to a prime contractor. The reality, though, is that in many instances the prime contractor isn't the actual builder or supplier of the goods; they just act as a giant middleman. They can organise plenty of other tier 2 suppliers of equipment, goods or services—but really, if we're going to try to deliver on the provisions in the Commonwealth Procurement Rules regarding value for money, I put it to the House that it's much better value to go to the direct supplier of the good or service, rather than doing everything through a prime. There are, obviously, some things that are too big for a small or medium-sized enterprise, or a large mid-level enterprise but, really, if you look below the tier 1 contractors, for all these procurements you will see a lot more capability used than if it is all done through a prime.

The other comment I would like to make is that nowhere in the value-for-money principles is there a mention of assessing the value to other Commonwealth, state or local government entities that benefit when a Commonwealth entity makes a decision about value for money. The feature that I want to highlight is that, if Commonwealth entities are procuring goods from local Australian businesses, there will be a return benefit, not necessarily in that particular department but in Treasury, or in Finance. If we procure from Australian providers, we get a GST payment or PAYE tax receipts. State governments receive payroll tax receipts. Local governments—if it's a local provider of services—will have many more businesses paying rates. We who have the responsibility for unemployment services and retraining will have reduced unemployment costs if we consider the value of procuring goods from local Australian companies rather than international suppliers. Think of all the retraining and stimulus packages in various parts of the country—these replace companies that used to rely on government contracts but now have people out of a job and are no longer viable, because they haven't got their base, large, long-term government supply contracts.

We also miss out on the multiplier effect. If we purchase goods and services from local or domestically-based companies, we get a local economic multiplier effect. This is particularly the case if the local supplier is in a regional community. Receiving a long-term government contract is, essentially, much more valuable to a local company—whether it's in paper goods, uniforms, boots or high-tech IT services—than giving grants and other stimulus payments. Rather than going to the big primes, we have a burgeoning IT industry with a lot of capability here. I talk about other IT services like cloud computing. We could have that all based here with Australian based companies that pay their taxes here, rather than with multinationals. As we know, we've had a whole tranche of legislation proposed to avoid all the issues of cost shifting—that is, instead of paying tax here in Australia, paying tax in low-taxing jurisdictions.

We also need to make allowance for the fact that a lot of the people who are supplying goods and services, including built and processed products, to the Commonwealth are hamstrung in Australia by high energy costs which overseas people and suppliers aren't necessarily subject to. We also have very high environmental standards in this country. When you're producing goods in Australia, in many cases, costs are higher because we do look after the environment. These added costs come from—mainly—federal and state legislation, particularly some of our energy market rules, and our environmental policies that have put up the costs of electricity and energy. If we're putting these extra burdens onto Australian producers and suppliers to the Commonwealth, it seems only fair and reasonable to account for that in the value-for-money equation.

Getting back to this bill, the Government Procurement (Judicial Review) Bill 2017, it will make it a lot easier for suppliers—local, regional and metropolitan suppliers—to make a complaint. It will allow the supply of critical goods and services to continue while the complaint is sorted out. There are exemptions, as I mentioned, with free trade agreements and defence contracts that must be supplied. But, overall, this is a very good piece of legislation. Legislation that makes things easier is what we're all about in the coalition. Our coalition government is trying to make it easier for all companies to do business with the Commonwealth, and this initiative will go a long way towards making that happen.

I commend this bill to the House. As I said, Commonwealth procurement in the value-for-money decision matrix must take account of value outside the department or entity that is actually doing the procurement. Entities should look at a whole-of-government return benefit, and at the benefit to the whole of the local, regional and national economy from procuring goods and services from local providers. I commend this bill to the House.

Josh Wilson (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I am glad for the opportunity to speak on this bill, the Government Procurement (Judicial Review) Bill 2017, and to speak in support of the amendment moved by the member for Rankin. I acknowledge the work that he has done and continues to do in this space. Government procurement in Australia is very important for a number of reasons. Chiefly, we want to get procurement right. We want procurement to achieve its ends. We want the outcomes of government contracts to be fit for purpose and to be good value. We also want procurement processes to be accessible to Australian businesses, particularly small and medium enterprises, which face greater difficulties because of their scale when it comes to dealing with bureaucratic processes and when it comes to dealing with Commonwealth Procurement Rules.

There are some aspects of this bill that appear beneficial. They give access to the Federal Circuit Court, a magistrates court, rather than the full Federal Court for resolving issues or taking up what seem to be breaches of the Commonwealth Procurement Rules in a way that will be much less time-consuming and much less costly. So, on the face of it, that's good for small and medium enterprises.

But it's worth considering where this bill comes from and why we are going into it in this way and at this time. It is related to the comprehensive and progressive Trans-Pacific Partnership. It's part of our obligations under that agreement. So it's important to see that what we really are doing is making some changes to our procurement framework that are balanced by changes that will be made elsewhere. The concept is that not just that small and medium businesses in Australia will benefit from the changes to our own Procurement Rules but Australian companies more broadly will benefit from similar changes elsewhere where Australian companies want to be involved in procurement processes that are conducted by other governments. Whether that is actually achieved or not is an open question. I'll come back to that in the context of some of our other trade agreements.

The timing of this bill is interesting, and what it seeks to achieve is interesting, if you look at the context of what's been happening in this space over the last little while. Australia is in the process of acceding to the government procurement agreement framework that exists under the WTO. We have been going through that process for some time. In fact, my understanding is that the Australian government position with respect to our accession to that agreement is going before the relevant committee in October. It is passing strange that we're entering into the framework covered by this bill at the same time that there's an equivalent set of mechanisms and measures covered under the WTO GPA in prospect. Certainly, when the Joint Select Committee on Government Procurement handed down its report, titled Buying into our future: review of the Commonwealth Procurement Rules,a bit more than a year ago, last June, its recommendation was that this kind of arrangement, the framework that this bill introduces, not be advanced until that WTO process has been resolved. There is basic logic in that, I think.

But, coming back to what I said before, there are benefits in harmonised procurement arrangements for companies in Australia that want to take advantage of Commonwealth procurement opportunities and for Australian companies in other jurisdictions in other countries. I think, when we look at these things and we balance up those benefits, it's valuable and important to have regard to instances of this kind of effort in the past. I'm mindful that there were some procurement arrangements put in place under the Australian-US Free Trade Agreement that, on the face of it, would have given Australian companies greater opportunities to participate in American procurement processes and, yet, since that time, the evidence is that those opportunities haven't really eventuated.

In fact, the Australian Industry Group made a submission to the Productivity Commission inquiry into Australia's bilateral and regional trade agreements, and, in so doing, cited a survey they'd conducted of Australian exporters to the US five years after that free trade agreement came into effect. The survey found that 87 per cent of Australian exporters to the US took the view that the Australia-US Free Trade Agreement was either of low effectiveness or no effectiveness in assisting their access to US government contracts. As we do these things, we must always keep track of, on the one hand, what they purport to achieve or secure for Australian companies and, on the other hand, what they actually deliver. As is the case with many aspects of trade agreements, they tend to overpromise and underdeliver. I think that's probably a relevant consideration with regard to other aspects of the TPP. I know that's been discussed elsewhere in this place this week.

It's important to note, as the previous member did, that when you change procurement rules those changes carry risks. There is very good reason for governments to have control, discretion and flexibility when it comes to government procurement. Government procurement is extraordinarily costly. In any given year, government procurement in Australia is worth something like $50 billion. In the 2016-17 year, Commonwealth procurement involved 64,000 separate contracts with a total value of $47 billion. In the 2014-15 year, the total value was closer to $60 billion. It's an extraordinary amount of money. First and foremost, we have to ensure that those procurement processes deliver the outcomes that we need. Inevitably, because they're being undertaken by government, what we're seeking to procure is of great importance to the wellbeing of Australians.

In addition to there being this imperative for procurement to achieve its ends and to do so at good value, there are other aspects of broad national and community wellbeing that governments should think about when they undertake procurement processes. One that has been mentioned here is being able to support small and medium businesses and recognise that, when it comes to Commonwealth procurement in particular, those kinds of enterprises do stand at a disadvantage to large companies—in some cases, large foreign companies. There is also the desire to use government procurement to achieve other ends: to build and sustain local industry and capacity, to address particular kinds of workforce shortcomings and those sorts of things.

The changes that this bill puts in place do contain exemptions for defence procurement. Again, that's an area where government wants to retain the ability to make choices with its mind squarely on our security needs. There are also some changes that allow some preferential, or you would say discriminatory, treatment in the interests of small and medium enterprises. In this case, any entity can have access to the changed procedures, the faster and cheaper procedures, but whether they end up being for the benefit of small and medium enterprises or for the greater benefit of larger companies—in some cases, foreign companies—is something we'll have to watch. In a submission on this issue, AFTINET made the following point:

There is much evidence to suggest that the main beneficiaries of open procurement markets are large global companies which have the capacity and economies of scale to monitor overseas procurement markets and tender for large government contracts. This means it is not a level playing field for most Australian companies.

I take the opportunity to make some general remarks on procurement more broadly. I think there are some process shortcomings with this bill around the timing and the way in which it's not consistent with relevant committee recommendations. I also think that procurement is a space in which the government has been less than active. There are a number of recommendations in the Buying into our future report that are yet to result in any real action, such as recommendation 2:

… that the Attorney-General's Department oversee the introduction and application of a procurement connected policy requiring Commonwealth agencies to evaluate suppliers' compliance with human rights regulation.

and recommendation 3:

… that the Department of Environment oversee the introduction and application of a procurement connected policy requiring Commonwealth agencies to evaluate the whole-of-life environmental sustainability of goods and services to be procured.

There are a range of way in which procurement processes can be designed and operated for the broad social welfare of Australia, and I'm not sure that's happening at the moment.

I have spoken before about the value of a debarment framework. Other countries make use of that sort of filter when it comes to any company—foreign companies in particular—that has been found to engage in any kind of exploitative, criminal or fraudulent conduct. Canada has such a framework. The OECD has noted this kind of thing on a number of occasions. It's not something we have here in Australia at this stage, and I think it's something we should consider.

On defence I would make the broad point that, while you can have exemptions in procurement arrangements that allow government to have a particularly free hand when making defence contracting provisions, the government of the day still has to use that free hand. When the Joint Standing Committee on Treaties inquired into and reported on the high-level agreement between Australia and France in relation to the Future Submarine program, it set out some high-level principles that should govern specific contracting arrangements in future, and I found it odd that the relevant provisions around achieving maximal Australian industry participation were pretty weak. The obligation put on France was that it require DCNS, the French prime, ensure Australian businesses participated in related work on an equal footing with French companies. I don't understand why, when you're paying $50 billion to a French prime for a massive multidecade project, you wouldn't require the participation of Australian companies to occur on a preferred basis, all other things being equal. If we're going to spend $90 billion on defence ships, at the end of the day we have to make sure a strong, secure, sustainable Australian shipbuilding industry comes out of that, which addresses the current problems we have in relation to how our defence procurement leads to related export opportunities. Most other countries do that much better than we do.

I note that Labor is active in this space and has done things. For instance, we talked about the requirement that one in 10 personnel in government contracts be apprentices. That's the kind of thing you can do through government procurement where you get both a good value-for-money, fit-for-purpose outcome and a broader social benefit. I was happy to meet this week with a delegation from AMWU pushing to get more young women involved in male dominated trades. That's another objective that could be met by properly framed procurement arrangements. To conclude, I support the amendment moved by the member for Rankin. It's good to see some procurement changes that have the potential to benefit small and medium-sized Australian enterprises. It could have been done via a better process than we've seen with this bill, and we'll have to watch the results.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Assistant Minister for Cyber Security and Defence) Share this | Link to this | Hansard source

The Government Procurement (Judicial Review) Bill 2017 is one of the enabling pieces of legislation supporting the implementation of the TPP agreement. It will amend the Commonwealth Procurement Rules to include an appeals mechanism and ensure that the CPRs are consistent with free trade agreements like the TPP and the WTO's Agreement on Government Procurement. But I would be doing a disservice to the number of Australian small and medium businesses who contract their goods and services to the Australian government if I didn't highlight—and we're talking about very macro international government procurement here, but we do really need to focus on this—what's actually happening here on the domestic front in terms of government procurement. There are significant challenges for Australian small and medium businesses getting a piece of the action when it comes to government procurement here in Australia. Despite the perceptions that they're getting between 20 and 60 per cent of the work, they are not.

The Australian National Audit Office's December report on Australian government procurement contracting reporting gave an extremely good read. It was a very good insight into the procurement environment of Australian Commonwealth entities. In the 2016-17 period the overall procurement activity by Commonwealth entities was worth $47.4 billion, which was represented by 64,092 contract notices published on AusTender. The ANAO's report analysed financial years over a five-year period from 2012-13 through to 2016-17 and found the number of contracts to be 290,867 and their overall value to be close to $217 billion. That's a huge amount. Of these contracts, the highest number were, not surprisingly, from the Department of Defence: 123,319 contracts, worth almost $112 billion. The second-highest number of contracts was with the non-reporting agencies: 56,000 contracts, worth $33 billion.

Of the identified Commonwealth agencies, the Department of Immigration and Border Protection was the second-highest in the ANAO report, with 13,198 contracts awarded, with a value of $15 billion. This report shows us that procurement accounts for a huge amount of government spending—in the 2016-17 period, $47.4 billion, and over that five-year period, $217 billion, with Defence topping out at $112 billion. They are very significant numbers. As a result of that, Commonwealth procurement should provide a significant opportunity for Australian small and medium businesses. The Commonwealth Procurement Rules set a government commitment to sourcing at least 10 per cent of its procurement by value from SMEs. But this opportunity is balanced against the competition Australian SMEs face, as the Commonwealth Procurement Rules also allow for international businesses to compete on the same playing field.

The CPRs outline the government's procurement policy framework and the core objective. They ensure that entities achieve value for money in their procurement activities. But the CPRs provide guidance to ensure accountability and transparency in government contracts by requiring contracts over a certain threshold to be publicly reported by AusTender. Another requirement is for tenders not to be split or divided into separate parts to avoid the relevant procurement threshold. The ANAO's report assessed the level of compliance by government entities with this requirement and found noncompliance to be low, with as little as 1.6 per cent of 290,867 contracts having discrepancies. The ANAO's analysis identified 2,457 pairs of contracts where both contracts were with the same entity, each of the contracts was entered into with the same supplier, the contracts had a start date within the same quarter and the combined value of the two contracts was above the relevant threshold but each of the reported contract values was below the threshold.

The ANAO notes that 4,914 of the individual contracts would need to be reviewed to determine whether they were for discrete procurements, whether there were data errors, like duplication, or whether a single procurement had been split to avoid reporting against the procurement threshold. It is interesting that the highest proportion of potentially related contracts, 30 per cent, were for the Department of Industry, Innovation and Science—a Commonwealth entity that accounts for only 2.7 per cent of all contracts entered into between that five-year period of 2012 to 2013 and 2016 to 2017. However, on the other hand, the Department of Defence accounts for 42 per cent of the total number of contracts awarded across the same period, with less than 10 per cent of those contracts having any potential contract discrepancies.

The one thing missing from the current CPRs is a complaints mechanism, and that is what this bill puts forward. This bill attempts to create a type of complaints mechanism that was recommended by the Senate Finance and Public Administration References Committee in 2014. While the committee didn't specify a model, this change to Australia's procurement arrangements will let SMEs more easily hold the government to account. It designates the Federal Circuit Court to receive and review local and international supply complaints about breaches of the CPRs, but, aside from that, the government really hasn't explained what this new process will add alongside current review mechanisms. Currently, suppliers can make complaints to the procuring entity, the procurement coordinator within the Department of Finance, the Commonwealth Ombudsman and the Federal Court. The judicial review process set out in the bill will give small and medium-sized businesses located in regional areas greater access to justice, with local magistrates or circuit courts hearing their complaints rather than having to have the case listed in major or capital cities.

While anything that makes undertaking business easier for small and medium-sized businesses is welcome, I have wondered whether this outcome was more by accident than by design. This bill amends the CPRs to include appeal mechanisms to ensure that Australia meets the requirements set out in future FTAs, including the TPP. The changes will also satisfy Australia's obligations as a proposed party to the WTO Agreement on Government Procurement and will allow Australian businesses access to significant government procurement markets in other countries. Whether this international opportunity can be realised by Australia's small to medium-sized enterprises remains to be seen, but I sincerely hope it does.

The Joint Committee of Public Accounts and Audit held a public hearing into Australian government procurement contract reporting in August. Representatives of the 'big four'—PwC, EY, KPMG and Deloitte—all commented on the success of Australian SMEs in being awarded contracts through government panel arrangements. They were applauding themselves. EY noted:

I understand from a recent report from the Digital Transformation Agency that in July 73 per cent of the contracts awarded through that mechanism—

the digital marketplace—

were to small and medium enterprises.

When specifically asked about the effectiveness of panel arrangements in providing opportunities to the SMEs, it was noted that the panels are effective from a government buying perspective but that it can be very difficult for SMEs when trying to access a panel. Evidence provided at the JCPAA hearing noted:

For a larger firm, it wouldn't be unusual for a larger organisation to spend $20,000 or $30,000 just on getting into the panel agreement. That is not an amount that many SMEs are able to withstand, certainly if they need to bid into multiple panel agreements, especially when there is no guarantee of work at the end of it.

This is from PWC:

… the tendering environment in government is highly competitive, and so I do see that there are challenges for SMEs in respect of panel arrangements. But … we also try to work to put the best team forward so that we can be successful and that includes involving SMEs and other subcontractors. When we think about AusTender, AusTender does only record the prime contractor and so there could be … an improvement that could be made to disclose the other organisations that are … part of that consortium.

Before entering politics, I had my own microbusiness. I was mainly contracting to Defence and to government agencies for 10 years, so I know the challenges. I know the challenges of getting on a panel. I know the challenges of getting work once you are on the panel. I know how many highly skilled and experienced microbusinesses and small businesses are being forced to contract to primes and multinationals just to get work. I know that quite often when you're going on a panel, particularly when you are doing that first bid, you basically have to give years and years of financial records, and for a microbusiness that's a challenge—not that we don't have the records. But, really, do we need that much detail? Basically, you have to give half your body in blood and also your firstborn just to get onto a panel. That's been my experience.

My experience has also been that, as a micro, to get onto a panel you have to subcontract to a medium or small outfit, and in some cases you have to subcontract to a prime, a multinational. In that process you are completely at the mercy of those primes and those subcontractors. It wasn't me, but when I was contracting in Defence I knew of other consultants who were billing themselves out to the prime or to the subcontractor for $150 an hour, and they were being billed out at $500 an hour.

I made a speech in this place just recently about the fact that small and medium businesses, and micros particularly, provide extraordinary opportunities for government agencies. They are agile. They are flexible. They are innovative. They are creative. They can deliver efficiencies that larger outfits, particularly large multinational primes, just cannot deliver. They deliver an agility that those large multinational primes just cannot deliver. Our system, unfortunately, is geared to recognising and encouraging those large multinational primes and those large subcontractors at the expense of small and medium businesses and micros. This is particularly the case in regional and remote Australia. In my shadow defence portfolio, I do a lot of travelling to bases around the country, and I usually take the opportunity to go and speak to the local business chamber. They're tearing their hair out about the fact that they can't get a cut of the work. They can't get a cut of the significant Defence work arising from the base. That work tends to go to primes and subcontractors that are invariably based in the major centres on the eastern seaboard or potentially overseas. So those local businesses—I'm talking here about the local electrician, engineer or ICT person—just cannot get a look in in terms of the work.

We really need as a nation to be thinking creatively about how we can maximise the potential of our micros and our small and medium businesses and capture that innovation, agility and creativity that they offer, because at the moment, the way the procurement arrangements are established, they favour being big. They favour low risk, and big is usually low risk. They favour tried and tested solutions that are not necessarily as innovative as they could be. I know this from conversations I've had with some of the cybersecurity outfits that we have here in Canberra, world-class outfits. I'm thinking here about Penten. They're coming out with amazing innovations, particularly for mobile highly secure devices, allowing devices to be mobile and secure. Their mantra when I was leaving was: 'All we ask is that government agencies, particularly Defence, just buy one. Just have a go. Just have faith in us as a creative Australian outfit here in Canberra and as an innovator. Just buy one and just try it.' That's all they ask, particularly those in start-ups, in the innovation sector, in the cybersecurity sector, in virtual reality and in artificial intelligence: 'Just buy one. Take a punt. Develop and manage risk. Mitigate risk. Develop an appetite for risk that is mitigated and managed.' That's all they're asking.

So we are talking here about potential opportunities for micros and small and medium businesses. That said, I want opportunities not just internationally but also here domestically for micros and small and medium businesses in Australia. I want us to realise their potential. I want us to unlock their innovation. I want us to unlock their agility, their flexibility and their creativity.

Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

This legislation, the Government Procurement (Judicial Review) Bill 2017, implements commitments that the Australian government is signing up to under the Trans-Pacific Partnership agreement and possibly the World Trade Organization Agreement on Government Procurement whereby, if an entity is aggrieved by the awarding of a government contract, that entity has an ability to appeal that decision through the Federal Circuit Court of Australia, which is an easier process than what currently exists. The appeal would challenge the government's compliance with its own Commonwealth Procurement Rules, which in turn must comply with Australian obligations under free trade agreements, other World Trade Organization obligations and the government procurement agreement which the government is currently negotiating.

The comprehensive and progressive Trans-Pacific Partnership agreement has been mainly dealt with via other enabling legislation that was debated in this place a few days ago. In that debate, Labor highlighted several shortfalls with the TPP. Firstly, there is the inclusion of investor-state dispute resolution clauses which give overseas corporations rights that domestic corporations simply don't have. Secondly, there is the recognition of overseas skills that may not meet Australian standards. Thirdly, there is the ability to more easily recruit overseas labour in Australian workplaces. And, fourthly, there is the likelihood that pharmaceutical companies will have longer periods of monopoly over costly medicines.

What has not been talked about so much but should be of real concern to all Australians is that under the TPP and the government procurement agreement overseas entities can bid for Australian government work on an even playing field with Australian bidders. That means that, other than where exceptions are provided for within the agreements, Australia cannot give favourable treatment to local entities for government contracts. That may sound like a good idea, but when analysed it not always is. If the government does give preferential treatment, under this legislation the aggrieved entity also has an easier appeal process.

The enabling legislation for the TPP is currently before the other place, and the government procurement agreement has already been signed by some 47 countries around the world. Nine other countries, including China and Russia, are currently in accession talks to join the WTO GPA. In June 2018, Australia received support to join the GPA and it is expected that final approval will be granted in October of this year—that is, next month. So, from next month onwards, we may be a full member of the government procurement agreement that currently exists amongst 47 countries, with another nine also in the process of getting approval. At this point in time, Australia is not a signatory to the GPA, but it certainly may well be and, like the TPP, the GPA—that is, the government procurement agreement—has its own risks for Australia.

Members of the House would recall that it was only about a year ago that there was a Joint Select Committee on Government Procurement that looked at the issue of government procurement within Australia and how we could ensure that that procurement better benefited local Australian companies. There were recommendations at the end of that inquiry. Recommendation 8 of that committee report said:

The Committee recommends that, in negotiating future trade or World Trade Organisation agreements, Australia not enter into any commitments that undermine the Australian government's ability to support Australian businesses.

The government's response to the report was pretty weak, if I should say so. Indeed, with respect to recommendation 8, the government's response was:

Noted. The Australian Government enters into commitments in trade agreements that are aimed at supporting Australian business, in particular to open up new market access opportunities internationally and to put in place a framework of rules and standards that support transparency and competition on a level playing field.

In other words, it didn't support a process that would have ensured that Australian businesses would have got preferential treatment but, rather, the opposite.

In 2015-16 Commonwealth agencies reported entering into 70,338 contracts valued at $56.9 billion. My estimate—because accurate figures are simply not available—is that the $56.9 billion figure that the Commonwealth spends would probably be doubled if state and territory government procurement were also included. That means that in this country around $120 billion of government procurement is spent each year. That's $120 billion that could be directed to support Australian businesses and their employees and the economy of this country. Yet all the local benefits of that procurement are increasingly being chipped away by free trade agreements—and now the Trans-Pacific Partnership agreement and, soon to come, the World Trade Organisation's government procurement agreement.

Even with the exclusions and the reservations that are carved out within those agreements, every agreement weakens the Australian government's rights to favour Australian businesses. This legislation weakens those rights even further, because it makes it easier for aggrieved parties—and that includes the foreign entities—to challenge Australian contracts. In the past, there may have been a process—and I know that there is some process where the government does favour local businesses, particularly small and medium ones. But in the future, if the government chooses to do that and it has signed up to the GPA and the TPP, it will be easier for those overseas competitors to challenge the decision to award those contracts. The argument that what Australia may lose by being a signatory to such an agreement is more than offset by what Australia may gain from winning contracts in other countries is wishful thinking at best. The figures on the trade agreements that Australia has signed to date simply do not show a net gain to Australia, or there are no figures on which we can make accurate comparisons. The fact that there are no figures is of itself concerning, because it indicates that the claims about the benefits to Australia about these agreements are simply not met.

But the risk if Australia joins the government procurement agreement is even greater for this reason. Most of the agreements we have entered into to date rely heavily on the export of agricultural products and minerals in order to justify the benefits that are to come to Australia. However, with the GPA, no minerals and no agricultural products are to be exported to offset the possibility of overseas companies bidding for government contracts, which are in most cases services or the building of infrastructure. Additionally, whereas Australia acts ethically and complies with the spirit of trade agreements, that can't be said of all the countries we have signed agreements with. Indeed, I refer to the 47 countries from earlier on, with another nine to join the GPA in the future—possibly the near future. Governments in other places have been known to use what we call 'behind the border' barriers to make it much harder for overseas jurisdictions to continue doing business with them than it is for their local companies.

A good example of that is that it was only a couple of years ago that it was brought out that the Reserve Bank of Australia's subsidiary, Securency, had got caught up in a note-printing scandal. The reason it did was that we had a product that was wanted overseas—that is, the printing of banknotes—and we could do so better than anybody else. But the reality was that, in order to win the contracts, bribes had to be paid. That's what happened with the Securency scandal. That just highlights that, whilst Australia signs agreements and then ethically goes about complying with them, it's not always the case with overseas jurisdictions, which can use all sorts of tactics to continue to favour their local businesses. That is a concern with this legislation and, indeed, with all of the trade agreements that Australia has to date been a signatory to.

If Australians cannot rely on the Australian government to give preferential treatment to Australian businesses in the issuing of government contracts then they cannot expect any support whatsoever with respect to the trade agreements that the government is prepared to sign up to. With government contracts, the government is in total control of who gets the work and how it is awarded. So, if we can't rely on the Australian government for the $120-odd billion dollars of work that governments give out every year, then what hope do Australian businesses have of being supported by the government in respect to overseas contracts and in respect to the conditions within these trade agreements?

The government could easily fix the problem it has, where it says that it cannot give preferential treatment to Australian businesses, simply by broadening the meaning of the words 'value for money' in respect of the criteria used when it comes to the awarding of Australian government contracts. The definition of 'value for money' should include whole-of-life benefits that accrue when a contract is awarded here within Australia and that should also include the additional revenue that the government gets back in taxes both by the sale of the product and from the workers who work there and pay pay-as-you-go income tax and the like. It should be a whole-of-product cost and not simply the bottom-line price as to how the product can be delivered.

Unfortunately, that is not the case and that is why, in my view, Australia doesn't always get the best deal with respect to these contracts. Deputy Speaker Georganas, you would be fully aware of this with respect to the Rossi Boots factory that was in your electorate. It lost a contract simply because it was undercut by an overseas supplier. But if you had factored in all of the benefits to the local economy and put a dollar value to those factors, it would have been the case that Rossi Boots would have got the contract. It is not unreasonable and it is not unethical to include the whole-of-life costs of the product when a contract is awarded, whether it is a product or whether it is a service, and all of the income that accrues to the government should be factored into the final decision as to who gets it.

I haven't seen, and none of us have seen, the actual text of the government procurement agreement that the current government is negotiating. As with all of these agreements, we only ever see the text once it has been agreed to. But I would have thought that, at the very least, if we're going to enter into new agreements, we should—with that agreement—also carve out protections with respect to national treasures of artistic, historical and archaeological value and we should also carve out any measures for the economic advancement, health, welfare and social advancement of our Indigenous Australians. If that can be done in the GPA then I believe it ought to be done and we should be doing our best to ensure that it is done.

I finish with this comment, and it relates to a submission made by Dr Elizabeth Thurbon, who contacted the inquiry committee with respect to government procurement:

… World Trade Organization (WTO) membership requires governments to curtail the use of local content requirements, direct export subsidies and preferential government procurement policies (which involve using government purchasing to support local firms).

That quote, where Dr Thurbon makes it clear that we cannot give preferential treatment to Australian businesses, is concerning. I hope the government ensures that that is not the case with respect to new agreements that we enter into.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

This bill, the Government Procurement (Judicial Review) Bill 2017, will make it easier for multinational corporations to take the Australian government to court over how the Australian government spends its money, and Labor and Liberal are about to join together with the Nationals to vote for it. The trickle-down troika of Labor, Liberal and big business is trucking on and saying, 'How can we change the rules to make it easier for big multinational companies to come and restrict how this government wants to spend its money?'

Why are we here debating this bill? We're debating this bill, in the words of the government—which have been echoed by the opposition—because Australia has recently signed up to the TPP, the Trans-Pacific Partnership, which is a blueprint for giving corporations greater rights over everyday people, and also because the government wants to go off and negotiate another deal with the World Trade Organization that will make it easier for overseas companies to take the Australian government to court. The previous speaker has just said that he hasn't even seen the text of that, yet Labor and Liberal are about to pass this bill through this place.

This bill deals with what's called government procurement, which is about how government spends its money. We know that the government has some very deep pockets and can drive significant change and influence what Australia looks like by how it spends its money. The government can decide, when it awards contracts, that it is going to do so in a way that it thinks is of benefit to the local population. For example, it could say, 'We have a youth unemployment crisis in this country,' which we do, because under this government one in three young people either hasn't got a job or doesn't have enough hours of work, and it's at crisis levels that have not got better since the GFC, when we, together with the mining boom, effectively destroyed a huge number of manufacturing and entry-level jobs in this country. The government could, for example, if it wanted to—this government won't, but a good government could—say: 'We're going to spend our tax revenue to help young people get jobs and increase apprentices, and we're going to give priority to local businesses in doing that. We want to give some preferential treatment to local businesses, because we know that it's going to be better for the long run in this country if everyone has a sustainable, meaningful job.' You implement those things through your procurement policy. You set some rules about how government spends its money. When you do that, you can make the judgement calls about saying: 'Well, on paper, a bid from somewhere else might appear to be a couple of hundred thousand dollars cheaper, but by the time we factor in the people who will get a job if we give it to a local business and the avoided welfare costs of that, and the additional environmental benefits of doing it here locally and the ability to regulate local companies, perhaps on balance it's better.' That's why you have local procurement rules that can have preferential treatment built into them.

Big multinational companies don't like this, because they look at governments and they just see dollar signs. They see bank accounts and cheques being written for them. They want the right to come to countries, including Australia, and say: 'Well, hang on. We can sell you the product much more cheaply—perhaps because we're getting it made by someone in a country where we don't have to pay Australian wages—and we want the right to do that. We don't want to have our hands tied by you deciding that you might want to give preference to local businesses in some way.' So these big multinationals have got together and written a blueprint for a set of rules that will make it much more difficult for the Australian government to spend its money in a way that looks after its population. Those rules are found in things like the Trans-Pacific Partnership, and also in things like this procurement agreement being negotiated by the World Trade Organization.

What this bill does—and the reason that this gives us an entry ticket into the very bad TPP and the very bad WTO agreement—is allow a multinational company, when it hears about how the Australian government has decided to award a tender, to go to court to get an injunction to stop the government from proceeding. Why does it want to get an injunction, get compensation, run a claim against the government or take it to court? Because, if it can put a brake on the Australian government doing it, it can then go and lodge a complaint with the World Trade Organization or with some other body under the TPP, and have it resolved in an international forum behind closed doors where they apply the rule of trickle-down economics and don't care about governments looking after their own population.

Who is that going to work to the benefit of? I've heard the government and even the opposition saying: 'Actually, this is all right, because it works the other way around. Australian companies will be able to do the same overseas.' Do you really think that an Australian small or medium-sized business is going to have the capacity to go to the WTO and lodge complaints against overseas governments? No. This isn't going to benefit local businesses accessing overseas markets. This is designed to give a leg-up to multinational corporations against Australian small and medium-sized businesses. When a company has won the tender, looks like it's going to win the tender or has rules that appear to give preference to local companies for some very, very good reasons, all of a sudden it's going to find itself in court—not against another Australian company, but against an overseas company with much deeper pockets—facing an injunction, facing a compensation order and facing a complaint through a different authority before they go to the court. These new rights that companies will have are only going to work to the disadvantage of local companies.

This is why, in part, when the Senate looked at this, many senators, including government senators, said: 'Don't pass this. At the very least, don't pass it until we know what the final rules are that we're signing up to as part of this WTO agreement. Don't pass it until we know whether the TPP contains protections.' Well, now we know that it doesn't contain adequate protections. We now know that the senators who looked at it and said, 'Look, hang on for a moment,' were right to say that. Now we've got the TPP in front of us. We know that under the TPP the government did not remove the so-called ISDS provisions, the ability for companies to take the Australian government to court. Jacinda Ardern, over in New Zealand, had the good sense to negotiate some get-out clauses for New Zealand, but the Australian government did not. The Australian government doesn't care, so it signed up to these awful deals. It doesn't care that it's going to give corporations much more significant rights.

We now know that these deals have some huge traps in them. That's why the Greens think we shouldn't be signing up to them. That's why half of the Labor Party thinks that we shouldn't be signing up to them. That's why civil society thinks we shouldn't be signing up to them. That's why the ACTU—and the member for Batman when she was the head of the ACTU—put in a submission to the Senate inquiry to say, 'Don't rush ahead with this, because we can only see that this is going to disadvantage local businesses.' And they were right.

We've got an opportunity now to say: 'Let's park this bill until the opposition and everyone else gets to see the full text of this agreement.' They're coming in here, complaining they haven't. 'Let's park it until we've gone back and renegotiated the TPP to include some better protections for labour and the environment, and to remove the ability for corporations to sue governments.' That is the opposition's policy, so it should be unobjectionable to say: 'We're not going to rush this bill through until we've gone back and negotiated a better deal.'

So, as an amendment to the amendment moved by the opposition, I move the following:

That all words after "whilst" be omitted with a view to substituting the following words:

"the House appreciates the significance of this measure, the House defers further consideration of the bill until the Trans-Pacific Partnership Agreement and the World Trade Organization Agreement on Government Procurement contain:

(1) better protections for labour rights, the environment, and local business; and

(2) no investor-state dispute settlement provisions".

I'm moving that amendment, which the member for Denison is going to second, because it is no good to sit in your party room and say, 'We don't agree with the TPP,' or, 'We don't agree with these deals that the government is negotiating secretly,' but then, when you have the opportunity on the floor of parliament to do something about it, when you've got the most precious thing that the Australian people trusted you with when they elected you—which is your vote in this place—go and vote with the government to fast-track this bill through. We should not be pushing this bill through when we absolutely do not need to. This bill has been sitting around for a while. It could very reasonably sit and wait until the TPP has gone back and been renegotiated.

I'm very sceptical of the Labor Party's view that it somehow is going to be in this magical position where it can renegotiate the TPP, if and when it gets elected—and I do hope there's a change of government at this election. But the idea that Labor's putting out there, that we can go back and renegotiate it, is fanciful. That's why we've separately moved to park the TPP agreement as well. We should not be signing up to that. But it's crystal clear that, even if you think that's right, even if you think that the new Prime Minister is going to be a negotiator who's going to be able to go back and take all these terrible clauses out of the TPP, then we should not pass this bill now. Wait until all of that has happened. So I'm moving what is a very simple, reasonable and unobjectionable amendment to park consideration of this until we have that opportunity.

I must say, by way of comparison, that I personally wish that the government were willing to allow people the freedom of movement to the same extent that they're allowing it for multinational corporations. If you're some person who has suffered torture, war or famine and you decide that you want to come to this country to make a better life here and to contribute, this government locks you up. Even if you are an 11-year-old child, this government, with the support of the Labor Party, will lock you behind wire until you no longer have the will to live. As we've heard this week, 11- and 12-year-olds are now saying that they no longer have the will to live, and a 12-year-old girl has reportedly set herself on fire in a camp under our watch. So, if you're a person who wants nothing more than to come here and seek a better life, you get locked up until you die or you kill yourself. But if you're a multinational company wanting to come here, Labor and the Liberals roll out the red carpet and say: 'What protections would you like us to remove? You're welcome here. The door is open. Don't worry; if you think there are any pesky rules that we've set up that might give benefits to the local Australian population, feel free to take us to court.'

What the government and the opposition don't seem to understand is that we keep playing by rules that no-one else plays by, in the hope that somehow it's going to result in the economy magically growing. Yet speaker after speaker from the Labor Party comes in here and says, correctly, that there's no evidence that these deals deliver any meaningful benefit for the Australian population at all. It's not often that the Greens and the Productivity Commission are on the same page, but they are on this one. They've said that the tangible benefits of these deals are overstated and that we should know about them before we sign up.

So let's find out first, before we sign up. Before we give a blank cheque, let's park this bill. I am going to oppose it, but I imagine others might support it. At the very least, everyone should agree to park it until we have gone back and put some things in those multinational agreements that reflect what the Australian people want and, probably, what the majority of this parliament want as well. It is time to stand up, use the vote and support this amendment.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Andrew Hastie (Canning, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The honourable member for Melbourne has moved as an amendment to the proposed amendment that all words after 'Whilst' be omitted with a view to substituting other words. The question now is that the amendment to the proposed amendment be agreed to.

Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

I rise to speak to the original bill, the Government Procurement (Judicial Review) Bill 2017, but, obviously, that has gone sideways. I have risen again and again on this issue. I have a unique position in this place, because I have been a member of parliament for longer than anyone else in Australian history, with the exception of Billy Hughes—not good company to be in, Mr Deputy Speaker, I can tell you. I have seen the complete destruction of manufacturing in my country, and, if you go back to my speeches from 35 years ago, I was probably advocating a movement towards free trade, but you have to judge policy upon its outcomes.

I wrote a book, and some would argue it was based, to a very large extent, around the views of Edward Theodore, who Malcolm Fraser said was one of his two heroes and who Paul Keating said was one of his two heroes. I have a picture of Jack McEwen and Ted Theodore on my wall. I am not an important person. I'm not the Prime Minister of Australia; I am a relative nobody, but I say, Mr Deputy Speaker, that you couldn't find three more unalike people on the planet as those three people. But they agree on one thing. The whole existence of the Labor Party was to get arbitration, which has been removed by free markets, undermined for the worker and completely removed for the farmers. So we have been left to the tender mercies of Woolworths and Coles and the foreign marketplace, where every farmer on earth gets 40 per cent of his income from the government—and we get none of our income from the government. So that is real fun. But, you have to be judged on your outcomes. You have completely closed down the motor vehicle industry. You have completely closed down the whitegoods industry. Every single thing that you use in your house, from an air conditioner to a washing machine to a fridge, is now produced overseas.

I remember vividly when Keating said: 'We are going to be the most free market economy on earth.' That was one promise that he did keep! It was six o'clock in the morning. I picked up a boot and threw it at the wall. I thought, 'From now on, I have to look after the workers in this country. What does this imbecile think? Do we go down to slave labour wage levels, give massive subsidies like our competitors, or close down industry in Australia?' They were the alternatives. Clearly, we were never going to go to subsidies. So we had two alternatives, not three, and one was to close down the industries here. So we closed down the industries. Were you surprised? That morning I knew that, if he were fair dinkum, every industry in this country was going to be closed down. Your motor vehicle industry has gone. Your whitegoods industry has gone. Your glass industry has gone. Your textile, footwear and clothing industry has gone. Your steel industry is about 60 per cent gone, and soon it will be gone completely. Your cement industry has gone—well, 40 per cent gone, but soon it will be gone completely. I was referred to by Keating as the 'last socialist' left in this place. I don't know. What the hell.

When QCL, Queensland Cement and Lime, was in a bit of trouble—we could see that it would be mopped up by a foreign corporation, and the entire cement market in Queensland would not be buying cement produced in Queensland but would be buying cement being produced overseas—we went in and bought the company. If you said to Bjelke-Petersen that you were going the pay $1,000 million to a foreign corporation to build a rail line into the Galilee he would have had you put in a lunatic asylum. But now we're the people being put in a lunatic asylum.

Where is the benefit? I have waited for a single speaker from that side, or from this side, to point out a single benefit. They all got up and said 'rural industries'. If there is one person in this place that represents rural industries it is me. There is no doubt about that one. I don't think anyone would contest that one. I represent the biggest agricultural industry in Australia. I represent about a sixth of the Australian beef industry. No-one represents more beef cattle than I do, and we are down 23 per cent. After this drought we are going to be down even further in our numbers. The beef industry has to help the sugar industry—one of the four giants of the Australian agricultural economy. We're now 17 per cent. In fact, we're closing a sugar mill every three or four years in Australia. Soon we will have no sugar industry at all. It didn't help the sugar industry. Did it help the dairy industry, which is one of the big four? Their production is down 31 per cent, so it most certainly didn't help the dairy industry.

The next one is the wool industry. This industry had carried the Australian economy for 160 years. In the year that Keating chose to deregulate it, it was bigger than coal. It was the biggest export commodity this country had. It was the biggest and greatest asset this nation had, and Keating destroyed it. These people participated in the destruction. Seventy-two per cent of our sheep industry has gone. There are your big four in agriculture. It didn't help them. Who did it help? Please, stand up and tell me who it helped.

When I walk into this place I walk past a magnificent portrait of the first member for Kennedy, Charles McDonald. If you ever watch me walk past I never walk past without saying, 'Good on you, Charlie.'

When we got arbitration, what the government did was allow blackbirding, indentured labour in the sugar industry, and they allowed coolies, indentured labour in the mining industry. They said, 'Take that one, Mr Trade Union Movement, Mr Theodore and all your mignons. Take that one between the eyeballs.'

A bloke on a bicycle in a place called Chillagoe north of Cairns had a dream that we weren't going to live like slaves any longer. He lived not far away from Mount Mulligan, where 72 human beings were blown to pieces in the Kennedy electorate. Seventy-two human beings were blown to pieces in one explosion. In my hometown, Charters Towers, 23 people were blown to pieces in a matter of seconds. This is what was going on. We fought the fight. He had this dream this he could actually make it better. Do you know what he did? Within seven years he had taken over control of Queensland and said: 'Righto. You blokes did that, so what we are going to do is take all your plantations off you and hand them over to the cane cutters, the people who actually work it and actually live here in North Queensland. We are going to take all your pastoral runs off you, you big foreign corporations, and we are going to hand it over to Queenslanders.'

There is a political message here. Do you know that the people that lived outside of Brisbane loved that bloke so much so that for 56 straight years the labour movement won every single seat outside of Brisbane in almost every single election. When you do the right thing, people see that you are doing the right thing. With Bjelke-Petersen, every single election we increased our majority. That was because we strained every muscle and nerve and sinew to see that the people of Queensland owned the assets. We owned the electricity industry. We owned the railways. We owned the ports. And—it would be unthinkable—we owned the cement and lime company that was producing cement in Queensland. I don't know how many things we owned, but the people of Queensland owned them, and we produced from them and, yes, we enabled foreign corporations to come in and use those facilities, but we charged like a wounded bull. They said that sometimes our rail charges were a bit high. Well, I didn't notice.

The famous Sir Leo Hielscher is the greatest Treasurer and financier the country has ever seen by a long way. Two of the three biggest bridges in Australia are named the Sir Leo Hielscher Bridges, and quite rightly so. I think at his address last weekend he had five ex-treasurers, one or two ex-premiers and about seven or eight ex-cabinet ministers. He's one of the most famous men in Australian history and he is the architect of the economic miracle which was Queensland. It was wonderful to hear that man speak. He took a state where we had chooks in the backyard—he had chooks in the backyard; my family had chooks in the backyard. We were poor people; everyone in Queensland was poor. But we suddenly became rich because we owned the assets; we put government money into developing those assets. We didn't build pleasure domes on the South Bank of the Brisbane River. We built railway lines where the men with the hard hats and the hard hands could go and earn a big quid. If they got off their backside in the city and were prepared to go out there and work hard, they made big money. And I'm proud to say that the workers in the state of Queensland were the most highly paid workers in the world when the government fell in 1990. And they could only bring us down by backdoor, backstabbing methods.

I have written a best-selling history book. It was published by Murdoch Books, and it was launched by Kevin Rudd no less, with over 1,000 people in Sydney. We turned away 200. In Melbourne we had 750 people when it was launched by Barrie Cassidy. That was not my choice; that was Murdoch Books' choice. I'm proud to be associated with both those men. When they write a history book of this period, they will spit upon all you people sitting over on that side and all you people sitting over on the other side. When you read my history book and you read about those people who reduced us by 72 human beings who were blown to death at Mount Mulligan and 23 who were blown to death at Mount Leyshon—and my own son worked at Mount Leyshon—you spit upon those people. When people listened to Sir Niemeyer from the Bank of England instead of listening to our own people and we had the worst depression of any country on Earth, they spit upon those people. If you read that book and that history of Australia, you'll say there were great men and there were little pissants.

God help the people in this place when the history books are written, because this period has presided over the most disastrous destruction of the Australian economy. This country now has only two things left that we can export from two quarries, an iron ore quarry and a coal quarry. Let me be very specific: more than 50 per cent of our income comes from two quarries. That's all we've got left. And quarries run out. I'm a mining man; I've been in mining all my life. Eventually your mine runs out. What have you got when the mine runs out? You've got nothing. Let me just say that they're at about $120 billion to $130 billion a year. The next item down is maybe gold or aluminium or beef, which is at $11 billion. You've got nothing left. All you've got is two quarries. That's all you've got left. And who did it? And what are you doing today? Are you apologising? Are you reversing it? No, you're doing just the opposite. I said it again and again about the car industry.

I hope that somewhere in my country will rise up in righteous anger and destroy the people who are in this place. My brothers in North Queensland, where the last explosion came from, have a look at the figures; have a look at the One Nation and KAP figures. We're ready for the explosion up there, I can tell you. And we'll lead the same as we did last time. But, when that explosion occurs, one of the first things to do is to restore the motor vehicle industry, which is as far away from me as the South Pole. But I love my country. One of the greatest stories in the history of Australia is the story of Laurence Hartnett and Ben Chifley, who created the car industry. It is so easy to do that, because all you've got to do is say, 'All motor vehicles purchased under a government contract will be Australian made.' That's all you've got to do. But the right to do that—that little piece of sovereignty—is being removed, to their eternal shame, by the ALP and the Liberal Party. So that right is being removed by those people. And I promise you, you will be recorded in the history books.

Sussan Ley (Farrer, Liberal Party, Assistant Minister for Regional Development and Territories) Share this | Link to this | Hansard source

Firstly, I'd like to thank those members who have contributed to this debate on the Government Procurement (Judicial Review) Bill 2017. The bill implements recommendation 11 of the July 2014 report of the Senate Finance and Public Administration References Committee into Commonwealth procurement procedures that the Department of Finance establish an independent and effective complaints mechanism for procurement processes.

The bill ensures that regional suppliers and small and medium enterprises have timely access to justice to raise complaints about procurement processes. The bill also complies with international trade obligations to maintain an impartial and independent body where suppliers can raise complaints about government procurement processes and be awarded remedies and compensations. It will give Australia the opportunity to access the government procurement benefits of the World Trade Organization Agreement on Government Procurement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, TPP-11.

By designating the Federal Circuit Court with concurrent jurisdiction with the Federal Court, the courts can decide which is the most appropriate court to deal with the matter. This will allow complaints to be heard in a timely manner. The bill specifies a 10-day time frame for suppliers to make an application to the courts to encourage timely efforts to resolve any concerns about a procurement process. However, the bill also provides a flexibility for the courts to allow a longer period for applications if there are genuine reasons for the delay. The courts may order remedies to preserve a supplier's opportunity to participate in the procurement, but will not be able to overturn awarded contracts. Where a procurement cannot be delayed, the courts will be able to order compensation limited to the costs or damages which occurred in the preparation of the tender or in bringing the complaint or both.

Before a complaint reaches the court, the supplier must first complain to the Commonwealth entity responsible for conducting the procurement. The entity will investigate and attempt to resolve the complaint with the supplier. Suppliers must provide evidence of their complaint, including attempting to resolve the complaint with the procuring entity in the first instance. Regional suppliers and small and medium enterprises will now have timely access to justice to raise complaints about procurement processes and seek remedies. The Federal Circuit Court is the only court at the federal level with a continuous presence outside major capital cities. Suppliers in rural and regional Australia will have easier access to have their complaints heard without the need to attend major cities.

I will briefly correct some errors made by speakers during the second reading debate. First, I note that the WTO Agreement on Government Procurement is already publicly available. It has, in fact, been in the public domain since 2014 on the WTO website. We're not negotiating a new text. Indeed, 47 countries are already members. If some members have not seen the agreement, it is because they haven't looked. Second, in relation to value-for-money assessments under the Commonwealth Procurement Rules, the procuring official must consider relevant financial and non-financial costs, which include whole-of-life costs. I also note that, in 2017, the Procurement Rules were changed to take into account economic benefit of a tender to the Australian economy.

The government does not support the second reading amendment proposed by the opposition criticising the level of opportunity for participation by Australian business in the Commonwealth procurement. I inform the House that Australian suppliers are already well represented in government procurement, with over 95 per cent, by number, of contracts being awarded to suppliers in Australia in 2016-17. As much as $40.8 billion of the $47.3 billion contracts were with suppliers operating from an Australian address. The government also does not support the amendment proposed by Mr Bandt, the member for Melbourne. There is an important advantage to Australia being an early entrant to the TPP.

Once again, I thank all members for their contributions. I commend the bill to the House, and I table an addendum to the explanatory memorandum.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The honourable member for Melbourne has moved as an amendment to the proposed amendment that all words after 'whilst' be omitted with a view to substituting other words. So the immediate question is that the amendment moved by the member for Melbourne be agreed to.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the ayes in this division, I declare the question negatived in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question negatived, Mr Bandt, Mr Katter and Mr Wilkie voting aye.

The question is that the amendment moved by the honourable member for Rankin be agreed to.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that this bill be now read a second time.

A division having been called and the bells having been rung—

As there are fewer than five members on the side for the noes in this division, I declare the question resolved in the affirmative in accordance with standing order 127. The names of those members who are in the minority will be recorded in the Votes and Proceedings.

Question agreed to, Mr Bandt, Mr Katter and Mr Wilkie voting no.

Bill read a second time.