Labor leader Bill Shorten has announced a new national procurement plan, with the policy set to give better access to government contracts for local businesses.

Under the proposed Local Projects, Local Jobs plan, locally-owned and operated companies would be given more support to win government contracts and major projects.

“If bidders on large government contracts can’t show how they’ll support competitive local business and local jobs, then they shouldn’t be getting contracts. It’s simple – no local jobs, no contract,” Shorten said.

“Local companies – those based in the town, city and region where the government is spending funds, should get better access to contracts so they can employ local people.”

For projects over $10 million Labor will require bidders to develop a Plan for Local Jobs to support jobs in the regions that projects are undertaken.

Successful bidders will be required to nominate an on-the-ground contact to engage with local small and medium businesses to raise awareness of upcoming tender and subcontracting opportunities.

Companies will also have to undertake local labour-market testing for any new employees required for the project, to ensure temporary work visa holders are not undercutting local wages.

The federal government spends $50 billion every year on goods and services, but the percentage of government procurement given to the SME sector has declined over the last four years.

The policy has been welcomed by the Building Services Contractors Association of Australia (BSCAA).

“BSCAA has always been a strong supporter of the notion of ‘local businesses for local contracts’,” BSCAA national president, George Stamas said.

“Fortunately Australia has many locally-owned and operated cleaning businesses of all sizes from small to medium to large. If the Labor policy of Local Projects Local Jobs reinforces the focus for government contracts on local businesses then BSCAA is 100 per cent supportive of such an outcome.

“BSCAA has said many times that it seeks a level playing field and realistic pricing on government contracts. BSCAA believes this to be a sensible and achievable ask. If Local Projects Local Jobs fits within that context then the policy can only benefit the many local businesses whom BSCAA represents.”

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has  also welcomed the initiative.

“This is great news for the small business sector, considering the percentage of government procurement by SMEs has declined over the past four years,” Carnell said.

“Small businesses tell us every day they don’t want handouts; they want work. A commitment by the Labor Party to ensure that SMEs get their fair share of work is a step in the right direction.”

Carnell said the challenge for Labor is to have a target of real work for SMEs, “not just paperclips and catering”.

“It’s important that government work allows SMEs to innovate and grow their business.

“The experience to date is that unless governments regularly audit contracts to ensure large companies and multinationals have delivered on their promise to engage small business, it regularly doesn’t happen.

“The other issue that needs addressing is to ensure big businesses don’t ‘screw’ SMEs in the supply chain by reducing the amount paid to small businesses and lengthening payment times. We see this all the time.

“We support the requirements in the Plan for Local Jobs, particularly local labour-market testing and the on-the-ground contact for engagement with SMEs.”

Projects over $250 million will have to ensure that local firms are provided with a fair opportunity to win work and not be excluded.

These projects will be required to put an Australian Industry Participation plan in place, opening up access to new opportunities including in mining, rail, road and energy.

Labor will require one in 10 workers on major projects to be apprentices from the local area to ensure we are giving young locals the chance to learn the skills they need for a job, and help older workers retrain for new jobs.

“We also welcome efforts to increase apprenticeships and traineeships so SMEs have access to well-trained people in their local communities to grow their businesses.

“SMEs are the engine room of Australia’s economy; where jobs are created and we are pleased to see Labor recognising this.”

Australian Manufacturing Workers’ Union national president Andrew Dettmer said: “The AMWU has always campaigned hard for strong local procurement policies. We know that when you invest in secure local jobs, the whole community benefits.”

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