Tuesday, 20 September 2022

Government procurement policy

Mr RICH-PHILLIPS (South Eastern Metropolitan) (18:06): (2133) I raise a matter for the attention of the Assistant Treasurer in the other place, and it relates to the government procurement framework. This is something that has undergone extensive reform in the past under the previous government. When I was Assistant Treasurer we undertook a substantial rewrite and consolidation of the procurement framework, simplifying those policies. Some of the elements that were introduced were successful, others less so. Since those changes were made in 2012 and 2013 there have been a number of changes to the procurement framework under the current government over the last eight years. It is now time for a wholesale review and update of the procurement framework because a number of issues have emerged with the current framework, particularly with the additional changes that were made by the current government that have actually made it more difficult for vendors to deal with government and to engage with government.

The Australian Information Industry Association, with which I had a very strong relationship when we were in government, is a very good source of advice to government. Its Victorian policy advisory network produced a paper on procurement reform, making a number of significant recommendations to government. I would like to touch on a couple of those. The first is in relation to procurement thresholds. AIIA is recommending the reintroduction of procurement thresholds. One of the decisions taken previously was to shift to a procurement model which relied on risk and complexity as the basis for determining how procurement was done, rather than having simple dollar thresholds—to adopt an approach used in the private sector. The problem is in the public sector we have a different culture to the private sector and a risk complexity model has simply not worked, so there is now support within the industry to go back to a dollar threshold model whereby different levels of complexity would be required in procurement based on the value of the procurement. Another is to look at evidence-based decision-making.

One of the key complaints I hear about government procurement is its cost to vendors. In many instances a vendor or a group of vendors will spend more on putting in a bid for a project than the project is actually worth. Government should not be requiring the private sector to spend more on bids than any individual project is worth. So a mechanism whereby governments would capture the cost of bids and report on the cost of bids would hopefully have the effect of driving down the cost of bids, ensuring that government makes procurement processes simpler for lower value procurements to ensure that it is worthwhile for vendors to bid and therefore the government gets a more competitive market. There are a range of initiatives proposed by the AIIA, and what I seek from the Assistant Treasurer is a commitment to this government adopting those changes and reforming the procurement framework.