GOVERNMENT CONTRACTS

Ms BETTISON (Ramsay) (14:35): My question is to the Minister for Small Business. Can the minister update the house on how the government is reforming its tender and procurement processes by cutting more red tape and making it easier for local businesses to win government contracts?

The Hon. T.R. KENYON (Newland—Minister for Manufacturing, Innovation and Trade, Minister for Small Business) (14:35): I thank the member for Ramsay for her question. I am glad to see she is recovering somewhat, certainly enough to finish the question. I am pleased to advise the house that through the work of the Industry Participation Advocate the government is making it easier for local businesses to win government contracts.

The government has implemented a set of widespread procurement reforms that are now being delivered. These reforms include lowering the threshold at which the industry participation policy applies for projects valued at $10 million down to $4 million in metropolitan areas, and from $3 million down to $1 million in regional areas. This means that significantly more government contracts will in future be covered by policy plans, providing greater opportunities for local businesses to compete, and making it easier for South Australian businesses to win smaller government contracts by requiring that at least one local quota is sought on contracts up to $220,000 where possible.

Local participation has been made more critical to the award criteria of these contracts, with the minimum rating increasing from 2 per cent to 5 per cent. Businesses winning government contracts valued up to $1 million in future will have their liability capped at five times the contract value instead of the uncapped amount at present. Insurance requirements will be reduced to the level of the cap. We are establishing a single prequalifying process across all government agencies so that companies are required to pay only a single fee for similar contracts over a set period.

Within government, the Industry Participation Advocate can request meetings with government buyers on behalf of local companies; review acquisition plans and tender documentation in key contracts to assess any unnecessary impediments to local companies' bidding; review tender awards to evaluate if assessment criteria have been applied; review contracts and assess if IP plans are being applied well by the prime contractor; and review tenders post-award and when necessary make recommendations to the relevant agency chief executive or minister for improving industry participation into the future.

The government considers that value for money includes the economic contributions of the state for procurement decisions. Accordingly, the Office of the Industry Advocate has engaged Deloitte Access Economics to conduct an economic contribution analysis of the government's entire procurement spending, and this work will be used in future tender evaluations. Based on three years of data, Deloitte Access Economics will be modelling the areas of public contracting that deliver the greatest economic contribution. The review will consider how public contracts can deliver even more economic contribution to the state. The economic contribution review is expected to report to the government in December.

Mr Whetstone interjecting:

The SPEAKER: The member for Chaffey is warned for the first time. If he wants to ask a supplementary he can, of course, get to his feet.

Mr Whetstone interjecting:

The SPEAKER: No? The Leader of the Opposition.