State Government Procurement

Ms DIGANCE (Elder) (15:04): My question is to the Treasurer. Can the Treasurer inform the house what the Industry Participation Advocate has been doing to maximise the economic benefit from state government expenditure?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:04): As you would know, the state government is committed to creating jobs and diversifying our industry sectors during this period of economic transformation. Public sector spending must always have a strong emphasis on value for money, but value for money should include measures to broaden economic benefit. These include factors such as employment, investment and of course industry development. There must be a broader measure of value when spending is measured across a total spend of government.

On many occasions, cost and the allocation of risk are considered to be the primary drivers of procurement decisions and, in doing so, we simply create a race to the bottom where other matters are not given the due consideration that they deserve. That is why I am proud to say that this state government is leading the charge to support the Australian steel industry by ensuring all state government projects use steel that meets the Australian standards and certification requirements, giving local industry a competitive advantage against lower quality imports that may be being dumped on our shores. Importantly, this policy position leverages from the South Australian industry participation policy, with the steel certification initiative being part of a holistic value for money assessment measuring economic benefit to our state.

Further to this policy position, the government recently announced hosting a meeting of leading South Australian architects, which I was lucky enough to be at. At that meeting, I canvassed their ideas on how we can use design to stimulate our current industry sectors and at the same time grow the diversity of our industry base in this state. As a result of that meeting, remembering that a lot of the procurement decisions are made very early on in design when often the horse has bolted, I asked the Industry Participation Advocate to work with the design fraternity to provide me with recommendations on how the government can drive innovation and growth that supports the economy and provides long-term and social community benefits—public value.

We want to make the current industry participation policy even stronger to ensure that at the initial design phase we are considering what value can be achieved in terms of social and economic outcomes. This latest initiative will make smart procurement central to the development of public projects, from conception through to delivery, and ensure that maximum economic activity is generated here in South Australia, giving local producers, local entrepreneurs and local businesses every opportunity to be successful.

This includes working with our Government Architect, local architects and universities to come up with recommendations that can be embedded in our future procurement policies. Whether it is the design of a building, landscaping, an office fit-out or procurement services and systems, this new requirement will mean that design should incorporate social and economic outcomes, and this must be at the forefront of our decision-making process.

I know that it drives all members of this house crazy when we see interstate or international products being used that are substandard, and there are many examples of that in the local government area. I am pleased to see the Local Government Association, indeed the national Local Government Association, adopt our procurement policy on steel procurement. Indeed, that national body yesterday in Canberra put out a press release crediting this government in its leading role for doing that. We are working to do more on this, and I will be further updating the house on the good work the Industry Participation Advocate is doing. It is lucky that we won because the opposition would have abolished that office.