Employment Opportunities

The Hon. R.L. BROKENSHIRE (14:42): It is alright, the crossbenchers can handle two things at once. I seek leave to make a brief explanation before asking the Minister for Employment a question regarding building jobs here in South Australia.

Leave granted.

The Hon. R.L. BROKENSHIRE: Much has been said by this government in the media of late, criticising the federal government's outsourcing of South Australian jobs and about how we need to throw our support behind local businesses to help build this state's economy and to ensure jobs stay here for the people of South Australia. Yet, according to the Department of Planning, Transport and Infrastructure website and a report in The Advertiser on the weekend, South Australian civil engineering firms were overlooked when it came time to hand out a $10.5 million contract to build the Penola Southern Bypass.

When this contract was put out to tender in November last year, the then minister and now Treasurer, the Hon. Mr Koutsantonis, said that the infrastructure upgrades were brought forward to provide opportunities for local contractors to win new work which would help create jobs for local workers. Understandably, local contractors and local businesses are very concerned that they have been again overlooked as serious contenders for local infrastructure projects. My questions to the minister are:

1. Can the minister actually tell us how serious this government is when it comes to keeping South Australian jobs and when it comes to supporting South Australian businesses when they are giving away contracts to interstate companies?

2. How many South Australian jobs will be created when the Victorian firm Millers from Horsham starts work on the Penola Southern Bypass?

3. How exactly will employing a Victorian company to build this 2.5 kilometres of road build the South Australian economy?

4. Finally, what has happened to the Labor government's target they promised to create of 100,000 new jobs? Have they also gone to Victoria?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (14:44): I thank the honourable member for his most important question. I am sure the honourable member is aware that the contract involving the allocation of the work involved in the Penola bypass is the responsibility of another minister; however, I do have some information about that process, which I am happy to share with the chamber.

The honourable member's assertion that an Adelaide company was overlooked is incorrect, like much of what the Hon. Robert Brokenshire says in this place. It is incorrect; he never lets the facts get in the way of an outburst. I am advised that the Penola Southern Bypass road project south-west of the town of Penola was aimed at reducing heavy traffic through Penola. The state government funding for the project is committed under the 2013-14—

The Hon. D.W. Ridgway: That's all very well, but what about the Victorian contractor?

The Hon. G.E. GAGO: They never want to let the facts get in the way, do they, Mr President? They are happy to get up and shoot their mouths off saying anything, but when I actually bring facts—

Members interjecting:

The Hon. G.E. GAGO: When you bring the facts in, Mr President, they go to water. The project is estimated at $10.5 million, based on 2013. Construction has commenced, and is expected to be completed by June 2015. A Horsham company, P Miller Contractors (Millers) were awarded the $6.5 million Penola bypass construction project on 11 September, I am advised. This company tendered in a competitive price and met the remaining criteria of capability and experience, I am advised, better than any other of the tenderers.

Tenderers were assessed on a comparative price basis, in accordance with the evaluation plan, in May and June 2014. I am also advised that the evaluation included application of the requirements of the industry participation policy at the time the tender was called, where the tender price was subject to a 5 per cent industry participation weighting. A local company withdrew its tender during the evaluation period.

Local firms, I am advised, will benefit from this project, with all subcontracts and supplies valued over $110,000 to be exclusively performed or provided by South Australian businesses. The value of subcontracts for material supply and works is approximately $4 million of the tendered sum. The state government is constantly looking to maximise the amount of work local companies obtain from our government-funded projects. Over 95 per cent of the $30 million of work already contracted on the Torrens-to-Torrens project I am advised have gone to South Australian companies, and to the Southern Expressway project; 86 per cent of all subcontracts went to local contractors and suppliers.

The state government's objective is to do all we can to maximise local content in our procurement activities. However, we cannot close our borders and disregard competitive tenders from interstate companies. Closing our borders would disadvantage South Australian-based companies, such as Bardavcol, who I am advised were awarded a $5 million dam upgrade in New South Wales; or BADGE Group, who beat competitors from within WA for $16 million worth of works to upgrade Broome Senior High School; or SA-based Built Environs, who were awarded $63 million worth of building works on the Gold Coast Light Rail project.

So, if the Hon. Robert Brokenshire got his way, South Australia would have dipped out on all of those projects, and there are many others that can be cited. That is what his policy direction would do: it would rob this state of many opportunities for businesses to grow and expand. From 1 July 2014 the government increased to 10 per cent the amount of tender price that would be subject to industry participation weightings.