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Wednesday, 1 June 1994
Page: 1070

Senator SPINDLER —I direct my question to Senator McMullan in his capacity as the Minister for Trade and also in his capacity as the Minister representing the Minister for Administrative Services. I refer to press reports that Japan has criticised Australian government procurement policies. If Australia were to sign the GATT-related multilateral agreement on government procurement, would it inhibit: the policy to favour Australian companies where this is consistent with value for money; the Bevis committee's recommendation, taken up in the white paper, to place more emphasis on the development of Australian industries; or imposing requirements on foreign suppliers with regard to local content, technology transfer to Australian companies and offset arrangements for the purchase or export of Australian products? Since the answer is likely to be yes, will the minister give an assurance that Australia will not sign the agreement?

Senator McMULLAN —The GATT procurement code was revised as a result of the Uruguay Round and Australia is still assessing its response to that revised agreement. Referring to Senator Spindler's first question, there is no reason to believe at this stage that where value for money remains the dominant criterion there would be any significant inhibition imposed by that agreement.

  With regard to his other two questions concerning the Bevis committee and offsets, that would depend on how any particular proposals were implemented. In general, Australia's attitude to whether we should join such a procurement code will be essentially on a cost-benefit basis. We will be looking at the costs and benefits for Australia and we are consulting with industry about that at the moment.

  There are pluses and minuses. On the plus side, it is quite possible that signing such a code would give Australian industries enhanced access to markets in which they are now significantly inhibited—that is, the markets of the people who have signed the code. Many of our companies would get better access. That is an issue we cannot brush aside lightly because there will be jobs for Australians if we win those contracts. That is on the plus side of it. We would also need to judge whether this potential benefit outweighs any constraint that joining the code might impose. Those are the factors we are weighing up.

  The government's procurement policies were set out in the white paper. In essence, the government is restructuring its purchasing framework to use its capacity as a major purchaser of goods and services to promote the development of Australian industry strategically, without compromising on quality or price, whilst still ensuring value for money for the Australian taxpayer. We think the initiatives in the white paper will make a contribution to increasing domestic economic activity as well as providing the sales and experience in competitive markets that are essential if Australian firms are to win new business on the global stage.

Senator Hill —You've upset the children—there's a baby crying in the gallery.

Senator McMULLAN —I did not think that it was as bad an answer as all that! It is a balance between those two issues. This question of procurement is a matter of judgment. We have to make an important cost-benefit assessment for Australian industry and for the jobs of Australians.

Senator SPINDLER —Mr President, I ask a supplementary question. How widely is the government consulting with Australian industry on the pros and cons, and will the advice that it receives from industry be publicly available?

Senator McMULLAN —At this stage there is not a formalised public process of consultation; it is merely part of the Department of Foreign Affairs and Trade's and the Department of Industry, Science and Technology's continuing process of liaison with the private sector. I am sure that when any debate becomes public about whether or not we should join—perhaps arising from today's events—the private sector itself will make its views public. We do not have a formalised process of consultation at the moment; it is just part of the ongoing liaison with industry that various government departments, including my own, undertake. There is no secret. We are happy to try to reflect to the parliament and to the public the tenor of those views, but it would probably be better done by the private sector itself.