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Wednesday, 8 December 1976

Mr Scholes asked the Treasurer, upon notice:

(   1 ) Are the relative total costs of purchases of goods, for Government use, in (a) Australia and (b) overseas assessed by the Treasury.

(2)   If so, are related costs taken into account, such as payment of unemployment benefits and loss of revenue to persons and businesses whose employment and business profitability are affected by orders placed outside Australia.

(3)   If assessments are not made, how does the Government assess the actual cost of saving to revenue involved in acceptance of the lowest tender price.

Mr Lynch - The answer to the honourable member's question is as follows:

(1)   The relative total costs of purchases of goods for Government use are not assessed by the Treasury. Each purchasing authority is required to compare costs involved in competing tenders for Australian and overseas goods and notionally to add customs duty to the prices in tenders offering overseas goods.

(2)   and (3) Given the scope of Commonwealth Government purchasing it is quite impossible for all indirect costs and benefits to be computed as a matter of routine when considering competing tenders. In the processes leading to the establishment of the tariffs (which as indicated above are notionally applied to tenders offering overseas goods) the Industries Assistance Commission and the Government do of course take many such broader considerations into account. Additionally, I would refer the honourable member to the Prime Minister's press release of 1 October 1 976 about Government purchasing policy. That statement indicated that, while the basic principle of best value for money spent should continue generally to apply to Government purchases, the Government recognises that special circumstances can exist in which preference should be given in favour of Australian production. A Committee of Ministers has been established to examine cases in which evaluation by purchasing authorities, on the basis of best value for money, would lead to goods being bought overseas. The Committee will consider whether purchase from Australian sources would assist a depressed industry or area within Australia, or enable the establishment, development or retention of industrial or technological capabilities required for reasons of national security or independence.

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