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Tuesday, 10 September 1985
Page: 365

(Question No. 344)

Senator Chaney asked the Minister for Industry, Technology and Commerce, upon notice, on 31 May 1985:

(1) Does Australia have a Government purchasing policy; if so, what is the broad outline of that policy.

(2) What, if any, Government purchasing policies are in place in: (a) Japan: (b) U.S.A.; (c) U.K.; (d) Federal Republic of Germany; (e) France; (f) Canada; (g) Republic of Korea; (h) New Zealand; (i) Sweden; and (j) Switzerland

(3) Can the Minister for Industry, Technology and Commerce provide a brief outline of the policies for each country listed in (2) above.

(4) Do any of the policies referred to in (2) above involve a firm `buy local' policy; if so, what are the details.

Senator Button —The answer to the honour- able senator's question is as follows:

(1) Yes. A 20 per cent margin of preference for locally produced goods is applied to Commonwealth purchases. Relevant import duties are taken into account on a notional basis. Preference does not apply to services purchased separately from goods since in the great majority of cases these services necessarily are performed within Australia. Where the 20 per cent general margin would result in an additional cost to the Commonwealth of $200 000 or more, Ministers have discretion over whether or not it should apply.

Ministers also review all purchases valued at over $100 000 where application of preference is insufficient to give the contract to a suitable offer of higher Australian content. A group of departments advise Ministers whether, in such cases, a margin of preference of more than 20 per cent is warranted. Factors considered are whether local sourcing would assist the development of competitive high technology industries with growth potential; would assist in establishing or maintaining defence-strategic capabilities; or would avoid significant additional disruption in severely depressed labour markets. Tenderers may be asked to provide additional information on these aspects. The maximum preference margin that may be awarded is 30 per cent.

Supplementing these preference margin arrangements, purchasing procedures also provide that Government specifications may not exclude suitable, or reasonably adaptable, Australian or New Zealand-made products; that alternative solutions offered by Australian manufacturers must be considered; that as far as practicable, ordering patterns must be scaled to the minimum economic order requirements of Australian industry; and that briefings be available to unsuccessful tenderers on the reasons why they failed to win orders.

These arrangements apply to purchases by all Commonwealth departments and most statutory authorities, however a small number of authorities are restricted by their enabling legislation from applying the preference arrangements in their entirety.

(2) With the exception of the Republic of Korea, all of the countries listed are members of the Organisation for Economic Co-operation and Development (OECD). Details of purchasing policies of members were published by the OECD in its 1976 publication `Government Purchasing-Regulations and Procedures of OECD Member Countries'. Establishing what changes, if any, have taken place in these policies in the intervening period would require approaching each of the relevant countries concerned, since that information is not maintained by departments as a matter of course. More recently, information and comment on aspects of purchasing policies in some of the countries listed in the question (i.e. USA; Canada: UK; Sweden; Japan; France; Federal Republic of Germany) was included in the August 1984 report by the Australian Science and Technology Council (ASTEC) on Government Purchasing and Offset Policies in Industrial Innovation. I refer the honourable senator to these publications.

(3) See (2) above.

(4) See (2) above.