Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 2 September 1993
Page: 908

(Question No. 485)

Senator Campbell asked the Minister for the Arts and Administrative Services, upon notice, on 6 August 1993:

  (1) How many times has Interiors competed in the open market with private interior designers in the past 24 months.

  (2) How many times has Interiors competed in a tender situation against private companies in the past 24 months.

  (3) When involved in competitive tender situations, how is a fair bid price reached and how does Interiors factor in equivalent costs to those that private designers have to bear, for example, fringe benefits tax, State and local taxes and charges, superannuation guarantee levy, profit, rental, building outgoings, motor vehicle expenses, company law compliance costs, insurance, and other cost items that are not incurred by the Government's commercialised interior design service.

  (4) Could a pro-forma calculation demonstrating how these items are factored in to ensure fair competition with private sector firms be provided.

Senator McMullan —I have been advised that the answer to the honourable senator's question is as follows:

  (1) and (2) All work undertaken by Interiors is open to full competition and most of this work is for government. 136 competitive bids were submitted in the past 24 months.

  (3) Bid prices are determined by an assessment of the market and a knowledge of the full cost of operating the business. The full cost of operations include fringe benefits tax, superannuation guaran

tee, profit, rental, building outgoings, motor vehicle expenses, insurance and other costs of business operations.

  Where work is undertaken for non-Commonwealth customers, state taxes and charges are a cost to the business.

  The business also carries accountability costs, including compliance with administrative law provisions and the Audit Act as well as reporting to Government and the Parliament, which have some equivalence with company law compliance costs.

  (4) Bids are required to return a positive net margin to the business after all costs are factored in.