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Thursday, 21 August 1980
Page: 658


Mr John McLeay (BOOTHBY, SOUTH AUSTRALIA) (Minister for Administrative Services) - by leave - I move:

(1) Clause 10, page 6, omit sub-clause (2), substitute the following sub-clause: "(2) Where the regulations make provision for the determination of the origin of goods of a particular kind, a reference in this Act (other than this section) to the origin of goods shall, in relation to goods of that kind, be read as a reference to the origin of the goods as determined in accordance with the regulations.".

(2) Clause 1 1, page 6, omit sub-clauses (1) and (2), substitute the following sub-clauses: "(1) Where-

(a) a Commonwealth authority invites tenders for the supply of goods; and

(b) the estimated cost of the goods exceeds such amount as is prescribed, the Commonwealth authority shall require that there be set out in the tender the Australian content of the goods. "(2) Subject to sub-section ( 1 ), where a Commonwealth authority requests tenders or representative quotations for the supply of goods, the Commonwealth authority shall, at its option -

(a) require that there be set out in the tender or quotation the Australia content of the goods; or

(b) require that there be set out in the tender or quotation the origin of the goods.".

(3) Clause 12, page 6, omit the clause, insert the following clause:

Method of adjustment of tender price "12.(1) Where a call for tenders or quotations requires that there be set out in each tender or quotation the Australian content of the goods, the tender price of goods the subject of a tender or quotation submitted in response to that call, being goods having an Australian content, shall be adjusted, for the purposes of section 13, by subtracting from that price an amount equal to 20%, or such other percentage as is prescribed, of the value of the Australian content of the goods, being that value calculated in accordance with the method prescribed in the regulations in force under sub-section 9(1). "(2) Where a call for tenders or quotations requires that there be set out in each tender or quotation the origin of the goods, the tender price of goods the subject of a tender or quotation submitted in response to that call, being goods the origin of which is a country other than Australia, shall be adjusted, for the purposes of section 13, by adding to that price an amount equal to 20%, or such other percentage as is prescribed, of that price.".

(4) Clause 1 3, page 7, line 3, omit ", subject to sub-section (2).".

(5) Clause 13, page 7, line 4, omit "regulations in force under", substitute, "the provisions of".

(6) Clause 13, page 7, omit sub-clause (2).

(7) Clause 1 3, page 7, line 22, omit "the question which of'

(8) Clause 1 3, page 7, line 24, omit "is to be accepted,''.

(9) Clause 13, page 7, line 26, omit "$50,000", substitute "$100,000".

(10) Clause 13, page 8, omit sub-clauses (10) and (11), substitute the following sub-clause: "(10) In considering a reference under sub-section (6), the Minister shall take into account all the circumstances of the case and may have regard to the national interest and may, by instrument in writing -

(a) direct the acceptance of that one of the tenders received for the supply of the goods that, in his view, is the appropriate tender;

(b) direct the Commonwealth authority concerned to inform each of the tenders that no tender will be accepted; or

(c) where in the call for tenders the Commonwealth reserves the right to accept separate tenders for each or any item, or any part of an item, to which the call relates - direct the acceptance of 2 or more tenders that, in his view, are the appropriate tenders.".

(11) Page 8, after clause 1 3, insert the following new clause:

Section 13 not to apply in relation to certain tenders "13a. (1) Unless the Minister otherwise directs in a particular case, section 13 does not apply in relation to tenders received for the supply of goods for a Commonwealth authority if the tenders set out the Australian content of the goods concerned and -

(a) all the percentage figures representing Australian content of goods that are set out in such of those tenders as are suitable tenders are equal; or

(b) the lowest of those percentage figures is less by not more than 10 than the highest of those percentage figures. "(2) A Commonwealth authority may refer to the Minister for his direction the question whether a tender should be treated as unsuitable for further consideration, and shall do so in any case where the regulations so provide. "(3) In this section, 'tender' includes any quotation for the supply of goods.".

In my second reading speech on this Bill I indicated my intention to introduce appropriate amendments to incorporate in the Bill the preference margins currently being used. These preference margins would be best incorporated in an amendment to clause 12 of the Bill. In the period since the Bill was introduced there has been further opportunity for consideration of its various provisions by both the business community and departments and authorities. That further consideration has revealed the need for amendments to clauses 10, 11 and 13, not to reflect any changes of policy but rather to clarify the intended operation of the legislation.

The amendment to clause 12 of the Bill will incorporate the preference margins to be applied under the Bill in the evaluation of tenders or quotations. The inclusion of the preference margins in the Bill will mean that for all practical purposes the whole machinery for implementing the Government's preference policy is on the public record. The amendment provides for the preference margins to be applied in two ways. In the case of smaller purchases, generally those of an estimated value below the prescribed value at which public tenders must be invited, a 20 per cent margin is added to the tender price of offers determined to be of imported origin. In the case of larger purchases, including all purchases of an estimated value equalling or exceeding the value at which public tenders must be invited, 20 per cent of the value of the Australian content of each tender is subtracted from the tender price of that tender. In each case the lowest adjusted tender is then accepted unless the purchase falls into that category of purchases where tenders must be referred to the Minister for decision or where the purchasing authority's option to refer any other purchase to the Minister for decision is exercised under the provisions of clause 1 3.

Clauses 10 and 11 deal respectively with the method of determination of the country of origin of goods tendered and with the requirement to set out in tenders or quotations the Australian content of goods or the origin of goods as appropriate. Sub-clause (2) of clause 10 needs to be amended to make it clear that origin will be determined in accordance with the regulations in cases where the provisions of the regulations are applicable. The regulations will provide for origin to be decided in accordance with the statutory labelling requirements applicable to imported goods. Where the labelling test cannot be applied, however, origin will be determined by any other means available. This was the original intention of the clause.

Clause 1 1 needs to be amended in a similar way to clause 10 in relation to the operation of the regulation in regard to determining origin. The wording of sub-clause (2) (b) would confine the determination of origin of goods to the terms of the regulations, which will not provide exhaustive rules for all cases. The proposed amendment, however, sets out the intent of the whole clause with better clarity. In essence, the clause provides that the Australian content approach is to be used in relation to purchases of an estimated value at or above the value at which public tenders must be invited and that either the content or origin approach may be used for purchases of lower value. Clause 1 3 is the key clause of the Bill in the sense that it provides for the final decision on tenders where preference is a consideration. A proposed new clause 1 3A removes from the ambit of clause 13 any purchases where the Australian content levels of suitable tenders are equal to or within a range of 1 0 percentage points.

The proposed amended sub-clause (10) to replace sub-clauses (10) and (1 1) of the Bill recognises the long-standing practice of inviting tenders on the basis that tenderers may make offers for the whole or for part of supplies where required. Where part offers are accepted two or more offers would be accepted in respect of the same requirement. This practice often works to the advantage of smaller business concerns. The amendment also refers to considerations of national interest. This is to ensure that the Minister will be permitted to give appropriate weight to considerations such as national security, employment and Australia's broader industrial development and trade interests. Consideration of these factors is a long-standing feature of Government purchasing policy.

A further amendment provides for the prescribed value at which purchases are to be referred to the Minister to be raised from $50,000 to $100,000. This change will be consistent with changes presently being effected to threshold values in the finance regulations, largely to take account of inflation. Finally, so that we can expedite the passage df the legislation, I would like briefly to thank members of the House, such as the honourable member for Adelaide (Mr Hurford), the honourable member for Hotham (Mr Roger Johnston), the honourable member for Melbourne (Mr Innes) and the honourable member for St George (Mr Neil) who have taken part in the debate. Apart from a few minor variations I think we can say that this is one example of a genuinely bipartisan piece of legislation. I thank the Opposition for its support in the past, the present and I trust, in the future - at least in relation to this matter.

I will comment very briefly on one or two points. I think the honourable member for Adelaide said the legislation was three years late and the honourable member for Melbourne said that the legislation was four years late. I suppose one could say that it is better late than never. As has been previously mentioned the Prime Minister (Mr Malcolm Fraser) made his statement on this matter in 1977. Preference in Government departments for Australian purchases had operated before then, and it has operated since then in the way that was explained tonight. I guess the primary purpose of this Bill is to overcome the problem that we have with some statutory authorities whose enabling legislation excludes them from being brought under the umbrella. The honourable member for Melbourne seemed to have some difficulty in understanding the question of exemptions. I could read the relevant passage out to him but I guess he will be able to read it himself tomorrow. I will read from the first part of clause 16(1) dealing with exemptions and perhaps the honourable member for Adelaide could explain this to his colleague. The clause reads: 16. (1) Where the Minister is satisfied that the application of this Act to a Commonwealth authority would have the effect of affecting adversely -

(a) the commercial viability of any business carried on by the authority; or

(b) the ability of the authority to perform its functions or to comply with any financial requirements applicable to it, the Minister shall, by instrument in writing, declare that this Act does not apply to that authority.

Other parts of clause 16 expand on exemptions. That really is the thrust of the whole Bill. We seek to protect those organisations and statutory authorities upon whose commercial viability their very existence is dependent. It seems to be that it would be useful to indicate to the chamber the names of three or four of the organisations or authorities that are currently exempt. They are the sorts of authorities I would expect to be exempt under this Bill. The honourable member for Melbourne seemed to be advancing the view that no authority can be exempt. That is why he should read clause 16(1).

The Anglo-Australian Telescope Board currently is exempt. It is a joint government enterprise. I think the Opposition would agree that it should be exempt. There is no way that we could expect to bring it in. The Commonwealth Banking Corporation and its various adjuncts are exempt. Qantas Airways Ltd, which in fact is set up under State legislation, is exempt. The River Murray Commission is exempt. Partial exemptions currently apply to the Australian National Airlines Commission, the Australian National Railways Commission and the Australian Shipping Commission. It is likely that that will continue under this legislation. It cannot be written into the Bill, as I am sure the honourable member for Adelaide, who led for the Opposition, would understand. Although this provision talks about the powers of the Minister, it really means the Government. In practice, the Minister would take to the Government a submission which lists those organisations and statutory authorities that should be exempt and those that should not.

The only other matter I would like to mention is clause 16(3), to which passing reference was made by the honourable member for St George. It reads:

I would like to place on record the fact that the Prime Minister has written to the States and asked them to support a particular philosophy. I commend it to the Opposition. I am pleased to see that the honourable member for Adelaide is nodding his head in agreement. If we can persuade the State governments to support the Commonwealth Government in its preference policies it would be a great blow in support of Australian industries. There may be honourable members opposite who are able to influence State Labor governments in that regard. I commend the amendments to the Committee.







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