Better deal for Australian businesses under Commonwealth contracts

Australian Treasury

The Albanese Government has taken the first step to deliver on an election commitment to boost the amount of small and medium businesses that can benefit from government spending contracts with revisions to the Commonwealth Procurement Rules (CPRs).

Minister for Finance, Senator the Hon. Katy Gallagher and Minister for Small Business, the Hon. Julie Collins, announced the revised CPRs today.

Each year the Australian Government spends approximately $70 billion a year on contracts.

These changes to the CPRs will open the door to more opportunities for small and medium sized businesses to participate in applying for Commonwealth contracts.

This spending is a significant economic lever which can support Australian business and stimulate growth in small and regional businesses and across industry sectors.

The changes announced today will help small and medium businesses grow and ultimately employ more staff.

The Albanese Government wants to ensure that more Australian businesses have the chance to benefit from contracts that deliver the goods and services the Commonwealth needs to support Australians.

The new CPRs will double down on the Government’s commitment to expand opportunities for SMEs, now requiring that 20 per cent of procurements by value are sourced from SMEs.

This is an increase from the previous target of 10 per cent and will open the door to more government work for SMEs.

Value for money is the core rule of the CPRs. When assessing value for money official must consider the relevant financial and non-financial costs and benefits of each proposal.

In additional to this value for money principle, the revised CPRs also now require that procuring official consider a procurement’s broader impact on climate change when undertaking this value for money assessment.

This change goes hand in hand with our commitment to reduce Australia’s emissions by 43 per cent by 2030 and provides an opportunity to showcase Australia’s abundance of talent, resources and innovation.

Lastly, the CPRs will now encourage entities to approach multiple suppliers, when procuring from a panel arrangement. Adopting this change improves competition, driving value for money outcomes and ensuring a better deal for the taxpayer.

Small business is the engine room of the Australian economy and these measures are targeted at making it easier for small business to bounce back from the ongoing pandemic and recover from the bushfires and floods which have ravaged parts of Australia.

“When the Albanese Labor Government makes a promise, it delivers,” Senator Gallagher said.

“This announcement is a clear demonstration that we won’t waste time when it comes to taking practical steps to support businesses to grow, create more jobs and ultimately help to boost the Australian economy.”

“This is the first step in delivering on our Buy Australian Plan and we’ll have more to say about implementing this key element of Labor’s plans to build a future made in Australia.”

“Small businesses shouldn’t be locked out from opportunities to gain government contracts just because they might not have the leverage of bigger businesses,” Minister for Small Business, Julie Collins said.

“The swift delivery of these changes shows the Albanese Government is serious about implementing our commitment for a better deal for small business.”

The updated Commonwealth Procurement Rules are now online and will come into effect on 1 July 2022.

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