The Morrison Government is leading by example through its new procurement policy that will enhance the integrity of supply chains and government procurement processes. The new policy will require the tenderer’s tax record to be taken into account.Changing supply chain practices of the Commonwealth will have an impact on businesses in all sectors. Our action will support businesses that are doing the right thing.
Supply chain integrity can easily be undermined due to illegal supplier practices that are often unknown to the purchaser at the procurement stage or during the course of the contract that creates an unfair advantage.
The Government is one of the largest procurers of goods and services in the national market. In 2017-18, total Australian Government procurement was over $71 billion.
To ensure public confidence that tenderers receiving taxpayers’ money are complying with their tax obligations, from 1 July 2019 Australian and foreign businesses seeking to tender for Australian Government procurement contracts over $4 million will have to obtain a statement from the Australian Taxation Office to show they have a satisfactory tax record. This action follows a recommendation of the Black Economy Taskforce.
The new procurement-connected policy has been released today by the Treasury and is available on the Treasury website. The Treasury consulted last year on the development of the draft PCP guidelines, which found general support for the criteria proposed to demonstrate a satisfactory tax record.
The guidance will be refined after the first year of implementation and may include additional criteria to determine a satisfactory tax record, such as compliance with superannuation guarantee and PAYG withholding obligations, and no convictions for tax misconduct in connection with phoenixing, bribery and corruption.