The Buy Queensland policy. Brexit or no big deal?

Friday 1 September, 2017

The big state politics story this week has been the State Labor Government's recent decision to potentially give Queensland-based businesses a 30% preference on government contracts.

 

Any reasonable onlooker might assume, with all the bluff and bluster, that the Sunshine State is about to declare war on our closest trading partners and break away Brexit-style from mainland Australia. New Zealand government reps have flown into Canberra to prevent a trade war, the Federal Trade Minister has declared a war of his own on against Premier Palaszczuk for being "protectionist", and the Australian Chamber of Commerce & Industry is at odds with the Queensland Chamber, because we’ve endorsed the buy local policy as something our members might actually benefit from.
 
If you're a busy business owner, you'd probably rather spend your weekend with your family or catching up on the last episode of Game of Thrones. That is, if you're not actually working hard on Saturdays and Sundays as I know many of our members do. So before I leave for a well-earned weekend break myself, I thought I'd try to summarise this issue, or non-issue as the case may be.

GoT Whitewalker
Is winter coming to the Sunshine State? Don't let the truth get in the way of a good story.
 
What happened?
About a month ago the Queensland Government announced that, when it comes to dishing out significant government contracts, it would consider giving special preference to small business employers who are actually based here and employ workers in our state.
 
From today (Sep 1), if you’re a small business which is pitching for a Queensland Government contract - whether that's for landscaping, or HB pencils, or fidget spinners, or anything else - you may get up to a 30% weighting in your favour over businesses from other states or other countries.
To be considered a "local supplier", you need to be a business that maintains a workforce within a 125 kilometre radius of where the goods or workers are needed.
 
 
What does the Queensland Chamber think about preferencing locals?
Shock horror, as a politically independent voice for Queensland small business, we think it's great. For years, our members have told us one of their biggest frustrations is the red tape and uneven playing field you have to compete on to sell into government.
 
Even though small business’s quality and customer service is better, you tell us you simply can't compete with the multinationals who often make their goods and source their labour offshore. Even when all other things are equal, the time and missed opportunity that goes into submitting a government tender is sometimes not worth the effort and risk.
 
So on 2 August we supported the policy to give local businesses a boost when it comes to winning government contracts.
 
When the trade brouhaha really started to heat up between Federal Minister Steven Ciobo and the Queensland Government, we thought we’d explain the difference between supporting a strategy and supporting a policy on our blog. We took the opportunity to restate that we’re duty-bound to represent our members’ views, and that more contracts for small business lead to more jobs for Queensland. (And… erm… by the way, many other Australian states and territories give preferential treatment to their own small business sector in exactly the same way.)
 
What happens in other states?
Yes, the most amazing thing about all the argy-bargy is that similar policies which are in place in a number of other states and the Federal Government. There's nothing really that spectacular about giving special treatment to local suppliers.
 
Every single state seeks value for their money by spending with local businesses. The table below shows the small business favouritism Palaszczuk announced is pretty standard across the country, if not the world.
thumbnail Local Procurement 1.jpg
 
Let’s put it all into perspective. What we’re talking about here is a bit of special treatment for local mum and dad businesses bidding on government services. If you're a massive producer which sells sugar into China, or a meat grower which exports prime rib to Japan, the policy has really nothing to do with you.
 
If you’re a New South Wales, South Australian or New Zealand company which ships in goods or services for our State Government, you are still able to tender or if I was you, I’d pack my bags and move to Queensland. We care about you and we’ll treat you better.
 
Now, Game of Thrones here I come.
 

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