As part of the 2022-23 Budget, the Government has announced the establishment of the Future Made in Australia Office (FMAO) as part of its broader election commitment to deliver the Buy Australian Plan (BAP). The BAP aims to use the buying power of government to use more Australian goods and services in Commonwealth contracts (including regional, Indigenous-owned, and small and medium businesses), thereby helping Australian businesses to win more contracts, employ more people and build more resilient supply chains.
The FMAO has been established in the Department of Finance to:
- co-ordinate and monitor the delivery of the 10-point BAP;
- support the uplift of procurement and contracting capability across the Australian Public Service to provide government buyers with the skills, tools and resources they need; and
- deliver targeted learning events to raise awareness on how to do business with the Government.
Astryx understands that a key aspiration of the FMAO will be to inculcate a behavioural change amongst procurement officials to assess carefully how value for money can be achieved while still improving and building more resilient Australian supply chains.
We note that the Commonwealth Procurement Rules (CPRs) already require procurement officers to assess, as part of value for money, the economic benefit of procurements to the Australian economy, which should include consideration of local supply chains. Separately, non-corporate Commonwealth entities are required, as part of encouraging competition, to source at least 25 per cent of procurement by value from Small and Medium Enterprises (SMEs), and to procure 35 per cent of contracts by value of up to $20 million from SMEs.
The Government is also aiming to ‘lock in key elements’ in the CPRs that will actively support local industry in seizing government contracts, which was announced as part of this election commitment. It is unclear what this will mean in practice and what adjustments and/or what additional elements will be included to achieve these objectives, particularly without introducing more ‘compliance’ measures and offending the Australian Government’s non-discriminatory procurement framework or its international obligations.
The FMAO may also have a role in establishing a ‘Secure Australian Jobs Code’ (which is also part of the BAP election commitment) to ensure government contracts are awarded to businesses that engage in fair, equitable, ethical, and sustainable practices. Currently, the Commonwealth Procurement Framework only captures environmental sustainability considerations when procuring goods and services and does not provide guidance on how government contracts can promote fair, equitable and ethical practices by businesses.
We look forward to the FMAO releasing further updates on their work and more detail on the Government’s proposed changes to the CPRs and introduction of the Secure Australian Jobs Code.