The Buy Queensland strategy breaks international trade deals

The Queensland government’s new controversial procurement strategy stacks the deck of public tenders against interstate and international suppliers, and is illegitimate under Australia’s free trade agreements.

The strategy, Buy Queensland, is set to start next month. It will apply to all public agencies, statutory bodies and government-owned corporations that purchase goods and services, commission major projects and infrastructure, or build schools, housing and other community facilities.

Every year the Queensland government spends more than A$14 billion on essential goods and services, on top of a further A$4 billion of capital expenditure used to build and maintain infrastructure assets such as roads, schools and hospitals. So these tenders are worth a lot to any business.

The strategy has questionable economic logic, as it limits the competition for public tenders, likely pushing government expenditure up without substantial modelling that proves superior returns for the local job market. It also explicitly contravenes a number of Australia’s international trade obligations.

The main legal issue is that the Buy Queensland strategy plans to apply a local benefits test, with a weighting of up to 30% for all significant procurement. Also, where possible, it envisages inviting one regional and one Queensland supplier to quote or tender for every opportunity. It sets out that the government will use local contractors and manufacturers in significant projects valued at A$100 million and above. Read more

Giovanni Di Lietto - The Conversation - 16 Aug 2017