Page 973 - Week 04 - Thursday, 3 May 2007
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It is also good to see that the principles to be applied by the procurement board are now prescribed by legislation rather than regulations and guidelines determined by the board itself. It is a sensible general principle of governance that a government agency should be subject to a clear statement of the objectives it is to achieve and the basic principles it is to apply.
The new section 22A inserted by the bill sets out the procurement principles for territory entities. The primary consideration is value for money and this is to be considered in the light of other considerations, including probity and ethical behaviour, management of risk, open and efficient competition, whole-of-life costs and anything else prescribed by legislation.
While I have reservations about government administrators determining what behaviour is ethical, which I will go into in detail in a moment, I regard the basic principle of value for money and the other considerations in the bill to be very sensible. An efficient government should always seek value for money and I think these principles will give sensible guidance to government administrators in making procurement decisions.
It is also clear that factors such as the management of risk and the determination of whole-of-life costs are crucial in determining what constitutes value for money. These are principles that private enterprise, risking their own shareholder capital, have long applied, and customarily with great efficiency. If you do not apply them with efficiency in the private sector, you would normally go broke. It is appropriate indeed that these principles have been included as fundamental principles in the act.
I note that government procurement is now governed by principles of free trade under free trade agreements with the United States, New Zealand, Singapore and Thailand. This ensures that governments will not engage in protectionist procurement practices that end up hurting everyone as we move towards a global economy. For a small territory like the ACT this is a very welcome development because I believe that we have one of the most innovative populations in Australia and perhaps in the world. ACT companies have shown themselves to be able to compete on a global scale. Thus merit standards in government procurement, such as value for money, are welcome indeed.
Whilst I support without reservation the principles of free trade and the intention of this measure, there is a concern that other jurisdictions have not implemented similar provisions to facilitate free trade. Once again this is a concern that could have been addressed if the government had not attempted to rush this thing through the Assembly, and there are still some unanswered questions.
I have had assurances in briefings by Treasury officials that no jurisdictions have retained preference clauses that would discriminate against, for example, ACT companies. I was also informed that to do so would be a violation of Australia’s free-trade obligations. Specifically, I have been informed by ACT government officials that New South Wales legislation does not preference New South Wales companies, including those based in country regions, over ACT competitors.
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