The federal government should review its use of panels in relation to the procurement of both goods and professional services and look for ways to increase opportunities for a wider range of firms to offer their services, a parliamentary inquiry has recommended.
It said government must look for ways to capture the efficiencies of infrequent supplier vetting and contract setting versus different arrangements that increase the scope for a broader range of suppliers.
Procurement reform made up a significant part of the recommendations made by the House Economics committee report from its ‘inquiry into promoting economic dynamism, competition and business formation’.
The inquiry was established in January last year following a reference from the Treasurer Jim Chalmers to investigate ways to increase Australia’s economic dynamism, lifting productivity growth and putting easing cost-of-living pressures.
The inquiry’s report, tabled on Tuesday, said that “if we don’t improve the level of competition and dynamism within our economy, today’s consumers will get a raw deal, while future generations will be far poorer than they might have been. This is a key challenge for policy makers.
“Australia needs to lift its game when it comes to both competition and economic dynamism. In the short-term, this will put downward pressure on prices, thereby improving the cost of living. It will also place a check on poor corporate behaviour towards consumers,” the report said.
“If we don’t tackle this challenge, future generations will be left poorer. The potential upside is massive: higher growth rates, higher incomes and better outcomes for consumers.”
The report notes the tens of billions of dollars that government spends on goods and services.
“The efficiency and effectiveness of this procurement needs to be improved, by including social enterprises and SMEs and through better designed auctions and panels,” it said, devoting a section of recommendations to procurement reform.
The report recommends that the government explore ways to adjust procurement processes to allow for greater participation by SMEs and social enterprises. This could include adjusting the way panels are used to be less exclusionary to SMEs and social enterprises.
The report also includes a recommendation that the government develop a social enterprise accreditation scheme to better enable buying goods and services from social enterprises, suggesting using policy models already in operation in Victoria and Queensland.
Other procurement and technology-related recommendations from the report include:
- That the government continue to develop and advance its digital strategy, particularly in areas where it can enhance client outcomes.
- That the government develop a dashboard that outlines in an accessible way key performance indicators. This could be started with pilots by Services Australia and the Australian Securities and Investments Commission.
- That the government actively develops greater opportunities to appropriately share or use government funded data and research, in ways that create public benefit, but also preserve privacy.
- That the government develop a fit for purpose ‘regulatory grid’ to provide greater visibility and coordination of regulatory interventions across the financial services sector.
Other important issues identified in the report include the need for a regulatory sandbox to facilitate and test sensible and timely first steps in areas of rapid product innovation where consumer harm is a risk, and well-designed and proportionate licensing arrangements in areas such as the payments system in Australia.
“Australia is at a crossroads. We are emerging from a decade of low productivity growth. The need for competition and economic dynamism is great,” the report reads.
“There are many opportunities – at an economy-wide level and at a sectoral level – for meaningful reform that not only produces immediate benefits for consumers, but that will also deliver higher standards of living for future generations.”
