Aust Jobs Bill seeks to boost local participation

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Aust Jobs Bill seeks to boost local participation

Legislation aimed at advising Australian industries and suppliers of major new projects that are valued at $500m or more, and providing assistance to win related contracts, has been considered by a Senate Committee — with the majority recommending that it go ahead.

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Legislation aimed at advising Australian industries and suppliers of major new projects that are valued at $500m or more, and providing assistance to win related contracts, has been considered by a Senate Committee — with the majority recommending that it go ahead.
 
The committee’s report was released late last week.
 
Background
 
On 21 March 2013, the Minister for Climate Change, Industry and Innovation, Greg Combet, announced the release of an Exposure Draft of the Australian Jobs Bill 2013. The same day, the Senate referred the Exposure Draft to the Senate Economics Legislation Committee for inquiry and report by 14 May 2013. The Committee comprises three Labor members, two Liberal and one Independent (Senator Nick Xenophon).
 
Purpose of legislation
 
The Bill’s stated objective is ‘to support the creation and retention of Australian jobs by requiring Australian Industry Participation plans for major projects’.
 
Australian Industry Participation (AIP) Plans aim to ensure that Australian entities have ‘full, fair and reasonable opportunity to bid for the supply of key goods or services for the project’.
 
The Bill would require AIP Plans for all projects with a capital expenditure of $500 million or more, to help Australian
firms win work on large domestic projects and in global supply chains. These Plans must be provided to a new body created under the proposed legislation — the Australian Industry Participation Authority. The Authority’s core objective will be to ensure that Australian businesses have access and support in winning business from major projects.
 
Reaction
 
The manufacturing industry generally supports the proposed legislation. However, the mining industry is not in support — arguing it will create another layer of red-tape.
 
The union movement supports the Bill and the AMWU–AWU submission argued that the threshold should be reduced to
$250 million without indexation for the remainder of the decade.
 
Majority support legislation
 
It was the committee’s view that the draft Australian Jobs Bill 2013 will be good for Australian businesses, helping them access Australia’s strong pipeline of major projects:
‘The legislation will help ensure Australian manufacturing, construction and service businesses are fairly considered for all projects. The combination of a requirement to develop Australian Industry Participation Plans for all projects with a capital expenditure of $500 million or more, and the establishment of the new Australian Industry Participation Authority to ensure compliance with the new legislation, represents an effective way to help Australian businesses win work on large domestic projects and in global supply chains.’
Dissent
 
Coalition Senators were concerned that a range of problems will be likely to accompany the reduction in the financial threshold at which projects will become subjected to Australian Industry Participation Plan (AIPP) requirements:
‘Foremost among them are that this change will undoubtedly lead to an explosion in the number of the AIPPs that need to be produced and reporting requirements that need to be met. Indeed, it is instructive to note the Chamber of Commerce and Industry WA’s calculation that these changes will mean that the share of affected projects will rise from approximately 6 to 26.2 per cent.’
 
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