Government’s private tender process puts small businesses in harm’s way, says Senator Jacqui Lambie

Jacqui Lambie outside parliament

Every year the federal government gives out tens of thousands of contracts to private businesses through a busted private tender process that goes on behind closed doors.

The contracts provide plenty of jobs, but the government doesn’t advertise more than half of them publicly. In 2019-20, $1.5 billion of your cash was splashed around the private sector under the table.

But the government doesn’t seem worried about it.

If your car broke down, you’d take it to a mechanic. If that mechanic quoted you $10,000 to fix a flat tyre, you’d go to a different mechanic. But the government says no worries — it’s more than happy to be ripped off. What’s going on?

Politicians do not generally have much life experience. Beyond turning a sod here and there for the cameras, their well-moisturised hands are accustomed to the pen, not the wrench. This might explain why they are so loose with your money. But that doesn’t just fail the pub test, it disqualifies them from setting it.

The government leaves the business of building our nation to private businesses. And what a gigantic business it is. A lot of money is spent through a public tender process, but any project worth less than $80,000 can be awarded to anyone — without scrutiny.

You can see where this is going.

In the past four years there were three times as many contracts between $78,000 and $80,000 — the threshold — than there were between $80,000 and $82,000. Coincidence? Come on. It’s like when something at the supermarket costs $9.99, as though we don’t notice it costs $10.

That’s not the only bit of wool they’re pulling over our eyes either. A contract that goes over budget and requires more taxpayer dollars on top is allowed to raid the public purse with no consequence.

So, here we have another classic rort — and this one harms small businesses. They need all the work they can get while the country plays a never-ending game of wheel-of-fortune with COVID-19.

A government contract could keep a small business going, and missing out on that contract might be the difference between staying open or closing their doors. When the government picks who gets the job without advertising it, small businesses don’t get a chance to shoot their shot.

The way the government spends money needs to be held to a standard. It bought the Leppington Triangle lot for the Western Sydney airport for about $30 million, when it was worth only $3 million. It saw no problem with that until the Australian National Audit Office made the rest of us aware. And then the government was as shocked as we were! Give me a break.

The government reckons it has money to fritter away on this rubbish, but it will chase people to the ends of the earth over the $500 its robo-debt algorithm incorrectly guessed they owed.

Solutions to the private tender process

Here are some solutions for how to stop this crap.

One: lower the tender limit so more businesses can compete and there’s more transparency. Make it so the government can’t rip us off for more than a few bucks at a time. Make it not worth it to even bother.

Two: get a decent cop on the beat to enforce the current standards. No more $79,999 contracts being tendered in the dark.

Three: if the costs blow out, that’s on the company, not the taxpayer.

Small contracts under the tendering threshold come in drips and drabs. They may not be as scandalous as buying a ridiculously overpriced bit of land near an airport, but $30 million is a drop in the ocean compared with the $1.5 billion free-for-all spent on untendered contracts in the last year alone.

This article was first published by Crikey.

Crikey and SmartCompany accept submissions from all sides of politics which are in keeping with our editorial standards.

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Garry Busowsky
Garry Busowsky
5 months ago

I fully agree with the issues outlined. I am a retired business guy. I ran my own IT business for just on 30 years. Government tenders are also excruciating to respond and at times the final cost is too high and so the contract or project is just dropped and small business has spent a great deal of time and real money in responding. I agree the tender limit should be lowered BUT the tender evaluation and terms really need to be looked at and become ‘real world’ for example an $80,000 contract wants Professional Indemnity Insurance for $20 million which would cost around $25,000 if you could get it for a small business. Australia we can do MUCH better and be a lot more agile and this will grow small business into medium and large businesses.