Independent senators draft legislation on local procurement

Senators Nick Xenophon and John Madigan are drafting legislation based on an ignored senate committee report, urging government procurement of steel and other goods unless there’s good reason not to.

The Australian Financial Review reports that the issue has emerged again with difficulties at BlueScope Steel, which is preparing to hold crisis meetings regarding the future of its No. 5 blast furnace at Port Kembla. The company wants 500 jobs cut to save costs against a glut of cheap steel imports, with the possibility of around 5,000 jobs in total lost if the steelworks shut altogether.

Xenophon said other countries were “laughing at” the Australian approach to procurement, and this should consider flow on effects such as local employment and tax revenues. Legislation would be based on the presumption that procurement – worth $40 billion annually – should be local unless there was a good reason for it not to be.

"We should structure an annual reporting framework and monitoring of procurement policies. There should be a buy Australian approach where you maximise local industry participation," he told The AFR.

Xenophon and Madigan, the co-convenors of the Parliamentary Friends of Manufacturing group, were part of a senate references committee that reported on local procurement in July last year. The report has since been ignored, and the draft legislation will be based on its recommendations.

The two senators also made a demonstration of buying local crockery (this had previously been imported from the UAE) out of their own pockets in 2013 and donating this to parliament house.

The senators’ procurement push comes after comments from unions comparing other nations’ efforts to source steel locally.

There will be a crisis meeting on BlueScope’s steelworks’ future on September 7 – including unions, Bluescope and three tiers of government – followed by a “buy our steel” community rally on September 12.

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