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The Federal Government has announced an official “Australian business” definition for the first time ever, to assist Australian businesses seeking to win Commonwealth procurement contracts and decision makers.
The updated guidance is expected to impact broader economic benefits through government tender processes and provides an Australian business definition for the purposes of procurement and the ensuring of greater transparency.
In addition, the definition is expected to provide better insight into who is winning Commonwealth tenders, and assist in making businesses more competitive in tendering.
Identification as an Australian business will depend on having 50 percent or more Australian ownership, or being principally traded on an Australian equities market, and having Australian tax residency, and has its principal place of business in Australia.
“This is an Australian government first. When we say we want Australian companies to have a chance to provide goods and services to government, we want genuine, true-blue Australian businesses to do so,” according to Minister for Industry and Science, Ed Husic.
“This new definition helps give confidence that this is the case – and helps make the job easier for government officials too.
“Government is a big potential customer for lots of businesses, especially in our world-class tech sector.
“These changes help smaller Australian businesses have a fair crack, providing genuine competition against big multinational firms for government contracts.”
The Australian Government is also releasing updated guidance on the Consideration of Broader Economic Benefits in Procurement incorporating a range of changes including consideration of weightings, priority outcomes, and contracting.
In addition, the Government is also issuing “Broader economic benefits in ICT sector procurement” planning and engagement guidance to assist ICT businesses navigating Commonwealth procurement, acknowledging the importance that the ICT sector plays in procurement – making up approximately 15 per cent of Commonwealth procurement commitments.
“Australian businesses have been calling for these changes, and we have listened,” according to Minister for Finance, Senator Katy Gallagher.
“Procurement is one of the most important economic levers government has – helping to grow our economy, support small and medium businesses, and benefit Australian workers and consumers.
“Being able to easily identify Australian businesses in tender processes will help make them more competitive, and guide future initiatives to better support them.
“I’m proud that our government is taking bold and novel steps to support local suppliers, who contribute so much to our economy and workforce.”
The Buy Australia Plan forms part of the Federal Government’s Future Made in Australia agenda. It builds on the Commonwealth Procurement Framework to support Australian businesses and SMEs to win government work.
The framework increases the SME exemption from $200,000 to $500,000 to give SMEs more access to a greater number of contracts, raising the target for procuring from SMEs to 25 per cent of contracts by value for contracts up to $1 billion and 40 per cent of those below $20 million, as well as ensuring at least one SME must be included in every approach to market through the whole-of-government Management Advisory Services and People panels
Commonwealth Government procurement is a major economic lever, with on average around $70 billion and 80,000 contracts committed to each year.
From 2025-26, businesses on the Whole of Australian Government Panel arrangements will be able to report their Australian Business status in line with the definition on the Australian Government’s Supplier Portal, with this opportunity expanded to all AusTender registered businesses in the future.
