NSW Finance Minister Courtney Houssos has come under fire over concerns from the state’s corruption watchdog that the government’s pledge to source goods and services from local providers could lead to “unnecessary” lobbying and conflicts of interest.
In a submission made to a parliamentary inquiry into local procurement, the Independent Commission Against Corruption (ICAC) said it “does not support” a Labor election promise to give preference to NSW-based suppliers when awarding tender contracts.
In particular, it said it could lead to risks associated with conflict of interests between government agencies and suppliers, the “unnecessary” potential for MPs to be lobbied by local businesses, and sacrificing “value for money” by limiting competition.
“For many categories of goods and services, local suppliers already benefit from some natural advantages over their more remote competitors,” it said.
“Consequently, the commission sees little benefit in policies that favour local content or suppliers.”
During budget estimates on Thursday, Ms Houssos faced a barrage of questions around why she hadn’t read any of the 32 submissions, including one from ICAC that was lodged on January 18.
“If, in fact, the ICAC had concerns in relation to local content schemes, would you be concerned about that?” Liberal MP Damien Tudehope asked.
Later, fellow Liberal MP Chris Rath questioned whether the ICAC’s recommendations threw Labor’s election pledge “entirely up in the air”
While Ms Houssos acknowledged the “important and complex” observations raised by the ICAC, she highlighted similar local content policies undertaken by Victorian, Queensland, and West Australian state governments.
She also noted issue-plagued international contracts inked by the former government, like the asbestos-plagued River class ferries from Indonesia that were unable to safely pass through bridges along the Parramatta River and the $2.3bn Mariyung-class trains sourced from South Korea that didn’t fit the state’s train tracks.
“We said that the approach of your previous government of sending billions of dollars of taxpayer funds offshore was not right,” she said.
“We want to build things here. We want to be able to build trains or ferries or spend our government procurement dollars here.”
In the lead-up to the 2023 state election, the Minns government committed to increasing tender weighting for small and medium businesses to 30 per cent and contract thresholds from$150,000 to $250,000.
On Thursday, Ms Houssos said given the government secured $42bn worth of goods and services or construction contracts this year alone, she wanted small and medium-sized businesses to receive a “large slice of that pie”.