Leading Australian technology companies have called for an urgent overhaul of government ICT procurement practices, warning that current policies are leaving local firms at a competitive disadvantage against international rivals.
A new report by Melbourne’s public policy analysts Insight Economics for enterprise resource planning provider TechnologyOne suggests Australia has fallen behind its major trading partners in supporting domestic technology industries through government procurement, despite recent reforms by the Albanese government.
Insight Economics pointed to international ICT buying innovations such as Canada’s Agile Procurement Process 3.0 reforms, and ScaleUp social procruement, along with equivalents in the United Kingdom and the United States such as Made in America Office, to encourage local supply chains.
New South Wales has an “if not, why not?” rule announced in September this year, introduced by the Minns government to the state’s A$42 billion procurement system.
The rule comes into effect by January 1, 2025 and requires NSW agencies to justify any decision to bypass local suppliers for all procurements above A$7.5 million.
“Australian tech is world-best and has shown it can compete and win in every market in the world, but continually finds itself fighting for recognition and respect with governments at home,” Ed Chung, chief executive officer of ASX-listed TechnologyOne said.
The research highlighted how countries including the United States, Canada and the United Kingdom actively use procurement policies to strengthen their technology sectors, recognising them as crucial to national self-reliance and economic growth.
“ICT continues to be the defining enabler of Australia’s economic growth, yet our highly sophisticated and world class technology sector is not adequately prioritised by government procurement processes,” Josh Griggs, chief executive officer of the Australian Computer Society said.
Industry leaders have proposed a new framework for evaluating procurement decisions, including a weighted scorecard for smaller contracts and economic impact assessments for deals over 10 million dollars.
“When we empower Australian sovereign companies, we drive locally led research and development, enabling Australian engineers to lead the forefront of technological advancement,” Angus Bean, chief technology officer at ASX-listed DroneShield said.
The report garnered support from major Australian technology firms including Vault Cloud, Macquarie Technology Group, Agile Digital, and Gilmour Space.
“Our allied national security partners are very clear on what control and economic benefit they require when deploying their taxpayer’s funds – they see it as part of their patriotic duty,” said Rupert Taylor-Price, chief executive officer of Vault Cloud.
David Elliott, executive director at Agile Digital, pointed to broader economic implications: “as the cost of living crisis continues, Australians are questioning why so much time and taxpayer money goes into large, often unsuccessful Commonwealth ICT projects.”
The industry leaders emphasised that reform would help create more high-skilled jobs while delivering better value for Australian taxpayers.
