Labor’s Buy Australian Plan proposes to grow small to mid-sized Australian construction businesses through changes to government buying practices to “maximise opportunities for Aussie businesses in major infrastructure projects,” but the plan fails to recognise that these projects are already largely built by Australian contractors and Australian workers supported by Australian suppliers.

Australian Constructors Association CEO Jon Davies has questioned why the size or ownership of a company matters if they employ and train local staff, workers, and utilise local subcontractors and suppliers.

“The plan has been released at a time when there are real concerns about capability and capacity to deliver the record investment in infrastructure and construction companies account for almost 25 per cent of all business insolvencies,” said Mr Davies.

“If we want to increase sovereign capability and capacity, we should focus on the issues that are sending many Aussie companies broke and making larger contractors unwitting investors in government infrastructure.

“Giving more or less work to different sizes of construction companies will not solve the issues of poor profitability, lack of diversity within the workforce, low productivity growth and a high rate of worker suicide.

“We need to recognise the industry for what it is, a complex system made up of thousands of different parts all of which need to collaborate to deliver value for taxpayers.

“Industry reforms should focus on improving industry sustainability to drive productivity and innovation as recommended by nation’s infrastructure advisor, Infrastructure Australia.

“Part of the solution is government shifting its mindset to start procuring projects based on best value not lowest cost.

“With a focus on value we will maximise benefits for the local community, increase training outcomes, drive innovation, improve industry diversity, reduce our impact on the environment and significantly improve productivity.”

Partnering with the NSW and Victorian Governments through the Construction Industry Leadership Forum, the Australian Constructors Association is helping improve the effectiveness and value of the procurement and delivery of government infrastructure programs.

“Part of the work of the Construction Industry Leadership Forum involves developing an approach to determining value for money when procuring projects that moves away from the broken model of lowest price and maximum risk transfer,” said Mr Davies.

“Improvements made to government buying practices can help to combat adversarial behaviours which will help improve industry culture and sustainability.

“The focus must be on addressing problems with the system as a whole to realise improved outcomes for all players in the industry and for the benefit of Australian taxpayers.”