OP ED by TechnologyOne CEO, Ed Chung
“Australian businesses will be front of the queue for Government procurement and contracts, maximising value for local businesses and the taxpayer.”
Those words from Prime Minister Anthony Albanese in the wake of US President Donald Trump’s tariff announcements – followed quickly by the indication of support from Opposition Leader Peter Dutton – may have changed the destinies of Australian tech businesses and could inspire the creation of scores more.
For many years, Australia technology businesses have been making two points to policy makers. Firstly, a government contract is crucial for tech businesses when they are starting out, because they are seen as reference customers.
Secondly, while tech businesses in other countries typically look to their own governments for these references, Australians have struggled immensely to persuade Australian governments to buy from them.
Even last year, Senators inquiring into Federal Government procurement heard stories from small Australian tech companies that they often had to do the opposite – win a contract from another government before their own governments would take them seriously!
Even before the dramatic announcements by President Trump, the Australian Government had introduced a series of reforms to change that culture.
Last month, the Government has launched a $20 million campaign to encourage more customers to buy local at the checkout and unveiled the first ever definition of an ‘Australian business’. On top of that, it provided stronger guidance on what public servants should be looking for when they consider what broader economic benefits might accrue from a contract.
Among those changes was the announcement of a legislated definition of an Australian business. The definition is simple and precise – a company must be 50% or more Australian-owned or principally traded on an Australian equities market, have Australian tax residency and have its principal place of business in Australia.
These new levels of clarity and transparency were announced before the Trump tariffs, but they take on a new significance in the light of the Australian Government response.
I recently had the pleasure of hosting a panel of distinguished Australians, including former Prime Minister Malcolm Turnbull, in our head office to discuss some of the dramatic events shaking the world and how they might affect our customers.
Mr Turnbull expressed the same frustration that the public service in State and Federal Governments continued to display what amounted to a cultural cringe when it comes to buying local. He recalled the decades old slogan – “Nobody gets fired for buying IBM” and questioned whether we were finally ready to move beyond.
It seems the changes in global politics have put the final pieces in place.
Finance Minister Katy Gallagher has plainly stated, “procurement is an important lever in Australia’s national development”. By buying Australian, the Government is re-investing significant taxpayer’s funds within our shores: shaping Australia’s R&D capabilities, creating jobs and generating home-grown skills, in turn returning more tax.
We have a clear definition that aligns with these national benefits. And now, we have a clear statement of expectation, from the Prime Minister no less, about the priority that should be given to Australian businesses.
With this wave of new guidance, policy rubber can now hit the road: an internal shift in Government buying culture can begin and Australia can reap the economic rewards.
