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GOVERNMENT INFRASTRUCTURE PLANS SHAPING UP TO BE AN ECONOMIC HOUSE OF CARDS

10 September 2020

 

Independent Senator Rex Patrick has called on the Federal Government to reform the way taxpayer funded infrastructure projects are contracted so that the full economic stimulus benefits of its post-COVID-19 infrastructure plan will be realised and not leached away by multinational corporations. 

"In order to win a major infrastructure program from Government, a tenderer has to be a ‘Tier One’ construction company. There are no Australian owned ‘Tier Ones’, only multinationals, and that means that Australian owned companies are effectively excluded from tenders for these big infrastructure projects."

"We have a totally unacceptable situation where Aussie companies are being discriminated against by their own Governments. It’s a disgraceful situation and one that has to change."

Large multinationals win the prime contracts and then squeeze their ‘Tier Two’ sub-contractors so there is very little profit for them. This squeeze flows through the entire supply chain. It’s not unusual to see good Australian sub-contractor companies end up going under. The profits go to the primes who then export them offshore, often to tax havens – with a resultant loss of benefit to the Australian economy.

Tier One companies are represented by the Australian Constructors Association and include:

  • Acciona (Spain)
  • Bouygues Construction (France)
  • Clough (South Africa)
  • CPB (Spain)
  • Downer (NZ)
  • Ferrovial (Spain)
  • Fulton Hogan (NZ)
  • John Holland (China)
  • Lang O’Rourke (UK)
  • Lendlease (Spain)
  • McDonell Dowell (South Africa)
  • Multiplex (Canada)
  • Probuild (Canada)
  • UGL (Spain)
  • Webuild (Italy)

"‘Australian Owned Contractors’ are taking their cause to Canberra and I’m 100 per cent on side," said Senator Patrick. "The Federal Government, whether directly or through the States, is effectively mandating 95 per cent of Australia’s largest public infrastructure projects ($500 million +) to multinationals leaving highly capable Aussie companies with 5 per cent of the dregs. Some might think it's a conspiracy, but we all know how the saying goes – given the choice between conspiracy and incompetence, pick the latter."

"How is it that the Government has implemented policies that work against Australian companies and limit their potential. The bureaucrats have got it all back to front – Aussie companies should be delivering the majority of Australian infrastructure projects and also leading projects in overseas jurisdictions. Of course, that’s not happening because in those jurisdictions they have Governments that support and have confidence in their own industry."

"This has to change and I’ll be working with Australian industry to ensure this happens," said Senator Patrick. "If I have to set up a picket line outside the offices of the Prime Minister and Finance Minister to get change, then so be it."

"I’m sick and tired of Australian companies being disadvantaged by the flawed implementation of Government procurement practices."