On Tuesday last, under pressure from Senator Nick Xenophon, the Australian Government committed to overhaul rules about how it spends its annual $60 billion procurement bill to maximise local content.The new rules will take effect from March next year. Under the changes, bidders for government projects worth more than $4 million will need to show:
- How much locally-produced material they will source
- How they are contributing to local employment
- How they are growing local skills
- The whole-of-life cost of the project, not just the build cost
- That the materials they use comply with Australian product standards
The fact that these changes were needed, and that they were resisted for so long, throws doubt on the long held popular notion that infrastructure ‘creates jobs’ and, by implication, Australian jobs. Now there is more chance that they will. The use of local labour and materials and increase in local skills will also improve our ability and reduce costs needed to maintain the new infrastructure.
But, perhaps the most interesting of the new requirements is the requirement for ‘whole-of-life’ cost of the project which will require assessment of the anticipated life of the project, and, hopefully, public discussion of what determines the useful life in a world of rapidly changing opportunities, demands and technologies.
I would like to see an additional requirement – designers and planners should be expected to show how they are actively minimising whole-of-life, or lifecycle, costs.
What do you like – or dislike – about Xenophon’s proposals?
What other additions might improve our approach to infrastructure?