In a significant move, the federal government has officially outlined the criteria for what constitutes an ‘Australian business,’ marking a pivotal moment for the tech sector and paving the way for local companies to access Commonwealth contracts more easily. Finance Minister Katy Gallagher and Industry Minister Ed Husic jointly introduced the definition, a groundbreaking step that sets clear parameters for businesses seeking government procurement opportunities.
Under the new definition, effective from the upcoming financial year, companies can self-declare as Australian businesses if they meet specific requirements. These include being at least 50% Australian owned or primarily traded on an Australian equities market, holding Australian tax residency, and having their main business operations based in Australia. Minister Husic emphasized the government’s commitment to enabling genuine Australian businesses to participate in supplying goods and services to the government.
The establishment of this definition comes after years of advocacy from the Australian tech and business sectors, with a Senate inquiry on sovereign capability recommending such a definition. The Department of Finance conducted consultations to gather input on the definition, reflecting a collaborative effort to address the needs of local businesses competing with larger foreign corporations for government contracts.
TechnologyOne CEO Ed Chung applauded the move, highlighting its role in fostering a level playing field for local tech firms vying for government contracts against global players. The initiative not only boosts confidence in Australia’s technology industry but also underscores the government’s investment in local innovation, promoting fair competition and supporting the growth of Australian companies in the digital landscape.
Chung stressed the importance of measuring and improving the support for local businesses through a clear definition of ‘Australian business.’ By enabling companies to self-declare their status, the government aims to enhance transparency in procurement processes and ensure that taxpayer funds are channeled into Australian-owned enterprises, benefiting the local economy and fostering innovation.
In addition to the new business definition, the Labor government has updated guidelines concerning the consideration of broader economic benefits in procurement decisions, particularly in the ICT sector. These adjustments align with the government’s efforts to enhance transparency and inclusivity in procurement practices, with recent Commonwealth Procurement Rules setting targets for sourcing a significant percentage of procurements from small and medium-sized enterprises.
The collaboration with the European Union on refining procurement guidelines underscores the government’s commitment to aligning with international best practices and ensuring a robust framework for supporting local businesses. As Australia moves towards a more inclusive and transparent procurement landscape, the definition of ‘Australian business’ stands as a pivotal milestone in empowering local companies and driving economic growth through enhanced opportunities in the tech sector.
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