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Victorian Government’s Social Procurement and Local Jobs First Policies

10 minutes
June 21st, 2021

As one of Victoria’s leading timber manufacturers, ASH is committed to supplying the Australian built environment with high quality timber products – fit for Australian rules and regulations. To us, this means more than simply manufacturing, because it also creates local employment, supports Victorian communities, ensures safety and contributes to the economy.

What comes with supplying Victorian projects is policy to align with that. With the Victorian Government being one of the largest producers of construction works in the state, it is vital that these projects support local business. The Victorian Government’s Social Procurement Framework and Local Jobs First Policy are key drivers in providing local businesses – like us – with the opportunity to supply.

This article is a condensed overview of the two policies and what it means for Victorian businesses.

What are the policies?

The Social Procurement Framework ensures that the buying power of the government is used to make choices that benefit the Victorian community in the long run. This framework guarantees that purchasing and invitation considerations are not only based on price, but also social and sustainability impacts.

The Local Jobs First Policy is a practice that requires the Victorian government to use their purchasing power to create jobs, assist local industries and promote economic recovery. Mandatory for all government departments and contractors supplying these projects, the policy is mean to guarantee Victoria’s future workforce is provided with employment opportunities and businesses of all sizes are given equal opportunity to compete for government contracts.

Social Procurement Framework Rules

The Social Procurement Framework is applied to the procurement of all goods, services and construction for Victorian Government projects. Requirements for suppliers are dependent on the value of each project, projects valued below $1m in regional Victoria and $3m in metro are encouraged to follow the framework while projects valued over these figures are obliged to follow requirements dependent on which band they fit into – lower band, middle band and upper band.

Below threshold = Regional – under $1m, Metro – under $3m
Lower band = Regional – $1m – $20m, Metro – $3m – $20m
Middle band = $20m – $50m
Upper band = Over $50m

A snapshot of the social procurement requirements and expectations are as followed:

  • All projects are encouraged to seek opportunities to procure from social enterprises, Australian disability enterprises and Aboriginal businesses.
  • Suppliers for projects over $20m must follow set targets for training and employing Victorians from disadvantaged communities.
  • Projects above the threshold must
    – ensure suppliers demonstrate fair and honest gender employment practices, while middle and upper band suppliers have performance standards and targets for labour hours worked by women.
    – ensure suppliers follow inclusive disability employment practices, while middle and upper band suppliers have performance standards and targets for labour hours worked by Victorians with a disability.
    – ask suppliers if they offer family violence leave.
    – ask suppliers to demonstrate fair and safe work practices that align with industry relations laws.
    – ask suppliers to demonstrate environmentally sustainable practices, while middle and upper band project suppliers have requirements on recycling, waste management and energy consumption.
  • Procurement for projects above $20m must include a design component that outline climate change impacts.

Learn more about Social Procurement Framework Requirements and Expectations here.

The Local Jobs First Policy

The Local Jobs First Act 2003 is an industry participation legislation that provides local businesses and workers with opportunities to supply Victorian Government projects. Reinforced in 2018 to further emphasise the significance of promoting local jobs and business growth, The Act positions Victoria as a leading state when it comes to industry participation policies. To further enforce rules, a Local Jobs First Commissioner is appointed to work with industries and departments to provide even more opportunities for Victorian businesses to work on government projects.

As part of the Local Jobs First Policy, Victorian Government projects must follow the Victorian Industry Participation Policy and Major Skills Project Guarantee.

The Victorian Industry Participation Policy provides small and medium sized businesses with fair and equal opportunities to compete for Victorian projects. By choosing local goods, services and construction, the Victorian Government can also assure that they are meeting local content requirements.

The Victorian Government is committed to providing leading education and training. The Major Skills Guarantee requires projects valued at over $20m to allocate 10% of total estimated labour hours to Victorian apprentices, trainees and cadets.

To further support this policy, the Industry Capability Network (ICN) was created as a not-for-profit organisation to help support industry growth. The ICN’s objective is to increase opportunities to supply government projects by providing local businesses with a platform to register interest in upcoming builds. The ICN have a number of resources such as the ICN Gateway to allow access to project opportunities, research suppliers and register business capabilities.

Learn more about The Local Jobs First Policy here.

What does this mean for Victorian businesses?

Promote employment and business growth

These polices are designed to drive the creation of new jobs and promotion of local spending which boast positive long-term impacts on the Australian economy. The Local Jobs First policy is designed to guarantee that a number of hours worked for each project is made up of our future generation of employees, including trainees, apprentices and cadets. These policies also promote the capability of local industries, showcasing the potential of Australian projects to a variety of stakeholders involved in the process.

Develop our local industries international competitiveness

By promoting the equal opportunity for Victorian businesses to obtain Government projects, local businesses are more inclined to compete with foreign suppliers. This activity allows local industries to learn from a range of leading international practices and by increasing competition in the market, so that Australian organisations are in positions where they can respond to market changes and technology advancements.

Provide a transparent method of tendering

Projects that are part of The Local Jobs First Policy ensures the Victorian Government is held accountable for creating transparent tendering processes and decisions. This includes considerations when choosing suppliers and products based on their entire lifecycle. On the other hand, the requirements of the Social Procurement Framework are designed to provide certainty to the Victorian Government that suppliers involved in major projects align with social and ethical considerations.

There are many reasons for choosing local businesses; it promotes conformance with Australian requirements while generating Victorian jobs, increases economic growth and ensures we can remain competitive within the international market. The Social Procurement Framework and the Local First Policy are excellent incentives for the Government to choose local suppliers (like ASH). As a local manufacturer that adheres to both policies, it is extremely important to us that we continue to supply local projects to support both our business and our local community.

Learn about the difference between local vs imported mass timber