The government’s proposed Procurement Connected Policy will come into effect on July 1 2019. The regulations will require businesses tendering for Commonwealth contracts over $4 million to provide a satisfactory statement of tax record (STR) from the Australian Taxation Office. The new regulations are aimed at promoting better compliance and will hopefully assist in safeguarding contractors from shonky operators.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the proposal but says more needs to be done to protect small businesses and subcontractors to ensure obligations are met.
“The government should also require that tenderers use contracts with subcontractors that comply with unfair contract terms legislation and that all subcontractors are paid on time,” Carnell suggested.
The ombudsman acknowledged the new regulations are an important step to ensure businesses tendering for government projects are up-to-date with tax payments.
“It provides small businesses, particularly subcontractors who work further down the supply chain, with some security, but certainly more can be done in the procurement space. Small businesses rely on contracts being awarded to businesses that operate in a fair and sustainable manner.
Carnell suggests if businesses do not comply with the new regulations they should be banned from future tendering for a period of time.
“I will continue to argue the case for a level playing field and the need to give small business a fair go in the procurement process,” Carnell said.