Review of Buy Australian at Home and Abroad – June 2014

 Executive Summary

The resources sector has the potential to provide significant opportunities to Australian suppliers. However, many Australian suppliers, even when competitive, miss out on work arising from major resource projects. Achieving success in supplying to major projects in Australia, can give suppliers the platform they need to win work in international projects and integrate into global supply chains.

Markets are globalising and consolidating. The use of established global vendor lists creates significant impediments to Australian firms as they find it difficult to obtain the opportunity to showcase their capabilities. In addition, Australian suppliers are often unaware of resource opportunities and how to best access them. This creates information asymmetry in which project developers are unaware of Australian firms and Australian firms are unaware of contestable opportunities. Government intervention can assist in addressing this market failure.

Announced in May 2011, the Buy Australian at Home and Abroad (Buy Australian) initiative was designed to improve the competitiveness and capability of Australian firms, encourage better linkages between major projects and Australian suppliers, and increase access to opportunities in major resource projects, both domestically and internationally.

This Evaluation has reviewed four measures of the Buy Australian initiative: the Resources Sector Supplier Advisory Forum (Forum) and Resources Sector Supplier Envoy (Envoy), Supplier Advocates in the resources sector (Supplier Advocates), Enterprise Connect resource focused services, and additional support for the Australian Made Campaign Limited.

Based on stakeholder consultations and review of relevant program documentation, the Envoy and Forum were found to be instrumental in bringing together key industry stakeholders to identify common opportunities and challenges, and develop a strategy to assist Australian suppliers to access major resource projects. Stakeholders unanimously agreed that the appointment of a high profile spokesperson for the industry (the Envoy) was crucial. The Hon. Peter Beattie AC, in his role as Envoy, instigated behavioural change within the industry, which opened doors to Australian firms that would have otherwise remained closed. His role and that of the Forum, helped to raise awareness among project developers and their international agents of the benefit in considering Australian firms within their major projects. While some stakeholders commented that momentum slowed when Mr Beattie’s term ceased, all agreed that there were enduring benefits as a result of his tenure and the Forum.

The Supplier Advocates also helped facilitate behavioural change within the resources sector by increasing industry awareness of opportunities and encouraging project developers to consider capable and competitive Australian suppliers for their projects. The four Supplier Advocates were an effective instrument for industry development, using their insight, networks and leadership skills to drive practical activities to open up opportunities and better improve the capability and competitiveness of Australian suppliers. The Department of Industry (the Department) attracted a cohort of senior, high-calibre people. There is also agreement amongst stakeholders that the Supplier Advocate model, comprising the appointment of part-time Supplier Advocates supported by full-time Departmental staff, was effective and efficient.

In terms of structure, although the Supplier Advocates were guided by the work of the Envoy and Forum, they had the flexibility to develop priority areas of focus in consultation with industry. The Supplier Advocates also used their industry experience and networks in the execution of the agreed strategies. While this flexibility was beneficial, more formalised industry agendas that better tracked outcomes and progress, and identified all relevant stakeholders and activities, may have improved industry’s understanding of their roles.

The Enterprise Connect resource focused services were found to deliver effective capability development services and facilitate linkages between major project opportunities and capable Australian suppliers. The combination of dedicated Business Advisers, supply chain tools, mapping exercises and workshops, meant that Enterprise Connect was able to work with firms to assist them consider their strengths, areas for development and implement improved business practices. This ensured they were well placed to meet resources customer needs and capitalise on opportunities. Firms that had participated in these activities improved their business practices and/or considered new markets as a result.

Funding provided to the Australian Made Campaign Limited (AMCL) was successful in delivering on its objective, namely to increase AMCL licensees awareness of, and the benefits from, registering their details on the Industry Capability Network (ICN) Gateway database. The appointment of a Supply Chain Adviser helped increase SMEs’ awareness of opportunities to participate in major projects; linked the capabilities of SMEs to the ICN and potential procurers; and increased collaboration between AMCL and ICN. If future funding is provided to similar initiatives, more ambitious, outcome-focused targets could be set in order to capture the extent to which Australian firms are linking with and winning work as a result of increasing their awareness to such frameworks.

The Review found the various elements of the Buy Australian initiative were delivered efficiently. However, improved coordination and collaboration between those delivering the different elements may have helped the general communication about the offerings and services covered, with a more consistent message to industry.

Conclusion

Overall the Review found that the Buy Australian initiative achieved short and medium-term outcomes consistent with the policy objectives. These objectives being:

  • Identifying opportunities, new customers and export markets for SMEs in areas of Australia’s competitive strengths;
  • Assisting firms understand the procurement requirements and procedures associated with new markets and customers; and
  • Building SMEs scale and capability to accelerate their ability to capture opportunities attract investment and generate new jobs.

The measures were seen to be undertaken by the most appropriate level of government (Federal) as, without national facilitation, states would tend to support their local state-based companies.

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