Major projects are those with an estimated capital expenditure of $500 million Australian dollars or more.
The Australian Jobs Act 2013 (the Jobs Act) applies to any entity that carries out a major project (public or private) to establish or upgrade eligible facilities within Australia. These entities, including companies and government authorities, are called project proponents.
Project proponent responsibilities
If you’re planning a major public or private project to establish or upgrade eligible facilities within Australia, you must:
- notify the Australian Industry Participation (AIP) Authority of your major project
- complete and submit a draft AIP plan for approval
- manage and implement your AIP plan by:
- reporting your compliance against the AIP plan to the AIP Authority every 6 months
- notifying the AIP Authority of any changes in your project
- keeping detailed records.
The AIP Authority:
- is the statutory officer responsible for administering the Jobs Act
- evaluates, approves and publishes AIP plan executive summaries
- monitors and reports on AIP plan implementation
- reports annually to Parliament through our department's annual report.
There are a range of consequences that the AIP Authority may exercise in cases where a project proponent does not comply with the Jobs Act or their approved AIP plan. The consequences range from adverse publicity notices to performance and restraining injunctions.
An AIP plan ensures Australian entities have full, fair and reasonable opportunity to bid for:
- the supply of key goods and services for the project
- the supply of key goods or services for the new facility’s initial operational phase (if the project involves establishing a new facility).
An eligible facility includes:
- mine or quarry
- land transport facility (railways and roads)
- wharf or port
- petroleum facility
- electricity facility (renewable energy projects, for example wind, solar, hydro)
- airport or passenger terminal
- water supply facility
- sewage or wastewater facility
- telecommunications facility
- any other productive facility like a hotel, resort, commercial and retail centre.
Non-eligible facilities or activities
Generally non-productive facilities are not covered by the Jobs Act. These include:
- residential developments
- schools, universities or research institutes
- prisons or law courts.
Non-eligible activities include:
- procurement of machinery or transport equipment (rolling stock, vehicles and aircraft) without any associated physical infrastructure (factory, maintenance workshop or hangar).
- Australian Government defence facilities and materiel procurements, which are covered by their own industry participation arrangements.
Projects that combine eligible and non-eligible facilities
If your project is a combination of eligible and non-eligible facilities, for example a hotel and residential apartments, you can contact us for advice.
Government expenditure, grants or loans
All projects to establish or upgrade eligible facilities worth $500 million or more have obligations under the Jobs Act. This includes publicly and privately funded projects or any combination of project funding sources and types. Projects undertaken by Commonwealth, state, territory or local governments may have obligations under the Jobs Act.
$500 million threshold
The $500 million threshold amount should include all expenditure of a capital nature incurred or likely to be incurred in carrying out the project. GST must be included where it is payable.
This includes, but is not limited to, expenditure directly related to capital construction costs like:
- land acquisition
- design fees (architecture and engineering)
- council building licences
- contingency sums
- equipment for the project.
Projects with a state or territory industry participation plan
If your project must submit a state or territory industry participation plan, you may be eligible for an AIP plan exception.
Section 5 of the Australian Jobs (Australian Industry Participation) Rule 2014 explains the conditions that must be met by the state or territory industry participation plan for a project not to require an AIP plan. You must submit an AIP plan if you do not meet these conditions.
The state or territory industry participation plan must ensure that all Australian businesses have full, fair and reasonable opportunity to supply goods and services. It must not give preference to suppliers located in one state or territory over another. Project proponents must ensure the AIP Authority is notified when the plan is submitted to a state or territory, and when a decision on the plan has been made.