ABC Drive, Perth Interview with John Mcglue

Release Date: 
17 March 2015
Transcript
E&OE

JOHN McGLUE:

Welcome back to Drive, good to talk with you.

ALAN TUDGE:
Thank you John.

JOHN McGLUE:
What is a quota system? How does it work and why is it needed?

ALAN TUDGE:
Well we've announced two things today. One is to lift our Indigenous employment target for the Australian Public Service to three per cent. The other, which is the more substantial announcement, is to say that in the future we want to spend three per cent of all of our federal procurement dollars on Indigenous
businesses. Three per cent happens to correlate to the proportion of Indigenous people in this country.

JOHN McGLUE:
So what types of business will qualify for this procurement deal? Because it's by my estimate it's worth- the Commonwealth spends $39 billion a year- this is roughly three per cent of that, it's roughly a billion dollars, maybe a touch under so it's a lot of money, a lot of taxpayer's money. What qualifies as an Indigenous business?

ALAN TUDGE:
This is a very significant announcement and at the moment we do very poorly on this.

An Indigenous business is going to be one which is majority Indigenous owned. Now that will be determined by an independent organisation called Supply Nation. It has a good board, predominantly indigenous people and they will make that determination.

Our overall objective here John is to get more aboriginal people employed because we know from the Closing the Gap report that the proportion of aboriginal people in jobs is actually declining, not increasing, despite all of the good work that has been going on.

And when you look at the demographics, half the Indigenous population is below the age of 21, which means over the next decade we're going to have a huge proportion of people coming into the workforce. Unless we can provide opportunities for those people, then the difficulties are going to get a whole lot worse.

Providing Indigenous business opportunities means you're much more likely to employ Indigenous people.

JOHN McGLUE:
Alan Tudge, is my guest, Parliamentary Secretary to the Prime Minister. We're talking about an initiative launched by the Federal Government today, two really, to have three per cent of public service positions occupied by Indigenous people and for three per cent of federal government procurement to reside with Indigenous companies by 2020 I think is the deadline for that?

ALAN TUDGE:
Yes, that's right.

JOHN McGLUE:
Alan Tudge, I mean these are very laudable plans I'm sure but money is tight inside the government. We know that. We keep getting told the age of entitlement is over, we need to count every dollar that's being spent, every dollar of taxpayer's money. So how do you guarantee that the taxpayer's get a good deal if there's an artificial quota system like this in place?

ALAN TUDGE:

It's not an artificial quota system. I want to make this important point: for any Indigenous business to get a contract, they still nevertheless have to prove that they're providing value for money. That's still the most important criteria overall.

You are right. We don't want to misallocate or be spending more for a contract than what is necessary and taxpayer's expect us to do that. At the moment Indigenous businesses haven't been getting their fair
share. To date they've only been getting 0.2 per cent of the overall Commonwealth spend and we think that figure should be significantly higher- closer to parity which is the percentage of the overall population which is Indigenous.

JOHN McGLUE:
What about governance? Again there have been significant problems with some Indigenous corporations and how they're managed. How do you ensure good standards among organisations like this?

ALAN TUDGE:
Well this is case for every Commonwealth contract. It always has to ensure that it's value for money and you always have to be checking out that it's got a good governance record. Now if any contractor doesn't deliver, then they don't get paid and they're very unlikely to get another contract down the track. That's the bottom line, that will apply to Indigenous businesses and non-Indigenous business similarly.

JOHN McGLUE:
OK, it's good to talk to you today, thanks for your time.

ALAN TUDGE:
Thanks so much for that John.

[ENDS]