RESTRICTED  
  
GPA/ACC/AUS/25  
 
16 February 2017  
(17-0948) Page: 1/3 
Committee on Government Procurement  Original: English  
 
ACCESSION OF AUSTRAL IA TO THE AGREEMENT ON GOVERNMENT PROCUR EMENT  
COMMUNICATION FROM A USTRALIA  
The following communication, dated 16 February 2017, is being circulated at the request of the 
Delegation of Australia.  
 
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COMMENTS AND REQUEST S FOR IMPROVEMENT FROM N EW ZEALAND 
(GPA/ACC/AUS/21) REGARDING AUSTRALIA' S  
REVISED OFFER (GPA/ACC/AUS/1 7) 
General requests  
 
1. New Zealand notes that the revised offer does not cover the procurement of motor 
vehicles by many entities listed in Annexes 1, 2 and 3.  Can Australia please clarify what 
types of vehicle are included in its definition of motor vehicles? For example, are 
specialist vehicles such as fire engines excluded from coverage or is it just passenger 
vehicles?  
The exception covers motor vehicles gen erally. However, this does not prevent governments from 
purchasing vehicles not produced in Australia, including specialist vehicles. For example, in the 
2014-2015 financial year, the Australian Government purchased A$3,000,000 of specialised motor 
vehicle s from  BMW and in 2013 -2014 the Australian Government purchased A$1,800,000 of 
specialised vehicles from Mercedes Benz. This reflects that Australia has not closed off the motor 
vehicle sector to competition from overseas auto manufacturers.  
 
2. Where service s are not included in the revised offer, can Australia please provide 
the Provisional Central Product Classification (CPC) codes for these services?  
Australia will consider this request.  
 
Annex 1 – Central Governmental Entities  
 
3. In Notes to Annex 1, point 4.d., Australia states "In respect of paragraphs 1 and 2 
(Non Discrimination) of Article IV of the Agreement (General Principles) the Australian 
Government reserves the right, pursuant to paragraph 1 of Article III (Security and 
General Exceptions) to main tain the Australian industry capability program and its 
successor programs and policies".  
4. Can Australia please clarify the role of the Australian industry capability program 
and any successor programs and policies, as well as its role and involvement in th e 
security and defence procurement that is covered by this offer?  
The Australian industry capability program aims to build capacity for Australian industry to 
participate in Defence procurement within Australia and internationally. The Australian industry 
capability program applies to complex defence -related procurements where value for money is still 
the prime consideration when determining whether defence capability is to be sourced from GPA/ACC/AUS/25  
 
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  Australian or overseas suppliers. For further information on the Aus tralian industry capability 
program, please refer to:  http://www.defence.gov.au/SPI/Industry/AIC.asp . 
 
Annex 2 – Sub-Central Governmental Entities  
 
5. In Annex 2, Australia lists the thresholds fo r sub -central government entities as 
SDR 355,000 for goods and services. New Zealand notes this is inconsistent with the 
Annex 2 thresholds of most GPA Parties, which is SDR 200,000 for goods and services.  
a. We request that Australia amends the thresholds fo r sub -central government 
entities listed in Annex 2 to SDR 200,000 to align with the majority of GPA 
Parties.  
The current thresholds are similar to other GPA members, including the United States 
and Canada. The threshold is consistent with State and Territ ory commitments in 
Australia 's existing trade agreements.  
 
6. New Zealand notes that the number of sub -central government entities listed for 
each State Government in Annex 2 varies from State to State. These range from 17 for 
the Australian Capital Territory  and Tasmania to 74 for Western Australia.  
a. Can Australia please clarify whether all State -level entities are covered in 
Annex 2? If not, can a list of the State -level entities not covered by Annex 2 be 
provided?  
The main procuring entities in each of the S tates and Territories are offered. The entities 
offered is consistent with State and Territory commitments in Australia 's existing trade 
agreements. Differences between the number of entities offered between jurisdictions 
reflects the different sizes and g overnance structures of the respective States and 
Territories.  
 
7. In Notes for Queensland, point 1.b., Australia states that the Agreement does not 
cover "procurement undertaken by departments, or parts of departments, which deliver 
health,  education, traini ng or arts services".  
a. Can Australia please advise which departments or parts of departments deliver 
health, education, training or arts services?  
These departments include:  
 
 Education services - Department of Education and Training;  
 Health services - Depar tment of Health;  
 Arts services – part of the Department of Premier and Cabinet.  
b. Can Australia please explain why it is seeking to exclude these departments 
from the Agreement?  
Australia, through a negative list approach, has offered ambitious and comprehen sive 
coverage of services. We can confirm that the exclusion of the above departments/parts 
of departments is required for Queensland to be able to provide this high level of 
coverage. Australia notes that New Zealand does not cover the procurement of heal th 
and education services.  
 
Annex 3 – Other Entities  
 
8. New Zealand requests that Australia expand Annex 3 by covering the following 
Australian Government Business Enterprises: Australian Postal Corporation; Defence 
Housing Australia; ASC Pty Limited; Austra lian Rail Track Corporation Limited; 
Moorebank Intermodal Company Limited; and NBN Co Limited.  
Government business enterprises (GBEs) are not covered under Australia 's procurement 
framework. GBEs operate essentially as a company, being required to earn at least a commercial GPA/ACC/AUS/25  
 
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  rate of return to justify the retention of assets in the business, and to pay commercial dividends 
from those returns. Australia 's limited number of GBEs operate independently of other government 
entities, but may be subject to strategic  control from relevant government ministers. The directors 
of a GBE develop business strategies and handle day -to-day management policies, including 
procurement. The Australian Government does not directly control the procurement decisions of 
GBEs, and acc ordingly, they are not able to be covered.  
 
Annex 7 – General Notes  
 
9. In Annex 7, point 1., Australia states that the Agreement does not apply to "any 
form of preference to benefit small and medium enterprises". New Zealand is concerned 
about the inclusion of this General Note and considers it not appropriate in the 
multilateral framework on government procurement.  
a. Can Australia please provide information on the preference schemes currently 
in place to benefit small and medium enterprises at the Federal and  State level?  
Australian governments recognise the important contribution small and medium 
enterprises (SMEs) make to the economy and employment in particular. For this reason, 
Australian governments seek to ensure that Australian SMEs have the same 
opport unities as international competitors to participate in procurement opportunities. 
SME participation schemes aim to assist competitive Australian SMEs to participate in 
major projects by encouraging innovation, expansion of capability and investment 
opportu nities.  
 
The N ote does not stop foreign companies from winning contracts in Australia. The Note 
on SMEs is consistent with Australia 's existing trade agreements.  
 
Additional detail is available in Australia 's WTO GPA checklist. Please refer to Q14 in the 
checklist, in which, the Australian Government and State and Territory governments 
provided responses in relation to small and medium enterprises (SMEs).  
 
The SME N ote is also used to support businesses with Indigenous ownership:  
 
 the Australian government procurement framework allows Australian government 
entities to procure goods and servic es from an SME with at least 50% Indigenous 
ownership ; 
 the Indigenous Procurement Policy (IPP) is also within the scope of this exclusion. 
The policy has three key compo nents: a target for purchasing from Indigenous 
enterprises; a mandatory set -aside to direct some Commonwealth contracts to 
Indigenous enterprises, and; minimum Indigenous participation requirements for 
certain Commonwealth contracts. Further information on  the IPP can be found at: 
https://www.dpmc.gov.au/indigenous -affairs/economic -development/indigenous -
procurement -policy -ipp. 
b. Is the purpose of  these preference schemes to benefit Australian small and 
medium enterprises, or also small and medium enterprises from other 
countries?  
As set out above, the purpose of the inclusion of the note is to cover schemes designed 
to ensure that Australian SMEs have an equal opportunity to participate in government 
procurement. This includes New Zealand SMEs, reflecting the single market for 
government procurement that exists between Australia and New Zealand.  
 
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