Firms supplying to Commonwealth departments and agencies could be in for a rude shock after the government announced plans to shake-up its procurement procedures to exclude certain businesses.
Minister for Revenue and Financial Services Kelly O’Dwyer said the overhaul is designed to “ensure that contracts are only awarded to businesses which have a good compliance history”, and forms part of its crackdown on the black economy.
Yet the determination of what constitutes “a good compliance history” will rest with the Tax Office.
“As announced in the 2018–19 Budget, from 1 July 2019, businesses seeking to tender for Australian Government procurement contracts over $4 million (including GST) will be required to provide a statement from the Australian Taxation Office indicating that they are generally compliant with their tax obligations,” Ms O’Dwyer said in a statement.
“In some cases, suppliers may be outbid at the procurement point by those who have unfairly cut costs by not complying with their tax obligations. This puts suppliers that do meet their regulatory obligations at a commercial disadvantage.
“The government is taking the opportunity to level the playing field. The new requirements will not only give businesses a fair go, it will instill public confidence that honest businesses are being awarded government contracts.”
However, SMEs are unlikely to be convinced that the measures are a positive change, given the ongoing criticism of ATO judgments and investigation procedures that have allegedly caused financial and emotional hardship for numerous business owners.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.