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Nick Xenophon and Defence Minister target Defence Materiel bureaucrats over army boots

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Bob Katter's shoeless cameo

The colourful politician removed his shoes to make a point in question time on Tuesday.

PT0M0S 620 349

Bob Katter has now joined a chorus of critics lashing the decision by federal public servants to buy up to 100,000 pairs of army boots made overseas as protectionist pressure builds to change procurement rules to favour more Australian-made goods.

All of what has happened with respect to this particular tender was without my knowledge or the knowledge of any other member of the government. 

Defence Minister David Johnston

In question time on Tuesday Mr Katter outlined a number of Defence items he said were manufactured overseas while asking the government whether it would launch an inquiry into procurement.

DLP Senator John Madigan (left) and Independent Senator Nick Xenophon (right) together with Rossi Boots CEO Neville Hayward (centre).

DLP Senator John Madigan (left) and Independent Senator Nick Xenophon (right) together with Rossi Boots CEO Neville Hayward (centre). Photo: Alex Ellinghausen

It followed news South Australian company Rossi lost out on a tender to supply the boots and instead the footwear would be made in Indonesia by an Australian company.

Mr Katter said Australian combat troops refused to use the Austrian Steyr rifle and instead used the American Armalite which could be produced in Australia for half the price.

 

"At ANZAC Day, soldiers marched in their socks since the soles had fallen off their Chinese made boots," he said.

"Australian ordinance/ammunition is manufactured mainly by a French owned company. The slouch hat is partly foreign."

Assistant Defence Minister Stuart Robert said the tender previously covering industrial footwear for soldiers was previously held by an Australian company, Lymington Pacific, which had the boots made in China.

"Now they'll be manufactured in Indonesia by an Australian company," Mr Robert said.  

Defence Minister David Johnston on Monday said he would scrutinise the tender because he was "very concerned"  over the best value for money for taxpayers.

The issue has been taken up by Independent Senator Nick Xenophon who asked Senator Johnston on Monday whether the tender would be re-opened.  

Mr Xenophon and Senator John Madigan have been pushing to have procurement rules changed so bureaucrats would be forced to spend more taxpayer dollars on Australian-made products to protect local jobs.  

"Can the minister guarantee that the imported boots will be as durable and well-made as the Rossi boots?" Mr Xenophon asked.

"Further, what tests and measures are carried out to ensure the comparative durability and whole-of-life costs for such a procurement?" 

Minister Johnston said at the time the tender was released there was no expressed requirement for Australian content in the tender.

"The tender was conducted as a routine procurement that did not exceed the threshold requirements that necessitated notifying the minister's office," he said.

"So all of what has happened with respect to this particular tender was without my knowledge or the knowledge of any other member of the government."

Minister Johnston said the procurement rules Defence was complying were those which had been supported by the previous Labor government and the Coalition.

These included rule 5.3 which state all potential suppliers must be treated equitably and not discriminated against due to their degree of foreign affiliation or ownership.

"Rule 5.3 is potentially a problem for Australian manufacturers," Minister Johnston said.

"That is why we are bringing down a white paper that deals with industry policy, and these matters will be considered in the broader context of the way we do our business in Defence.

He said the army boot purchase was about the differential between manufacturing here and overseas.

"Given the high dollar and all of the other issues, I am very concerned about this particular aspect," Minister Johnston said.

"I am concerned that the amount of money involved is such that this...might well have gone to an Australian manufacturer."

32 comments

  • Whatever happened to the Australian Offset Policy? Overseas Defence industrialist were, in the last century obliged to provide at least thirty percent of the tendered value of work to be implemented in Australia. This tit for tat had to be of the same value and technical level as that being bought. Effectivel this supplied Australian Defence manufacturers with work that would have been lost on nearly every overseas defence contract. If memory serves me, the same rule applied to all Dept of Supply and Administrative Services tenders. Assuredly these offsets were not always to the taste of the overseas tenderers; but it meant research and work for our now defunct Defence industry. Airbus Industrie and Boeing have had parts of their aircraft manufactured here for many years.

    Commenter
    chasm4
    Date and time
    July 15, 2014, 12:38PM
    • Government must review the whole procurement process. Since the demise of Purchasing Australia and the function being integrated into Finance, procurement policy has been a fiasco. The last substantial review of Government Procurement was a result of the Bevis report in the 1990s, which was a Labor initiative. The Howard government undone or failed to enforce many of the recommendation, disbanded Purchasing Australia and gave incompetent bureaucrats in Finance free rein to destroy the reforms. Nothing changed under Labor. If you want evidence of Finance incompetence look at the current mess with WOG contracts, PGPA implementation and naive procurement policy.

      Commenter
      Irene
      Date and time
      July 15, 2014, 12:54PM
      • Buying the boots from overseas is a straight-out lose-lose situation; the overseas supplier doesn't pay tax in Australia, whereas Rossi Boots, its employees and its suppliers do pay Australian tax.

        So if Defence pays $15 million to Rossi for the boots, the ATO gets to tax Rossi and suppliers on their profits, and gets to tax the employees on their wages - so even directly, the Federal government spends less on boots.

        The decision they made doesn't afford confidence that anyone in Defence Procurement understands basic book-keeping.

        Commenter
        David Arthur
        Location
        Queensland
        Date and time
        July 15, 2014, 12:55PM
        • Or couldn't give a stuff about the fate of Australian workers who would likely lose their jobs and have little hope of finding new employment.

          Commenter
          Justinian
          Date and time
          July 15, 2014, 1:06PM
        • Or would rather buy Australian made products but are required to work within budget and go with the lowest cost tender. And if they go over budget - then there'll be cries in this comments section of "bloated bureaucracy" and "wasting taxpayer's money".

          Commenter
          Louise
          Location
          Canberra
          Date and time
          July 15, 2014, 1:38PM
        • The government only likes paper shufflers that dont make or produce anything, like lawyers, accountants, real estate agents, etc. They think manufacturing is a dirty word.

          Commenter
          John
          Date and time
          July 15, 2014, 1:52PM
        • Precisely. Not only does the federal government collect taxes, it doesn't have to pay unemployment benefits to the workers. Perhaps if state, federal and local government departments all bought Falcons, Commodores and utes, there would still be a local car industry. And Justinian is correct, they couldn't give a stuff. The only jobs they care about is their own.

          Commenter
          The Genuine Article
          Date and time
          July 15, 2014, 2:03PM
      • The thing that everyone forgets is that DMO, like every other government agency, must tender for products openly and without bias as per our WTO agreements.

        This means that if two products are equally as good then we have to go to the lower cost item. The fact is that in nearly every case when it comes to general manufacturing type goods the O/S item will win.

        Commenter
        James
        Location
        Canberra
        Date and time
        July 15, 2014, 1:07PM
        • Well,if that's WTO rules, we're better off outside the WTO. Australia's signed up to oodles of bilateral Trade Agreements anyway, so what purpose does WTO serve?

          Commenter
          David Arthur
          Location
          Queensland
          Date and time
          July 15, 2014, 2:48PM
        • @David the WTO is where those bilateral agreements come from. If we were to walk away from the overarching WTO agreement Australia would find itself having to pay much more for most of the basic items and we would also find it almost impossible for us to export much of the high value items that we still manufacture.
          The simple fact is that items like these boots and cars are considered non skill manufacturing (i.e. the majority of those doing the work do not have a trade or similar level of skill development) and we can not compete with nations which have basic wages 50% lower. We need to find more ways to move into high level skilled or niche manufacturing.

          Commenter
          James
          Location
          Canberra
          Date and time
          July 15, 2014, 2:55PM

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