'Extraordinary proposals': Tony Burke has rejected a request to support changes to government tender processes. Photo: Andrew Meares
A plan by the federal government to exempt hundreds of millions of dollars in government contracts from public scrutiny and increase credit card limits for government purchases from $10,000 to $20,000 will be blocked by Labor.
Finance Minister Mathias Cormann wrote to his opposite number in the ALP, Tony Burke, seeking the opposition's support for the rule changes, which would mean any government contract worth less than $20,000 would not have to be reported on the AusTender website. The present limit is $10,000.
In his letter, Senator Cormann said the changes would reduce red tape for business, help improve their cash flow and ensure greater efficiency in the public sector.
"More than 99 per cent of government procurement will still be reported publicly," the minister said. "The proposed payment card and AusTender reforms will provide real red-tape reductions and cash-flow benefits to businesses supplying government, while also increasing public sector efficiency with only a very minor reduction in transparency," he said.
In 2012-13, about $280 million was spent on contracts worth between $10,000 and $20,000, of total government expenditure of $39 billion. On average, about 20,000 government transactions worth between $10,000 and $20,000 occur every year.
Mr Burke rejected the measures outright and said they were "extraordinary proposals, which doubles the threshold limit on credit cards in every government department".
"Labor cannot support such a change. The opposition believes that transparency and accountability for government expenditure is of paramount importance," he wrote in reply to Mr Cormann.
"The opposition notes that if this change had been implemented for the 2012-13 financial year, some $280 million of contracts would not have been reported on AusTender."
Some of the transactions that would not be publicly declared on AusTender's website under the proposed rise from $10,000 to $20,000 include:
- Two Christmas receptions hosted by the Prime Minister in December 2013, worth $14,624 and $18,940.
- Three Department of Human Services' contracts for taxi services in financial year 2014-15 worth $11,000, $19,000 and $18,200.
- A $10,872 contract for the Fair Work Ombudsman for focus group research.
- A $20,000 Defence contract for social media monitoring.