To pressure the government to give local businesses a fairer go when bidding for government contracts, they raise the spectre of shoddy products being made in overseas sweatshops and the possibility of Australian soldiers wearing foreign-made uniforms.

The complaints are being made to a parliamentary inquiry into government procurement which called for submissions by December 31.

The federal government is the largest user of office and printing paper in the nation but buys 55 per cent of its copy paper from overseas due to guidelines demanding value for money.

The inquiry has been told the government spends about $100 million a year on tissue paper alone.

However Australian Paper, which makes the Reflex brand, said the government would reap more tax revenue from the company - which paid $432 million in 2012 - by buying local, but procurement rules ignored this factor.

''[This is] value that we feel can't, but is, being ignored by the government's procurement decisions,'' the company's general manager, Julian Mathers, said in his submission.

The procurement rules should favour his company's products which generate jobs and have strict environmental standards.

''However, the reality is quite different,'' he said, pointing to imports of foreign paper.

''Regardless of the cause, there is a clear solution and, unlike the automotive industry, this does not require ongoing hand-outs from the government.

''Australian Paper recommends that the Commonwealth government more broadly assess and enforce recognition of the economic, social and environmental values of all aspects of the government's paper and printing services procurement decisions.''

The company acknowledges local paper manufacturing must be competitive with imports, allowed under Australia's international trade agreements.

However the concept of value for money is being applied too narrowly under the procurement guidelines, it says.

The Australian Forest Products Association says the federal government each year buys:

■ approximately 6500 tonnes of copy paper;

■ an estimated 50,000 to 60,000 tonnes of paper used for external printing, such as publications, pamphlets, forms, brochures and envelopes; and

■ about $100 million of tissue paper.

The Council of Textile and Fashion Industries of Australia said the government must recognise the nation's international supply channels could be disrupted.

''There is a risk that we spend a lot of money developing capability in Australia and then it loses out to a price and quality inferior item from overseas,'' the council's submission says.

Chief executive officer Richard Evans said on Friday that the government should introduce legislation similar to laws in the United States specifying the military had to use local manufacturers regardless of the cost.

The Australian Industry Group warned that the slowing economy meant the federal government should support local businesses instead of penny pinching.

''The government should avoid implementing short-term or narrowly considered savings measures or purchasing policies that may unfairly disadvantage local suppliers,'' it said.

However the Finance Department, which oversees public service procurement, said in its submission to the inquiry its priority was value for taxpayers.

The government had bought about 93 per cent of services from Australian suppliers worth $60.2 billion over the last three financial years. About 60 per cent of goods were bought from Australian suppliers, totalling $28.7 billion.

The inquiry's terms of reference do not refer specifically to campaigns to buy Australian goods but include the ''current ratio of Australian goods and services versus imported goods and services utilised by the Commonwealth through procurement procedures''.