Agencies pitching for federal government work will soon need to prove they meet a new, stricter definition of an “Australian business” under updated Commonwealth Procurement Rules (CPRs) taking effect November 17.
The reforms lift the threshold for direct contracts from $80,000 to $125,000 and, for the first time, introduce a formal definition of what qualifies as an Australian business.
To meet the criteria, companies must be at least 50 per cent Australian-owned or listed on an Australian equities market, be tax-resident in Australia, and have their main place of business locally. The definition also extends to any parent entity in the corporate structure.
Finance minister Katy Gallagher said the move is designed to ensure more of the Commonwealth’s purchasing power “flows directly to Australian businesses, creating local jobs and supporting our economy”.
The Independent Media Agencies of Australia (IMAA) has welcomed the shift as a long-awaited win for the independent sector. CEO Sam Buchanan said the rule “genuinely prioritises smaller Australian suppliers and ensures only true Australian-owned businesses qualify for certain government work.”
“This new rule is a win for the Australian independent media agency sector, but more needs to be done,” Buchanan said.
“This is the first time we’ve seen the Federal Government set this type of parameter, with clear definitions around what exactly an Australian business is. This new rule genuinely prioritises smaller Australian suppliers and ensures only true Australian-owned businesses qualify for certain government work.
“We’re optimistic that these new rules will finally open the door for independent media agencies across the country to play a bigger role, and rightly so, in government contracts”.
The change forms part of the government’s broader “Buy Australian Plan,” which targets at least 25 per cent of contract value to SMEs for projects up to $1 billion and 40 per cent for those up to $20 million.
Buchanan said the IMAA will continue lobbying for greater inclusion of independent agencies in master media contracts, adding, “If the government talks about supporting Australian business, they need to back it up with their agency selection.”
