It's boom time in this state for overseas and interstate companies on big government projects.
Everywhere you look... the new hospital, road construction projects, the desalination plant... South Aussie businesses just don't get a look in and as we've revealed jobs are being filled by interstate workers... even imports from Ireland on the South Road Expressway.
Housing SA is the latest government entity to deal a blow to small business... Two interstate companies have won the lion-share of its maintenance contract worth six hundred million dollars over eight years.
Max Davids, an economist and expert in government contracts says it's all about the bottom line for faceless bureaucrats handling tenders.
“Bureaucrats have grown up in that environment… never worked for living, never invested in infrastructure, never had to put their house on the line, never had to build, buy equipment on overdrafts from banks and understand tension and stress local maintenance company has to go through…That work will go interstate in terms of the profits… there's disruption to local community, mum and dad… none of that appears on profit and loss of State Government,” says Max.
But Max also has serious concerns about the probity of the tender process itself.
“One of contractors who won a contract… they went back to him 3 times to ask him to lower his price… now that's not fair,” says Max.
Just lodging a tender is a risky business. One of the locals which missed out spent more than 100 thousand dollars on its pitch... we've also been told of one company which spent one million dollars on its losing bid for another major project.
“We have real concerns about tendering… some contracts let without even going to market,” says Max.
Opposition Leader Steven Marshall promises a review if the Liberals win government.
“What we want to do is revise entire procurement process so we don't cut SA firms out of SA work... that's going to be our number one priority… Not a perception, a reality… they haven't created a level playing field for SA companies to compete,” says Opposition Leader Steven Marshall.
“Over time the price will go up because people from interstate know they can get better prices because there’s no competition,” explains Max.
No surprise then that many locals are going bust along with the jobs that go with them.” says Opposition Leader Steven Marshall.
In March quarter ASIC shows SA businesses had insolvency appointments, that's 3 companies per day.
“Over many months, years now, State Government is driving business away by issuing contracts interstate which are on cheap but avoiding real cost of disruption to the local business,” says Max.