Senator MARSHALL (Victoria) (17:27): In Senator Carr's contribution, he made the important point that those who think there may be no difference between the conservatives and Labor on matters of procurement, trade and industry policy need only look at this important issue to see how stark the difference can be. I invite people to compare Senator Macdonald's contribution to that of Senator Carr, as that actually demonstrates how far apart the different parties are on these issues. If people ignore Senator Macdonald's repackaging and opinion of what Senator Carr said and merely look at the facts about where parties stand on these matters, they will see that the Labor Party and the conservatives bring very different approaches to these matters. I think people are getting more and more concerned about where jobs and the quality of jobs in this country are going. They are getting more and more concerned that governments seem to be abandoning industry intervention and policies that support jobs and good quality jobs in this country. I think Senator Rhiannon made an important point when she said that a lot of these issues were canvassed with working people and their families through the election campaign. I had a number of firsthand experiences of this. To my surprise, my elderly parents, when I was assisting them with their postal votes, asked me how they could vote for 'that nice Mr Xenophon'. I was a little bit disappointed! I explained that I knew 'that nice Mr Xenophon' and that, if they had actually met him themselves, they might not want to vote for him! Luckily, they were unable to vote for him because they live in Victoria. I pressed them on why they wanted to vote for 'that nice Mr Xenophon', and it was 'because he stands up for Australian jobs'. The Labor Party stands up for Australian jobs, but I think it is pretty obvious that our message is being lost. Senator Rhiannon made the important point that it gets lost because it also gets mixed in with free trade and trade agreements. The one thing that Senator Macdonald was right about is that we do need trade. We are a trading nation. I am certainly not antitrade, but I think governments need to do more to ensure that the jobs and the quality of the jobs of Australians are protected. It is no good having lots of jobs if they are not skilled jobs and they all pay very low wages. It is not good to see a manufacturing base decimated by free trade agreements or industry policy put in by governments which leave people out of work and businesses without capacity to tender for works into the future. When factories go, they are gone and can no longer participate in the economy of this country. People are getting more and more concerned, particularly people who have seen their children have a better standard of living, a better quality of life and better jobs than they did; they are now worried that their grandchildren will have lesser quality jobs and a lesser standard of living than their own children had. I think people see that in the move to casualisation, in the move to part-time work and in the move to contracting out work. They even see it in the teaching profession, where teachers are being employed by the public sector from the beginning of the school year to the end of the school year. So they miss out on holidays, they miss out on permanency and they then have to re-apply for jobs. That is happening across the board, and people are becoming more and more concerned about that. During the election campaign I talked to a lot of traditional Labor voters I assumed would be voting for us again and, to my astonishment, I found that some were not. Some were voting for One Nation, and I asked them why. It was not because of some of the immigration policies or other matters like that. Again, it was because they saw people standing up for jobs, talking about protections and talking about Australian values. Though One Nation does not have any of the answers to any of those problems, this identified for me that we have not talked about these issues enough and we have not explained our policies well enough. We need to be very clear about that with the Australian population. It is important that we protect high-skilled, high-paid, good-quality jobs, and one of the ways we can do that is through government procurement. As Senator Carr pointed out, that is not to say that that should just be automatic and there should be no competition and no efficiencies in that. But it does not have to be just the lowest cost; in fact, the lowest cost is often not best value. I think that is a concept that we really need to grapple with. Senator Macdonald made the point several times that it is just about cost—that cost is king and the market will deliver to us if we allow the lowest cost to prevail. But the best value is not always the lowest cost. I want to give a couple of examples of that. I want to give an example that actually happened on our watch when we were in government. It was not a government decision; it was a Defence decision for soldiers to have Chinese-made dress boots. I refer to a report on ABC News in May 2012. It says: The Australian Defence Force has admitted that the rubber soles are falling off the Chinese-made dress boots that soldiers are expected to wear for official parades. Senator Xenophon: Sole less! Senator MARSHALL: 'Sole less', says Senator Xenophon. It continues: Defence officials have told Senate estimates the problems began in 2008 when the tender to make the boots was won by a Chinese company. Defence had sent the boots back to the manufacturer for extra stitching and nails to try and hold them together. But officials say the glue is still failing in hot conditions. On a number of parades, especially in northern Australia, soldiers were marching and the soles were falling off their boots. That was not a good value contract. It was certainly the lowest cost contract, but it was not a good value contract. We were in government then, and a lesson was learnt by Defence at that time and a new contract was awarded to R. M. Williams. R. M. Williams were very happy to receive that contract. Back in 2013, Chief of Army, Lieutenant General David Morrison AO, said: The Army is proud to be partnering with the Australian brand. With the Australian Army’s 112 year history, it is fitting that we will now also carry over 80 years of Australian tradition in our boots. That is an example of where the lowest cost was not the best value. We now have the best value, because we look at a long-term quality product and we look at the workers who actually make that product—workers who pay taxes in Australia; workers who do not receive unemployment benefits, because they are employed; workers who have families and buy houses; workers who buy food, put food on the table; workers who have children and send their children to our schools; workers who contribute to every facet of our economy, working because we took a best-value approach to that particular contract. If we apply that across the board to the $59 billion worth of government procurement every year, we can assist the economy. We can best value-add to our economy by ensuring that Australian manufacturers are best positioned to compete for that work and ensuring a system that allows the full value of the tendering process to be taken into consideration. Other countries do it. We know the United States do it. They have 'buy American' policies and they sometimes have some absolute restrictions on foreign companies tendering for some of those products. Government procurement certainly has the huge and important purchasing power of the government. It is an immense part of our nation's industry and of our economic policy. We must ensure that this money, this $59 billion, is spent in the best interest of our economy, and not someone else's. We should use that spending to drive a diverse industrial base capable of generating those skilled and well-paid jobs that I talked about earlier, the ones that are so essential to the future of our economy. Decisions such as the recent Australian Defence Force dress uniforms contract revealed that the current government has made a poor choice. Just going back to the example I used earlier: we thought that Defence had learnt their lesson with their parade shoes, but I suspect that they have not. Lessons only seem to be learnt for periods of a government and do not continue past that. Commonwealth decision-making must take into account all the factors which flow from its procurement. It is not simply a matter of obtaining a product by handing less money to a low-wage manufacturer in another country. Domestic manufacturers are part of the Australian economy, and we want that money to assist there. A product's quality and capability and whether it is fit for purpose are all issues which need to be tested before the value-for-money test is applied. Time and time again we have seen examples of state, territory and Commonwealth purchases putting the price tag before the purpose. For instance, I am aware of an example in Victoria where one of the fire authorities bought some cheap firetrucks from Eastern Europe. When the ladders were extended there were huge gaps in the ladders. They were really cheap, but they were not fit for purpose. We have seen firetrucks purchased that did not fit into the fire stations. They were not fit for purpose—they simply went for the lowest cost without making sure that the purchases were fit for what we were spending the money on. The wrong product can be picked if the proper requirements are not set. Everything in Commonwealth purchases must have met the exacting Australian standards for what we needed to do. We also know that there are many examples where substandard material and product is coming in, and much of that is purchased by the Commonwealth government. We have examples where asbestos—something that took years and years of campaigning to get out of this country—is now being imported into this country, sometimes with 'asbestos free' labelled on it. We ought not just rely on low standards from some overseas countries with a stamp saying there is no asbestos when there is no ability for us to ensure that. We have seen bridges made with the wrong gauge steel, and the hollow parts of the bridges, from overseas, were filled with water to ensure that they weighed more. They would trick the receiver of the goods into thinking that the right gauge steel had been used, because they had secretly added weight. Again, we find that many of those things are not fit for purpose. In this country we need a consistent, straightforward and thorough approach to procurement. Commonwealth agencies should not be required to choose the cheapest supplier, whether at home or abroad, and they should be able to consider any detrimental environmental and social effects when making their purchasing decisions. Any government which was committed to providing for a growing and thriving Australian industry would commit itself to responsible domestic procurement and not simply look only at the purchase price in competitive tenders. I want to spend a bit of time drilling down into what value for money actually is. The question of value for money goes to the very heart of this motion. It was examined in great detail in the 2014 report of the Senate Finance and Public Administration References Committee inquiry into Commonwealth procurement procedures. The committee went to considerable length to explain what value for money really means. This is what the committee came up with, and it is a very clear definition: At a basic level, obtaining value for money for each procurement action requires a comparative analysis of all the relevant costs and benefits of each supplier's proposal throughout the procurement cycle, and is not determined by price alone. It should also consider the whole-of-life costs of the procurement and include consideration of quality and overall fitness for purpose. If we apply that test we will have many, many different outcomes. We will see that the value of the taxpayer's dollar for government procurement is invested back into our economy, supporting Australian jobs, Australian industry and the Australian economy. I think it is time that we had a very hard look at these arrangements. We need to have a very hard look at how free trade agreements work their way into some of these decisions. We need to ensure that Australian industry and jobs in this country are supported. Given that we are getting close to time and Senator Xenophon has indicated that he would like to speak to conclude this debate or take it through to 6 o'clock plus, I will now allow him to do that.