Mayoral candidates split on changing buy local policy

ONLY one of the three mayoral candidates is in favour of re-introducing a council policy that would give local companies a 10% advantage.

In the lead up to Saturday's election, Gladstone Engineering Alliance canvassed all candidates for their view on bringing back a weighting system for council tenders.

Matt Burnett is the only mayoral candidate in favour of the move; an issue the GEA, a not-for-profit organisation involved with more than 250 businesses, has been pushing for more than a year.

Should local companies be given a financial advantage when competing for council work?

This poll ended on 16 March 2016.

Current Results

Yes. Especially when local businesses are struggling.

60%

No. It would cost ratepayers more.

40%

I don’t care. Local businesses should be competitive.

0%

This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

But his views go against those of an expert who says introducing any type of protectionist policy would likely lead to higher prices for the council and leave little incentive for local businesses to become more competitive.

University of Queensland economics professor John Mangan said while he understands regional councils' desire to support small and medium businesses, the weighting policy was just "window dressing".

The idea of a local weighting policy is to make it easier for local companies to secure council tenders by reducing the final price by a percentage.

Before 2012 the council had a local weighting policy but it was abolished after it was found to be relatively ineffective as price only accounts for about 30% of the criteria tenders are assessed against.

>>Council votes against local weighting for tenders, March 2015

In Gladstone local companies already win a majority of the work.

For the last two financial years local companies have won about 60% of all council tenders worth $37 million compared to $24 million awarded to non-local companies.

But Gladstone Engineering Alliance CEO Carli Homann wants to see that number increase.

She says a weighting policy would help drive sustainable economic growth, generate more employment and is particularly important given the council is a "significant" buyer in the region.

Ms Homann has called for the weighting policy to be restored at a minimum of 10%, an idea most of the 21 councillor candidates agreed with.

In his response to the GEA's questions, Matt Burnett said he has always supported a weighting towards local businesses.

>>The ten most expensive council tenders of 2015

>> LIVE VIDEO STREAM: Mayoral candidates respond to questions right now

Whereas his rivals Gail Sellers, mayor incumbent, and Michelle Wagner, former communications manager for the council, have both labelled the former policy "anti-competitive".

Professor Mangan agrees. He said any business that needs "a false economy" to win work wasn't competitive and shouldn't be propped up by ratepayer money.

"It's like robbing Peter to pay Paul," Professor Mangan said.

"It would be costing the consumers in the region more.

"In my opinion it's a policy that is unnecessary and silly.

"I wouldn't say it is an effective policy either because it allows locals, in a way, to charge slightly more.

"That hinders their ability to go outside the region to win work because only people in Gladstone will put up with their high prices."

The council says a provision in its new policy actually makes it easier for councillors to award work locally - even if the price is twice as high.

That was shown in October last year when councillors Karen Porter and PJ Sobhanian argued Boyds Bay should win a $1.4 million tender for landscaping work at Calliope Cemetery despite being $70,000 more expensive than a non-local company.

The decision went against the recommendations of council officers, but was approved by the councillors.

Professor Mangan said he understood why some councils would stand by the policy because if local industry and business are suffering, people leave the region which has a negative impact on the overall economy.

However, for him, that didn't justify manipulating the local economy through a weighting policy.

Instead, he says business should ensure they are in tune with the council's needs and offer additional services while highlighting their intimate knowledge of the job and the area.

Read all the candidates responses here via GEA.

Note: Alf Walker, Helena Sant, Alex Staines and Desley O'Grady did not respond to the GEA's questions.

Follow this reporter on Twitter @helenspelitis



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