The establishment of Local Jobs First strengthens the Victorian Government’s commitment to industry development by enshrining the requirements of VIPP and MPSG into legislation.
In August last year (2018), the Victorian Parliament approved some small changes to a piece of long-standing legislation: The Victorian Industry Participation Policy Act 2003. A notable change included amending the title of the act to the Local Jobs First Act 2003.
The changes also created closer links between the Major Project Skills Guarantee (MPSG) and the Victorian Industry Participation Policy (VIPP) – and enshrined their requirements into legislation.
While the main tenets of the VIPP and MPSG remain, it’s worthwhile for those businesses tendering for Victorian Government work to become familiar with the resulting overarching Local Jobs First Policy (released in October 2018) and its requirements.
What is Local Jobs First?
Local Jobs First strengthens the Victorian Government’s commitment to industry development and the provision of opportunities for local businesses, including small and medium-sized enterprises (SME), to supply into government projects.
Administered by the newly created Department of Jobs, Precincts and Regions (DJPR), the Local Jobs First Act 2003 commits all Victorian Government departments and agencies to compliance with the Local Jobs First Policy.
The first major component of the policy, Local Jobs First – Victorian Industry Participation Policy (VIPP), is aimed at helping to create and sustain Victorian industry growth by setting minimum local content requirements (supplied goods and services) for high-value government projects. We explored this in detail in our post, VIPP, LIDP, Local Content, ANZ Value! What do they all mean?.
The second major component, Local Jobs First – Major Projects Skills Guarantee (MPSG), aims to grow the next generation of skilled workers in Victoria by setting target numbers of apprentices, trainees and cadets to work on high-value government construction projects. You can also see our post, Major Projects Skills Guarantee: How to help up-skill Victoria.
A Local Jobs First Commissioner has also been established by the Act. Balancing advocacy, facilitation and compliance functions, the Local Jobs First Commissioner works closely with industry and departments to create opportunities for small and medium sized businesses on government projects. The inaugural Local Jobs First Commissioner is Mr Don Matthews, most recently Executive Director of the Industry Capability Network Victoria.
What do these changes mean to industry?
When it was first introduced in 2003, VIPP was used by government to distinguish between leading tenderers: given equal value-for-money assessments, those which incorporated stronger Victorian content in their solution would be granted the work. This policy provided government with a means of complying with ‘buying local’ (which is still defined as buying from Australian and New Zealand businesses), while also giving some preference to Victorian businesses.
These days, with government’s growing focus on local industry development and local jobs first, the VIPP is growing in importance. This is particularly the case for government tenders. With the establishment of Local Jobs First, compliance with the VIPP is now a weighted criterion in high-value government tenders, up to 10%, and comes with quite high mandatory local content thresholds – for example, 80% for some construction work.
Further, while VIPP thresholds apply from $1M projects in regional Victorian and $3M projects in metropolitan Melbourne, it is very important for businesses to note that if their project is less than these thresholds BUT to be delivered within a much higher-value program, then they may also need to complete local industry development plans. This will see businesses needing to build VIPP responses even if they are tendering for $200,000 or $300,000 pieces of work.
On the whole, I think it’s a good move to merge VIPP and MPSG requirements under the one piece of legislation, as many VIPP commitments do include using local trainees, apprentices and engineering cadets, while the implementation of MPSG commitments leverage the same strategies as the VIPP requirements. Where a condition of the tender (based on $ threshold) requires a business to respond to both VIPP and MPSG requirements, it would be great to see government take the next step of using a consolidated response template that merges VIPP and MPSG strategies, while retaining separate tables for VIPP and MPSG calculations.