Local manufacturers watch Government source PPE overseas

22-02-2022

As the federal Government searches for suppliers of Personal Protection Equipment (PPE), it appears that Australian manufacturers have been left off the list. 

The Health Department has issued a tender to replenish the national medical stockpile, of face masks, gowns, gloves and other personal protective equipment. Some of these existing items are due to expire in coming months while millions have been sent to aged care facilities, pharmacists and GP practices

Economist and Director of the Centre for Future Work, Dr. Jim Stanford has told the media that the failure to prioritise local manufacturers showed the government had not learned the lessons of 2020, when “we were caught flat-footed as the pandemic hit”. 

“Without a deliberate effort to support Australian manufacturing, it’s almost certain that this production will go overseas to the lowest-cost producer,” he said. 

Stuck in the past?

According to Stanford, although the pandemic was ‘forcing a rethink’ of our reliance on low-cost global supply chains, the most recent tender revealed “they’re still stuck in their bad old ways.” 

He added that the decision to put the national medical stockpile replenishment out to a competitive tender stands in opposition to the Senate Economics References Committee’s recommendation that all government tenders “maximise the use of local suppliers and manufacturers”.An inquiry into Australia’s manufacturing industry by a Labor-led committee also handed its report to the government on February 7, four days before the tender was published.

Opposition spokesman for industry and innovation Ed Husic told Industry Update said "This just shows the Morrison government has learned absolutely nothing from the last two years. They previously swore we wouldn’t be caught short of critical medical items yet here they are doing nothing to work with local industry to ensure we avoid this occurring again.

"Time and time again, we see top notch Aussie companies struggle to break into the local market because of this Government's lack of belief in Australian industry.
Labor has announced a Buy Australian Plan that is determined to send a clear signal. We want to use government procurement and purchasing power to back Australian manufacturers wherever we can," Husic added.

Stanford added that, by putting out a tender now, with no reference to domestic content and Australian capacity was setting us up for shortages. 

“We have to be able to produce essential medical supplies in Australia,” he said. 

Meanwhile, Labor is taking a ‘Buy Australian’ plan to the coming federal election, vowing to “use government procurement and purchasing power to back Australian manufacturers wherever we can.” 

‘A Health Department spokesman said tenderers “are required to demonstrate value for money and how their tender will benefit the Australian economy”. 

But, Dr Stanford said, the approach could end up costing the taxpayer more if faulty items were sourced again. 

“It doesn’t turn out to be cheaper, once you’ve taken into account the extra cost of making up for quality failures from low-cost foreign operations,” he said.

In 2020, the Health Department scrambled to buy face masks from overseas amid global shortages, only to dispose of batches that failed a post-market review by the Therapeutic Goods Administration. 

A Department of Industry spokeswoman said the government was investing in a range of medical products made in Australia, including drugs, vaccination patches and rapid antigen tests. Local businesses “are accessing procurement at record levels under the policies of the Morrison government” and made up the majority of all contracts awarded, the spokeswoman said. 

 

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