Local Jobs First Act 2003 (Vic) Amendments

This alert applies to organisations that are agencies (being a department or a public body within the meaning of the Financial Management Act 1994 (Vic)). The Bill will amend the VIC – Victorian Industry Participation Policy module.

Victorian Industry Participation Policy (Local Jobs First) Amendment Bill 2018 (Vic)

Please be advised that the Victorian Industry Participation Policy (Local Jobs First) Amendment Bill 2018 (Vic) (the Bill) passed the Victorian Parliament on 7 August 2018 and is currently awaiting assent. The Bill will amend the Victorian Industry Participation Policy Act 2003 (Vic) (the Act) and is due to commence on the day after it receives Royal Assent.

Name of Act changed

Firstly, organisations that are agencies under the Act (being a department or a public body within the meaning of the Financial Management Act 1994 (Vic)) should be aware that the Bill will change the title of the Act to the Local Jobs First Act 2003 (Vic).

Compliance with the Local Jobs First Policy

Agencies will be aware of the requirement under section 9 of the Act to include in their report of operations under the Financial Management Act 1994 (Vic), a report on the agency’s compliance with the Victorian Industry Participation Policy (VIPP) in the financial year to which the report of operations relates. Agencies should note that the Bill will amend the reference to the VIPP in section 9, with a reference to the Local Jobs First Policy (LJFP). The LJFP is comprised of:

  • the VIPP – an industry development policy designed to ensure small and medium-sized enterprises are given full and fair opportunity to compete for Victorian government contracts;
  • the Major Projects Skills Guarantee (MPSG) – a policy that provides job opportunities for apprentices, trainees and cadets on high value construction projects.

It is also important to note that the Bill will amend section 9 of the Act to also require agencies to provide the information included in their report under the Financial Management Act 1994 (Vic) relating to compliance with the LJFP, to the Department of Economic Development, Jobs, Transport and Resources no later than 6 weeks after the end of the financial year to which the report relates.

In addition, agencies should be aware that the Bill will insert section 4A in the Act which requires agencies (unless exempted by the Minister) to ensure that contracts for standard projects or strategic projects require a person providing goods, services and construction activities under the contract to comply with the requirements of the LJFP. A standard project means:

  • a project with a budget of $1 million or more that is for the benefit of an area that is wholly in rural and regional Victoria;
  • a project with a budget of $3 million or more that is for the benefit of an area that is wholly outside rural and regional Victoria;
  • a project with a budget of $3 million or more that is for the benefit of an area that includes rural and regional Victoria and an area outside rural and regional Victoria;
  • (and significantly) any other project with a budget of less than $3 million declared by the Minister to be a standard project.

strategic project means:

  • a project with a budget of $50 million or more; or
  • (and significantly) any other project with a budget of less than $50 million declared by the Minister to be a strategic project.

The Minister has powers to determine the local content requirements for a strategic project which must be a minimum of 90% for a construction project, 80% for a services or maintenance project or 80% for the maintenance or operations phase of a strategic project.

Major Projects Skills Guarantee

The Bill will introduce section 7C into the Act which applies the MPSG to standard projects that are construction projects with a budget of $20 million or more and to strategic projects that are construction projects. Notably, the MPSG requires apprentices, trainees or cadets to be engaged for a minimum of 10% of the total number of estimated hours or work on the project.

Local Industry Development Plan

The Bill will introduce section 7D into the Act which requires a person tendering for a standard project or a strategic project to submit a Local Industry Development Plan (LIDP) to the agency responsible for the project and to the Department of Economic Development, Jobs, Transport and Resources. Section 7D(2) provides that a LIDP must specify how the requirements of the LJFP will be met, identify total content and local content for the project, and include any other matters required to be included under the LJFP.

Importantly, agencies should be aware that section 7D(3) prohibits an agency from accepting a tender that does not include a LIDP.

Weighting of commitments to Local Jobs First Policy

Subscribers should note that agencies evaluating a tender for a contract for a standard or strategic project will be required under the Bill to give 10% weighting for industry development, and 10 % weighting for jobs outcomes.

Local Jobs First Commissioner

Finally, the Bill will establish the Local Jobs First Commissioner, whose powers will include taking enforcement action in relation to any breaches of the LJFP and LIDPs. Significantly, the Commissioner will have the power to issue Adverse Publicity Notices for failing to comply with the LJFP or LIDP, which will name the person, set out the details of the conduct and be published.

Please click here to access the full Bill.

Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au

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