Thursday, 14 August 2025

Bills

Local Jobs First Amendment Bill 2025

Debate resumed on motion of Harriet Shing:

That the bill be now read a second time.

Richard WELCH (North-Eastern Metropolitan) (15:21): I am pleased to rise and speak on the Local Jobs First Amendment Bill 2025. The Local Jobs First program dates back to 2003 and requires contractors on government-funded projects to actively support local businesses, workers, apprentices and trainees. It has two key components: the Victorian industry participation policy and the major projects skills guarantee. The VIPP applies to government projects valued at $1 million or more in regional Victoria or $3 million or more in metropolitan Melbourne or on statewide tenders. It requires companies who are tendering for work to include a local industry development plan and also embeds a 10 per cent weighting in tender evaluations for industry development. The MPSG applies to any publicly funded construction project valued at over $20 million and requires contractors to ensure that at least 10 per cent of total labour hours are performed by Victorian-registered apprentices, trainees or cadets. In 2018 the office of the Local Jobs First commissioner was established to oversee and promote compliance with the requirements under the VIPP and the MPSG. At the outset, the Liberals and the Nationals support the concept and purpose behind the Local Jobs First program and its intended outcomes. It is a good goal. Whatever Victorians’ cold comfort in paying the level of tax we do, part of it is at least knowing that some of it has gone to local businesses and local jobs and local industry participation. Victoria is in such a poor economic state that supporting local supply chains and employment is not just right but actually necessary.

But that is what makes this bill so curious, because it is not really about the objective; it dances around the topic of local jobs, productivity and economic growth, all economic components that are deeply interrelated – inseparable, actually – and it does not qualify or quantify any of its provisions in those terms. It is clearly not an economic policy, it is clearly not a productivity policy and it is actually not even a local jobs policy; it is simply about how the government wants to conduct enforcement on local businesses. It is about introducing harsher penalties, stricter rules and sweeping new compliance mandates over businesses. It goes absolutely nowhere in terms of helping industry to create jobs. It adds punitive blame and punishment when government targets are not magically met. It is one thing to set a goal of more local content and apprentices on projects, a goal we wholeheartedly support, but it is another to unleash a raft of new compliance measures and penalties without clear justification, definition and quantification of the problem or analysis of the cause and effect that leads to a remedy or a solution in law. Those are not unreasonable criteria to expect to be met. The coalition is concerned that this bill’s approach is heavy handed and potentially harmful to Victorian businesses, especially small businesses. It is light on evidence and lacks transparency when it comes to costs. We stand for local jobs and common sense for the businesses who deliver them, and these two things are not mutually exclusive; unfortunately, this bill fails that test because it represents neither, and it risks undermining the very outcomes we all want to see. It does not make any underlying connection between compliance, regulation and outcomes – it just observes them.

The bill hands the Local Jobs First commissioner a set of new powers and penalties, and I will give a brief overview from the bill. First, it empowers the commissioner with additional investigative and enforcement authority, including the power to conduct onsite inspections of projects and to issue formal reports on noncompliance. It establishes a deprioritisation scheme, essentially a form of social credit, essentially a potential blacklist for future government tenders. If a company is deemed to be noncompliant on one project, the commissioner can issue a deprioritisation notice that will count against them the next time they bid for government work. In practice this means the business could be marked down or effectively disqualified from future projects if, for example, they do not submit their compliance paperwork within 90 days of project completion or if that paperwork shows they missed one of their local content targets.

There are new civil penalties allowing the commissioner to take a supplier before the courts and seek fines for failing to meet Local Job First requirements. The fines proposed are a maximum up to roughly $20,000 for an individual and $100,000 for a business, and that is a very significant hit by any measure. And they require suppliers on government projects to meet every local industry development plan quota as an enforceable obligation. These are drastic measures. The bill is effectively creating a local jobs compliance police force with the ability to inspect worksites, audit records, haul companies into court and destroy the company’s chances of winning future business. All of that requires people, inspectors. There is no indication of how many or how long each of these investigations will happen or what happens in the meantime. It is a very heavy hammer to swing.

The logical question business asks – the same businesses doing the actual employing – is: what is the evidence that this is needed? What is the problem so dire that warrants this kind of regulatory intrusion into the operation of businesses? It is a fair question, because if there was clear evidence that a substantial number of companies are materially failing in their local employment targets and covering it up somehow, then you might actually see the point. However, up to now the government has failed to provide any convincing evidence of a systemic problem in the current scheme. They have not given us one example – not one – of a company blatantly flouting their local content obligations under existing rules. They have not shown that projects are routinely failing to meet local industry participation targets. They have not presented any data demonstrating that Victorian apprentices are being denied opportunities en masse or that local subcontractors are being shut out in favour of interstate or overseas suppliers. We have no case studies, no examples, no hard evidence of widespread noncompliance or abuse that would justify what is an intrusive, punitive and very expensive crackdown.

This creates an unhelpful impression that this is change for the sake of appearances rather than change based on actual need or towards a genuine outcome. It is as if the government is saying, ‘We’re going to get tough on business. Even though we can’t point to what they’re doing wrong, we’re going to do it anyway.’ The absence of a clear rationale, I think, is frustrating – frustrating to us, frustrating to the taxpayer and certainly frustrating to business. If such failures of the program existed, the minister would be articulating them to make the case for the bill. But no, instead we have this curious mindset that more compliance is better, without proof that the current compliance is even insufficient. It feels like an expensive distraction – window dressing to cover up deeper issues that this government has failed to address.

The truth is you cannot legislate jobs, far less prosperity, into existence. You cannot just impose tougher rules and expect them to magically create jobs, improve productivity or improve local job outcomes. Improving local job outcomes requires tackling fundamentals – things like training, education, economic competitiveness, infrastructure and lowering the cost of business. But addressing those fundamentals is hard work, and this government has shown little capacity or understanding for it. Instead they reach for the same old playbook – more regulations, more penalties, more bureaucracy, a classic compliance-heavy, ‘compliance can fix it’ mindset. It smacks of a government that cannot deliver real economic growth or job creation, so in the style of all socialist governments, they resort to forcing it. They will not treat the root causes of why jobs may not be created in the first place. They will just legislate the desired outcome and hope that does the trick. It is a belief you can dream something into existence by the stroke of a pen or the slam of the state’s hammer. If Victoria is not creating enough jobs, Labor’s answer is not to ask why or how we can help but to simply mandate it and punish anyone who does not comply to that mandate. We have seen this story before.

The government thinks a glossy announcement of a new law is a substitute for actual delivery. But as we have found time and time again with their lofty housing targets that never get met; with their promises on social housing that have not come close to matching the press release edict, so we have less capacity, a billion dollars to build 40-odd houses; with elective surgery waitlists that despite the ‘record investment’ are the longest in the country and 30,000 surgeries behind where they were announced to be; with electricity bills that keep going up despite the government’s spin; with tough-on-crime bail laws that are still weaker than when they started announcing reform and have not prevented daily tragic outcomes in our news headlines; and even with this new gimmick of the so-called machete amnesty bins that cost $345,000 each to make, you cannot put out a press release and expect results.

Reality does not bend to wishful legislation or PR stunts. You actually have to do the work to address the real issues. But instead of doing the real work, the bill shows the government once again is opting for the blunt instrument approach – comply or else. And make no mistake, the message that this bill sends to business is ‘Comply or you are out. Comply or we’ll make sure you are in some sense blacklisted from future work. Comply or you’ll get slugged with massive fines. Just comply.’ It is a message delivered with a clenched fist rather than an open helping hand. It is a heavy-handed approach that is simply not justified by any evidence the government has put forward. It is all stick and no carrot, and it is aimed at the very people we rely on to build our infrastructure and employ our workers. The government is asking us to endorse a significant expansion of state power over businesses without making a convincing case for why it is necessary, and that is not good governance. It is legislation based on a hunch and a headline, not on facts and outcomes. If we truly want more local jobs, we need solutions that address real-world problems. Enforcement for enforcement’s sake is no good. Good governments usually seek to repeal two regulations for every one they apply. This does the opposite.

Consider what these changes would mean on the ground for businesses, large and small. The feedback the coalition has received from industry stakeholders is unequivocal. These are punitive measures that will hurt businesses, especially smaller local operators, and may even backfire in the goal of job creation. We have spoken with contractors and suppliers across various sectors. Time and again we have heard that when local content requirements are achievable, businesses do meet them. They understand the importance of hiring local and supporting apprentices. In fact many take great pride in it, and I do not think anyone would dispute that fact. Businesses take pride in their local hiring. When it is feasible they are already doing it. However, there are situations where meeting these targets is simply not possible, no matter how much effort or ingenuity a company puts into it, and those are situations that this bill fails to fairly account for.

In regional Victoria a builder might be required to ensure 10 per cent of all labour hours on a project are performed by Victorian apprentices, trainees or cadets – a laudable goal – but what if there just are not enough qualified apprentices available in that remote area? What if the businesses have already hired all the apprentices in the town and still come up short on the 10 per cent target? What is the company supposed to do then? The reality on the ground is that skill shortages are real, especially in regional areas and in specialised trades. We cannot conjure skilled workers out of thin air. As one regional contractor said to me, ‘We can’t find apprentices who don’t exist in our town, and we can’t magically create experienced local tradies overnight.’ Only a completely blinkered, business-ignorant government assumes that every contractor can always hit all quotas, at all times, in all situations, on all projects, regardless of their idiosyncrasies, in all sectors, in all locations. Businesses operate in the real world, and the real world is just not as simple as our technocrats wish it to be for their convenience. God forbid the government actually did some intellectual labour on this. But I think more to the point, it is a very real case of the government not knowing what it does not know and not being intellectually curious enough or being too exhausted as a government to bother to find out or think about it too hard.

Industries vary widely in their needs. An IT project has a very different workforce requirement to a civil engineering project. In cutting-edge fields like digital technology, artificial intelligence or advanced manufacturing, the specific skills may not even exist in Victoria at the scale needed, and we might need to bring in some expertise from outside to get the project done. And those who have any experience in actually running an industry know that doing so can help build local capability in the long run through training and knowledge transfer. Anyone in business knows that punitive quotas and compliance act as a massive disincentive to new entrants. So what this bill effectively does through its bias to enforcement and permanent punishment rather than economic enablement is, firstly, to narrow the pool of eligible, preferred, at-all-times-compliant suppliers on one hand and reduce the capacity of new businesses to enter the pool on the other. Then, to top it off, you will have companies with the talent, skills, track records and resources to deliver backing off from projects and sectors where they could add value because the risk of incurring a black mark creates a risk to the rest of their business.

If the supplier base shrinks, what do you think happens to project cost competitiveness and innovation? I think it is obvious: it costs more. But this bill does not seem to care about those basics – that is, the outcomes. It really does have the worst hallmarks of bureaucratic logic and ignorant desktop theory, filled out like a template by someone who has never run a business, does not understand the motivators, the levers, the triggers, the consequences and the attitudes. It really does; it has some truly headshaking elements. I would love to know what business experience the authors of this bill actually have. Here we are, threatening to penalise companies even if the reasons for falling short are completely out of their control, and those reasons can be very much day-to-day life-of-a-business matters.

There is a fundamental fairness issue here. It is not just a matter of commitment; it is often a matter of availability. Businesses tell us that wherever they can hire local, they absolutely do. And when they cannot, it is not for lack of effort or imagination, it is because the local skills or suppliers are not there at that moment. There is not a shred of evidence to contradict this – they do not have it; they have just asserted it. Penalising a company in those circumstances is fundamentally unfair and wrong. It is punishing someone for a situation they tried to avoid and could not change, essentially punishing them for not performing a miracle.

What do you think will happen if we enforce this rigidly? And if you are not going to enforce it rigidly, why do it at all? A company gets hit with a fine or a deprioritisation notice because it could not find an apprentice electrician in a small country town or because the only supplier of a specialised component was interstate, or maybe it is because, in a spurt of business growth due to their good performance, there is a period where they dip below the quota while they scramble to keep up. That company might well decide, ‘You know what? It’s not worth the risk or hassle to bid on government projects anymore.’ Small and medium-sized businesses find the problem all the more acute. They do not have big legal departments or compliance teams to navigate this minefield. They do not have the deep pockets to absorb a $100,000 fine or the loss of future work because of a black mark from the commissioner. We have to remember, SMEs are the backbone of local economies and of many government supply chains. If they pull back from public projects, who fills the gap? Well, actually, large multinational companies who can afford compliance departments and can spread their costs, that is who. And is that what we want, fewer local players in the game because we scared them off with overly bureaucratic and overly rigid rules?

I think there is some risk that this bill – a bill supposed to promote Local Jobs First – could end up discouraging local businesses from participating in public projects. We are also concerned about the compliance cost this bill will impose, particularly on small operators. Larger firms might be able to carry the burden of more paperwork and more reporting and potentially fighting off penalty proceedings; they will just hire another compliance officer or charge a bit more on the project. Not so for small businesses. Several small business owners have told us they feel this bill is effectively stacking the deck in favour of larger companies who can afford to navigate these complex regulations. This is how you end up consolidating the industry towards big players at the expense of the little guys, and surely that is not what anyone in this Parliament wants.

Another area of concern to us is the complete lack of transparency around the costs associated with this bill and the new measures. It is all very well and good for the government to trumpet that they are beefing up compliance and enforcement, but who is paying for it, and how much? As with so many things this government do, they do not seem to have done their homework on the financial side, or if they have, they are refusing to share it. During the briefing on this bill coalition members specifically asked department officials about what the expected budget impact of these changes would be – after all, if you are going to have more site inspections, more investigations, potential court proceedings and overall heightened monitoring, it stands to reason you will need more resources. You should be modelling what your expected number of cases would be per year, how long those cases will take, how many will go to court, more staff for the commissioner’s office, more administrative support, maybe more new IT systems to track compliance, perhaps even money to educate and guide business on the new requirements. Astonishingly, the officials were unable or unwilling to provide any estimate – not even a ballpark figure. We were essentially told nothing. Either they genuinely did not know, which is concerning, or they chose not to tell us, which is galling.

Think of the irony here: this is a government that has baked into the bill the idea of holding businesses strictly accountable for the meeting of commitments down to the last jot, yet the government itself cannot tell us the cost of its own commitment in this bill. They want to wield a big stick in one hand, but they are keeping the price tag hidden behind their back. This is the government that cannot tell us what it is going to cost to build the Suburban Rail Loop, cannot tell us how it is going to fund the SRL, has blown out on costs on every project it runs by tens of billions of dollars and habitually runs its budgets out by an average of $14 billion a year telling businesses it knows what it takes to run a business better than they do. To put that into perspective, we will be paying $10 billion in interest on that debt in coming years – that is roughly $28.9 million every single day, or about $1.2 million every hour – just in interest payments. This is the hole that has been dug, a hole that means every dollar in the budget is precious and every new initiative should be justified when it comes to costs.

If the government were a business, they would be in administration, because they are a tired, worn-down, lack-of-ideas kind of government. This explains why you are spending time on a bill like this, a bill that tells businesses ‘Do it our way’ rather than actually creating an environment where that would not even be necessary. In this climate introducing a bill that likely expands the bureaucracy and ramps up enforcement activity without a clear budget outline is simply unacceptable. We are going to be hiring dozens of new inspectors for the commissioner’s office – well, are we? We do not know. Maybe they are. Maybe they will just, I do not know, fill out a form or follow a QR code. How many dollars are we talking about to implement the deprioritisation scheme and chase people through the courts for penalties? The government has gone silent on these questions. Perhaps the government thinks the cost will be minor, but if so, why not say so? Or perhaps, as is often the case, they have not actually done the work to calculate it and do not care because, after all, it is someone else’s money. Or worse, they know it is significant but fear admitting the price would undermine the political optics of being tough on noncompliance from businesses. I am not raising this as a triviality. The fact is that every added element of compliance adds to the cost of business and adds to the cost to the taxpayers, and that cost should have an ROI. It should have a return on investment. Is it going to increase the local economy? Is it going to increase costs to business? They cannot tell us. The Victorian public deserves to know how much of their money will be spent on this heightened compliance regime, especially when that money could be going to something that was actually creating jobs and training apprentices rather than funding bureaucratic oversight. It should not be this one-way street, and there has been a lack of straight answers. Good intentions do not equate to good financial management.

A final problematic aspect of this bill is how much discretion and power it places in the hands of the Local Jobs First commissioner when it comes to enforcement, and this might be an appropriate time to circulate the amendments that we are proposing. Under the bill, a company that falls short on a target or makes a paperwork misstep will essentially be at the mercy of the commissioner’s judgement. The bill says the commissioner may consider mitigating circumstances before issuing a penalty or de-prioritisation notice but provides very little detail on what those mitigating factors might be or how they are to be weighted. There are no clear, robust criteria or safeguards spelt out. I do not like it. It means that a business owner could be left pleading their case, saying ‘Look, we tried our best, and here’s why we could not meet the target’ and just hoping the commissioner is in a forgiving mood that day. Perhaps one commissioner will be understanding and another will not, but that is not good law or a good environment in which businesses can be expected to take working-capital risks or subject themselves to stretch goals. We should ensure fairness and consistency up-front, not just cross our fingers that the regulator uses common sense. The way the bill is written effectively says, ‘Trust us; the commissioner will do the right thing.’ That is a very poor basis to operate on when people’s livelihoods are on the line.

Business owners, directors, managers, boards, suppliers, creditors, stakeholders, subcontractors and employees are entitled to clarity, guardrails and clear definitions of what is conditional compliance and what is not, and perhaps there should be an appeals process or review mechanism so that businesses have some recourse before they are slapped with a penalty or banished from future contracts. There is a very genuine risk here that without such protections, this becomes a system of ‘guilty until proven innocent’ for contractors. It would be deeply unfair to mark a business as a bad actor, effectively tarnishing their reputation and prospects, when the so-called failure was simply due to circumstances beyond their control. We have to remember that very few shortfalls, in the absence of evidence to the contrary, are the result of wilful neglect or lack of commitment to Victoria; sometimes it is just the reality of the market. For all the reasons I have outlined, the coalition cannot support this bill in its current form, but we are willing to consider a smarter path, and we believe these two amendments are a small measure to address the flaws in this very flawed bill. I will leave my contribution there.

Sonja TERPSTRA (North-Eastern Metropolitan) (15:50): I rise to also make a contribution on the Local Jobs First Amendment Bill 2025, and in doing so I just want to perhaps set the correct context for this bill. This bill is an amendment bill. It is not a new concept around local jobs. In fact, if you have a look at the history of the original act, the Local Jobs First Act 2003 was formerly known as the Victorian Industry Participation Policy Act 2003 and was delivered under the Bracks Labor government – so quite some time ago. If you were listening to the contribution of Mr Welch over there, you would think that this was a whole new introduction of policy that we were debating today. But in fact, no, we are debating an amendment bill to the originating act.

I am pleased to say that the original act is actually Australia’s longest standing industry participation legislation and has been supporting Victorian businesses and workers for over 20 years, something our government is incredibly proud of. Also, Victoria is party to the Australian Industry Participation National Framework 2001, which defines ‘local’ as Australia and New Zealand. So there is a trans-Tasman partnership there, and with our proud partners across the ditch, we are very proud to be able to offer them an entree into our market.

What perhaps was not really highlighted by Mr Welch in his contribution is that the Victorian government is actually the largest procurer of goods, services and construction works in the state. We use our purchasing power to help develop local industries and create jobs and boost economic activity across Victoria. So we use our social licence. Obviously we have been democratically elected by the majority of Victorians to run government, and of course we get on and build many things. We create many industries by creating jobs and undertake many aspects which boost economic activity across Victoria. What we determine as significantly important is creating jobs that can create real meaning and economic prosperity for Victorians. Like I said, we have a partnership with not only Victorians but also our local partners across the ditch in New Zealand.

Who would not want to participate in a bit of economic prosperity for your own business or perhaps even start a new business and offer your products and services as something that you could do to help the Victorian government build our many big construction projects as part of the Big Build. I know that in my region, the North-Eastern Metropolitan Region, there are many local tradies who are absolutely loving working on the North East Link Program. I see them all the time working on the project. I go up and down the roads quite frequently, and I see many, many local tradies who are benefiting from those projects. As I said, government has used its procurement power to in fact do that. The purpose of the originating act, as I said, is to encourage Victorian businesses and workers in our government procurement processes, and it sets minimum requirements to do so. It is about encouraging job creation locally and making sure that Victorians and our trans-Tasman partners can actually participate in that and provide goods, services and businesses.

Now I will get to the nub of what the amendment act is, which is about amending the original act. There are a few things in the act that needed some clarification. For example, we needed to clarify the commissioner’s powers. Of course this also delivers on our 2022 election commitment to strengthening the Local Jobs First Act, to strengthening that local jobs code, because there was some clarity needed around the commissioner’s powers, but certainly it also further unlocks opportunities for Victorian jobs and businesses who want to work on government projects and clarifies the content requirements to meet contemporary expectations and what that might mean.

Like I said, this act has been in operation for quite some time now – it is not a new piece of legislation – and as time goes on there needs to be some clarification around how the act might operate but also the intentions of government around that. As I said, there is a commitment to clarifying in the act that individual commitments in local industry development plans are enforceable by the commissioner. That is about clarifying the commissioner’s powers. And of course all bids for Local Jobs First projects are required to provide a local industry development plan, or LIDP – and I thank whoever put that in my speaking points, to actually spell out what an LIDP is, because I hate acronyms. It is good for people who might be watching at home to actually know what I am talking about; it is good to have that spelt out.

So as I said, all bids would have a local industry development plan, which would clearly identify local content job commitments, including opportunities for apprentices, trainees and cadets within the project. That is very important because we know there is a skills shortage, and we absolutely desperately need more skilled tradespeople. I am the very proud parent of two children who are training in the trades area. I love the fact that they are tradies, and I can tell you right now, they are very well paid as apprentices for what they do, they are in very secure and unionised jobs and I know they will have a great future as skilled tradespeople and will always have plenty of work. Whilst none of them are working on government projects, I might add, nevertheless they are still working in industries that are booming. I am particularly happy about that. As I said, we need more apprentices and more trainees. We need more young people and even older people who might want to become adult apprentices. There are opportunities for them to train and retrain there, and why not use our social licence to do that? Why not create opportunities for Victorians to be able to work in skilled trades? That is a very important part of our processes here.

The amendments in the bill also clarify that suppliers are required to comply with their commitments around local content and jobs and the major projects skills guarantee that at least 10 per cent of labour hours on large projects are completed by apprentices, trainees or cadets. Again, not only do we want to make sure we provide job opportunities for apprentices, trainees and cadets, but at least 10 per cent of those labour hours must be undertaken by that cohort. That resolves a current ambiguity in the act and will support the strengthened compliance and enforcement measures that are contained in the amendment bill.

Also, there will be a commitment to introducing new penalties for the commissioner, allowing site inspections, the conducting of investigations and reports on compliance. The bill clarifies the commissioner’s role, it clarifies their investigative powers, it formalises their role in managing complaints and it enhances their ability to report on any Local Jobs First issue to the responsible minister. That is a welcome change and a welcome clarification. We received feedback from stakeholders that that clarification was needed. The bill also introduces a new power for the commissioner to conduct site inspections with three days notice. So if there is a concern on a particular job site, the commissioner can in fact do that with notice and have that inspection undertaken within three days. That is, of course, to support the commissioner’s jobs compliance and monitoring functions, which were conferred upon it under the originating act.

There is also a commitment to strengthening consequences for noncompliance where this is discovered and that this will lead to the potential for deprioritisation of an organisation. If someone has given a commitment to local content, local jobs, and that has been put in their plan and it has been found that has not happened, that organisation might be deprioritised for future government tenders or financial penalties might be required, because of course we want to make sure that a commitment that is given by a business is actually fulfilled and is not just an on-paper commitment. It is important that any entity that is making a commitment to the government is able to fulfil that commitment. And because this matters to Victorians, we have given a very strong commitment around jobs and local procurement to the Victorian people, and we want to make sure that we are able to fulfil that. So of course, as I said, there could be a deprioritisation of businesses who fail to comply or fulfil their obligations, but also they could be required to fulfil any local content commitments before receiving any final payment of the contract as well. These are contractual matters, and again that is just a clarification of powers that were provided under the act. It also allows the commissioner to apply to the court for a civil penalty order if a supplier fails to comply with an information notice or an inspection notice. The bill also introduces a requirement for government agencies at their discretion to include contractual clauses that make payment conditional on the fulfilment of Local Jobs First deliverables, including local content commitments when it is appropriate and feasible to do so.

It is important that where there is a problem that has been identified there can be notice given and businesses can be given an opportunity to rectify any concerns that may have eventuated – it gives people the opportunity and time to work together to resolve that. But again it signals to the Victorian community and Victorian businesses that when government made these election commitments around Local Jobs First and local content, we were serious in that, and of course the Victorian public and the Victorian community expect us to do nothing less than deliver on our election commitments, and that is what we are doing.

I talked about a deprioritisation scheme. If a supplier, for example, does not deliver on the local content requirements of that agreed plan – the local industry development plan – and cannot provide a satisfactory reason why, the commissioner may then deprioritise that work. It is not a blacklist – that is not how this works – but it aims to disincentivise noncompliance with suppliers’ local industry development plan commitments and provides agencies with information on suppliers’ poor past performance on Local Jobs First applicable projects. Again, it is about government making sure, because, as I said, we as the government have market power and we are quite within our rights to determine how we have that work carried out and by whom. Like I said earlier, we like to use our social licence to make sure that we are also tipping benefits back into the community by generating jobs for local people. There are local jobs procurement targets, and we know that they are making real differences to Victorian businesses, apprentices and young people who want to work on our projects. So we cannot be criticised at all for any of that.

As with anybody who purchases something from a business, if you are paying good money for something, you certainly expect to receive what you were promised, and if some business promised to deliver on local content or local jobs through their local development plan and they do not do that, we are quite within our rights to question that. As we are using taxpayers money to do so, it is quite appropriate. So I am quite bemused by those opposite, and their approach to this bill is quite interesting. Nevertheless the bill will give effect to the commitment by introducing an explicit power under the act to allow the responsible minister to set requirements to use a specified amount of locally produced uniform and personal protective equipment, or PPE, on strategic projects as well. Strategic projects are designated as Victorian government projects valued at $50 million or more and other projects as declared by the responsible minister.

Further amendments within this bill also include increasing opportunities for Aboriginal and regional businesses. We want to make sure that wherever large-scale projects are being offered, we are reaching into those Indigenous communities and regional businesses so they can also get their fair share of this. It is important because whilst we can grow businesses and opportunities in the metropolitan region, we also take the opportunity to grow businesses and offer those opportunities to regional businesses. This has been incredibly popular with regional businesses.

A lengthy consultation process was undertaken during 2023 and 2024 on the reforms in the bill before us today, and key industry associations, contractors, unions, bodies and government departments and agencies have participated in those consultations as well.

The clock is against me – I have got just about 30 seconds left on the clock – but I can say again that this bill just expands and delivers on our election commitments that we made in 2022. As I said, the original scheme has been around for some 20-plus years now, and this amending bill amends the original act. It is to just clarify some matters that I have touched on in my remarks today. I will leave my contribution there and commend the bill to the house.

Renee HEATH (Eastern Victoria) (16:04): I rise to speak today on the Local Jobs First Amendment Bill 2025. This government stands before us today claiming the Local Jobs First Amendment Bill will strengthen Victorian manufacturing and secure local jobs. Minister for Industry and Advanced Manufacturing Colin Brooks said the legislation reinforces the government’s determination to keep the economic benefits of public projects within Australia. He said:

Victorian Government contracts and projects should benefit Victorian workers and businesses. This Bill puts our state and our people first. It makes sure more money spent in Victoria, stays in Victoria.

It sounds pretty good, doesn’t it? However, the evidence tells a completely different story. This bill is not what it promises to be. It is a punitive regime that will punish Victorian businesses while the real causes of job losses remain untouched. The opposition absolutely supports, in principle, Local Jobs First – we absolutely do. We want to build Victorian capability and secure local jobs, but this bill prioritises punishment over performance and bureaucracy over outcomes and leaves the back door wide open for offshore content on major projects.

Let us address something that Ms Terpstra raised. Under this government’s definition local content includes New Zealand industry. It primarily refers to goods produced, services supplied or construction activities carried out by Australian or New Zealand industry. This seems to dilute the benefit for Victorian manufacturers and trades, allowing New Zealand firms to undercut locals while meeting the policy requirements on paper. The situation is becoming more acute as New Zealand’s economic downturn drives record migration to Australia. There was a net migration loss of 30,000 people from New Zealand to Australia in the year to December 2024, with 72,000 New Zealand citizens leaving their country in 2024 – that is a calendar year high. New Zealand’s economy contracted by 0.5 per cent in 2024, driving this exodus. The migration trend is largely driven by economic hurdles and rising living costs, prompting many to seek better prospects overseas, especially here in Australia.

This bill tightens enforcement without fixing this fundamental definition problem. It is like installing a stronger lock on a door but leaving it wide open. This is on top of the deteriorating situation that has been accelerated in the last decade. Our generous immigration visas and lopsided free trade agreements have benefited foreign nations and offshore labour instead of ours locally here. We can see this problem happening right now across the massive state-backed renewables rollout.

I am going to take the opportunity now to quote Peter Walsh from the other place, because he laid it out, I believe, very well. He said:

… there is no compulsion on those projects to actually employ local people … no compulsion on those projects to have Australian procurement …

He said solar panels are made in China, there is no manufacturer of wind towers in Australia and three-quarters of large batteries are made in China. They are creating jobs in China and Europe.

This was confirmed by the McKell Institute. Its research warns that thousands of manufacturing jobs in Australia are at risk, particularly in local areas like the one I represent. Their chief executive said:

In the short-term, China’s geoeconomic strategy is designed to onshore as much global heavy industrial capacity as possible.

This is Labor’s track record: solar panels made in China, batteries imported from China and wind towers manufactured overseas, all while the government claims to champion local jobs. Peter Walsh went on to say:

… in regional communities the commercial builders very rarely get an opportunity to bid … The best that the locals can get is some accommodation and meals …

I agree with him.

This is not the first time we have seen this pattern. Back in 2015, when similar frameworks under the banner of free trade were being introduced, Labor’s own traditional allies, the unions, warned exactly what would happen. The then ACTU president Ged Kearney said:

Workers from China can come under temporary work visas just about in any category and will not be subject to labour market testing … If you can bring an entire workforce in to build that building from another country then you immediately lock out Australian workers.

The Australian Manufacturing Workers’ Union was equally clear when they said:

… thousands of workers will miss out on jobs …

…

… they will become cash cows for overseas Chinese investors …

Australian Industry Group’s Innes Willox warned that with a lack of real consultation:

… it’s only after the agreement has been signed that we can see the real fallout.

These are Labor’s own allies sounding the alarm, yet here we are a decade later watching the same mistakes being repeated and amplified. So let us examine Labor’s real track record over the past decade. The CFMEU, merged in 2018 as the state’s most powerful construction and manufacturing union, has shown no backbone in securing local industry and jobs; it has only shown self-interest. Every sector they represent, from construction to forestry and fishing, has been in terminal decline under their watch with the government’s official rubberstamping. We have seen the incredible impacts of this, particularly in my region, the Eastern Victoria Region. Our world-leading fishing industry has been left to rot. Many of the small and independent generational fishing communities have seen our oceans and waterways turn into what can only be described as an illegal fishers paradise as fisheries officers jobs are slashed and our oceans become a playground for recreational fishers and international offshore wind farms. Meanwhile our commercial fishers, employing the world’s most sustainable practices, are being shut down for supposed ecological concerns.

The hypocrisy I think reached fever pitch with the closure of the native timber industry. This government callously destroyed thousands of jobs and entire communities when they shut down Victoria’s sustainable timber industry several years ahead of their promised deadline. This is one that I have spoken about so many times in this place, because when you destroy an industry, you destroy the community that relies on it, and that has been seen time and time again in the Eastern Victoria Region. Workers and related industries were suddenly abandoned, their incomes and communities absolutely destroyed. But here is the stunning contradiction: even now tonnes of windblown sawlogs salvaged from the Wombat forest are being left to split and decay despite urgent calls from Victoria’s remaining timber mills to repurpose the wood for high-value products such as flooring and stair treads. Instead the government now imports timber from nations with some of the most unsustainable logging practices, including timber linked to Russian criminal organisations and also from some countries with the most horrific and appalling environmental records. This continues to be what feeds and builds our nation now. They destroyed our sustainable world-class industries and replaced them with imports from dubious foreign nations. This is Labor’s idea of environmental responsibility and local jobs.

Victoria is now one of Australia’s poorest states. We have got more debt and we pay more tax than anywhere else in this nation. Its jobs and industries are in terminal decline after a decade of Labor’s policies. Recent data indicates that over 129,000 businesses closed in Victoria during 2024, including small enterprises.

Jacinta Ermacora: How many opened?

Renee HEATH: I just am going to pick up on the interjection from Ms Ermacora here. I am talking about, on average, 530 closures of businesses per day.

Jacinta Ermacora: Well, what’s your reference? ‘Recent data’ isn’t a reference.

Renee HEATH: ‘Using data isn’t a reference,’ she just said. That is literally what Ms Ermacora just said. ‘Quoting data isn’t a reference’ – okay.

More than 3000 Victorian businesses have relocated interstate. Just last week I was in businesses in the Pakenham electorate. I spoke to three major employers that are considering packing up and moving interstate because the environment is just not right here to have businesses. A few months ago we heard that a 169-year-old glass manufacturer based in Dandenong South collapsed after warning of the impact of cheap imports being dumped here in Australia. The reason was clear, and Honi Walker from SEMMA, the South East Melbourne Manufacturers Alliance, did not mince words. She said:

We simply can’t compete on price from China and other Asian countries.

The loss of sovereign capability on an essential product would cause homes to cost more and take longer to build with unsafe overseas glass, she said:

What our governments have completely ignored is safety. Imported steel from China does not meet Australian Standards and was the reason the new stand at GMBH Stadium collapsed in 2023 and the Kew Recreational Centre’s roof caved in.

The same pattern was found in the deadly apartment cladding disasters. Unions and this government have overseen the destruction of local, sustainable and world-class industries while importing from nations with a track record of unsuitable practices and have handed energy assets to foreign owners and then claimed to champion local jobs. Where is the security for local jobs in this?

This bill creates a deprioritisation regime and civil penalties scheme that will disproportionately impact small and medium enterprises. Small and medium enterprises are the lifeblood of our state. Fines of approximately $20,000 for individuals and $101,000 for corporations, combined with a tender ranking handicap, will crush SMEs that lack compliance teams, especially when labour shortages make targets impossible to achieve. Master Builders Victoria described it perfectly as ‘all stick and no carrot’ and likely to create more burden than benefit for many small and medium builders. They said some requirements are not possible to comply with in regions with smaller transient workforces.

I am going to quote Brad Rowswell, my colleague from the other place, who said:

… this bill is not about whether we support the Local Jobs First program; this bill is about whether we support punitive action being taken against businesses who are not able to meet their industry development targets.

Fines of approximately $20,000 for individuals and $101,000 for corporations, combined with tender ranking handicaps, will crush small and medium enterprises that lack compliance teams, even where labour shortages make targets impossible to achieve.

In the last minute – I might just skip to the ending because I always write too much – this bill is not what it promises to be. The evidence shows it will punish Victorian businesses, while the structural cause of job leakage, broad definitions that include overseas contacts and lack of binding mandates on major projects remain untouched. Labor heard the warnings from its own unions in 2015 and ignored them. They are now doubling down on a system that serves foreign manufacturers and overseas workforces first and Victorian workers last. The opposition cannot support this legislation because it destroys what small and medium businesses remain while failing to address the real cause of job losses. This bill is a costly fix to a problem that the government has not been able to demonstrate exists, and it will make the solution worse and not better. We call on the government to actually come up with some practical solutions that really do put Victorian workers first.

David LIMBRICK (South-Eastern Metropolitan) (16:19): This bill makes me despair. The economic ignorance required to continue the belief that this somehow benefits Victorians is astounding, and the bill itself has measures in it to try and combat the crime and corruption that are incentivised by the government’s own policies. It is absolutely astounding. Firstly, on the economic ignorance, this idea that the government can create jobs – the government cannot create jobs. Every time the government buys something, they say, ‘We’re going to do something first.’ They say, ‘Look at all this money we’re spending. Look at how we’re helping this local business’ – totally ignoring the fact that they need to take the same amount or more from somewhere else, which destroys something. For everything that they create, something equal or greater has to be destroyed, and they destroy it through taxes. That is how they do it. Every time they create something they are destroying something else through taxes. There is no net gain here. This is a zero-sum game. The government is not creating anything except media releases. What they should be doing is repealing the Local Jobs First Act 2003, not modifying it.

Secondly, on the incentives for corruption, they are out of control in Victoria with these procurement policies. They incentivise corruption. The government knows this, because they have got all these new powers in here to make sure that they are not getting conned by people. We have seen it with labour hire services, which provide services to fill the government’s procurement policy wishes for Aboriginal workers or for male or female workers and all these sorts of things. We have seen how corruption works there. In fact it has got to the point where organised crime is involved. The government is foreseeing more corruption and potentially organised crime involvement through businesses pretending that they are sourcing things locally when they are not, so in order to try and combat that – spoiler alert: they will not combat it – they are building in these draconian new powers so they can issue fines to people who are pretending to sell something that is made in Victoria when it is actually not.

The best policy, the most economically sound policy that will benefit Victorians, when we are procuring things – well, firstly, we should stop procuring so many things. But if we do have to procure things, we should do something radically different, which everyone in the business world knows is the right thing to do: buy the best product or service for the best price from a reputable supplier. What a radical suggestion. If they do that, they will be minimising the amount of taxpayers money that they spend – in other words, the things that they have to destroy in order to buy things – and they will also be making sure that they get a good-quality product.

Here is the other economic ignorance thing, and I think a few other speakers have touched on this: the idea that Victoria is the best place to do everything. Of course some places are better places to do things than others. This is a basic rule of economics where you have comparative advantage in certain things. Victoria is better at doing some things and it is not better at doing others. But in order to force this idea that Victoria can do everything, the government pumps in and effectively subsidises things that would not exist through normal comparative advantage and says, ‘Well, it’s made in Victoria, so we’re going to pump money into it.’ That is how we end up with all these sorts of problems.

As I said, what we should be doing here is actually repealing the act and starting from scratch. Imagine if we did that. All of that crime and corruption that are based on gaming the government’s procurement policies would disappear just like that. It would be gone. We could get rid of it overnight. But the government does not want to get rid of it, because they like announcing that they are going to give this money to this person or they are going to give it to someone that they like or give it to a union that they like or whatever it is. We should just be buying the best product or service at the best price from a reputable supplier, regardless of what their policies are on workforce diversity or where it is made and all those sorts of things. It should be the best product or service at the best price from a reputable supplier.

Jacinta ERMACORA (Western Victoria) (16:24): I am pleased to have an opportunity to speak on this bill and also to make some comments on some contributions already made. The Local Jobs First Amendment Bill 2025 delivers on the government’s 2022 election commitment to strengthen the Local Jobs First Act 2003, and the aim is to ensure that the Local Jobs First scheme continues to create maximum opportunities for local jobs and businesses, supporting a stronger workforce, local industry and Victorian economy. It remains fit for purpose and aligned with contemporary expectations, and the bill reforms focus on improving compliance and enforcement of local industry development plans. They also enhance the powers and functions of the Local Jobs First commissioner.

Just to clarify, Local Jobs First is focused on promoting employment and business growth by expanding market opportunities for local industry and providing for industry development on Victorian government projects. There are a whole range of categories that trigger the involvement of this act. It depends on the size of the project – $3 million, or $1 million in regional communities. Then if it is a strategic project of more than $50 million, that can be declared as well. The tool used to ensure that this happens is an industry development plan, and in the industry development plans, businesses are required to identify the local content. I know that sounds pretty vague, but really local content is: how many local people are you going to be employing for this project, and what local products, like furniture et cetera, are you going to be using?

I just want to counter some of the one-dimensional notions from those opposite, particularly Dr Heath. If we took what Dr Heath argued to the absolute nth degree, we would end up with a ban on importing products, and that is ridiculous. That is almost Trump-like, actually. That would completely demolish any kind of marketplace. The whole idea of this is to enhance local employment and enhance local products. But if you flip it around the other way, it is also there to prevent the prioritisation of foreign materials and even foreign workers. What it does is strengthen local communities either way. It does so by delicately putting in a framework that does not cut across the free marketplace in any kind of damaging way and certainly does not cut across the national laws as well. You could say that we should be going further, which was the implication from Dr Heath, and I am disappointed that she is not here to hear my counterargument.

What we are doing is encouraging local businesses. It had an incredibly positive outcome in Horsham, where the bill was used for local jobs in a public transport project. Victoria’s bus infrastructure began an overhaul through Local Jobs First, undertaking works on the design, supply, installation and maintenance of bus infrastructure across the state, and in Horsham that had a really terrific impact by ensuring that local people were employed and that local products were used where possible and where available. If something is not actually made in our country, then of course you can import it. It is ridiculous to imply this is a zero-sum game and say that we are banning things when we are not doing that at all. I am not sure what the argument really is from the other side. I support this bill, and I support the Local Jobs First legislation and the intent of it. It is particularly good for regional communities. I will leave my contribution there.

Gaelle BROAD (Northern Victoria) (16:29): I am pleased to have the opportunity to speak about this Local Jobs First Amendment Bill 2025. What we see with this bill are new powers, further bureaucracy and fines for business. The commissioner currently has limited ability to penalise suppliers for noncompliance under the commissioner’s information-gathering powers, but this bill introduces a civil penalty mechanism to enable the commissioner to apply to court for a civil penalty order in relation to a supplier’s noncompliance notice. The bill proposes a maximum penalty of 100 penalty units or 500 penalty units for an organisation. That is approximately a $20,000 fine and a $100,000 fine respectively. It is quite extraordinary what we are seeing in this bill.

The bill introduces new powers and functions for the commissioner, including additional investigation and reporting powers, a new power to conduct site inspections with notice and an explicit role to provide advice and support to contracting parties. The bill gives the commissioner an explicit function to conduct investigations and the ability to receive and investigate complaints. Mr Welch, I do thank you for your explanation of the concerns that we have with this bill about the potential financial impact on Victorian businesses, particularly smaller operators in regional and rural areas. The penalty schemes could unfairly penalise businesses that are unable to meet the local content requirements due to industry circumstances beyond their control. A further concern that has been highlighted in this debate is: what is the cost? What is the cost of administering this scheme and these extra powers? It does stand to reason that the increased auditing, compliance and enforcement activities would require greater resources for the office of the Local Jobs First commissioner, particularly in terms of a headcount. Labor has refused to acknowledge this fact or provide any modelling around what these measures will cost to implement, and that is of concern.

So what is life like for business under an Allan Labor government? I can tell you: as I talk to people, it is clear that it is pretty tough. The Business Council of Australia found high property taxes and other red tape. Their survey has once again confirmed that under the Allan Labor government Victoria is the worst place in Australia to start, operate and grow a business. Their survey marked Victoria last for overall business settings and found that with a low ranking for its property taxes and charges, payroll taxes and business licensing requirements, the state has much room for improvement if it is to attract and generate business-driven growth. Across specific areas impacting business conditions, the survey ranked Victoria very poorly for overall taxation, regulatory costs and trading regulations, and Victoria’s property tax settings were found to be the least competitive nationally. It also rated poorly for overall licensing, administrative burden and compliance, and this is certainly what we are seeing in this bill. Victoria rated very poorly for the cost of workers compensation schemes, with premiums above the national average, and also poorly for planning and building permit systems.

I know that my Nationals colleague Annabelle Cleeland has raised concerns about the closures that we have seen, particularly in her electorate. There have been very large businesses closing, and that has seen hundreds of job losses in the region. It is putting incredible pressure on towns, and I am seeing that right across the electorate. Victoria has recorded a staggering 48 per cent increase in business insolvencies in the last financial year alone. That is incredible. More than 4200 Victorian businesses closed in the last year. Local manufacturers, farmers, service providers and retailers are being pushed to the brink by skyrocketing energy bills, unaffordable insurance, out-of-control WorkCover premiums, layers of red tape and a very punishing tax burden. And we certainly know why: when you look at the net state debt in Victoria, it is astounding. We are heading towards $194 billion, and that is nearly $29 million every single day in interest.

After a decade of financial mismanagement we see Labor continue to increase taxes – just taxing and taxing, ever-increasing taxing – pushing businesses, investment and economic opportunities interstate. I was speaking to people just recently who live on the border, and they were talking about the number of housing developments that are moving into the other state because people are trying to avoid the incredible burden of tax that we now face in Victoria. I know the Herald Sun did an editorial this year, and they reported that Victoria is actually the high-taxing state. The Premier has acknowledged that Victoria relies heavily on payroll and property for our primary taxation sources, but these are taxes on productivity and investment. Stamp duty accounts for about $10 billion of our state revenue; land taxes account for about $9.8 billion of revenue. The Herald Sun highlighted in that editorial that increasing property taxes means more tax revenue. When I thought about it, I thought we should not be shocked when the state government continue to add costs and raise the bar for property owners with more regulations and requirements, because that is seeing people forced to sell their homes, and when they are forced to sell their homes it means a lot of properties are sold, and if a property is bought, then you are paying stamp duty, and stamp duty is money in the government coffers. So it is in their interests for people to lose their homes, because that is, in a way, how they make money.

I spoke to a developer recently who talked about the lack of building and the lack of investment happening. Also with councils – we have spoken to them recently, and they talked about the burden of taxes impacting regional Victoria. This burden is seeing thousands of homes going elsewhere. But if the government was concerned about local jobs, then they would be looking at the costs on business, not just with the taxes that I have been talking about but also with the energy costs. We are seeing a huge escalation in the costs, and I know just with VNI West we had the report recently from the Australian Energy Market Operator that talked about a huge increase in the cost of that transmission line. Again, that is all going to appear on our energy bills. The upper limit of that is more like $11 billion, so far higher than the $3.6 billion, I think it was, that they estimated early on.

Another impact that we are seeing on local jobs is WorkCover premium increases despite no claims. I have spoken to businesses that have really had that hit home. Just to give you some figures, in Seymour Annabelle Cleeland raised concerns about a concreting business; their WorkCover had doubled from $6000 to $13,000 in three years despite no claims or incidents. Tim Bull, who is in another part of the state, not in northern Victoria, has talked about the impact on some fishing operators and their industry. Their bill in 2022–23 was $4178; in 2025–26 it is now $24,078. That is despite a reduction in marine safety concerns and in the fishing sector. This is a huge issue and a huge burden on so many businesses in Victoria.

If the government is concerned about local jobs, then perhaps instead of looking for other ways to fine business and make more revenue they could look at ways of reducing costs on business. The Allan Labor government should be taking action to cut red tape and incentivise investment to ensure Australia is an attractive place to do business. If you care about local jobs and providing opportunities for apprentices, for regional businesses and for tradespeople, then stop wasting money and stop introducing new taxes that are crushing our state, crushing businesses and crushing jobs.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (16:39): I am very pleased to rise to sum up and make a contribution briefly on the Local Jobs First Amendment Bill 2025. I think it is important at the outset to just remind people of the scope of the bill that is before us today, and in doing so I want to reiterate that the Allan Labor government is on the side of workers. This bill is about prioritising Victorian jobs and the use of Victorian content across government projects, so let us just keep that in mind as we debate this bill.

Originally introduced as the Victorian Industry Participation Policy Act 2003 under the Bracks Labor government, the Local Jobs First Act 2003 boosts local employment opportunities by enhancing market access for local businesses and supporting the growth and development of Victorian industry. It has been Australia’s longest standing industry participation legislation for over 20 years, and as you would expect, it has evolved over time to meet contemporary needs. In 2022 we made a commitment to further building on our flagship legislation to ensure that Local Jobs First continues to maximise opportunities for apprentices, trainees, cadets and businesses and supports the Victorian economy.

The bill delivers on our election commitment in the following ways. We are clarifying and strengthening the frameworks that support compliance with enforcement of suppliers’ Local Jobs First commitments. We are providing the commissioner with additional investigation and reporting powers, including the power to conduct site inspections. We are introducing stronger consequences for noncompliance with Local Jobs First commitments and the act, including a deprioritisation scheme, civil penalties for noncompliance with the commissioner’s information-gathering powers and contingent payment mechanisms for agencies to include in appropriate contracts. We are expanding on the Local Jobs First policy objectives – and this is important – including more opportunities for Aboriginal businesses and regional small and medium-sized enterprises to participate in Local Jobs First projects. And we are also allowing the minister to set requirements to use a specified amount of uniform and PPE on strategic projects, which reinforces the government’s support for the local textile, clothing and footwear industry. The bill has been informed by extensive consultation which balanced a diverse range of views, and once implemented it will ensure that the economic benefits delivered by Local Jobs First are maximised.

Despite some of the negativity that we have heard today, these statistics are pretty powerful: since 2014 Local Jobs First has been applied to more than 3200 projects worth over $197 billion in government investment, ensuring that Victorian businesses and workers benefit from Victorian government procurement. Local Jobs First content requirements have been set on 396 strategic projects, and they have supported more than 60,000 jobs, enabling local companies to compete for both large and small government contracts on Victoria’s largest projects. These stats show that we are using our purchasing power to prioritise local jobs and local businesses for the benefit of Victorians across the suite of our future-shaping projects like level crossing removals, the Suburban Rail Loop, next-generation trams, new schools, kinders, new hospitals and on it goes.

I also wish to briefly address some of the points that the opposition have made about the bill during this debate. The opposition have claimed that the bill disproportionately impacts smaller Victorian businesses, particularly those operating in rural and regional areas. This concern overlooks the fact that Local Jobs First has supported regional businesses over the last 20 years. Since 2014 there have been more than 1300 Local Jobs First projects in regional Victoria. Regional businesses are also important contributors to many regional, statewide and metropolitan Local Jobs First projects. The major projects skills guarantee requirement helps to support opportunities for workers in regional areas on regional and statewide Local Jobs First projects, and it is helping to grow the next generation of skilled workers in Victoria by providing opportunities for Victorian apprentices, trainees and cadets to work on high-value construction projects. To further encourage participation and to create more opportunities for regional small and medium-sized enterprises on Local Jobs First projects, the bill introduces a specific new objective designed to support regional SMEs.

The opposition claimed that under the bill suppliers can be fined for failing to deliver their local content commitments, and this is a misunderstanding; it is incorrect. The commissioner cannot commence civil penalty proceedings if suppliers do not meet their local content commitments. The commissioner can only commence civil penalty proceedings if a person does not comply with an information notice or an inspection notice. Further, the process around the deprioritisation scheme has been designed to ensure procedural fairness for suppliers and that they are not unduly penalised for factors outside of their control. It is a shame that Mr Welch is busy talking to Mr Davis, because this is right to the point. The second-reading speech does make that clear, where the minister pointed out that this is not about a punitive approach but about ensuring that there is procedural fairness for suppliers and that they are not unduly penalised for factors outside of their control.

The commissioner is currently responsible for 299 strategic projects, and we want to make sure that these projects and future projects stay on track, that those businesses have every opportunity to participate through their supply chains and that their workers have well-paying and secure jobs. These reforms assist businesses in participating and benefiting from government procurement of goods and services. In fact the bill provides the commissioner with a broader suite of tools for – and this is another point that I know the opposition are going to want to go to – a graduated approach to compliance and enforcement. The commissioner’s expanded compliance powers, far from being punitive, have been carefully designed to incentivise compliance.

The opposition has also claimed that there has been no genuine industry consultation. That could not be further from the truth. There were a number of different rounds of consultation, including targeted consultation with departments and agencies, industry associations, contractors and unions in 2023 and 2024. This includes targeted consultation with Master Builders Victoria.

Finally, the opposition have made claims on budget impacts of the measures contained in the bill. There is funding through the budget of $6.3 million that has been allocated over the next year for the administration and delivery of Local Jobs First. It is intended that this bill will commence in two stages, with some reforms starting the day after royal assent and the majority of reforms, including the commissioner’s expanded powers and functions, commencing on 1 July 2026. Therefore there will be, as you would expect, government budget considerations for the 2026–27 financial year and what is required for the office of the Local Jobs First commissioner.

I note that there have been some amendments put forward by the opposition, which will be addressed in committee. However, I would like to indicate that the government will not be supporting these amendments. The amendments have the potential to undermine the Local Jobs First commissioner’s ability to consider all relevant circumstances in relation to a noncompliance matter, thereby weakening the Local Jobs First scheme and its objectives.

The bill strengthens the compliance and enforcement framework while maintaining the appropriate flexibility for agencies and suppliers to manage Local Jobs First projects. Through this bill we are making sure that suppliers tendering for government contracts understand and deliver on their Local Jobs First obligations and that they are aware of possible consequences for breaching their obligations. I am sure we will get into the detail of that in committee, and I commend the bill to the house.

Council divided on motion:

Ayes (18): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Jacinta Ermacora, David Ettershank, Michael Galea, Anasina Gray-Barberio, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Ingrid Stitt, Lee Tarlamis, Sonja Terpstra, Sheena Watt

Noes (12): Melina Bath, Gaelle Broad, Georgie Crozier, David Davis, Ann-Marie Hermans, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Rikkie-Lee Tyrrell, Richard Welch

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (16:56)

Richard WELCH: Thank you, Minister, for your very good summary, because it actually covered nine-tenths of my questions, even though I was not paying proper attention. But I did hear the numbers coming in. The first question is: how did you calibrate the fines of $20,000 and $100,000? What was the logic behind them being those specific numbers?

Ingrid STITT: In ordinary circumstances, Mr Welch, the penalty units are upon advice from our departments and proportionate to other like legislation and penalty units across different acts.

Richard WELCH: So they are not scaled to the scale of the projects themselves? They are not proportionate in that respect?

Ingrid STITT: In terms of the civil penalties, they are matters that are determined by the courts. The commissioner in certain circumstances may apply to a court for a civil penalty, but the actual awarding of any penalty would be a matter for the courts.

Richard WELCH: I apologise if you did actually say this in your summing-up and I missed it. I heard that there were I think 169 schemes or so that had run. Did you quote the number of how many companies are currently or would be monitored by the scheme?

Ingrid STITT: I can just recap what I said in my summing-up, Mr Welch, which was that since 2014 there have been more than 3200 projects that have participated in the Local Jobs First scheme, and that is worth over $197 billion. I also indicated that the Local Jobs First local content requirements have been set on 396 strategic projects. But as you know, there are different thresholds depending on what type of project it is.

Richard WELCH: I think maybe I did not say the question right. It is the number of projects, but are you saying the number of projects is the same as the number of companies scrutinised, or is there a number of actual companies scrutinised?

Ingrid STITT: Those figures were the number of projects. I am just trying to find reference to how many companies have benefited. Can you just bear with me for one sec.

We cannot give you a specific number because, as you will appreciate, there are hundreds of companies within a supply chain.

Clause agreed to; clauses 2 to 12 agreed to.

Clause 13 (17:00)

Richard WELCH: I move:

1. Clause 13, after line 15 insert –

‘(1A) After section 28(2) of the Principal Act insert –

“(2A) The Commissioner must not make a determination under subsection (2) if the Commissioner is satisfied that the person’s failure to comply with an information notice, the Local Jobs First Policy or a Local Industry Development Plan is due to circumstances outside the control of that person or any person employed or engaged by them.”.’.

Whilst we could disagree about a lot in the bill, I would hope that we probably could agree around here that a bit of rigour around the commissioner’s discretion would put the onus on them to actually demonstrate that it was not beyond their control. So effectively the amendment says the commissioner needs to consider whether it was beyond their control before making a determination.

Ingrid STITT: I need to indicate at the outset that the government will not be supporting this amendment. We think it is a misreading of the amendments in the bill, because it would actually have the effect of undermining the commissioner’s independent discretionary powers to support the enforcement of Local Jobs First to protect Victorian jobs and it would risk normalising noncompliance, so we do not think it is an effective or appropriate mechanism. The act already includes procedural fairness and review mechanisms which enable the commissioner to consider reasons for noncompliance before a final decision and require the commissioner to act reasonably in exercising their decision-making powers. This obviously is important because it ensures that suppliers are not unduly penalised if there are circumstances outside their control regarding noncompliance with the Local Jobs First commitments. A key part of the bill is empowering the commissioner with those additional enforcement powers to ensure compliance with Local Jobs First at the supplier level, and it introduces new consequences as a deterrent for noncompliance with the Local Jobs First commitments. I am not sure if you heard it, but I pointed to the second-reading speech of the minister in this regard, where he made it clear that we do not want people to be penalised for things that are outside their control, and that is why the amendments have been developed in the way they have. So we will not be supporting that amendment.

Aiv PUGLIELLI: Similar to what has already been covered by the minister, my colleagues and I are satisfied that the process already exists whereby the commission can work with suppliers to support them if they are coming up with issues which may make them noncompliant. Really it needs to be an ongoing conversation where suppliers and the commission can work together to address any concerns and support each other to meet the requirements of their agreements that encourage Victorian jobs.

Council divided on amendment:

Ayes (11): Melina Bath, Gaelle Broad, Georgie Crozier, David Davis, Ann-Marie Hermans, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Rikkie-Lee Tyrrell, Richard Welch

Noes (18): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Jacinta Ermacora, David Ettershank, Michael Galea, Anasina Gray-Barberio, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Ingrid Stitt, Lee Tarlamis, Sonja Terpstra, Sheena Watt

Amendment negatived.

Clause agreed to; clauses 14 to 18 agreed to.

Clause 19 (17:09)

Richard WELCH: I move:

2. Clause 19, page 22, after line 25 insert –

“(3A) The Commissioner must not issue a deprioritisation notice to a supplier if, in the case of a supplier who is alleged to have failed to comply with a commitment specified in a Local Industry Development Plan for a standard project or a strategic project, the Commissioner is satisfied that the failure is due to circumstances outside the control of the supplier or any person employed or engaged by the supplier.”.

It is on the same basis as the previous one – that the consideration of circumstances beyond their control should be a matter of rigour and should not be optional at the discretion of the commissioner.

Ingrid STITT: For similar reasons, the government will not be supporting this amendment. The amendment risks undermining the commissioner’s independent discretionary powers to support the enforcement of Local Jobs First to protect Victorian jobs, and it also risks normalising noncompliance. I will just note that the act already includes procedural fairness and review mechanisms which enable the commissioner to consider reasons for noncompliance before a final decision and require the commissioner to act reasonably in the exercise of their decision-making powers. The deprioritisation process has been designed to ensure a fair go for suppliers and that they are not unduly penalised for factors outside of their control regarding noncompliance with Local Jobs First commitments and the deprioritisation, noting that it is the last step in a gradual process whereby if a supplier is facing challenges meeting their Local Jobs First commitments the commissioner engages with the supplier to exhaust all supportive options to find a resolution.

Aiv PUGLIELLI: As has already been covered, the minister has provided an assurance via the second-reading speech that when it comes to deprioritisation the supplier will be provided with procedural fairness and, as we are hearing again today, will not be unduly penalised for factors outside their control. This is an assurance that my colleagues and I accept, and we do not therefore see a requirement to further amend the legislation. So we will not be supporting this amendment today.

Council divided on amendment:

Ayes (11): Melina Bath, Gaelle Broad, Georgie Crozier, David Davis, Ann-Marie Hermans, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Rikkie-Lee Tyrrell, Richard Welch

Noes (18): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Jacinta Ermacora, David Ettershank, Michael Galea, Anasina Gray-Barberio, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Ingrid Stitt, Lee Tarlamis, Sonja Terpstra, Sheena Watt

Amendment negatived.

Clause agreed to; clauses 20 to 48 agreed to.

Reported to house without amendment.

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (17:15): I move:

That the report be now adopted.

Motion agreed to.

Report adopted.

Third reading

Ingrid STITT (Western Metropolitan – Minister for Mental Health, Minister for Ageing, Minister for Multicultural Affairs) (17:15): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The PRESIDENT: Pursuant to standing order 14.28, a message will be sent to the Assembly that the bill has passed the Legislative Council without amendment.