I want to acknowledge the Ngunnawal people, the traditional owners of the land upon which we meet.

What a pleasure it is to be here bright and early on a Monday morning and see all your happy, shining faces, ready for two days on procurement. I have a new colleague who just started in my office, and I said to her, "have you told all your friends that you've come to work for a bloke who gets to speak at procurement conferences?"

I'm very, very keen to see the work that is completed here. It is very good to see delegates here at this event from the Pacific, from Timor Leste and from Indonesia – you are very welcome here. Make sure that you get out and about amongst the crowd of procurement officials here.

It is very good to see us reaching out across the Pacific, across the region, because so much of these challenges as we engage in reform and making procurement policy work in the public policy interests, so much of these are shared challenges.

I come with some experience in procurement terms, informed by a few developments, including as chair of that inquiry in the last term of government into the capability of the Australian Public Service. I do want to come to some of those issues, because you work at the intersection of the public service and the private sector.

How we approach these questions is really going to guide not just decision making – procurement by procurement – but developing procurement policy that meets those public interest tests in a serious way.

Secondly, as a trade union official in the manufacturing sector, I was engaged in this big struggle with the government in New South Wales, the former Liberal government in New South Wales, who made a decision to offshore a series of very large rail rolling stock procurements.

I think, for that government at that time, they applied some very narrow value for money tests. "How hard is it?" They must have thought. Andrew Constance, the then Liberal Transport Minister, how hard is it to build trains? Couldn't be that hard, I think, was the conclusion that he reached.

And of course, if you apply just that test to each individual procurement, I think it made sense to them to offshore some billions of dollars’ worth of rail procurement to, in that case, the South Koreans and the Indians, who have enormous scale when it comes to making trains.

My approach to that was driven by the communities that I represented, mostly in the Hunter Valley, where thousands of jobs disappeared as well as hundreds and hundreds of school-leaver job opportunities, for young people as apprentices or engineering cadets, in what is a giant industry for Newcastle and the Hunter Valley.

I was mobilised by the opposite. That is, how do I support these communities and these jobs, good quality jobs in a region, and industrial capability that really matters. But the answer came some years later when these trains arrived, hopelessly late, over budget to the tune of many, many hundreds of millions of dollars, and with significant quality and safety defects that mean the trains did not fit at the stations that they were designed to fit alongside. They didn't work in some of the tunnels, which is an important thing for a train to be able to fit through the tunnel.

All of this opportunity and industrial capability was gone – but then had to be engaged fixing these trains in Australia.

It really goes to show when you step back from that procurement disaster example, it illuminates some of the themes here. How do we ensure that public money is spent in the public interest?

And it turns out, if you step back, that you have a whole series of state governments making for example, tenders for trains that make perfect sense to them, but have no sense of national coordination. No consistent pipeline for industry to be able to plan to recruit apprentices, to recruit staff.

And so the cycle of tendering meant that companies who won tenders would have to commission plans and equipment, to establish workshops, employ people, apprentices, and all of that work would go on, and then on the downslope they would make people redundant decommissioning plants and equipment, and then five years later, the state or territory would say, we think we need a billion dollars’ worth of trains, and open a tendering process again and the whole cycle would start again.

Who bears the cost for the decommissioning and recommissioning, the hiring staff and the making staff redundant? In the end it is the taxpayer, who also bears the cost of the poor outcomes for communities and for passengers.

It is those two sets of experiences that drive my view about this. I think it informs Katie Gallagher, the principal Minister in this area. The focus on the value of the public service, building capability in the public service as a primary objective, that when decisions to procure goods or services or to outsource are made, that they are made in the public interest.

That the selection of external providers should be guided by principles that deliver value for money, improved services for Australians and add to, rather than detract from, the capability of the APS.

Delivering increased productivity and innovation in the APS, and fostering that in the firms that we deal with more broadly.

That is a real contrast to the approach that has been taken by the previous government, a hostility to the public service, an erosion of services and capability across the Australian Public Service that occurred under that unfortunate Abbott-Turnbull-Morrison decade.

When we came to office, one of the reforms led by Minister Gallagher that the Albanese Government undertook was to rebuild a fit for purpose public service that is resourced to do the job that the Australian people need and expect.

The first step was establishing an accurate picture of the state of our public sector workforce. $20.8 billion in external labour through labour hire companies equivalent to a shadow workforce of around 50,000 people. On average, agencies spent approximately one in every $4 on external labour.

Some of you, like me, may have family who were working for the tax office or whatever, on labour hire arrangements for year after year after year. One of them I know very, very well for a decade working for the tax office as labour hire, dispiriting, unable to secure a mortgage for his family.

These arrangements have deep social impacts. But it is the expenditure for the Commonwealth, which could be engaged at lower cost and be more effectively spent on permanent employees and good jobs, and more importantly, delivering better services.

For example, in areas like the Department of Veterans Affairs or Services Australia, where investing in a permanent workforce and the training and capability of that workforce has delivered much better outcomes.

We have converted 3300 roles to save $811 million over the four estimates in Services Australia. APS staff cleared the 42,000-case backlog at Veterans Affairs, APS staff did, an expanded APS staff, not the Government – those staff did that together. It was APS staff who reduced call wait times and claims processing times at Services Australia.

The Australians who we should be delivering most for were let down previously by these outsourcing arrangements. We put integrity measures in place to ensure that failures in public administration, like the illegal Robodebt scheme, can never happen again.

Some products and services cannot be engaged within the Australian Public Service, and must be procured outside, and your role in how we do that procurement of goods and services matters to Australians, it matters to industry, and the point I guess I'm trying to make is it matters to the health and vitality of the Australian public service itself.

It’s not just narrow questions on value for money, although that is essential, but issues around productivity, innovation, collaboration, gender equity. We see that significant progress has been made in Australia in terms of the gender wage gap over just the last two years – largely fuelled by the government's approach to wages for workers in aged care and childcare.

The government also introduced last week into the House of Representatives legislation that will mean that for procurement and tendering decisions, a consideration will be included about how large companies approach reporting on gender wage gap targets and then meet those targets. That is a good thing, using the capacity that we have of billions and billions and billions of dollars’ worth of public money to deliver good public policy outcomes.

We had 83,000 procurement contracts issued last financial year. A combined value of over $99 billion. Everything from socks for the Australian Defence Force, food for Border Force, AFP service animals – who we get to meet up at Parliament House. They bring up all these puppies – that's fantastic. We sort of undermine their training.

And graphic design, satellite capabilities, all kinds of things.

Those procurement decisions that you make have a real lasting change and real lasting value. The procurement reforms that took effect from first of July this year that will help SMEs get a bigger slice of government procurement opportunities. 25% of procurements worth up to a billion dollars, should go to SMEs and for procurements with a value of up to $20 million the targets increased to 40%.

That is making sure that businesses from Australia and New Zealand qualify for those changes that has a big effect in the capability of Australian businesses to be able to engage with the opportunities for contracts in the public service, but also for the opportunity for them to upscale their innovation and their capability.

Let me mention one other reform area where procurement policy can lead to lasting change. The Buy Australia plan, it is a policy commitment we took coming into government, and it's designed to improve the way government contracts work, and to use the Commonwealth's purchasing power to support all businesses, to develop better value for money, grow local economies and strengthening our domestic industry and manufacturing capability.

The value for money is not just about the price. It is about tipping the scales towards Australian innovation, Australian capability, and indeed, Australian manufacturing.

The Buy Australia plan objectives have been incorporated into the investment mandates for the National Reconstruction Fund, the Clean Energy Finance Corporation and the Northern Australia Infrastructure facility. The same objectives that are shaping your procurement decisions are also being engaged in the government’s Special Investment Vehicles, so that we are all pulling together.

We are all pointed in the same direction, using all of the levers of economic statecraft here to make Australia a stronger place with a stronger economy, and to chaperone investment into the capabilities that Australia needs for the future.

The Albanese Government is a government for all Australians. That is why we are using procurement policy to empower Australia's First Nations businesses. Indigenous businesses are an important vehicle for economic self-determination, an opportunity to contribute to Closing the Gap by employing, training and mentoring First Nations people.

Because of the way that the government has approached this area of policy, Indigenous businesses have secured $10 billion in Commonwealth contracts since 2015, that is 71,000 contracts awarded to 4100 indigenous businesses, that is a significant national achievement that that you should all be very proud of. 

One last story I will leave you with before you have two days of discussions about procurement.

I have some work in front of me. I have spent the last couple of months on the road talking to businesses engaged in the renewables and transmission rollout as we transform our energy system into a modern energy system fuelled by low-cost renewables, building the transmission infrastructure to make sure that it is reliable for households and industry.

The scale of the procurements that each one of these individual projects, led not by you and Commonwealth procurement decision making, but led by big wind farm developers or transmission project developers, the feedback I get from them is very much the same kind of response.

Big firms, big developers making, at that moment, decisions about where to procure goods and services like wind towers and turbines blade, solar panels, solar tracking devices, transmission towers, are making those decisions on a project-by-project basis.

We have in Australia all of the steel that is required for these projects. We have the engineering capability, but the same as the train argument – the decisions project-by-project mean that there are no Australian wind towers in the wind rollout at this stage.

I'm determined to use the experience that we have to develop a more coordinated approach to those questions, so that we see more Australian industrial capability, more Australian structural steel, more jobs and opportunities in regional and outer suburban economies, and stronger support in communities for this great industrial and energy transformation that Australia is engaged in.

The lessons and capabilities that you develop here, I think, matter for what is the art and science of good procurement decision making. This has applications for you and the public sector, but also much broader application as we confront some of these great national challenges in the private sector as well.

I hope that the next two days are rewarding. I hope that you learn from each other. I hope that you make connections with colleagues across the public service that serve you well into the future, and that you make connections, particularly with those colleagues from Indonesia and Timor Leste and from the Pacific that will serve all of us well as we work together.

I really want to see that collaboration from Australia across the region, in these areas. I hope that it's a very satisfying conference and that you leave it with new ideas and a fresh sense of vigour, enthusiasm and a strength of purpose about what it is that we are all here to achieve.

Thank you very much.