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In a major win for small businesses, the Queensland Government has permanently scrapped the former administration’s controversial Best Practice Industry Conditions (BIPC) regime, providing suppliers with easier access to a share of the state’s $35 billion annual spend on goods and services.
The abandonment of BIPC, which was introduced in 2018, is described as the biggest overhaul of procurement policy for Queensland in decades and has been lauded by the government as providing a “simpler, fairer and easier” way for businesses to access its procurement contracts.
The state government says its new policy places small, family and regional businesses at the heart of how it buys goods and services with “clear targets, less paperwork and greater transparency for taxpayers”.
The new policy removes the former government’s BIPC regime, which was found by the Queensland Productivity Commission to restrict competition, increase costs and decrease productivity. The new procurement policy has slashed more than 700 pages of regulations to just 50.
Business Chamber Queensland CEO Heidi Cooper says the new policy promises to provide opportunities to Queensland businesses and address challenges the businesses community has highlighted for many years.
“The government’s commitment to SME participation, incentives to lift capability and a reduction in red tape is welcome,” says Cooper.
“With the growth ahead in Queensland and the global spotlight on our state, there is no better time to be championing and celebrating Queensland made products and the businesses that produce them every day."
The BPIC was suspended in November 2024 by the then new Premier David Crisafulli for all new government-funded major construction projects and projects not yet at the procurement stage.
Queensland Treasurer David Janetzki says the BPIC was costing the community billions of dollars each year, as disclosed by the Queensland Productivity Commission report handed down in August.
The report estimated that the aggregate net cost of the former BIPC policy between FY25 and FY30 would range from $5.7 billion to $20.6 billion dollars.
“Removing red tape, permanently scrapping BPIC, and focusing on value for money will improve productivity and drive the delivery of better infrastructure and services,” says Janetzki.
“The former Labor government voted against re-establishing the Queensland Productivity Commission, despite the clear need to address the drop in productivity and massive project blowouts during Labor’s decade of decline.”
Minister for Housing and Public Works Sam O’Connor says the policy is about "fairness, respect and opportunity" while delivering “real value for Queensland taxpayers and businesses”.
“More Queensland businesses than ever before will benefit from the new Queensland Procurement Policy,” says O’Connor.
“This will simplify the process so local businesses can get on with winning work, not wading through paperwork.
“Labor’s 700-page policy of complicated, punitive red tape shut small businesses out and regional spend fell over their last term and they failed to deliver on their own targets.
“We’re delivering a procurement policy that’s fairer, faster and easier for Queensland businesses to navigate and benefit from government work.
“We’re backing Queensland’s small and family businesses by delivering better access to government work and more certainty to grow and employ local people."
The Productivity Commission report found that the BPIC had a major impact on the housing market and infrastructure projects.
While it provided “substantial direct benefits” for construction workers, largely in the form of higher wages and greater leisure time, this was “more than offset by direct costs to the broader community from more expensive and delayed infrastructure”.
Andrew Chapman, the CEO of Queensland Major Contractors Association (QMCA), has welcomed the launch of the new policy and the permanent removal of BPIC.
“BPIC forced up costs, slashed productivity and made collaboration between contractors and their workforce harder,” says Chapman.
“Independent analysis for QMCA found they increased project costs by 15 to 30 per cent.
“The permanent removal of BPIC restores balance and stability to the industry, allowing contractors to work constructively with employees and representatives to deliver projects safely, efficiently and with better value for taxpayers and results for Queenslanders."
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