Labor Defends Controversial Procurement Powers as Critics Warn of Expanding Government Influence

By Inside Canberra

Employment and Workplace Relations Minister Amanda Rishworth has defended one of the Albanese Government’s most controversial workplace reforms, insisting businesses will not be forced to hold enterprise agreements to secure Commonwealth contracts. But a tense press conference on Thursday did little to silence concerns that the legislation could fundamentally reshape how billions of dollars in Commonwealth procurement are awarded.

Watch the full press conference below:

While the Minister opened with positive labour force figures showing unemployment easing to 4.4 per cent and around 40,000 additional jobs created during May, the economic data quickly became secondary as attention turned to the Government’s Secure Jobs procurement legislation, which critics argue expands Canberra’s ability to use Commonwealth purchasing power to influence industrial relations.

Strong employment figures overshadowed by procurement controversy

Ms Rishworth described Australia’s labour market as remarkably resilient despite global uncertainty, pointing to employment reaching 14.7 million Australians, falling unemployment among women and young people, and workforce participation remaining close to record highs.

She argued the figures demonstrated the success of the Government’s economic agenda and justified continued reforms aimed at creating secure employment, lifting wages and supporting Australian workers.

However, it was the legislation quietly progressing through Parliament—not the jobs figures—that quickly became the focus of questioning.

Geoffrey Watson warning raises uncomfortable questions

The sharpest exchange centred on criticism from respected corruption barrister Geoffrey Watson KC, who has warned that linking procurement policy with industrial relations outcomes risks creating the sort of incentives that contributed to corruption exposed within Victoria’s construction industry.

Rather than dismissing Watson’s concerns, Ms Rishworth acknowledged his standing.

“I have the utmost respect for Geoffrey Watson,” she said, before pointing to the Government’s actions against corruption and its proposed National Construction Code as evidence it was addressing misconduct within the industry.

Yet the Minister largely avoided directly answering the underlying concern.

Watson’s criticism was not primarily about past corruption. Rather, it questioned whether giving governments greater discretion to reward certain workplace arrangements could unintentionally create new incentives for coercive bargaining or industrial pressure in the future.

That distinction remained largely unexplored during the press conference.

“Not compulsory”—but is that really the issue?

Throughout the exchange Ms Rishworth repeatedly argued businesses would not be required to negotiate enterprise agreements to secure Commonwealth contracts.

On the face of the legislation, that appears correct.

The bill does not mandate enterprise agreements as a legal prerequisite for tendering.

Instead, it enables the Commonwealth to preference businesses operating under enterprise agreements where appropriate, with the detailed circumstances to be established later through the proposed Secure Australian Jobs Code, which remains under consultation.

Critics, however, argue the Government is answering a question few are asking.

The concern is not whether enterprise agreements become legally compulsory.

The concern is whether businesses will face significant commercial pressure to adopt enterprise agreements if they believe doing so materially improves their chances of securing Commonwealth contracts.

For many businesses, particularly those heavily reliant on government work, commercial incentives may prove almost as influential as legal obligations.

Parliament approves the framework before seeing the rules

One of the more striking aspects of the Minister’s defence was how frequently she referred journalists to a future Secure Australian Jobs Code that has yet to be finalised.

The legislation creates the enabling framework.

The detailed rules governing when procurement preferences may be exercised remain subject to consultation.

That raises an important parliamentary question.

Should Parliament approve broad new procurement powers before the operational rules governing those powers have been published?

Supporters argue flexibility allows government procurement to respond to changing circumstances.

Critics argue Parliament is effectively being asked to approve the principle without first examining the rulebook.

Procurement becomes an industrial relations tool

The press conference also exposed a broader philosophical shift in Commonwealth procurement.

When pressed repeatedly on whether government contracts should simply be awarded to the best-qualified bidder offering the greatest value for taxpayers, Ms Rishworth argued procurement should achieve several objectives simultaneously.

According to the Minister, value for money, quality outcomes, secure employment and improved workplace standards should all be considered when taxpayer funds are spent.

That represents a significant evolution in procurement policy.

Historically, Commonwealth procurement has largely focused on obtaining the best combination of price, capability, risk management and delivery.

The Albanese Government increasingly views procurement as a mechanism for delivering broader social and industrial policy objectives.

Supporters argue governments should use their purchasing power to encourage secure employment and better workplace practices.

Opponents argue procurement risks becoming another industrial relations instrument, potentially reducing competition, increasing project costs and favouring particular workplace models over others.

Construction singled out—but wider implications remain

The Minister repeatedly stressed that construction would receive special treatment.

She said the forthcoming Construction Code would ensure enterprise agreements associated with Commonwealth-funded projects had been negotiated freely, in good faith and without coercion.

Those safeguards are intended to respond directly to concerns arising from misconduct uncovered in parts of the construction sector.

Nevertheless, employer groups have argued the enabling legislation itself is considerably broader than construction and establishes principles that could ultimately influence procurement decisions across multiple industries.

Until the Secure Australian Jobs Code is released, many businesses will remain uncertain about exactly how those new powers will operate.

What the Bill Actually Changes

While political debate has focused on slogans, the practical effect of the legislation is more nuanced.

Current approach

Commonwealth procurement has traditionally centred on value for money, capability, competition, risk management and compliance with procurement rules.

The new power

The legislation allows industrial relations considerations—including enterprise agreements—to be taken into account when awarding Commonwealth contracts through future procurement policies.

What it does not do

The legislation does not legally require businesses to negotiate enterprise agreements before they can bid for government work.

Why critics remain concerned

Business organisations argue that if procurement policies consistently favour businesses with enterprise agreements, companies may feel compelled to adopt them to remain commercially competitive, even though no legal obligation exists.

The Government’s position

The Albanese Government argues procurement should not only deliver value for taxpayers but also promote secure employment, higher workplace standards and better behaviour across industries benefiting from Commonwealth spending.

Editorial Analysis

Perhaps the most revealing aspect of Thursday’s press conference was not what the Minister said, but what she did not fully answer.

The central issue was never whether enterprise agreements become legally mandatory.

It was whether giving governments the discretion to favour particular industrial arrangements through procurement decisions could, in practice, reshape workplace bargaining across significant parts of the Australian economy.

That debate sits at the heart of the legislation.

The Government argues it is simply using taxpayer-funded procurement to encourage better workplace standards.

Critics see something more fundamental: an expansion of executive power that allows industrial relations policy to influence commercial contracting decisions in ways Parliament has yet to fully examine.

With the Secure Australian Jobs Code still being drafted, many of the practical details remain unknown.

As a result, the legislation’s long-term impact may depend less on the words Parliament passes than on the procurement rules ministers write afterwards—a process likely to receive close scrutiny from business groups, legal experts and procurement specialists in the months ahead.