Bigger role for SMEs in defence work: Combet

The industry group for small and medium sized businesses in the defence sector has welcomed a Government commitment to increase the flow of work to them from current levels.

Parliamentary secretary for defence procurement Greg Combet said yesterday that the Government aims to lift the current 15% of defence work performed by small and medium sized businesses to 20% by 2009.

“As a Government, we are committed to encouraging SMEs, and our policies aim to maximise the opportunities for Australian companies to compete for work, not only in our own market, but in overseas markets as well,” Combet said.

The target should be achievable given the increased flow of work likely to come from the Government’s Joint Strike Fighter project, according to Sue Smith, executive officer with the Australian Industry and Defence network.

“We are really encouraged by the positive tone and comments by Greg Combet,” Smith says. “That increase in work will be great for SMEs and I think they can probably upskill and increase capacity to take it on.”

Combet’s comments come as the Government awaits the results of the Cutler review into the national innovation system. A key idea being considered by the review is how to improve the ability of innovative small and medium sized businesses to win government tenders.

Cutler has previously said that government procurement systems in Australia could be improved by moving closer to the US model.

“In the US a huge number of procurement contracts go to SMEs. It is vitally important to build an SME base, so we need to look at how do you use your government spending such as procurement to create more opportunities for SMEs,” Cutler said.

Smith says the Government target for SME defence business – implemented through the contract and tendering process – could point to a solution for other industries.

“Defence could provide something of a model. Of course each industry is different, but there is strong support among SMEs for the way the system works in this sector,” Smith says.

Read more on government tenders and the innovation review