Local spending surges, overseas plummets: QRC report

10 April 2019

Queensland’s resources sector spending with small and medium businesses in Queensland has increased by 19 percent over 12 months and recorded its first gain in six years.

QRC Chief Executive Ian Macfarlane said companies were redirecting spending away from overseas and interstate suppliers to Queensland businesses.

“In 2017-18 the Queensland resources sector purchased $19.3 billion worth of goods and services with Queensland businesses or 69 percent of the total spend which compares to $400 million or 1 percent with international suppliers. That’s down more than 33 percent on the previous year,” Mr Macfarlane said.

“As a result of a concerted effort by the resources industry to buy locally interstate spending was $8.5 billion down from $8.6 billion a year earlier. In total the sector spent $28.14 billion locally, interstate (including New Zealand) and internationally.

“This is the first year the sector has recorded an increase in Queensland spending since 2011-12 which is good news for Queensland creating more investment, more exports and more jobs.

“More than $8 billion was invested outside the south-east with 8,000 regional suppliers benefiting from the resources sector.”

In November last year the Palaszczuk Government welcomed the decision by BHP, Peabody and New Hope Group to shorten payment terms with small to medium contractors within 30 days. Anglo American also moved to a 30 day payment system to support local businesses.

Minister for Employment and Small Business Shannon Fentiman said when you buy local you grow local.

“We know small businesses are the lifeblood of regional economies and a key part in powering our State’s jobs growth and we want to see more people Buy Queensland but also want those small businesses paid on time with fair payment terms.

“Since we highlighted the need for change last year there has been positive signs but more can be achieved and I am sure it will be.”

Gladstone Engineering Alliance Chief Executive Julie Gelder said the resources industry was a big supporter of small and medium businesses.

“The support to our local suppliers is ongoing and their commitment, along with the Queensland Resources Council’s commitment, to improve local spending with reports like their Local Content Report, will only continue to not only strengthen local relationships between industry and suppliers, but strengthen the local Gladstone economy in the long-term,” Ms Gelder said.

Mr Macfarlane will launch the report today at the Gladstone Supply Chain Expo.

Every year the QRC releases its Code Effectiveness Report which provides a snapshot of the sectors spending over the financial year. Now in its fifth year it encourages companies to adopt the ‘full, fair and reasonable’ principle to adopt a shared responsibility framework with industry, local suppliers, regional economic groups and governments. The code is voluntary but compulsory for companies starting new projects.

Mr Macfarlane said a report by CSIRO found people wanted industry and government to work together with communities and wider society to promote effective, constructive, and mutually beneficial relationships.

“Companies are listening to the need to buy locally and responding to the challenge by focusing their procurement strategy on their social licence to operate. A recent QRC survey of resource CEOs found 41 percent had engaged more local suppliers as a direct result of the increasing capabilities of suppliers in their region.

“By spending in Queensland the sector promotes the long term sustainability of local economies and boosts employment and economic growth by expanding local industries.”

The resources sector was already doing its bit to keep Queensland strong – making a contribution of more than $62 billion to the State’s economy or one in five dollars, supporting more than 316,000 full-time equivalent jobs or one in eight jobs in the Queensland workforce, generating more than 80 percent of the State’s record $80 billion annual export sales and working with 1260 community organisations.

Media contact: Anthony Donaghy 0412 450 360