KPMG defends Tassie tenders status

KPMG in Tasmania has defended its classification as a state business when the measure is applied to bids for government tenders.

Tomorrow the Liberal Party will call for a local benefits test in state Parliament to give a weighting to Tasmanian businesses for tenders over their interstate or overseas rivals.

It has criticised the state government's claim that 90 per cent of such tenders already go to Tasmanian businesses because national companies, such as Telstra and Corporate Express, and multinationals, such as KPMG, are counted.

KPMG in Tasmania partner Martin Rees said that while it was attached to a multinational company, it employed Tasmanians, and profits stayed in the state.

"In Tasmania we operate under our own management," Mr Rees said.

"The partners are all Tasmanians and we operate like any other local company - with earnings derived from Tasmania staying in Tasmania."

The accounting firm employs 50 people in Launceston and 50 in Hobart.

Mr Rees said that while the idea of a local benefits test might appear positive, it would be difficult to implement and anti- competitive.

"How do you work out the exact flow-on effects to the local economy (from any company's winning a tender)?" he said.

"My view is that competition should be encouraged as competition drives the best economic outcomes. If you limit that, you aren't going to have an efficient economy."

The opposition has had a bill tabled in Parliament that calls for a local benefits test since last year, but decided to bring on the debate after TasRail awarded a multimillion- dollar contract to a Chinese company in preference to a Tasmanian consortium.

While the exact bids are confidential, TasRail has argued that the difference between the winning tender and others was significant.

The Liberals Supporting Local Business and Jobs (Local Benefits Test) Bill 2011 contains no details on how such a test would operate but rather calls on the minister to "develop and adopt a local benefits test to enhance the participation of local businesses in government procurement processes" that recognises their contribution to the local economy and employment.

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