A storm is brewing over government procurement policies within the furnishing sector, with Members of Australia’s peak industry body, the Australasian Furnishing Association (AFA), pushing for reform. It seems that the AFA may have ‘hit a nerve’, with the issue spilling over into other areas of manufacturing. 

The AFA Membership is currently seeking a review of Victorian procurement and manufacturing policies, and the peak national body is poised to take its concerns to all States and to Canberra.

The Association says that in spite of the Government’s best intentions to support local manufacturers, there is, in reality, an endemic disregard for adherence to procurement rules, specifications of Australian Standards of safety and quality and the Victorian Local Jobs First Policy.

Complaints from school Principals about substitution of approved school furniture for cheaper, non-compliant products has been passed on to the AFA. This is just the ‘tip of the iceberg’ as far as substitution of Australian manufactured products according to reliable industry sources.

In the case of Victorian schools, specified classroom furnishings have been ‘swapped-out’ for inferior quality imported product that does not meet Australian standards of quality or safety, in spite of School Principals having the right to specify the products they require in the classroom.

The AFA says its Membership is continually frustrated by their designs being blatantly copied in countries like China and product imported into Australia that is non-compliant with safety standards.

Woods Furniture has been designing and manufacturing school furniture in Victoria for sixty years – working with educators to create products that are safe, sturdy and enhance the learning environment.

Director, Tony Rogers says that local manufacturers invest in ensuring their products meet Australian standards, and deliver value, yet imported ‘rip-off’ products meet no such requirements.

‘So of course, they can compete on price. We don’t have anywhere near a level playing field. The overseas companies do none of the research or testing that we are quite rightly required to do here.  

Our products must be safe, and they must deliver value over time, with their quality and robust warranties.’

 Watch Tony’s Message HERE.

School Principals have reported ‘misinformation’ by construction companies, telling them they do not have the right to specify the brand and quality of furniture they require.

Parents have reported being asked to fund-raise to replace furniture (already paid for by their taxes), that lacks the durability or performance guarantees of locally manufactured product. They say this has occurred less than 12 months of the imported furniture being placed in classrooms.

It appears from AFA research into case studies in other manufacturing industries, that misrepresentation, misinformation and what may amount to fraudulent behaviour, occurring in both government and private construction/renovation projects, is being ignored. Consequently, substandard practices are being inadvertently fostered.

The AFA says that construction companies are regularly using a loophole, or lack of clarity, in the Local Jobs First Policy and the 90/10 rule, to flout the spirit of the Government’s policy.

It has become ‘acceptable’ practice that procurement contracts use the bulk of their budget on the building and materials, with furnishing and fittings contracts simply awarded to the lowest bidder.

The construction companies argue that according to the 90/10 rule, they are within the boundaries of the Local Jobs First Policy to dedicate the last 10% of their expenditure to cheaper imported furnishing product.

As a result, companies like Woods Furniture are fighting to save the 110 local skilled jobs, along with more than 600 other supplier jobs at risk from import substitution.

CEO, Patrizia Torelli, says that the AFA Membership has clearly ‘had enough’ of unapproved, budget-driven, inferior substitutions that are occurring in the construction industry.

‘We in the furnishing industry are not alone. Architects and designers frequently complain that the big construction firms replace their specifications for quality Australian manufactured product with undocumented and inferior imported products that fail to meet Australian safety and quality standards, have minimal or no warranty, and lack durability.  

The result is Victoria and Australia losing jobs and skills, compromising safety and a further reduction of the marketplace capacity of local manufacturers who comply with necessary Australian standards and regulations. Conversely, construction companies are enabled to continue to supply inferior and budget-driven products which reduce their costs and maximise their profits whilst escaping scrutiny with regard to vital standards. 

The Government can no longer ‘hide’ behind Free Trade Agreements as an excuse for inaction. The nation’s future is dependent on a strong manufacturing economy. Time to put the money where the mouths to feed are.

The AFA is urging the Victorian Government to commit to local manufacturing, especially considering the need to re-build after the devastating effects of the COVID-19 pandemic. Clarification and strengthening of the Local Jobs First Policy and amendments to close loopholes would go a long way to fixing the problem.

The AFA has also called for an immediate review of specification guides for Government Procurement and an inquiry into how current regulatory and enforcement measures are failing to stop large construction companies’ substitution of specified materials and products for cheaper imports.

The AFA joined with Choice Australia last year, in lobbying the Federal Government for a General Safety provision, which makes it illegal to knowingly sell or fit unsafe products or materials in Australia. Many countries, like the United Kingdom and EU countries, have such a provision, but so far in Australia, it is not illegal to sell unsafe products, except with specified items like child car seats.

The AFA is calling for further provisions to protect Australian standards of safety and compliance, and fair competition for Australian manufacturing.

These include:

  • An inquiry into the independence of those who receive, inspect and verify materials
  • An Information Campaign to ensure that public service clients are aware of their right to select suitable furnishings for their classrooms, hospitals, aged care & correctional facilities etc.
  • A ruling that any product delivered to a public project must be assembled by the supplier who must take full responsibility for that assembly and installation with regard to occupational health and safety regulations, as well as furniture manufacturing standards.
  • A stipulation included in to the Victorian 90/10 procurement regulation that it should have to be applied across all categories of the contract and not utilised in the construction area only.
  • A ruling made that all substitutions should be authorised by the persons/ companies legally liable for their inclusion.
  • That the regulations be changed to ban any substitution for a product unless it is proven to be fully compliant with Australian Standards for both manufacturing regulations and Occupational, Safety and Health Laws.
  • Consideration of making it compulsory that manufacturers and suppliers should not be permitted to do their own tests. It must remain a compliance order that independent testing is performed on all products and materials. Testing should be standardised across Australia.
  • There should be no product allowed to be utilised that is produced under indentured employees, unregulated/underpaid employees or slave labour.

The AFA says it is interested to hear from any other manufacturing groups who may wish to join them in their representations to government. Contact: media@theafa.asn.au