This amendment adds a debarment regime to the Public Governance, Performance and Accountability Act 2013 that lets the Finance Minister exclude suppliers from Commonwealth procurement where they, their related entities, or key personnel have engaged in "unethical conduct." The bill mandates both mandatory and discretionary exclusion powers, requires a public excluded-entities register, and obliges the Minister to provide a review process for exclusion decisions.
The change shifts procurement from a narrow focus on price and capability toward an integrity-centred approach: criminal convictions, proven poor labour practices, tax avoidance, and other conduct that undermines public confidence can now bar firms from Commonwealth contracts. The regime creates transparency obligations for government and new compliance and litigation risks for suppliers and their supply chains.
At a Glance
What It Does
The bill requires the Finance Minister to put a legislative instrument in place that creates a debarment regime with mandatory and discretionary exclusion powers of up to five years, a publicly published excluded-entities register, and a review mechanism for exclusion decisions.
Who It Affects
All entities that seek to respond to Commonwealth approaches to market—tenderers and potential suppliers—and related parties such as corporate affiliates, directors, senior officers and employees; corporate Commonwealth entities that are prescribed under the rules will also be in scope.
Why It Matters
This is a procurement-integrity reform: it broadens debarment grounds beyond criminal convictions to include labour and tax practices, increases public transparency through a register, and gives the executive a rule-making route to set operational detail—shaping how agencies weigh reputational and integrity risks in buyer decisions.
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What This Bill Actually Does
The bill inserts a requirement into the PGPA Act that the Finance Minister must establish a debarment regime by legislative instrument. That regime must include processes for mandatory exclusion (where the supplier itself has engaged in unethical conduct) and discretionary exclusion (where unethical conduct is tied to a related entity or to directors, senior officers or employees).
Exclusions may last up to five years.
The amendments also require a formal review process for decisions that prevent a potential supplier or tenderer from entering into Commonwealth contracts because of unethical conduct — whether the conduct was by the supplier itself or by related entities or personnel. The bill does not set the detailed review procedures in the Act; instead it requires the Minister to ensure the instrument provides for the review mechanism, leaving the procedural design to delegated legislation.A public excluded-entities register is another central element: the Finance Minister must establish and publish on the Department’s website a register that lists each excluded potential supplier or tenderer and the exclusion period, and that records decisions to go ahead with a contract despite relevant unethical conduct.
The Minister must also provide rules for correcting register information and may make further administrative provisions by instrument.The Act defines key terms to bound the regime: it lists what counts as an "approach to market," defines "goods" broadly to include intangibles, specifies who counts as a potential supplier or tenderer, and defines "unethical conduct" to include a recent criminal conviction or pecuniary penalty, a proven record of poor labour practices, proven tax avoidance, or other conduct likely to harm Commonwealth integrity or public confidence. The bill requires the Finance Minister to make the necessary legislative instrument within three months of commencement; the instrument takes effect the day after it is made.
Transitional rules are allowed but expressly may not create offences, grant coercive powers, impose taxes, appropriate funds, or amend the Act's text, and a specific Legislation Act provision is disapplied for those transitional rules.
The Five Things You Need to Know
The bill requires the Finance Minister to make the delegated legislative instrument implementing the debarment regime within three months of commencement.
Debarment can be mandatory or discretionary and may exclude a supplier or tenderer from Commonwealth procurement for up to five years.
The Finance Minister must establish and publish an excluded-entities register on the Department’s website that lists exclusions and decisions to proceed despite unethical conduct, and provide a correction mechanism for register entries.
"Unethical conduct" is defined to include a conviction or pecuniary order within the previous three years, a proven record of poor labour practices, proven tax avoidance, or other conduct likely to harm integrity or public confidence.
Transitional rules can be made by instrument, but those rules may not create offences, impose taxes, grant arrest/search powers, appropriate money, or directly amend the Act’s text; and a Legislation Act provision on retrospective operation is expressly excluded for those rules.
Section-by-Section Breakdown
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Mandate for a debarment regime and notification duty
This provision forces the Finance Minister to ensure the legislative instrument under subsection 105B(1) contains a debarment regime. The instrument must cover a mandatory exclusion process (when the supplier itself is tainted) and a discretionary exclusion process (when related entities or personnel are involved). It also requires that relevant entities notify the Finance Minister of matters that must appear on the excluded-entities register—shifting some monitoring and reporting burden onto suppliers and their networks.
Review process for exclusion decisions
Section 105BA obliges the Minister to ensure the delegated instrument provides a review process for decisions that prevent a potential supplier or tenderer entering contracts because of unethical conduct. The Act leaves the design and standards of that review to the instrument, rather than prescribing judicial-review-level standards or an independent tribunal process in the statute itself, which means procedural protections will depend on what the Minister puts in the instrument.
Excluded entities register and publication rules
Section 105BB creates an obligation to establish and publish an excluded-entities register. The register must include each excluded supplier and the exclusion period, and it must also record when the Commonwealth decides to contract with an entity despite relevant unethical conduct. The Minister must provide correction procedures by instrument and may make other administrative provisions. Publication on the Department website makes the list a permanent public record, with reputational consequences for listed entities.
Key definitions that set the regime’s scope
Section 105BC defines the operational vocabulary: what counts as an approach to market, who is a potential supplier or tenderer, what goods include, and who are relevant entities. Critically, it defines "an entity or person has engaged in unethical conduct" to include convictions within three years, proven poor labour practices, proven tax avoidance, or other conduct likely to harm Commonwealth integrity or public confidence. These definitions are the legal hinge points that agencies and courts will use to interpret the regime.
Implementation timeline and limits on transitional instruments
The Finance Minister must make the required instrument within three months of commencement and the instrument takes effect the day after it is made. The Minister also may make transitional rules by legislative instrument, but those rules are explicitly constrained: they cannot create offences or civil penalties, confer arrest/search powers, impose taxes, appropriate funds, or directly amend the Act. The bill further disapplies a Legislation Act provision on retrospective operation for those transitional rules, which has implications for how the rules may be applied to ongoing procurements.
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Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Commonwealth procurement officials and the Department of Finance — gain a clear statutory toolset to exclude suppliers on integrity grounds and a central register to coordinate decisions and demonstrate procurement integrity.
- Workers and communities affected by poor labour practices — stand to benefit indirectly if proven labour abuses become grounds for exclusion and are treated seriously in procurement assessments.
- Responsible suppliers and competitors — receive protection from unfair competition by firms that undercut by using poor labour practices or aggressive tax arrangements, improving the level playing field for bidders who comply with standards.
- Civil society, journalists and watchdogs — gain a new transparency mechanism (the public register) to monitor and publicise which entities the Commonwealth has excluded or decided to contract with despite integrity concerns.
- Tax authorities and regulatory bodies — may find Commonwealth procurement aligned with enforcement objectives when proven tax avoidance is part of debarment criteria.
Who Bears the Cost
- Potential suppliers, particularly small and medium enterprises — face new compliance costs and reputational risk from being listed for conduct by related entities or employees over which they may have limited control.
- Corporate Commonwealth entities and agencies prescribed under the rules — will need to align procurement practices, due diligence, and record-keeping with the regime, creating administrative and systems costs.
- Department of Finance — will carry the operational burden of designing and running the register, processing corrections and reviews, and defending decisions, which will require resources and legal capacity.
- Legal and compliance teams for bidders and contracting officers — must build new due-diligence processes to assess related-party and personnel conduct, increasing transaction costs for procurement bids.
- Entities whose affiliates or employees have prior misconduct — face indirect exposure because conduct by a related entity, director or employee can trigger exclusion even if the primary bidder’s own conduct is clean.
Key Issues
The Core Tension
The central dilemma is between protecting public procurement integrity and preserving fair, proportionate processes: the bill empowers the Commonwealth to exclude firms to safeguard public confidence, but it does so by delegating critical definitions and procedures to instrument, and by attaching exclusion risk to related entities and personnel, which may overreach and reduce competition or impose unfair reputational penalties without clear due-process safeguards.
The bill hands much of the regime’s substance to a delegated legislative instrument, which means the law sets the framework but not the procedural or evidentiary standards. That delegation raises questions about consistency across agencies and the level of parliamentary scrutiny of the regime’s operational rules.
The Act defines several catch-all elements — for example, "proven record of poor labour practices" and "other conduct likely to have an adverse impact on the integrity of, or public confidence in, the Commonwealth" — but it does not say who establishes proof, by what standard, or whether administrative findings, civil decisions, or foreign judgements suffice.
The inclusion of related entities and personnel as potential grounds for exclusion creates a practical and legal tension: it extends accountability along supply chains but risks penalising innocent contractors for the actions of loosely connected affiliates or employees. Publication of exclusions and decisions to proceed could produce serious reputational harms before any court-like determination, raising defamation or procedural fairness challenges.
Finally, while transitional rules are permitted, the Act restricts their content (no offences, no taxes, no coercive powers), and it disapplies one Legislation Act protection — a combination that may produce legal uncertainty about how and when the regime applies to in-flight procurements and existing contracts.
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