McClay in crisis talks with Aussies over 'deeply disappointing' Queensland procurement deal

Attempts to strong-arm the Queensland government over the controversial Queensland First procurement policy have failed.

Trade Minister Todd McClay has revealed that, despite his efforts and those of the New Zealand Consulate-General and Australia’s federal trade minister Steve Ciobo, the Queensland government will be going ahead with the policy.

The scheme was announced at the Australian Labor Party’s state conference last month and would mean local businesses would receive weightings of up to 30% when government contracts were being considered.

Queensland has confirmed New Zealand companies will be impacted by its policy from tomorrow, Mr McClay says.

He had previously said retaliation against Queensland businesses with New Zealand government contracts is not off the table if the deal went ahead.

In a statement, Mr McClay says he is “deeply disappointed” by the decision, which he says will unfairly disadvantage and potentially harm New Zealand companies.

“The Queensland government's policy means everyone else comes second.

“Queensland companies have been welcome to bid for government contracts in New Zealand and under Closer Economic Relations we expect New Zealand companies to be treated exactly the same in Queensland.”

Queensland exports $5 billion worth of goods and services to New Zealand every year, which Mr McClays says has resulted in “probably 20,000 or 30,000 Queensland jobs as a result of that.”

Fulton Hogan, for example, is a New Zealand company that does work for the government in Queensland and is at risk if the Buy Queensland procurement policy comes into fruition.

Mr McClay says New Zealand is a $30 billion public government procurement market, whereas Queensland is at $18 billion.

Earlier this month, when asked about any potential retaliation, Mr McClay said he wants to “wait until I have all the advice from the officials about exactly what’s going on and report on what they have proposed.”

Today, he initiated “urgent” trade consultations with the Australian federal government to “fight for the fair and balanced trade access that New Zealand companies have a right to expect across the Tasman.”

After meeting with Mr McClay earlier this month, Mr Ciobo blasted Queensland's premier, Annastacia Palaszczuk, for the “reckless policy.”

“I don’t want to see Australian exporters being locked out of markets overseas because we have a reckless state premier who’s too arrogant to admit she has this wrong,” he told Sky News.