NSW Government procurement reform Part 6 – Local Jobs First Bill passes Parliament

The NSW Parliament passed the Local Jobs First Bill 2026 (Bill) on 13 October. The Bill is the centrepiece of the Government’s procurement reform agenda and focuses the State’s $40 billion procurement budget on enhancing opportunities for local workers and businesses. [1]  

This article is the sixth instalment in our series exploring the Government’s procurement reform agenda. The series addresses issues raised in the Upper House inquiry into government procurement practices (Inquiry)[2] and what this means for both government officials and suppliers. Our earlier articles in the series are available here.

Objective of the Bill

To recap, the Bill is designed to ensure that Government procurement maximises public value for the community by supporting local employment and manufacturing, enhancing opportunities for small businesses, promoting apprenticeships and other workforce capability, and enhancing the transparency of procurement processes. [3] [4] It was introduced in May 2026 after a public consultation process; we provided an overview of the consultation draft here.

The legislation will apply to all NSW government agencies to which Part 11 of the Public Works and Procurement Act 1912 (NSW) (PWP Act) applies, meaning Departments of State, most other NSW Government Agencies and some State-Owned Corporations (Agencies).

Local Jobs First reforms  

Establishment of Local Jobs First Commissioner

The Bill authorises the appointment of a Local Jobs First Commissioner (Commissioner), with the aim of overseeing the implementation of local procurement reforms.[5] The Commissioner will have significant powers to oversee the conduct of procurement by Agencies and enforce compliance requirements, discussed below. [6]

Establishment of Local Jobs First Advisory Board

A Local Jobs First Advisory Board (Advisory Board) will be established, chaired by the Commissioner, to  advise the Minister on promoting local businesses, jobs and industry – including participation in government procurement. [7] The Bill details the constitution (cl 13), functions (cl 14) and industry reference groups for the Advisory Board (cl 15).

Local Procurement Policy

The Procurement Minister is empowered to issue a Local Procurement Policy dealing with locally produced goods and services and the employment of local workers, including apprentices and other ‘learning’ workers.[8] It is expected to deal with such things as the 30% tender weighting for local employment, local content and SME participation [9]. The Local Procurement Policy is likely to contain much of the operational detail of the reforms.

Local procurement plans

Agencies will be prevented from contracting a supplier unless it has prepared a Local Procurement Plan, which describes how the supplier will comply with the requirements of the Local Procurement Policy. [10] Exemptions from the application of Local Procurement Policy to particular agencies and procurements will be available, either directly by the Procurement Minister at the request of Minister responsible for the Agency,[11] or at the request of the Agency heard where it is not feasible to apply it in the circumstances, or in case of an emergency. [12]

The Commissioner will have a role in the enforcement of local procurement plans, including the right to determine that a supplier has not complied with a local procurement plan, and a right to require an agency to carry out performance management processes relating to complies with the local procurement plan. [13] The Commissioner will be able to notify the Procurement Board if he or she believes an Agency has not complied with its obligations under the legislation  or a local procurement plan. [14]

Debarment scheme

The Bill amends the Public Works and Procurement Act 1912 (NSW) by inserting a new Division 6A, which establishes the supplier debarment regime for suppliers found to have engaged in serious misconduct. [15]

Development of the Bill

Amendment from consultation draft

The first draft of the Bill attracted submissions from industry, unions, small businesses, social enterprises and members of the public.  Stakeholder submissions revealed broad agreement that government procurement should be used to support domestic manufacturing, local employment, workforce capability, and ethical supply chain outcomes.

Parliamentary process

Various changes were incorporated into the Bill as it progressed through Parliament.

Meaning of ‘local’ narrowed

One of the most consequential amendments was to the definition of ‘local’. The Bill originally defined ‘local’ to include suppliers, workers and goods from Australia or New Zealand. This has been narrowed to ’New South Wales or another Australian jurisdiction’ [16]. During the debate the Opposition moved amendments that ‘local’ should mean ‘New South Wales’ only. This was not successful; the Minister noting that a measure of that kind would have contravened s 92 of the Australian Constitution, which guarantees free trade between the states. [17]           

Expansion of role of Commissioner

The role of the Commissioner was expanded, including to promote the employment and development of regional workers, and the participation of regional manufacturers and regional small and medium businesses in NSW Government procurement. [18] The Commissioner was also given a greater role in the procurement framework, including an express right to attend meetings of the Procurement Board and to consult, engage and receive information from the various government agencies.[19]

Greater transparency and accountability

Several amendments were directed towards strengthening accountability and transparency. In particular, where the Minister grants an exemption in relation to a procurement and that exemption is inconsistent with the Commissioner's advice, the Minister must publish reasons explaining why that advice was not followed.[20] The legislation's review mechanism was also enhanced, with a parliamentary committee tasked with reviewing the operation of the Act, including the effectiveness of the Local Procurement Policy and local procurement plans in achieving the Act's objectives.[21]

Stronger debarment regime

Parliamentary amendments further strengthened the supplier debarment scheme by requiring a publicly maintained list of debarred suppliers and replacing obligations to take ’reasonable steps’ to avoid dealing with such suppliers with a stricter prohibition on government agencies engaging listed suppliers.[22]

Conclusion

The passage of the Bill marks a significant development in the NSW Government’s procurement reform agenda. We will need to wait for the release of the regulations and Local Procurement Policy to fully assess the operational impact of the changes, however it is clear already that Agencies will need to re-orient what they value for significant procurements and prepare for a potentially interventionist regulator in the Commissioner.

[1] Minns Labor Government delivers landmark Local Jobs First reforms | NSW Government, 14 October 2026 [Link]

[2] Procurement practices of government agencies in New South Wales and its impact on the social development of the people of New South Wales - First Report (Parliament of NSW Legislative Council Standing Committee on Social Issues: Report No.63: June 2024) [Link]

[3] New South Wales, Parliamentary Debates, Legislative Assembly, Local Jobs First Bill 2026, Second Reading Speech, 13 October 2026 [Link].

[4] Local Jobs First Bill 2026 – Statement of Public Interest, 28 May 2026 [Link].

[5] Local Jobs First Bill 2026 (NSW), Part 2.

[6] Local Jobs First Bill 2026 (NSW), Part 5.

[7] Local Jobs First Bill 2026 (NSW), Part 3.

[8] Local Jobs First Bill 2026 (NSW), s 17.

[9] Ministerial Media Release: For the first time, local workers and businesses receive priority in NSW government contracts [Link].

[10] Local Jobs First Bill 2026 (NSW), s 19.

[11] Local Jobs First Bill 2026 (NSW), s 21.

[12] Local Jobs First Bill 2026 (NSW), ss 22 and 23.

[13] Local Jobs First Bill 2026 (NSW), s 30.

[14] Local Jobs First Bill 2026 (NSW), s 32.

[15] Local Jobs First Bill 2026 (NSW), Schedule 4.2, inserting proposed Division 6A (ss 176IA–176IH) into the Public Works and Procurement Act 1912 (NSW).

[16] Local Jobs First Bill, Sch 6 - Schedule of amendments – Local Jobs First Bill (Legislative Council: 24/9/26) [Link], amendments 38-41.

[17] Legislative Council Hansard – (24/9/26: NSW Parliament) [Link]

[18] Local Jobs First Bill, s 9(1)(d) – See note 16, amendment 2.

[19] Local Jobs First Bill, Sch 4, para 4.2 - See note 16, Amendment 36.

[20] Local Jobs First Bill, s 21(6) - See note 16, Amendment 9.

[21] Local Jobs First Bill, s 37 - See note 16, Amendments 13 and 14.

[22] Local Jobs First Bill, Sch 4, para 4.2 (s.176IC) - See note 16, Amendments 21 to 25.