Victoria's Local Jobs First: Changes to compliance and the Commissioner's function

Victorian Agencies and Suppliers should be building in the changes introduced by the Local Jobs First Amendment Act 2025 (Vic), some of which commenced on 1 August, and the remainder are due to start no later than 1 July 2026.

The reforms to the Local Jobs First Act 2003 (Vic) (LJF Act) primarily focus on:

• clarifying obligations of Suppliers and Agencies under the Local Jobs First (LJF) scheme;

• providing additional enforcement powers for the LJF Commissioner;

• introducing new penalties for non-compliance with the LJF scheme;

• introducing new LJF Policy objectives; and

• clarifying references to LJF Policy and associated obligations and guidelines.

This article unpacks these amendments, and how they may impact Agencies and Suppliers.

Clarified agency and supplier obligations

A key amendment made to the LJF Act concerns imposition of clear obligations on Agencies to monitor and manage compliance by Suppliers with:

• their Local Industry Development Plans (LIDPs);

• any contractual obligation to comply with the LJF scheme;

• reporting obligations under the LJF Policy including the submission of a completion report as soon as practicable after a project's practical completion; and

• any other obligation imposed under the LJF scheme.

The commitments Suppliers must meet to be found to comply with their LIDPs have also been clarified. In particular, Suppliers must meet commitments relating to:

• local content requirements (a minimum level of Australia and New Zealand value-added activity reflecting goods, services, and construction activities produced or carried out by local industry) determined by the Minister;

• requirements relating to the use of steel products or uniform and personal protective equipment produced by local industry determined by the Minister;

• job outcomes with respect to new and retained jobs as well as training; and

• the Major Projects Skills Guarantee requiring apprentices, trainees or cadets to be engaged for a minimum of 10% of the total number of estimated hours of work for a project.

A new contingent payment mechanism has also been introduced, requiring Agencies to ensure that payments to Suppliers are contingent on compliance with LJF obligations and LIDPs, unless impracticable.

Expanded powers for the LJF Commissioner

New provisions have been introduced expanding the compliance and enforcement powers of the LJF Commissioner, including new rights to:

• investigate matters and complaints relating to the Commissioner's functions or exercise of powers;

• report to the Minister on any matter concerning LJF or LIDPs;

• conduct site inspections by issuing an inspection notice, if the Commissioner believes on reasonable grounds that inspection is necessary to determine whether a Supplier has failed compliance with LJF or LIDPs;

• issue an Adverse Publicity Notice or make a civil penalty order if an inspection notice is not complied with; and

• make a recommendation to an agency on resolving or improving how a complaint or other matters relating to compliance with LJF or LIDPs could be resolved or improved.

Penalties for non-compliance

Importantly, civil penalties have been introduced for a person failing to comply with inspection or information notices issued by the Commissioner. The maximum penalties that may be imposed for non-compliance are 100 penalty units for individuals and 500 for corporations. Using today's penalty unit value, this equates to $20,351 for individuals and $101,755 for corporations.

Deprioritisation scheme for non-compliance of Suppliers

A deprioritisation scheme applying to Suppliers has been introduced which establishes a register of Suppliers maintained by the Commissioner, in respect of whom deprioritisation determinations are made.

This means if Suppliers fail to submit a completion report within 90 days after practical completion of a project, or fail to comply with commitments made in LIDP the Commissioner may issue a deprioritisation notice. Suppliers may apply to the Commissioner for a review of a deprioritisation notice and the Commissioner must make a determination to withdraw or confirm it.

Practically, the Scheme will permit the Commissioner to penalise Suppliers participation in future tenders for Government work if they have been deemed to be non-compliant in previous work.

The Scheme will commence by 1 July 2026 and will only apply to new projects.

Additional objectives for LJF Policy: First Nation and regional businesses

New objectives have also been introduced to inform the development of LJF Policy, and to inform the Minister setting requirements for projects and the making of any determinations regarding LIDPs. These include providing equitable opportunities for Aboriginal business and regional small to medium enterprises to participate, promoting the use of Australian Standards, and encouraging the prioritisation of local content and the local market.

Non-contestable projects

Before undertaking a tender process for a standard or strategic project (including individual tenders for sub-projects part of a larger standard or a strategic project), Agencies must now obtain a determination whether the project falls under the newly introduced definition of a non-contestable project. The LJF scheme is taken not to apply to Agencies who have obtained a non-contestable project determination. These projects include those for which local industry cannot competitively provide goods or services or where it is not practicable for goods and services required for the project to be provided except by local industry, and also must meet all requirements for a non-contestable project under the LJF Policy.

New emergency exemption

A new exemption has been introduced for projects procured under emergency procurement plans (plans for the procurement of goods and services prepared by an agency in accordance with a supply policy as defined under the Financial Management Act 1994 (Vic)) in response to an emergency as per the definition in the Emergency Management Act 2013 (Vic).

The LJF amendments and commencement dates at a glance