The federal government is about to begin a new procurement regime that should offer some benefit to small businesses.

From 1 July 2019, businesses that tender for government contracts worth more than $4 million must obtain a statement of tax record showing satisfactory engagement with the tax system.

This new regime also applies to first-tier contractors.

Australia’s small business ombudsman, Kate Carnell, said this will ensure that businesses that tender for government projects are up-to-date with tax payments.

“It provides small businesses, particularly subcontractors who work further down the supply chain, with some security, but certainly more can be done in the procurement space,” she said.

“The government should also require that tenderers use contracts with subcontractors that comply with unfair contract terms legislation and that all subcontractors are paid on time.

“If businesses do not comply, they should be banned from future tendering for a period of time.

“I will continue to argue the case for a level playing field and the need to give small business a fair go in the procurement process.”