Buy local study tallies up dollar spend in Gippsland

FOR every $100 of revenue in local Gippsland businesses, $96.93 is generated in local economic impact according to research conducted on behalf of the Committee for Gippsland.

Conversely for every $100 of revenue in non-local businesses, only $71.33 is generated in local economic impact.

That $26 difference is among key findings from a report commissioned by the Committee for Gippsland into the economic impact of buying locally in Gippsland conducted by Leongatha and Drouin based Business Insight Group.

Its final report stated “Significantly more money recirculates locally when government departments, businesses and consumers choose to support our locally owned businesses.

Unlike their national competition, locally owned businesses are more likely to purchase from other local retailers, manufacturers and service providers. Supporting our locally owned businesses is critical in growing a strong Gippsland economy.”

The research findings also back the stance taken by the Gippsland Times in our Buy Local Shop Wellington campaign, which has highlighted during the past three months the flow-on benefits of supporting retail, trade and service industries within the shire.

Committee for Gippsland chief executive Mary Aldred said the report and its findings were a crucial piece of work for the region, driven by C4G’s members who have repeatedly highlighted the need for more consumers, businesses and government organisations in Gippsland to procure goods and services from within Gippsland.

“While some good work has been done on generally highlighting the need to buy locally, there hasn’t been an actual breakdown of the dollar value that is invested back to the Gippsland community, which is what local businesses provide. This study has done just that, and the results are clear,” Ms Aldred said.

The report noted that there are four key ways a business returns money to the local community, including wages and benefits paid to local residents, profits earned by local owners, purchases of local goods and services for resale and internal use; and contributions to local charities and not for profit organisations.

“A prime example of this would be when someone like an electrical contractor is engaged for some work. Engaging the services of an electrician from Melbourne means that all of the benefits go to a business outside the region, but engaging an electrician from Gippsland means that with more business, they might put on extra local staff, procure more of their own goods locally, and re-invest some of the profits back into the community by sponsoring the local footy club or donating to a local charity,” Ms Aldred said.

While all sectors in Gippsland are being encouraged to note the findings in the report and increase their uptake of local procurement, Ms Aldred said the Committee for Gippsland hoped that local government organisations also took heed.

“While it’s good that all local government organisations in Gippsland include a commitment to buying locally in their respective procurement policies, the Committee for Gippsland especially encourages local government to take a greater lead in decisions to procure locally.

“Simple steps like making it easier for small Gippsland based businesses to tender can make a huge difference,” Ms Aldred said.

The author of the report, BI Group’s Alex Aeschlimann said it was one of the most challenging and emotive projects the firm had worked on in a while.

“While the confidentiality of the participants must be maintained, a common theme from the respondents was that there should be more emphasis by local government departments to support their local businesses.

“One respondent stated outright that ‘ratepayers pay their (LGA staff) wages, they should support local businesses owned by ratepayers,” Mr Aeschlimann said.

The report made several recommendations to local government organisations in Gippsland on encouraging local procurement, including a more consistent approach between the six LGAs, and a more comprehensive recognition of Total Local Impact, which would give a more accurate representation of local investment.

The Gippsland Times last week requested Wellington Shire Council provide an explanation of its policy on local procurement but has yet to receive a response.

Mayor Scott Rossetti had previously said buying locally benefited the community by keeping local dollars in the region.

“Wellington Shire Council strongly supports the local economy and an incredible 96.7 per cent of all purchases by council during the 2012/13 financial year were within Victoria,” he said.

“71.7 per cent of these purchases were made within Gippsland and it is our aim to continually increase this figure to support local businesses and employment, stimulating growth within our communities.”