27 September 2023

Indigenous procurement on right track

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A program requiring Australian Public Service entities to purchase goods and services from Indigenous businesses has passed the $2 billion mark according to the Minister for Indigenous Affairs, Senator Nigel Scullion.

Senator Scullion said the Indigenous Procurement Policy (IPP) had changed the relationship between Government and Indigenous businesses.

“Its introduction in July 2015 required Government Agencies to look for Indigenous businesses and procure three per cent of their overall number of contracts from Indigenous businesses,” Senator Scullion said.

He said this reflected that Indigenous Australians made up three per cent of the population.

“Before the IPP, Indigenous businesses were all but locked out of Commonwealth contracts, with just 30 Indigenous businesses winning $6.2 million worth of Commonwealth contracts in 2012-13,” he said.

“We now have had over 12,000 Commonwealth contracts being won by over 1,500 Indigenous businesses.”

He said census data showed that this had led to a 30 per cent increase in the size of the Indigenous business sector together with downstream benefits such as a 23.3 per cent increase in the number of Indigenous Australians with a job.

“Importantly, each and every one of these IPP contracts has had to demonstrate the value-for-money requirements in the Commonwealth Procurement Rules, meaning we are not paying any more for the goods or services we are procuring or receiving a lower quality,” Senator Scullion said.

He said that to build on that momentum, IPP 2.0 had been announced, requiring Departments and Agencies to direct three per cent of the value of their contracts to Indigenous businesses by 2027.

“This next phase of the IPP promises to supercharge an already successful policy,” the Minister said.

He said that to support the extra demand IPP 2.0 was likely to create, the Agency, Indigenous Business Australia, would establish a new $17 million Indigenous Entrepreneurs Capital Scheme to guarantee business loans for first time Indigenous business borrowers.

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