- Minister Scullion to launch a range of new business products during an Indigenous Business Roadshow as part of Indigenous Business Month
- This October will be the fourth annual Indigenous Business Month
- Indigenous businesses are at the forefront of the growing Australian economy – with a 30 per cent growth in the sector over recent years
- Minister Scullion will be making a series of new announcements this week and this month that will help the sector continue to grow and succeed, as part of our Indigenous Business Sector Strategy
October is Indigenous Business Month. While it’s not our oldest annual celebrations, it is fast becoming one of the most important, as Indigenous businesses record unprecedented growth thanks to initiatives like the Indigenous Procurement Policy (IPP).
Aboriginal and Torres Strait Islander people have been engaged in trade and commerce for tens of thousands of years. Many communities have an undoubted business pedigree, that for a range of historical reasons has been stymied but through the IPP is being given the chance to come to the fore again.
The IPP itself has been a runaway success. Since it began in July 2015, over 1000 Indigenous businesses have won over $1.084 billion of contracts, up from the just 30 Indigenous businesses who were winning $6.2 million of Commonwealth contracts in 2012-13.
Today, Indigenous businesses are producing high quality goods and services across every sector of the economy. Message Stick Conferencing provides teleconferencing services to Government and corporate clients, PSG Holdings is delivering $213 million of wharf upgrades at the Garden Island naval base and Terri Janke and Company is a highly successful law firm specialising in Indigenous cultural and intellectual property law – to name just a few.
These established businesses are benefiting from increasing opportunities under the IPP and many prospective Indigenous entrepreneurs are pursuing their small business ambitions as a result of it.
For those not familiar, the IPP includes a target for Government to procure 3 per cent of its contracts for goods and services from Indigenous businesses, reflecting Indigenous Australians are 3 per cent of the population. All contracts must still demonstrate value for money, which means the IPP is not about hand-outs, it’s about giving people a fair-go.
This has translated to a 30 per cent increase in the number of Indigenous businesses compared to a 1 per cent increase in non-Indigenous businesses, Census data shows. These IPP firms are in turn getting more Indigenous jobseekers into work, with an average Indigenous workforce of 50 per cent – a very high result given Indigenous Australians make up less than 3 per cent of the labour market.
However historical undercapitalisation is placing a handbrake on further growth, which is why we recently launched the Indigenous Business Sector Strategy (IBSS), the first comprehensive roadmap to grow the sector through a range of new financial and capital products to help Indigenous SMEs.
I also announced new rules to strengthen joint venture rules and will provide Supply Nation with resources to monitor and enforce the new arrangements.
Under the strengthened joint venture requirements, all joint ventures will now be required to register on Supply Nation’s Indigenous Business Directory, meet a 50 per cent Indigenous ownership and control test, and have a skills capability transfer and Indigenous workforce plan in place which will be reviewed annually by Supply Nation.
Last week I also announced the creation of a new Indigenous Business and Economic Advisory Council made up of Indigenous businessmen and women, who will support the implementation of the IBSS measures. Mr Mundine will be its inaugural Chair.
We have already announced a new $20 million Performance Bond facility to help Indigenous construction businesses grow and our Indigenous Entrepreneurs Fund has supported over 70 Indigenous businesses purchase plant and equipment to win new contracts.
To coincide with Indigenous Business Month we will be launching a number of new and exciting initiatives from the Indigenous Business Sector Strategy. These will particularly support Indigenous business in regional and remote Australia where the barriers to entry can be the highest but the impact the most significant.
Key initiatives announced as part of the Indigenous Business Sector Strategy include:
- A $27 million Indigenous Entrepreneurs Capital Scheme, to de-risk commercial finance for mature and established Indigenous businesses that cannot access finance. The Government will partner with financial institutions to deliver new Indigenous products which the Indigenous Entrepreneurs Capital Scheme will support a portion of the risk.
- A refocused $27 million Business Development Assistance Program, delivered by Indigenous Business Australia, to support start-ups and those entrepreneurs that are outside of the banks risk profile but who with one-on-one support and tailored finance can succeed.
- Doubling the microfinance footprint to support more entrepreneurial activity and economic development and piloting a CDP Business Incubator model to help CDP participants foster self-employment and turn their activities into micro businesses.
- A new $20 million Performance Bonds Facility has been introduced which Indigenous constructions firms can use to win roads and construction contracts.
- The $30 million Indigenous Entrepreneurs Fund is investing in plant and equipment to help Indigenous businesses in remote and regional areas win new contracts.
- Indigenous Business and Employment Hubs to bring together the myriad of support services, with the first being delivered by the NSW Aboriginal Land Council in Western Sydney.