Strengthening the Indigenous Procurement Policy and increasing engagement

Release Date: 
4 October 2018
Media release
  • The Coalition Government is strengthening the monitoring and oversight arrangements for Indigenous businesses winning Indigenous Procurement Policy (IPP) contracts
  • The Government is providing additional resources to Supply Nation to audit Indigenous businesses, with a particular focus on joint ventures
  • A new Indigenous Business and Economic Advisory Council to guide implementation of the Indigenous Business Sector Strategy

The Coalition Government is strengthening the Indigenous Procurement Policy (IPP), with additional resources for Supply Nation to monitor Indigenous businesses and take action against wrongdoing.

The changes were announced by the Minister for Indigenous Affairs, Nigel Scullion today who said the Coalition Government was taking a zero-tolerance approach to so-called “blackcladding”.

“The IPP has been a runaway success with over 1000 Indigenous businesses winning over $1.084 billion in Commonwealth contracts since its commencement in July 2015, compared to just 30 Indigenous businesses winning $6.2 million in 2012-13,” Minister Scullion said.

“It has been the catalyst for unprecedented growth in the Indigenous business sector and wealth creation for Indigenous Australians, but unfortunately with such success comes those looking to do the wrong thing.

“Supply Nation will be given additional resources to continuously monitor the 1600 Indigenous businesses on its Indigenous Business Directory to ensure they are, and remain, bona fide Indigenous businesses.

“Further, in recognition that joint-ventures can be an ideal vehicle for blackcladding, 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.

“Joint ventures have been used to great effect in the mining industry in particular as they facilitate a skills transfer between the capability partner (a mining company) and the community partner (a local Indigenous business) and the IPP will now be ensuring such skills transfers.

“This will ensure Indigenous Australians are actively involved in every IPP contract and there is clear commitment to long term Indigenous economic benefit.

Indigenous business leader, Mr Warren Mundine, played a key role in advising the Government on this strengthening of the IPP and its broader roadmap for growing the sector – the Indigenous Business Sector Strategy.

To ensure a continuation of this valuable advice, the Government is also announcing the creation of a new Indigenous Business and Economic Advisory Council made up of Indigenous businessmen and women, who will support the implementation of these measures. Mr Mundine will be its inaugural Chair.

“I have long said that the greatest challenge to the long-term success of the IPP is ensuring we have the supply of Indigenous businesses capable of taking up the new opportunities,” Mr Mundine said.

“The new measures in the Indigenous Business Sector Strategy will ensure there is support for businesses at every stage of the business cycle and I am so pleased that its implementation will be led by Aboriginal and Torres Strait Islander businesspeople.

Background:

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.

See: https://www.pmc.gov.au/resource-centre/indigenous-affairs/indigenous-business-sector-strategy