INDIGENOUS PROCUREMENT POLICY

Senator The Hon Nigel Scullion.
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1 year ago
INDIGENOUS PROCUREMENT POLICY
Senator The Hon Nigel Scullion
Aboriginal and Torres Strait Islander small businesses have experienced unprecedented growth thanks to the Indigenous Procurement Policy (IPP) with the next wave of opportunity coming thanks to the reforms being introduced under the IPP 2.0.

Minister for Indigenous Affairs, Nigel Scullion announced that the IPP is now passing the $2 billion mark in terms of Commonwealth Government contracts at the Supply Nation ‘Connect’ Conference today in Sydney - the largest gathering of Indigenous business in Australia.

“The IPP has changed the relationship between Government and Indigenous business. Its introduction in July 2015 required Government agencies to look for Indigenous businesses and procure 3 per cent of their overall number of contracts from Indigenous businesses - reflecting that Indigenous Australians are 3 per cent of the population,” Minister Scullion said.

“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.

“We now have had over 12,000 Commonwealth contracts being won by over 1,500 Indigenous businesses totalling $2 billion since the IPP began.

“Census data shows that this has led to a phenomenal 30 per cent increase in the size of the Indigenous business sector and 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 - we are just better leveraging our existing spend to achieve an important social outcome.

“To build on this momentum the Prime Minister, Scott Morrison recently announced the IPP 2.0 which will now require 3 per cent of the value of Commonwealth contracts for Indigenous businesses by 2027.

“This next phase of the IPP promises to supercharge an already successful policy reflecting the Morrison Government’s commitment to small and family businesses across Australia through lower taxes, less red tape and targeted support in the case of the IPP.

To support this surge in demand the Morrison Government is investing $17 million in a new Indigenous Entrepreneurs Capital Scheme to be delivered by the Commonwealth agency, Indigenous Business Australia (IBA).

“This new financial product will help larger Indigenous businesses that are looking to access bank finance but cannot because of historical undercapitalisation to get a foot in the door.

“IBA will assist those businesses thanks to this $17 million fund which can provide one-off guarantees to assist Indigenous businesses access commercial finance for the first time and set them up on a relationship to continue to grow.

Nigel Scullion said the Liberal National Government was the only party that recognised the opportunity to work with business including Indigenous businesses and it is great that our candidates include strong advocates for Indigenous business like Warren Mundine, Candidate for Gilmore, who as Chair of the Prime Minister’s Indigenous Advisory Council helped develop this game changing policy for Indigenous Australians.

BackgroundThe Indigenous Entrepreneurs Capital Scheme forms part of the Indigenous Business Sector Strategy which includes: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 providers and participants turn activities into jobs and local businesses.A $20 million Performance Bonds Facility to support Indigenous constructions firms can use to win roads and construction contracts.The Indigenous Entrepreneurs Fund is investing in plant and equipment to help Indigenous businesses in remote and regional areas win new contracts.
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