Senator the Hon Mathias Cormann

The Australian Government has unveiled two new reforms to significantly increase the development and growth of Indigenous businesses and employment.

Minister for Indigenous Affairs, Nigel Scullion, said that from 1 July 2015 the Commonwealth would have clear and accountable targets to significantly increase Indigenous employees in the public sector and leverage the Commonwealth’s own $39 billion in annual spending to build Indigenous businesses and boost Indigenous employment.

“These are two significant reforms which form part of the Government’s response to the Forrest Review – Creating Parity, and will, over the long-term, lead to significant growth in Indigenous employment,” Minister Scullion said.

“Indigenous businesses currently only secure a very, very small amount of Government business – far less than 1 per cent, or about $6.2 million.  This is despite existing exemption policies which make it easier for public sector agencies to purchase from Indigenous businesses.”  

Minister for Finance, Mathias Cormann, said the target was for the Commonwealth to have 3 per cent of its procurement contracts with Indigenous suppliers by 2020. 

“This equates to about 1,500 contracts each year by 2020. In dollar terms, this will be around $135 million each year, based on an average contract value of $90,000,” Minister Cormann said.

“This is a massive increase from the Commonwealth’s current Indigenous procurement spend.  

 “There are many Indigenous-owned companies capable of supplying services to the Commonwealth and winning a much greater share of Commonwealth work.”

Minister Scullion said Indigenous businesses were more likely to be employers of Aboriginal and Torres Strait Islander people, so it was natural that as more Commonwealth procurement was won by Indigenous businesses, more employment opportunities would be created for Indigenous people.

“As Mr Forrest’s report pointed out, other countries such as Canada have successfully used procurement to significantly drive economic development for First Nations people.  In Canada, Aboriginal businesses are growing at five times the rate of other businesses specifically due to government procurement policies,” Minister Scullion said.

The Minister said that to support the procurement push, the Government would work with Supply Nation to expand and strengthen its current register of Indigenous businesses and make it publicly available by 1 July 2015.  

“This will make it easier for Government departments to identify procurement and partnership opportunities with Indigenous businesses,” the Minister said.

Minister Scullion said the Commonwealth Government was a large employer with significant potential to employ more Indigenous people. 

“The Australian Government will be leading by example by increasing its own Indigenous workforce to 3 per cent by 2018, which equates to around 7,500 Indigenous employees across the Commonwealth public sector,” he said.

The Minister said the Government would hold public sector agencies and departments to account for achieving both the procurement and public sector employment targets.

New reporting arrangements will be introduced with agencies required to track their progress towards both the employment and procurement targets, with employment reported annually to the Australian Public Service Commission and in its annual reports.  

The procurement target, and progress towards meeting it, will be published each year on www.indigenous.gov.au for the Commonwealth as a whole and for individual portfolios.

“These reforms, along with changes to the Remote Jobs and Communities Programme announced in December, are a down-payment on areas identified in the Forrest Review,” Minister Scullion said.

“The Government will continue to work methodically through the recommendations of the Review to set up a framework of action to end Indigenous disadvantage in key priority areas.”