Release type: Joint Media Release

Date:

New Government procurement rules deliver boost for Indigenous businesses

Ministers:

Senator the Hon Mark Arbib
Minister for Indigenous Employment and Economic Development
Minister for Sport
Minister for Social Housing and Homelessness

New changes to the Federal Government’s procurement guidelines will strengthen business opportunities for small and medium Indigenous enterprises.

Under measures announced today by the Minister for Finance and Deregulation Penny Wong and Minister for Indigenous Employment and Economic Development Mark Arbib, small and medium Indigenous enterprises will be exempt from the Commonwealth’s mandatory procurement procedures.

Speaking to industry representatives at an Australian Petroleum Production and Exploration Association forum about the benefits of using Indigenous suppliers, Senator Arbib said the new changes will help boost Indigenous employment.

“Under the exemption, Commonwealth Government agencies will be able to contract small and medium Indigenous businesses without conducting a full tender process while still delivering value for money,” Senator Arbib said.

“Both Commonwealth Government agencies and Indigenous businesses will benefit from reduced administrative costs as a result of this exemption.

“We know the best way to boost Indigenous employment is to develop Indigenous enterprises because businesses owned and run by Indigenous people also provide great job opportunities for Indigenous Australians.”

Senator Wong said the new exemption measures complemented the implementation of the Government’s Indigenous Opportunities Policy (IOP), which aims to increasing training and employment opportunities for Indigenous communities.

“The exemption is an important indication of the Federal Government’s continued commitment to the development and growth of Indigenous business,” Senator Wong said.

“There will be increased opportunities for greater access to the Government’s procurement market for all small and medium Indigenous businesses.

“The policy embeds into our procurement processes the Closing the Gap goal of halving the gap in Indigenous unemployment by providing an avenue for Indigenous businesses to prosper.”

Senator Arbib said the new policies also build on the Government’s efforts to drive Indigenous enterprise through measures such as the Australian Indigenous Minority Supplier Council (AIMSC).

“AIMSC was set up to link some of Australia’s biggest corporations with Indigenous suppliers. It has facilitated almost $9 million in contracts and $4.5 Million in transactions between members and certified suppliers in just 18 months of operation,” Senator Arbib said.

“Growing the Indigenous business sector is a vital part of the Gillard Labor Government’s strategy to support Indigenous economic development.”

The new exemption states that ‘the Mandatory Procurement Procedures do not apply to procurement of property or services from a small or medium enterprise with at least 50 per cent Indigenous ownership.’

The definition of an Indigenous business will move to 51 per cent by 1 January 2013 in line with the definition under the Indigenous Opportunities Policy.