Procuring from Indigenous Businesses

Closing the Gap

Of the 17 ‘Closing the Gap’ targets which focus on reducing Indigenous disadvantage, Outcomes 6,7 and 8 specifically deal with Further Education and Economic Development Outcomes.

These outcomes focus on increasing education pathways and increasing employment opportunities for Indigenous people. It is important to note that Outcome 5 which is Students achieve their full learning potential is not yet on track so while there is a focus on tertiary study, there is still a large cohort of Indigenous children who are not finishing school.    

Continued low school completion rates manifest in low further education rates and poor employment rates which is clearly evidenced in the recent announcement by the Government that Outcomes 6 and 7 which are Students reach their full potential through further education pathways and Young people are engaged in employment or education continue to be below the Government’s target. 

Indigenous Procurement Policy (IPP)

The Indigenous Procurement Policy (IPP) was launched in 2015 and is managed by The National Indigenous Australians Agency (NIAA). As NIAA is part of the Prime Minister and Cabinet portfolio, the IPP targets are focussed on at the highest levels in all Departments.

The IPP mandates small Government contracts (less than $250k) to be offered to Indigenous firms first as a mandatory set aside.

The IPP also mandates large Government contractors to meet Indigenous Procurement and Employment targets of 3%. Organisations who are awarded contracts by the Commonwealth of over $7.5m need to report quarterly to NIAA on their spend with Indigenous businesses and their Indigenous employment targets.

All States and Territories have Indigenous Procurement policies which have similar structures.

Economic Impact

For every $1 of revenue generated by Indigenous businesses, an additional $4.41* of social return is generated. That means a dollar is working 4 times harder to break the cycle of poverty when it is spent with an Indigenous business.

Indigenous businesses are 100 times more likely to employ other Indigenous people. Indigenous employment is a key indicator of strong economic development so procuring from Indigenous businesses is an investment in sustainable communities.

* Source: Supply Nation 2018, The Sleeping Giant: A Social Return on Investment Report on Supply Nation Certified Suppliers