Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Hansard source

I thank the senator for the question. The government has a vision for a vibrant and diverse Indigenous business sector but Indigenous businesses currently only secure a very small amount of government business—far less than one per cent of it, or about $6.2 million out of $39 billion in annual spending. There are so many Indigenous companies capable of supplying services to the Commonwealth and winning a much greater share of government work. So the government has set a target that three per cent of Commonwealth contracts will be with Indigenous businesses by 2020. This equates to about 1,500 contracts a year. In dollar terms, this will be around $135 million a year based on the average contract value of some $90,000. This is a massive increase in the government's current Indigenous procurement spend, and the potential to grow is unlimited.

For certain Commonwealth contracts agencies will have to check whether an Indigenous small or medium enterprise can deliver goods and services on a value-for-money basis before they make a general approach to the market. Before making an approach to the market the Commonwealth has to demonstrate that there are no Indigenous businesses available. Certain larger contracts will also include mandatory minimum Indigenous employer and supplier use. Each minister and each agency head will be accountable for achieving the target, and performance will be published annually for the whole of the Commonwealth and portfolio by portfolio. Whether through direct contracts or as part of the supply chain, this policy will ensure that Indigenous businesses are showcasing the products that they have to offer. Indigenous businesses are also more likely to be employers of Aboriginal and Torres Strait Islander people by a factor of about 10. So it is natural that, as more Commonwealth procurement is won by Indigenous businesses, more employment opportunities will be created for Indigenous people.