Tuesday, 13 June 2017
Questions without Notice
My question is to the Minister for Indigenous Affairs, Senator Scullion. Could the minister please update the Senate on the government's approach to supporting Indigenous businesses and how the measures announced in the last budget support the growth of this sector?
I thank the senator for the question. When I became minister I was less than satisfied with how government policies and programs aligned with ensuring that we were supporting Indigenous business. In 2012-13 we actually purchased $6.2 million worth of goods and services from Indigenous businesses out of a $39 billion economy—hardly something you would beat your chest about—which equated to 0.02 per cent of contracts. Given that Indigenous Australians are three per cent of the population, clearly Indigenous businesses had been locked out of government contracts for some time, so we wanted to turn this around.
There is nothing new with how you do things in business. We would like to say we have a businesslike approach. We just simply tied the KPIs that we wanted to the KPIs of our CEOs, so the secretaries of every department had a KPI, a target. Whilst I think they would acknowledge that it was not too popular an approach at the time, they see that it has worked enormously well. As a bit of encouragement we indicated that we would publicly publish the outcomes of those KPIs on my website.
The results have been remarkable. Since we introduced this policy, 708 Indigenous businesses have won over $407 million worth of government contracts in the first 18 months, an extraordinary jump from just over $6 million. Each and every one of these contracts had to show value for money. To build on that success, we are leveraging the Commonwealth investment in significant infrastructure—$700 million investment in north Australia's roads. I would like to acknowledge Senator Canavan's leadership in this initiative. Townsville City Deals are at 6.6 per cent because that is the exact Indigenous population of Townsville— (Time expired)
The Commonwealth leadership in supporting Indigenous businesses has created a real shift in the Indigenous business landscape. It can be called nothing else but the soft bigotry, the passive racism of low expectations that had to be overcome. Many had a perception that Indigenous businesses simply could not deliver.
One of the most outstanding successes of this procurement policy is that we have been able to demonstrate that Indigenous businesses are fantastic business partners. They provide fantastic competitive goods and services on time and on budget. States and territories have recognised this and, for the first time, are now introducing by agreement their own Indigenous procurement policies through COAG. The City of Sydney has led the pack with local government, and I congratulate them. I recently met with the City of Brisbane and they are keen to make Indigenous procurement part of their business. I was pleased at the Supply Nation-Connect 2017 conference that the Business Council of Australia— (Time expired)
If I could just finish my answer to the previous question, the BCA have also decided to introduce their own targets. Through the budget, we have been focused on fairness and opportunity. Though it is fair to support three per cent of the population winning three per cent of government contracts, we provided opportunity by not giving Indigenous businesses a handout; we are simply giving them a chance to win business so they can demonstrate value for money. But it is more than that.
Supporting Indigenous businesses also makes great economic sense. Deloitte Access Economics found that if we close the gap in economic Indigenous participation, our economy would be $24 billion better off by 2031—that is, $24 billion from increased tax receipts and decreased welfare payments. Backing Indigenous business also helps get more Indigenous jobseekers off welfare and into work. This has been a remarkable change around. IPP contracts have an average Indigenous workforce of 51 per cent.