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Public procurement targets ‘will boost Indigenous employment’

Public procurement targets ‘will boost Indigenous employment’

More public procurement contracts will be going to Indigenous businesses.

The federal government has announced new reforms that are expected to provide a significant boost to Indigenous employment opportunities nationwide.

From July 1 this year, the government will have clear targets geared towards driving jobs for Aboriginal and Torres Strait Islander people.

As such, specific schemes will be launched in an effort to better leverage the $39 billion the Commonwealth spends annually in an effort to develop Indigenous organisations.

In a joint media release (March 17) by Minister for Finance Mathias Cormann and Minister for Indigenous Affairs Nigel Scullion, it was acknowledged that Aboriginal firms secure less than 1 per cent of government business.

This represents approximately $6.2 million a year, despite existing policies that facilitate public sector agreements with Indigenous enterprises.

However, Mr Cormann said the government is committed to increasing the percentage of contracts offered to Indigenous suppliers to 3 per cent within the next four years.

“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,” he stated.

Mr Cormann described the change as a “massive increase” on the federal government’s existing procurement spend with Indigenous companies.

Knock-on effect for Indigenous employment

According to Mr Scullion, the fact that Indigenous businesses are more likely to employ Aboriginal and Torres Strait workers will mean the government’s public procurement reforms will create more employment opportunities for these demographics.

Last year’s Forrest Review, compiled by billionaire mining magnate Andrew Forrest, highlighted the success that Canada has achieved by using procurement to improve outcomes for the nation’s Aboriginal people.

“In Canada, Aboriginal businesses are growing at five times the rate of other businesses specifically due to government procurement policies,” Mr Scullion said in reference to the report.

“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.”

As a way of tracking progress on these targets, the government will introduce new reporting arrangements across public sector agencies. The Australian Public Service Commission will be specifically tasked with reporting on Indigenous employment milestones.

Mr Scullion said the new reforms, in conjunction with amendments to the Remote Jobs and Communities Programme announced last year, are a step in the right direction towards fulfilling suggestions outlined in the Forrest Review.

By Leanne Macnamara, Public Affairs Coordinator

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