To Senator the Hon Malarndirri McCarthy, Minister for Indigenous Australians, and the National Indigenous Australians Agency
We support the goal of using Commonwealth procurement to grow strong, self‑determining Aboriginal and Torres Strait Islander businesses. However, recent evidence shows that the Indigenous Procurement Policy (IPP) is not sharing opportunities fairly.
An ANU study of all IPP contracts worth at least $10,000 from 2015–16 to mid‑2023 (covering more than 99% of total IPP contract value) found that 12,800 such contracts worth $7 billion were awarded to more than 900 Indigenous firms, but half of that $7 billion went to just 18 businesses and half of the contracts (6,415) to only 11 businesses. It also found that 5,272 of those contracts (over 40%) and 30% of their value ($2.1 billion) went to firms based in Canberra, even though the Australian Capital Territory is home to only about 1% of Indigenous Australians and there were close to 14,000 Indigenous businesses across Australia by 2022.
First Nations women‑owned businesses face further disadvantage. A 2023 analysis by Supply Nation and Dr Zannie Langford found that, in 2021–22, Indigenous women owned 28% of Supply Nation‑registered businesses yet received just 14% of total contract revenue. This means Indigenous businesswomen are capturing only about half the procurement revenue you’d expect given their share of the sector.
The ANU research also highlighted structural risks that can enable “black cladding”. It found 47% of total IPP contract value went to companies with only 50–51% Indigenous ownership, and a further 27% went to businesses whose Indigenous ownership was not recorded, raising serious questions about whether many contracts are going to firms with only minimal or opaque Indigenous involvement.
By contrast, research cited by Supply Nation shows that for every $1 of revenue earned by certified Indigenous suppliers, an estimated $4.41 in social and economic value is generated, and these businesses are up to 100 times more likely to employ Indigenous people than other Australian businesses. When contracts go to genuine First Nations businesses, communities benefit through jobs, local spending and cultural leadership.
We welcome the Australian Government’s decision that from 1 July 2026, First Nations businesses must be at least 51% First Nations‑owned and controlled (or registered with the Office of the Registrar of Indigenous Corporations) to access the IPP, and the commitment to reforms aimed at “ensuring that the economic benefits of the IPP are genuinely flowing to First Nations Australians as intended”.
But without stronger transparency, enforcement and attention to concentration, gender and regional equity, these reforms may not go far enough.
We therefore call on you to:
Publish clear, accessible annual data on IPP contracts, including recipients, contract values, geographic location and the level of First Nations ownership and control.
Enforce robust verification of Indigenous ownership and control, and disqualify or sanction businesses / entrepreneurs found to be engaging in black cladding or misrepresenting their Indigenous status.
Actively diversify suppliers, with specific measures or targets to increase the proportion of IPP contracts awarded to First Nations women‑owned businesses and to businesses based in regional and remote communities.
Review panel arrangements and procurement exemptions that may be entrenching an insiders’ market centred on Canberra at the expense of wider First Nations participation, and implement safeguards against nepotism and conflicts of interest.
By taking these steps, you can ensure that the Indigenous Procurement Policy delivers a genuine fair go - spreading opportunity and prosperity across the full diversity of First Nations businesses and communities.
To Senator the Hon Malarndirri McCarthy, Minister for Indigenous Australians, and the National Indigenous Australians Agency
We support the goal of using Commonwealth procurement to grow strong, self‑determining Aboriginal and Torres Strait Islander businesses. However, recent evidence shows that the Indigenous Procurement Policy (IPP) is not sharing opportunities fairly.
An ANU study of all IPP contracts worth at least $10,000 from 2015–16 to mid‑2023 (covering more than 99% of total IPP contract value) found that 12,800 such contracts worth $7 billion were awarded to more than 900 Indigenous firms, but half of that $7 billion went to just 18 businesses and half of the contracts (6,415) to only 11 businesses. It also found that 5,272 of those contracts (over 40%) and 30% of their value ($2.1 billion) went to firms based in Canberra, even though the Australian Capital Territory is home to only about 1% of Indigenous Australians and there were close to 14,000 Indigenous businesses across Australia by 2022.
First Nations women‑owned businesses face further disadvantage. A 2023 analysis by Supply Nation and Dr Zannie Langford found that, in 2021–22, Indigenous women owned 28% of Supply Nation‑registered businesses yet received just 14% of total contract revenue. This means Indigenous businesswomen are capturing only about half the procurement revenue you’d expect given their share of the sector.
The ANU research also highlighted structural risks that can enable “black cladding”. It found 47% of total IPP contract value went to companies with only 50–51% Indigenous ownership, and a further 27% went to businesses whose Indigenous ownership was not recorded, raising serious questions about whether many contracts are going to firms with only minimal or opaque Indigenous involvement.
By contrast, research cited by Supply Nation shows that for every $1 of revenue earned by certified Indigenous suppliers, an estimated $4.41 in social and economic value is generated, and these businesses are up to 100 times more likely to employ Indigenous people than other Australian businesses. When contracts go to genuine First Nations businesses, communities benefit through jobs, local spending and cultural leadership.
We welcome the Australian Government’s decision that from 1 July 2026, First Nations businesses must be at least 51% First Nations‑owned and controlled (or registered with the Office of the Registrar of Indigenous Corporations) to access the IPP, and the commitment to reforms aimed at “ensuring that the economic benefits of the IPP are genuinely flowing to First Nations Australians as intended”.
But without stronger transparency, enforcement and attention to concentration, gender and regional equity, these reforms may not go far enough.
We therefore call on you to:
Publish clear, accessible annual data on IPP contracts, including recipients, contract values, geographic location and the level of First Nations ownership and control.
Enforce robust verification of Indigenous ownership and control, and disqualify or sanction businesses / entrepreneurs found to be engaging in black cladding or misrepresenting their Indigenous status.
Actively diversify suppliers, with specific measures or targets to increase the proportion of IPP contracts awarded to First Nations women‑owned businesses and to businesses based in regional and remote communities.
Review panel arrangements and procurement exemptions that may be entrenching an insiders’ market centred on Canberra at the expense of wider First Nations participation, and implement safeguards against nepotism and conflicts of interest.
By taking these steps, you can ensure that the Indigenous Procurement Policy delivers a genuine fair go - spreading opportunity and prosperity across the full diversity of First Nations businesses and communities.