Buy Local Advocate says gov’t investment in businesses at record low, amid review into Aboriginal Procurement Policy

The government has hit a seven-year low in the rate of investment in local businesses, as a three-year review is opened to the public.

The next three years of Indigenous investment could be shaped by an comprehensive review into government contracts, amid a steep downturn in tenders going to locals.

On Wednesday the Department of Industry Tourism and Trade confirmed it would review the

Aboriginal Procurement Policy, almost a year and a half after the plan was first announced.

Under the APP, Aboriginal-owned companies can be given a first preference to certain government contracts worth at least $15,000.

A discussion paper said in the first 12 months of the policy, the government was on track with its five per cent investment target, with 70 contracts worth a total of $73m awarded to Aboriginal businesses.

However, the next six months fell off with only two per cent of spending going to Indigenous businesses, just 18 contract worth $20m.

The discussion paper said only 287 — less than two per cent of all NT businesses — met the definition of an Aboriginal-run operation, which must be 51 per cent owned, controlled and managed by Indigenous people

The discussion paper also highlighted a concentration of the APP contracts, with 70 per cent for construction tenders, but only one per cent for consultancy, and zero for security, information management, landscaping or project management.

NT Indigenous Business Network chief executive Jerome Cubillo said he welcomed the review into the Aboriginal Procurement Policy. Picture: Pema Tamang Pakhrin

The Commonwealth has set a target for three per cent of contracts going to Indigenous owned businesses – roughly mirroring the national First Nations population.

However in the Territory, which has a 30 per cent Aboriginal population, the target was only set at five per cent of government contracts.

NT Indigenous Business Network chief executive Jerome Cubillo said he welcomed the review, and advocated for more ambitious procurement targets based on population figures”.

“A thriving Aboriginal business sector is not just about wealth creation; it’s about building stronger communities and closing the socio-economic divide,” Mr Cubillo said.

DITT Business and Workforce deputy Chief Executive Cathy White said the government was committed to improving employment outcomes and ensuring more transparency in procurement.

It comes amid the lowest year of financial investment in Territory-owned businesses in seven years, with only 71 per cent of NT Government contracts going to locals in 2022-23.

In December the Buy Local Industry Advocate Denys Stedman released a scathing annual report into the state of government contracts to Territory companies, saying the rollout of 19 Buy Local Plan recommendations was “frustratingly slow”.

NT Buy Local Industry Advocate Denys Stedman released a scathing annual report into the state of government contracts to Territory companies.

Mr Stedman said while there was “initial enthusiasm” and regained trust from private industry following the Value for Territory Assessment Framework in 2022.

“It was unable to be sustained with several system issues having been identified post rollout … leading to erosion of some of the newly built industry trust,” he said.

The APP consultation period will run until Sunday 3 March 2023, with round tables to be held in Alice Springs on January 30, Darwin on January 31, with teleconference sessions based in Darwin to be held on February 12 and 19.