Last week the Federal Government announced a 3 per cent target for federal procurement with Indigenous suppliers by 2020, which equates to about $1.17 billion based on current annual spending.
Read the article: commonwealth taking steps increase indigenous jobs
Read the Article: indigenous employers in line for 1bn in public contracts
The purpose of the policy is to drive sustainable, long term employment opportunities for Indigenous people as Indigenous businesses are more likely to employ Indigenous people.
This change was recommended as part of the Forrest Review which was released last year. This could be a fantastic initiative to boost Indigenous businesses. However, it is important to ask who will qualify as an Indigenous supplier under this policy? How do we ensure that the benefits of this policy change will result in real benefits and jobs for Indigenous people?
Supply Nation is a federally funded body that certifies Indigenous businesses and the federal government plans to use Supply Nation to identify the suppliers who will be eligible for the government spending initiatives. Currently, to qualify as a Certified Indigenous Business applicants must meet the following six criteria:
- Ownership – at least 51 per cent ownership of the company by an Indigenous Australian(s).
- Management – the company is led/managed by a Principal Executive Officer who is an Indigenous Australian.
- Control – the key business decisions regarding the company’s finances, operations, personnel and strategy are made by an Indigenous Australian(s).
- For-profit – the company is able to distribute its equity to members.
- Trading as a business – with a minimum annual revenue of $50,000.00 and a demonstrated recent history of trade (ideally, at least 6 months trade history).*
*Businesses with a low turnover (less than $50k) or that are start-ups (no trade history), can be certified as Emerging Suppliers.
- Business is located in Australia
The purpose of these criteria is to ensure that Certified Indigenous businesses have a capacity which is provided by an Indigenous Australian and that they are owned and managed by Indigenous Australians. Too often lists of Indigenous businesses compiled by the media do not meet these criteria and they are not used by resources companies to identify who should qualify for contracts. Joint Ventures which are 50% Indigenous-owned but where the management is not Indigenous and the key decisions about finances, operations and strategy are not made by Indigenous Australians have no place on the list prepared by Supply Nation.
When you look to do business with an Indigenous business, make sure that the business is Certified Indigenous by Supply Nation to ensure you are engaging with a genuine Indigenous business. This will maximise the benefits to the Indigenous community.
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