Tom Burton: Abbott’s new procurement game changer

Yaru Water

New federal procurement rules are set to drive major changes in indigenous development and create a model for using the Commonwealth’s $39 billion annual spend to promote other minorities and small business entrepreneurs.

The release of the detail of the new indigenous procurement policy with a mandatory 3% target and compulsory set-aside for indigenous businesses contracts is a game changer for Commonwealth procurement and indigenous development.

For the first time ever, there is a hard mandated target, detailed rule changes for a large swag of contract opportunities and mandatory employment requirements for contracts above $7.5 million for a wide range of contract types.

If the US experience is anything to go by, this fundamental change has the potential to create a major and sustaining economic development model for indigenous communities.

The policy is revolutionary, the first time at Commonwealth level where a mandated procurement target has been created to drive a broader development objective. It represents a far more activist approach to using Canberra’s $39 billion procurement budget as a driver of economic development and is a landmark change for the indigenous community. It is also a clear example of the priority Prime Minister Tony Abbott has given to aboriginal development.

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