• Indigenous Affairs Minister Nigel Scullion says the government businesses with government contracts will face more scrutiny. (AAP)Source: AAP
The federal government is strengthening its monitoring and oversight of Indigenous businesses it contracts under its procurement scheme.
5 Oct 2018 - 5:15 PM  UPDATED 5 Oct 2018 - 5:27 PM

The Morrison government will strengthen its monitoring and oversight arrangements of Indigenous businesses winning Indigenous Procurement Policy contracts, in an effort to crack down on wrongdoing.  

Indigenous Affairs Minister Nigel Scullion announced the changes on Thursday saying the government is taking a ‘zero-tolerance’ approach to so-called ‘blackcladding’.

“All joint ventures will now be required to register on Supply Nation’s Indigenous Business Directory, meet a 50 per cent Indigenous ownership and control test, and have a skills capability transfer and Indigenous workforce plan in place which will be reviewed annually by Supply Nation,” Minister Scullion said.

Supply Nation, a non-government organisation setup to verify Indigenous businesses, will be given additional funding to ensure companies have majority Indigenous ownership, and carry out regular audits for changes in structures.

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The government has also established a new advisory council to ensure Indigenous business targets are being met, with business leader Warren Mundine to chair. 

“We want to ensure we have a credible, transparent system that is working towards a viable, economic future for Aboriginal and Torres Strait Islander businesses,” Mr Mundine told NITV News.

He said the new council will work with the prime minister’s Indigenous Advisory Council, land councils, representative bodies and Indigenous businesses to ensure confidence in the system, and to create a new database to monitor Indigenous ownership. 

With no clear data of 'blackcladding' businesses, it's hoped the body will also create a new database to monitor Indigenous ownership. 

"It's not as bad as people think it is, [but] we need data now and we are going to start creating right away," he said. 

The former Labor Party president has pursued the issue for a number of years, presenting a research paper to Malcolm Turnbull and challenging the former prime minister to come up with an economic strategy to close the gap.

“I want a focused approach on [Indigenous] business and economic development. People are telling me, across Australia, that this is the new self-determination, so we’ve got ensure this is operating with solid foundations and benefiting Aboriginal and Torres Strait Islander businesses,” he said. 

Mr Mundine said credible Indigenous businesses need to have at least 50 per cent Indigenous ownership, top roles designated for Aboriginal and Torres Strait Islander peoples, and opportunities for Indigenous employees to grow, with penalties enforced for any business that does meet the criteria. 

The government regards its Indigenous Procurement Policy as a ‘runaway success’ with 1000 Indigenous businesses winning over $1 billion in contracts since it began in 2015, but a Productivity Commission report found last year the share of funding that went to Indigenous organisations had dropped by a third.

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