Aboriginal businesses in Western Australia will be granted a portion of government contracts under the state's very first Aboriginal Procurement Policy.
Finance and Aboriginal Affairs Minister, Ben Wyatt, who became the state's first Indigenous treasurer, made the announcement Tuesday in a bid to increase economic participation of Aboriginal people throughout the state.
Under the policy, government departments will be required to award one per cent of contracts to registered Aboriginal businesses from July 1.
The target will increase to three per cent by the end of 2021, and will apply to all purchases of goods, services, community services and works.
"The benefit of contracting with Aboriginal businesses can extend beyond the successful delivery of contracts, by not only improving the economic prosperity of those involved in the Aboriginal business but the broader Aboriginal community as a whole," Mr Wyatt said.
Federal Indigenous Affairs Minister Nigel Scullion said the policy will be a welcome boost in lifting Indigenous prosperity, improving employment and empowering First Australians in the West.
"The success of the Commonwealth’s IPP has shown what can be achieved with clear leadership – since it was established at a federal level almost 1000 Indigenous businesses have won 4880 contracts worth $594 million, compared to just a handful winning $6.2 million in the last year of the former Labor Government," he said.
Western Australia has become the third government to implement a state level Indigenous procurement plan, broadly in line with the Commonwealth's Indigenous Procurement Policy, after recent moves from Queensland and Victoria.
“These Indigenous businesses are around 100 times more likely to hire Aboriginal and Torres Strait Islander Australians than a non-Indigenous business, so the policy is directly improving employment outcomes," Mr Scullion said.
Supply Nation CEO, Laura Berry, said the federal government's policy has shown how setting measurable targets can open up opportunities to Aboriginal businesses.
"We believe that the introduction of this policy in Western Australia is likely to drive significant outcomes for Aboriginal entrepreneurs, their families and communities," Ms Berry said.
The achievement of each target will be reported back to the Minister at the end of each financial year.
Mr Wyatt says the policy executes one of WA Labor's election commitments.
"The State Government is a major employer, investor, and purchaser of goods and services in Western Australia and it can leverage these roles to create opportunities for contracting with Aboriginal businesses," he said.
Labor won the March state election in a landslide victory over the long-running, eight-year reign of the Barnett government. It made Mr Wyatt the state's first Indigenous Treasurer in any Australian state or federal government.
Mr Wyatt hopes his new policy will build on the capacity and capability of Aboriginal businesses around the state.
"The Aboriginal Procurement Policy will support the economic participation of Aboriginal people and presents exciting opportunities for those in business, or seeking to establish a business and we look forward to the entrepreneurial growth of this sector," he said.
The Department of Finance will work to introduce the policy throughout the state from early next year, with an Aboriginal Business Expo to be held in March.
It comes as Mr Wyatt prepares to hand down the WA's mid-year budget review which he predicts will only show 'slight changes' with a small increase in the deficit for the 2017/18 financial year.
His comments come as the McGowan government announced widely criticised cuts to education last week worth $64 million, axing the School of the Air, 170 jobs and slashing funding for gifted and talented entry programs.
Mr Wyatt said there would be "no dramatic change" to the 2017/18 budget deficit but predicted it would be slightly higher than the September budget estimate of $2.3 billion.
WA's total net debt is predicted to hit $43 billion by 2020/21.
- with APP