Tighten Indigenous contract checks: report

·2-min read

MPs from across the political divide want tightened criteria for Indigenous businesses applying for federal government contracts, despite a program's success in creating jobs.

Random audits for businesses that have contracts under the Indigenous Procurement Policy have also been recommended.

At the moment, businesses with at least 51 per cent Indigenous ownership can apply under the program.

But a report by lower house Liberal and Labor MPs calls for more rigorous criteria.

Specifically, it recommends consideration of the proportion of Indigenous employees, the training and opportunities provided to them, use of profits and whether the enterprise has other revenue sources.

Liberal MP and chair of the Indigenous affairs committee Julian Leeser said the procurement policy had been a "runaway success", but needed improvements.

"The policy has worked well, but we think there's some things that could make it work even better," he told AAP on Monday.

"We want to make sure that in spending this money, more Indigenous Australians are benefiting.

"Are we just creating a class of Indigenous entrepreneurs that are doing well, or are they applying those profits to the benefit of broader Indigenous communities?"

Among the concerns was whether a business was reliant wholly on government contracts or had a diverse revenue source.

Mr Leeser also said concerns had been raised about "black cladding", where a businesses disingenuously made out to be an Indigenous enterprise.

Supply Nation, which certifies Indigenous suppliers, received eight or nine complaints in the last year.

As a result, it removed one business from its register of more than 17,000.

The national procurement policy aimed to give three per of commonwealth contracts and one per cent of the combined contracts' value to Indigenous businesses.

For example, the Department of Defence had a target of 714 contracts worth $95.5 million in the 2019-20 financial year.

It overshot that, awarding 2974 contracts valued at $471.9 million.

The report made 17 recommendations. Among these were support for Indigenous access to foreign direct investment and ensuring future free trade agreements had Indigenous inclusions.

There was also a call to amend the government's JobActive scheme and Community Development Program (CDP).

"The fact the government is reviewing both the programs acknowledges they aren't working as well as they should," Mr Leeser said.

The employment rate for Aboriginal and Torres Strait Islander people was around 49 per cent in 2018 compared to 75 per cent for the rest of the country.

Committee deputy chair and Labor MP Warren Snowdon said the inquiry report's findings should be taken up by the government.

"This report provides you with a pathway ... an opportunity to do something different in relation to promoting Indigenous business and employment opportunities."

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