Reforms Strengthen Small Business Access To Procurement

Australian Treasury

The Albanese Labor Government recognises the important contribution small businesses make to the Australian economy and is committed to a level playing field for small businesses when competing for Australian Government contracts.

Today’s release of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Procurement Inquiry Final Report shows the importance of supporting businesses accessing Commonwealth procurement.

The Australian Government awards on average $70 billion each year on procurement activities. Small and medium enterprises (SMEs) represent a significant amount of that expenditure, with over $20 billion, or 27.3 per cent of government contracts being awarded to SMEs in 2022-23.

The Albanese Labor Government continues to exceed its 20 per cent procurement target for SMEs.

The Government continues to look for ways to improve opportunities for SMEs to participate in Government procurement through a fairer and simpler system.

We thank the ASBFEO for its work examining the impact on SMEs as a result of the 1 July 2022 changes to the Commonwealth Procurement Rules.

The Government supports the majority of ASBFEO’s recommendations.

Reforms are already underway to address some of the issues highlighted in the report, including supporting procurement capability for both SMEs and the APS, increased transparency and streamlined processes for SMEs engaging with the Government’s procurement platform, AusTender, and the Payment Times Reporting Scheme.

The Government’s Buy Australian Plan commits to opening the door to more government work for SMEs by decoding and simplifying government procurement.

In 2023-24, the Department of Finance has delivered 60 training sessions to over 2,200 APS officials which includes contract management courses that cover ethical behaviour, conflict management and performance management. Finance is also engaging directly with businesses to improve industry awareness of opportunities to compete for Australian Government contracts.

This is part of the Government’s aim to have a procurement system that Australians can have confidence in, that provides opportunities for Australian businesses and SMEs, and delivers value for money for taxpayers.

The Minister for Finance, Senator the Hon Katy Gallagher said the Albanese Government will continue to focus on uplifting SME awareness and work with the APS to better engage with businesses.

“SMEs are the powerhouse of this nation. We want to ensure the government is a buyer of choice for SMEs and secures value for money for Australians,” Minister Gallagher said.

“We’re committed to supporting SMEs participate in Government procurement and our response to ASBFEO’s inquiry reaffirms that commitment.”

“Procurement reforms are just one way that the Government is supporting small businesses through competitive and fair market conduct,” Minister for Small Business, the Hon Julie Collins MP, said.

“Other Government initiatives and reforms include improving payment times for small businesses, removing unfair contract terms, and establishing a small business designated complaints function.”

The full report and Government response is available on the Finance website.

/Public Release. View in full here.