Celebrating 10 Years of the Indigenous Procurement Policy

More than a decade on from its introduction, the Indigenous Procurement Policy continues to reshape government procurement and supply chains across Australia.

Since 2015, Indigenous procurement in Australia has evolved from a targeted policy initiative into a central pillar of government procurement strategy. With strengthened ownership requirements, increased reporting obligations and expanded participation targets, organisations in 2026 must take a structured and strategic approach to Indigenous procurement.

Whether you are new to Indigenous procurement or looking to build momentum, this guide outlines what the Indigenous Procurement Policy requires, why it matters and how your organisation can respond effectively.

What is the Indigenous Procurement Policy?

The Indigenous Procurement Policy, introduced by the Australian Government in 2015 and updated in 2025, uses the purchasing power of government procurement to drive economic participation for First Nations people.

Under the policy, an Indigenous enterprise had been defined as a business that is at least 50 per cent Indigenous owned. From 1 July 2026, this definition strengthens to require at least 51 per cent First Nations ownership and control.

This adjustment reflects the Government’s commitment to ensuring that Indigenous procurement delivers genuine economic outcomes and strengthens the Indigenous business sector.

Indigenous Procurement Policy Targets

The Indigenous Procurement Policy sets clear government procurement targets:

• 3 per cent of contract volume to be awarded to Indigenous businesses in 2025 to 2026

• Increasing to 4 per cent by 2029 to 2030

• 2.25 per cent target for total contract value

• Mandatory Set Asides for eligible lower value and remote contracts

• Mandatory Minimum Indigenous Participation Requirements for contracts over $7.5 million delivered in Australia.

As these requirements mature, reporting expectations are increasingly flowing through supply chains. Prime contractors bidding for government procurement opportunities are now expected to demonstrate measurable Indigenous procurement outcomes.

Performance data is publicly reported through the National Indigenous Australians Agency, reinforcing transparency and accountability.

Indigenous Procurement Across Australia

Indigenous procurement in Australia extends beyond Commonwealth Government procurement.

State and territory governments have implemented their own Indigenous procurement and social procurement frameworks. In Victoria, for example, Indigenous procurement is embedded within the Social Procurement Framework. This requires suppliers to demonstrate how procurement decisions contribute to Aboriginal economic participation and employment outcomes.

Across jurisdictions, the direction is consistent. Indigenous procurement and social procurement are now embedded within broader government procurement systems.

Organisations that align their procurement strategies with these frameworks strengthen their competitiveness in public sector markets.

Why Indigenous Procurement Matters

Indigenous procurement is a key mechanism for advancing economic participation and self determination for Aboriginal and Torres Strait Islander peoples.

It is directly linked to national Closing the Gap targets, particularly those focused on employment, business growth and economic development.

By directing government procurement and corporate spend towards Indigenous suppliers, organisations can:

• Stimulate First Nations entrepreneurship

• Build long term Indigenous business capability

• Create sustainable employment pathways

• Contribute to improved social and economic outcomes.

The 2025 Sleeping Giant Rises report by Supply Nation estimates that Indigenous businesses generate approximately $42.6 billion in annual social value, including strengthened financial security, wellbeing and cultural pride.

Indigenous procurement is not unique to Australia. Comparable government procurement policies operate in Canada, New Zealand and Chile, demonstrating global recognition that procurement is a powerful lever for economic inclusion.

Addressing Common Misconceptions About Indigenous Suppliers

A frequent perceived barrier to Indigenous procurement is the belief that Aboriginal and Torres Strait Islander businesses are limited in number or capability.

In practice, Indigenous businesses operate across diverse sectors, including:

• Construction and civil works

• Electrical, landscaping and waste management

• Facilities management

• Recruitment and labour hire

• Manufacturing

• Professional services and consulting

• Education and training

• Environmental and land management

The opportunity for organisations lies not in the absence of Indigenous suppliers, but in engaging earlier, searching strategically and embedding Indigenous procurement into sourcing processes.

How to Strengthen Your Indigenous Procurement Strategy in 2026

Indigenous procurement is not a compliance tick box. It requires governance, leadership and continuous improvement.

To build or strengthen your Indigenous procurement approach:

1. Review your procurement policies, Reconciliation Action Plan and government procurement obligations

2. Analyse spend data to identify realistic Indigenous supplier opportunities

3. Map the Indigenous supplier market relevant to your industry

4. Verify that suppliers meet the 51 per cent ownership and control requirement

5. Set measurable Indigenous procurement targets aligned with policy requirements

6. Develop a clear action plan with defined accountability

7. Track, report and communicate impact across your supply chain

Embedding Indigenous procurement into strategic planning ensures it becomes part of core business operations rather than a reactive activity.

Managing Risk: Black Cladding

As Indigenous Procurement Policy targets increase, so does the risk of unethical conduct.

Black Cladding refers to arrangements where businesses present themselves as Indigenous owned without genuine majority ownership and control in order to access government procurement opportunities.

To mitigate this risk, organisations should source Indigenous suppliers through recognised certification bodies that undertake rigorous verification, including:

• Kinaway for Victorian Aboriginal businesses

• Supply Nation for nationally certified Indigenous suppliers

Due diligence protects both policy integrity and your organisation’s reputation.

Indigenous Procurement Beyond Compliance

10+ years on, the Indigenous Procurement Policy is more rigorous. Ownership thresholds have strengthened. Reporting is more transparent. Government procurement expectations are expanding across supply chains.

Indigenous procurement and social procurement are now embedded in Australian government procurement frameworks. Organisations that take a strategic approach will not only meet compliance obligations but also contribute to meaningful and lasting economic impact.

How Sedo Group Supports Indigenous Procurement and Government Procurement Outcomes

At Sedo Group, we are experts in strategic and social procurement. We support organisations to align Indigenous procurement strategies with government procurement requirements and deliver measurable supply chain outcomes.

We assist clients to:

• Develop and implement Indigenous Procurement Policy aligned strategies

• Identify practical Indigenous supplier opportunities

• Prepare Indigenous Participation Plans for major contracts

• Strengthen governance, reporting and compliance systems

• Translate policy requirements into genuine community impact.

We work with integrity, kindness and excellence to help our clients grow while delivering meaningful outcomes for First Nations communities.

Ready to Strengthen Your Indigenous Procurement Approach?

Indigenous procurement in Australia is firmly embedded in government procurement policy. The opportunity for organisations in 2026 is to move beyond minimum compliance and build strategic, high impact supply chains.

If you are seeking to strengthen your Indigenous procurement strategy or improve your competitiveness in government procurement, contact Sedo Group to start the conversation.