What NSW’s Industry Policy means for contractors

NSW has moved local participation in government procurement from policy ambition to law. With the Industry Policy setting direction and the Local Jobs First Bill 2026 now passed, contractors will be scored on local commitments and held to them. Here’s how to prepare, and what Victoria has already taught us.

Three missions shaping NSW demand

The NSW Industry Policy is built around three connected missions. Together, they link demand for new homes and infrastructure with the local capability needed to deliver them.

• Housing. A target of 377,000 well-located homes by mid-2029, with a push towards sustainable building materials and modern methods such as modular construction. Supplier capacity and material availability become early planning priorities.
• Net Zero and Energy Transition. Renewable Energy Zones, critical minerals and green technologies create demand for the infrastructure itself, and for local fabrication, installation, maintenance and skilled workers.
• Local Manufacturing. Includes a 50% minimum local content target for future rolling stock by 2035. This is sector-specific, so confirm what applies to each procurement.

SEDO INSIGHT

The missions tell you where demand is heading. Contractors who map their capability against them now will be suited to responding to NSW government procurements as opportunities arise.

Local Jobs First: NSW turns direction into obligation

On 14 October 2026, the NSW Government announced that the Local Jobs First Bill 2026 had passed Parliament. NSW spends around $40 billion a year on procurement, and the reforms aim to direct more of it to local businesses and workers. Announced measures include:

• a Local Jobs First Commissioner to champion local industry, workers and suppliers
• a Local Procurement Policy, including a 30 per cent tender weighting for contracts valued over $7.5 million
• Local Procurement Plans for major contracts, locking in commitments on local jobs, local content, and regional and SME participation
• a Future Skills Guarantee setting quotas for apprentices, cadets and trainees
• a supplier debarment scheme for serious misconduct

The Local Procurement Policy and the Commission are still being established, so detailed requirements are yet to land. NSW agencies already buy under the NSW Procurement Policy Framework, and tender documents and contracts will set the local participation obligations for each project. We unpacked the draft Bill earlier this year in NSW Local Jobs First procurement changes explained.

Lessons from Victoria

NSW’s model follows Victoria’s Local Jobs First policy, which brings together the Victorian Industry Participation Policy and the Major Projects Skills Guarantee. The 2024–25 Annual Report shows its scale, and why evidence matters:

• 338 projects worth $17.2 billion commenced in 2024–25. Their Local Industry Development Plans identified 15,405 opportunities for local SMEs. These are identified opportunities, not contracts awarded.
• 94% average minimum local content was required across 28 construction Strategic Projects that year. That is a requirement, not achieved content.
• 24.3 million hours worked and 19,197 apprentice, trainee and cadet jobs have been supported under the Major Projects Skills Guarantee since 2016. These are cumulative figures to 30 March 2025.

SEDO INSIGHT

Targets set the expectation; project records prove what happened. In our reviews of Victorian tender commitments, the most common weakness isn’t low ambition. It’s commitments the delivery team hasn’t tested and the reporting team can’t evidence.

From policy to proof: who owns what

Local participation is committed to at bid stage but delivered across different business units. Each step from policy to proof needs a clear owner.

The local participation pathway, from policy to proof

Gaps usually appear at the handovers: between the bid team and delivery, or between delivery and reporting. A cross-functional working group with an executive sponsor closes them. It gives every commitment an owner, a delivery pathway and an evidence source.

What contractors should do now

Victoria provides the lessons, but NSW’s own policies and project requirements must guide implementation. We recommend five priorities:

• Map capability against the pipeline. Identify where your services and suppliers support housing, energy or manufacturing projects. Test capacity, lead times and dependencies before you commit.
• Look beyond the first tier. Know where products are made, what value is added locally and which components rely on overseas supply. That shows both opportunity and risk.
• Build partnerships before tendering. Engage local manufacturers, regional SMEs, Aboriginal businesses and training providers early, around real packages, entry requirements and timing.
• Test every commitment with delivery. Before a Local Procurement Plan goes in, confirm the package, the supplier or workforce pathway, the accountable person and the evidence required. Then flow it into subcontract terms.
• Set up evidence from day one. Treat procurement reporting as part of delivery, not an afterthought, and assign responsibility for supplier declarations, spend data and workforce records. Track commitments against actuals and act on gaps while there’s time to recover.

SEDO INSIGHT

Local content isn’t the same as local benefit. Under Victoria’s policy, local content includes Australian and New Zealand industry and local value added to imported items. Where place-based outcomes matter, as they do in many social procurement commitments, track regional supplier spend and host-community workforce participation separately.

Getting ready for NSW Local Jobs First

NSW now has both the direction and the legislation. For contractors working out how to win government tenders in NSW, what will separate strong bidders is credible commitments, owned by the right people and backed by evidence. Contractors who build that capability before the Local Procurement Policy lands will be ready to compete.

Could your business show a NSW agency not just what you’ll commit to locally, but how you’ll deliver it and prove it?

How can Sedo Group help?

Sedo Group helps organisations connect government policy with practical procurement and project delivery, drawing on deep experience with industry participation and local jobs first procurement policies. We work with clients to:

• map local supply chain capability against NSW project pipelines
• develop local participation strategies and Local Procurement Plans
• review tender commitments so they are achievable before submission
• set up governance, working groups and clear ownership for delivery
• establish measurement and reporting for local content, jobs and social procurement outcomes

Talk to Sedo Group about preparing your business, or your next NSW project, for the NSW Industry Policy.