What the policy is for
In the National Indigenous Australians Agency’s words, the policy’s primary purpose “is to stimulate Indigenous entrepreneurship, business and economic development, providing First Nations people with more opportunities to participate in the economy”.
How it works
NIAA describes four working parts.
- Targets. Annual targets for the number and value of contracts awarded to Indigenous businesses, for the Commonwealth and for each portfolio.
- The Mandatory Set Aside. Before a procurement goes to the open market, Indigenous businesses get the chance to show they offer value for money. This covers procurements to be delivered in remote Australia, and any other procurement delivered wholly in Australia and worth between $80,000 and $200,000 including GST.
- Mandatory Minimum Indigenous Participation Requirements. Contracts in 19 industries that are delivered wholly in Australia and worth $7.5 million or more carry targets for Indigenous employment and business participation.
- Exemption 16. This exemption in the Commonwealth Procurement Rules lets portfolios buy directly from Indigenous small and medium enterprises that can demonstrate value for money.
The third part reaches past Indigenous businesses themselves. As this guide reads it, a large contractor winning one of those contracts takes on Indigenous participation targets, which gives Indigenous suppliers a reason to be in that contractor’s supply chain.
Targets and results
The Commonwealth and portfolio target for buying from Indigenous businesses rose to 3 per cent on 1 July 2025, and NIAA says it will rise by 0.25 per cent a year until it reaches 4 per cent by 2029–30. For 2024–25, NIAA reports that the Commonwealth and every portfolio exceeded their targets of 3 per cent of the number of contracts and 2.25 per cent of their value.
NIAA reports that from 2015 to February 2026 the policy generated over $13.5 billion in contracting opportunities for Indigenous businesses, across more than 86,000 contracts awarded to more than 4,700 businesses. It publishes the 2024–25 figures by portfolio on its policy page.
The changes, in order
- Dec 2023 to Mar 2024
Public consultations on reform options, including changing the definition of a First Nations business.
- February 2025
The Australian Government announced changes to raise the policy’s ambition and make sure its economic benefits are “genuinely flowing to First Nations people”.
- 1 July 2025
The Commonwealth and portfolio target rose to 3 per cent.
- May 2026
An updated version of the policy was released.
- 1 July 2026
The strengthened eligibility criteria began: at least 51 per cent First Nations owned and controlled, or registered with the Office of the Registrar of Indigenous Corporations. Through the 2026–27 transition, a business that meets the original criterion of at least 50 per cent Indigenous ownership is still eligible.
- 13 August 2026
NIAA released an approach to market on AusTender for a provider to verify Indigenous businesses against the strengthened criteria and keep an online registry of verified businesses. Submissions closed on 18 September 2026.
- 2026–27
A transition year: a business is eligible if it meets either the original criterion of at least 50 per cent Indigenous ownership or the strengthened one of at least 51 per cent ownership and control.
NIAA says that once the new verification provider starts, businesses can no longer be verified under the original criteria, and businesses already registered under them will have 12 months from that date to meet the strengthened criteria. It expects the new service to begin in 2026–27.
Supply Nation’s role, as NIAA describes it
NIAA has given Supply Nation’s contract a 12-month extension “to maintain the database of businesses satisfying the original IPP definition of a First Nations business (50 per cent or more First Nations owned)”, to keep verification services steady during the move to the strengthened criteria. Because of probity requirements, NIAA says it cannot yet give more detail on how businesses will meet the new criteria, and will publish it once a provider is chosen.
Black cladding
NIAA says the government “remains committed to exploring options to tackle black cladding”, including work with regulators and support services to find ways for First Nations people to report black cladding more easily that may be unlawful. The 51 per cent “owned and controlled” test is meant, in NIAA’s words, to ensure First Nations owners “are empowered to run their businesses and exercise their rights as majority owners”.
Where to read the policy itself
NIAA publishes the updated policy, factsheets on the Mandatory Set Aside and the participation requirements, and guides for procuring officials and for potential suppliers on its Indigenous Procurement Policy page, and the reform timetable on its page on the changes. The thresholds for small businesses generally are in selling to government as a small business.