Rules tightened to stop ‘black cladding’ fraud

The Federal Government has announced reforms to strengthen the Indigenous Procurement Policy (IPP) to provide more opportunities for First Nations businesses and entrepreneurship.

Under new criteria, businesses will need to be 51 per cent or more First Nations owned and controlled (or registered as an Indigenous Corporation) to access these Commonwealth procurement contracts.

The Government is also making the IPP more ambitious, lifting the Commonwealth’s Indigenous procurement targets from 2.5 per cent of total value of contracts to 3 per cent from 1 July 2025.

‘We are committed to increasing opportunities for First Nations businesses,” Minister for Indigenous Australians, Malarndirri McCarthy said.

“First Nations businesses play a key role in advancing the economic empowerment and self-determination of First Nations people.

“These reforms, based on consultations with Indigenous and non-Indigenous businesses, Chambers of Commerce and various levels of government, will create even more opportunities for First Nations businesses.”

The targets will then rise annually until they reach four per cent by 2030.

The Government will also work with regulators to tackle ‘black cladding’ – disingenuous conduct designed to gain access to programs like the IPP – and explore options to make it easier to report the practice.

These reforms act on consultations carried out last year and are part of the Government’s work towards the economic empowerment of First Nations people and communities.

The IPP reforms go towards Outcome 8 in the National Agreement on Closing the Gap (Strong economic participation and development of Aboriginal and Torres Strait Islander people and communities) and complements work under the Buy Australian Plan to create more opportunities for First Nations businesses.

To read more about the reforms, visit https://www.niaa.gov.au/our-work/employment-and-economic-development/indigenous-procurement-policy-changing