The Ministers for Indigenous Affairs and Finance have released a new policy that requires the Australian Public Service (APS) to award 3 per cent of all contracts and tenders to Indigenous businesses by 2020.

The ministers say the policy will be binding – and have no exceptions - for all APS Agencies from 1 July 2015.

It hopes the new policy will put Indigenous businesses at the centre of the Commonwealth Government’s did business practice, and create opportunities for Indigenous businesses to grow and employ more people.

“Whether through direct contracts, or as part of the supply chain of some of Australia’s biggest companies, the policy will ensure that Indigenous businesses have the chance to compete and showcase the products they have to offer,” the Ministers’ joint statement said.

The policy contains three key components; a target for purchasing from Indigenous enterprises, a mandatory set-aside to direct some Commonwealth contracts to Indigenous enterprises, and minimum Indigenous participation requirements for certain Commonwealth contracts.

The Commonwealth Government purchases billions of dollars of goods and services every year, and this policy should see a reasonable slice of that figure go to Indigenous businesses.

“For the first time, the Commonwealth Government has committed to a procurement target for goods and services from Indigenous businesses,” the ministers said.

“The target - three per cent of Commonwealth contracts awarded to Indigenous businesses by 2020 - is ambitious and will be achieved.”

Non-corporate Commonwealth entities that currenlty comply with the Commonwealth Procurement Rules must now comply with the new policy.

Entities that do not have to fulfil the Commonwealth Procurement Rules are encouraged to make their “best endeavours” to apply the policy.

The policy does not apply to grants subject to the Commonwealth Grant Rules and Guidelines.

More information is available in PDF form, here.