The value of state government contracts awarded to Aboriginal businesses has fallen by 21 per cent over the past year though the number of contracts has risen.
The government awarded 279 contracts worth $136 million to Aboriginal businesses in the year to June 2021.
The value was substantially down from $172 million in FY20 and $167 million in FY19.
However the number was up from 234 and 179 in the two prior years.
The fall in the annual value of contracts was calculated by Business News after finance minister Tony Buti, who has responsibility for government procurement policy, released aggregate data for the past three years.
Mr Buti hailed the three-year data, saying it showed the success of the government’s Aboriginal Procurement Policy, which has been running for three years, but he did not address the fall in the value of work awarded.
In the current financial year, the government is aiming to award at least three per cent of all contracts (by number) to Aboriginal businesses.
It has substantially exceeded this target in each of the past three years – 4.77 per cent in FY19, 5.55 per cent in FY20 and 6.35 per cent in FY21.
Despite this track record, the government failed to lift the target this financial year, instead keeping it at three per cent.
The target will, however, rise gradually to four per cent by 2023-24.
The state government has recently announced two policy changes to boost the Aboriginal business sector.
It has adopted new targets for Aboriginal employment and for sub-contractors on certain government projects worth more than $5 million.
It is also aiming to award $700 million of contracts in the transport sector to Aboriginal businesses over the next five years.
This equates to about five per cent of all contracts in the sector.
The minister was speaking today at the conclusion of the third annual Aboriginal Business Expo, hosted by the Department of Finance.
More than 400 people, including representatives from almost 100 Aboriginal businesses, attended the expo at Optus Stadium.
The expo aims to bring together Aboriginal businesses, not-for-profit sectors and head contractors to build relationships and discuss upcoming contracting opportunities.
Mr Buti commended the response of Aboriginal businesses to contracting opportunities.
“Aboriginal businesses throughout the State have shown their ability to successfully tender and deliver contracts,” he said.
“They’ve demonstrated their important and vital role in the WA Government supply chain.”
Mr Buti also claimed the McGowan government was leading the State in prioritising Aboriginal economic development.
However, to put its numbers in perspective, the big three iron ore miners in WA have made a substantially larger contribution.
Business News reported in June that Fortescue Metals Group spent $354 million with 63 Aboriginal businesses in 2020, while Rio Tinto spent $218 million and BHP spent $67 million.
