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Newly enforced changes to procurement rules have set locally owned small businesses up for better access to federal government contracts.
Business NSW welcomes procurement changes to empower SMEs
11 March 2025
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7 minute read
Reforms to federal government procurement guidelines have been welcomed as locally-owned SMEs hiring local people will now be given preferential treatment.
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Business NSW voiced its support for the fresh changes to the Consideration of broader economic beliefs in procurement paper and said it welcomed the visibility for locally owned small businesses when applying for tenders.
The amendments to the procurement rules would give local businesses greater consideration when applying for tenders if they had 50 per cent or more Australian ownership, Australian tax residency and the principal place of business in Australia.
Daniel Hunter, chief executive of Business NSW, said the body’s members were looking forward to and willing to engage in these tenders but had been caught up in bureaucratic red tape.
“This announcement must be part of a revisit of policy around government spending in the local SME market,” he said.
“We await further details in the economic benefits paper. Any step that encourages small businesses is good for business and good for the Australian economy. We have members with strong local expertise often losing out to international players for small contracts.”
Hunter noted this was a welcome step in helping address issues and struggles for international businesses and would ensure that SMEs were part of the process in helping “level the playing field.”
The updated guidance would incorporate a range of changes, such as consideration of weightings, priority outcomes and contracting, according to the government.
The changes were enforced with the motivation to empower local businesses, as local businesses could provide significant economic benefits to their local and national economy.
“We saw during COVID the risk of not having sovereign manufacturing capabilities in key sectors across our economy, so any change that helps grow these industries will be a welcome one,” Hunter said.
“In a globally competitive world, where some of our input costs (energy and labour) are higher than the rest of the globe, anything that helps re-balance that equation is good policy.”
Business NSW said the announcement followed years of consultation and policy development between the body and the NSW government to ensure the state’s small businesses got a “fair crack” at winning government work.
“For the sake of the broader community’s ongoing prosperity, state and federal governments must have a strong focus on creating the best climate for businesses to thrive,” Hunter said.
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