NSW Aboriginal Procurement Policy: the 1.5% rule explained
From $7.5 million, NSW Government contracts must carry at least 1.5% Aboriginal participation, set out in a plan and reported every quarter. The policy dates from January 2021, and the revised version promised after the 2023 review is still to come.
What is the NSW Aboriginal Procurement Policy?
The NSW Aboriginal Procurement Policy (APP) sets how NSW Government agencies buy from Aboriginal businesses and create Aboriginal jobs. Since 1 January 2021, contracts of $7.5 million or more must include at least 1.5% Aboriginal participation through subcontracting, workforce or education and training, with an Aboriginal Participation Plan and quarterly reports from the supplier.
NSW Government Agencies
It covers goods, services and construction bought by agencies under the Public Works and Procurement Act 1912. State-owned corporations, the NSW Parliament and local councils are not covered, although state-owned corporations are encouraged to adopt parts of it.
Head Contractors And Suppliers
Suppliers on contracts of $7.5 million or more must allocate at least 1.5% of contract value, or a higher agreed figure, to Aboriginal participation. The final plan becomes part of the contract.
Aboriginal Businesses
An Aboriginal business has at least 50% Aboriginal ownership and is recognised by a suitable organisation such as Supply Nation or the NSW Indigenous Chamber of Commerce. ORIC was added as a further verification source in September 2022.
What the NSW Aboriginal Procurement Policy asks for.
What you report, and when.
Aboriginal Participation Plan
To the contracting agency
Progress Against The Plan
To the reporting.buy.nsw portal
Final Report And Reconciliation
To the contracting agency
Unspent Participation Balance
To Training Services NSW, through the agency
- Aboriginal Participation Plan
- Declaration Of Past NSW Government Participation
- Aboriginal Business Recognition Records
- Subcontract Values And Invoices
- FTE Records And Your FTE Method
- Process For Confirming Aboriginal Or Torres Strait Islander Heritage
- Education And Training Costs
Treating It As Three Separate Targets
The policy asks for one or a combination of subcontracting, workforce and training, not 1.5% of each. Plans should say which route carries the commitment and how each part will be measured.
Not Defining FTE
The workforce route is measured in full-time equivalents using the definition relevant to your industry, and your plan must say how you define and measure it. An hours-only record leaves you converting late, with no agreed method.
Assuming A Shortfall Just Lapses
Where participation falls short, the remaining balance is collected by the agency and sent to Training Services NSW for the Aboriginal Participation Fund, and suppliers cannot transfer it themselves. Past performance is also weighed on later tenders, so a shortfall can follow you.
How Catchment manages the NSW Aboriginal Procurement Policy.
Each Route Has A Target
SocialProThe built-in framework creates Aboriginal Participation - Employment, Training and Subcontracting targets at 1.5%, and you keep the ones your plan uses. The policy counts workforce in FTE and training in dollars, and these starters count hours. Catchment has no FTE or training dollar target, so convert the figures for your plan.
Subcontract Spend By Invoice
SocialProCertified Spend keeps one row per invoice with supplier ABN, entity type, certification, value excluding GST and any invoice file you attach, checked against the Subcontracting target. It records certification such as Supply Nation; it does not verify with the certifier.
Hours From Worker Attributes
SocialProMonthly hours count towards the Employment target when a worker is recorded as Aboriginal or Torres Strait Islander, including hours from your trade partners. A reviewer accepts or sends back each section before the period locks.
The Plan And Reconciliation On File
GovAssureThe framework adds the Aboriginal Participation Plan, Quarterly Progress Report and Final Reconciliation Report as document requirements. Keep each revision of your own copy in the Document Register and select the current one when you file it. Packages also get report reminder and overdue emails for their monthly reporting.
A Record For The Portal
SocialProTarget progress and monthly report packs export to PDF or spreadsheet, which gives you the record to report from in reporting.buy.nsw. You lodge it yourself: Catchment does not submit to the portal.
Adopting this framework on a project generates these targets and documents. You can edit them to match your contract.
NSW Aboriginal Procurement Policy questions.
What is the minimum Aboriginal participation in NSW Government contracts?
At least 1.5% for contracts valued at $7.5 million or more. It can be met through subcontracting to Aboriginal businesses, an Aboriginal or Torres Strait Islander workforce, spending on education and training, or a combination. Agencies can set a higher figure.
Is the NSW Aboriginal Procurement Policy being replaced?
A revision is overdue, not published. NSW Treasury reviewed the policy in 2023 and said a revised version would come in July 2024, but the NSW Ombudsman reported in June 2026 that it had not been finalised. The January 2021 policy remains the one to work to.
What counts as an Aboriginal business under the NSW policy?
A business with at least 50% Aboriginal ownership that is recognised by an appropriate organisation, such as Supply Nation or the NSW Indigenous Chamber of Commerce. ORIC was added as a verification source in September 2022.
What happens if a contractor misses the 1.5% requirement?
The remaining balance is collected by the contracting agency and directed to Training Services NSW, within three months of completion or earlier if the supplier confirms the target will be missed. It goes to the Aboriginal Participation Fund, which funds skills and capability programs. Agencies also consider past performance on later tenders.
Can an agency buy directly from an Aboriginal business in NSW?
Yes, up to $250,000, even if a mandated prequalification scheme or panel is in place, and the business need not be on a scheme. Agencies should give Aboriginal businesses first consideration at this level. Up to $1 million, agencies may also invite several Aboriginal businesses to a limited tender.
Does the Local Jobs First Bill change the Aboriginal Procurement Policy?
Not on what has been published. The Ombudsman noted in June 2026 that the Local Jobs First Bill 2026 and its consultation drafts were silent on the APP and Aboriginal businesses, and recommended the government explain how the two will work together. The Bill has since passed Parliament.
- Aboriginal Procurement Policy (NSW Treasury, buy.NSW)
- Aboriginal Procurement Policy, January 2021 (NSW Government)
- Aboriginal Procurement Policy: update history (NSW Treasury, buy.NSW)
- NSW Aboriginal Procurement Policy Implementation Assessment (NSW Ombudsman, June 2026)
- Opportunity to strengthen impact of the NSW Aboriginal Procurement Policy (NSW Ombudsman media release)
- Minns Labor Government delivers landmark Local Jobs First reforms (NSW Government ministerial release, 14 October 2026)
Reviewed 4 November 2026. General information to help you plan reporting, not legal advice. Policies change, so check the current version with the policy owner before you rely on it.
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