The NSW Ombudsman's new report detailing its assessment of the implementation of the NSW Aboriginal Procurement Policy since its commencement in 2021 found some progress but also inconsistent implementation across agencies, limited transparency, and concerns around compliance by agencies and head contractors, as well as concerns surrounding Black cladding.
NSW Treasury data indicates the total spend by agency groups to Aboriginal businesses under the APP consistently exceeded the one per cent addressable spend target between July 2021 to June 2025. Over the four‑year period, the cumulative expenditure target was approximately $868 million. The actual spend reached $1.6 billion, exceeding the target by $741 million, or 85 per cent.
The NSW Aboriginal Procurement Policy: Implementation Assessment report noted that while stakeholders expressed strong support for the APP and spoke positively about NSW Treasury's 2023 review of it, the report identifies the impact of the APP is "constrained by inconsistent implementation across agencies, limited transparency, and concerns around compliance by agencies and head contractors".
The report assesses the implementation of the APP, including whether the APP targets have been achieved and requirements in the APP have been met.
The key objectives of the APP are to support employment opportunities for Aboriginal and Torres Strait Islander peoples and promote sustainable growth of Aboriginal businesses, by driving demand via NSW Government procurement of goods, services and construction.
The NSW Ombudsman consulted with the NSW Coalition of Aboriginal Peak Organisations, NSW Coalition of Aboriginal Regional Alliances, the NSW Indigenous Chamber of Commerce, Supply Nation, NSW Yarpa Hub and the NSW Aboriginal Business Taskforce, to understand what was working well under the current policy framework, and identify any concerns around its implementation and operation. The report provides key observations from stakeholder consultation to inform future improvements to the APP.
"There is widespread support among stakeholders we engaged with for the intent and objectives of the Aboriginal Procurement Policy, providing a foundation of trust and goodwill to build upon," said NSW Ombudsman, Paul Miller.
"The Policy is viewed by stakeholders as an integral lever for supporting the growth of Aboriginal businesses, employment opportunities, and encouraging economic prosperity within Aboriginal communities."
However, while stakeholders expressed strong support for the APP and spoke positively about NSW Treasury's 2023 review of it, the report identifies the impact of the APP is "constrained by inconsistent implementation across agencies, limited transparency, and concerns around compliance by agencies and head contractors".
The report also noted NSW Treasury failed to deliver on its commitment to publish a revised APP within the expected timeframe following the 2023 review, a delay which has reduced stakeholder confidence and delayed reform impacts.
"The failure to publish a revised Policy as scheduled has prolonged uncertainty," Mr Miller said.
"It also appears to be eroding the generally positive views of Aboriginal stakeholders regarding the manner in which NSW Treasury undertook its 2023 review."
NSW Treasury advised the timing for the release of an updated APP was guided by broader Government priorities, including the development of the Local Jobs First Bill 2026. It indicated that, based on feedback, it would consider publishing an update to clarify its approach.
The Ombudsman's report identifies systemic issues currently limiting the effectiveness of the APP. These include inconsistency in implementation, capability and access gaps, limited cultural capability among procurement officers, and insufficient regional engagement that can restrict equitable participation for Aboriginal businesses.
Additionally, there remain perceptions among stakeholders of compliance and integrity risks, including Black cladding - a term for disingenuous or unlawful conduct aimed at taking advantage of Aboriginal businesses and people or misleading buyers.
The report also identifies measurement limitations, with a focus on spend "rather than meaningful outcomes and contract-level data".
The NSW Ombudsman has made recommendations across four key reform areas to strengthen and sustain the APP's impact.
Recommendations include publishing information on a revised APP that adopts targets that are both ambitious and achievable; with an indicative timeline for implementation.
The NSW Ombudsman has also recommended strengthening reporting and transparency of Aboriginal procurement, enhanced auditing processes, and mechanisms to address "Black cladding" and other forms of misconduct.
