Rule change a boon for small businesses

Business NSW Executive Director Regional NSW Paula Martin

Small businesses on the Central Coast have welcomed a major change to State Government procurement rules.

Business NSW said the rule change would unlock opportunities for small-to-medium-sized enterprises (SMEs).

The Government has announced it will increase the threshold for direct engagement with SMEs on government contracts from $150,000 to $250,000.

Business NSW Executive Director Regional NSW Paula Martin said the change was a win for SMEs on the Central Coast.

“This move is a positive step in the right direction for many businesses on the Central Coast which have the capacity and capability to get a greater slice of the action on government contracts without the hassle of tedious tender processes,” she said.

“With the threshold raised, SMEs will be able to engage directly on contracts up to $250,000 – this will make it easier for smaller businesses to access larger contracts and ultimately will help NSW’s small businesses to grow.

“On the Central Coast we have expertise in manufacturing, professional services and digital enablement – all areas that can provide value to government when seeking to resolve a problem.

“We are pleased to see requirements for businesses to be insured will only come into effect on confirmation that a contract has been won.

“We know businesses have been deterred from bidding for government contracts in the past due to the need to secure hefty insurance coverage – regardless of whether they win the contract.

“Currently 46,000 SMEs directly engage with government contracts and this announcement is a positive signal to government departments to increase their engagement with small business not just on the Central Coast but across NSW.”

The change applies to small and medium size businesses with less than 200 employees.

The state’s 840,000 small businesses make up 98 per cent of all NSW businesses, employing 1.6 million people in NSW and thousands on the Central Coast.

Premier Chris Minns said small businesses were the backbone of the state’s economy.

“It’s only right that the NSW Government use small businesses to deliver goods and services that the state requires,” he said.

“The NSW Government purchases around $40B worth of goods and services each year.

“The bigger we can make the slice that goes to small businesses, the better.

“Small and medium businesses have been through a very tough time over the past few years; the very least the government should do is make accessing government contracts simpler and easier.”

Minister for Domestic Manufacturing and Government Procurement Courtney Houssos said this would be the first of several reforms planned to support small businesses, local content and domestic manufacturing.

Minister for Small Business Steve Kamper said the move would provide small businesses with greater opportunity.

“As a government, we are committed to getting the policy settings right to ensure that NSW can best harness the expertise and agility of local small businesses, while supporting jobs and investing in NSW,” he said.

Each year, the NSW Government spends more than $9B on goods and services obtained directly from 46,000 small and medium businesses in NSW and this change to procurement will deliver more government contracts going to these businesses and a bigger slice of government procurement spend.

The Ministerial Direction was issued to the NSW Procurement Board and requires agencies to implement the policy change no later than December 31.

It also serves as an important signal to government agencies to directly engage small businesses when procuring goods and services, including for: catering, food and beverage services at state-owned museums, galleries, venues and sites; office supplies and furniture for government offices and buildings; maintenance and repairs, including ground maintenance and landscaping at government facilities; and the development of training resources, including for health and wellness support.

Other significant changes recently implemented to support small businesses in NSW include: the launch of the Service NSW Business Bureau; major upgrades to the Service NSW Business Bureau App; the successful delivery of Small Business Month with more than 600 events across the state; energy bill relief for more than 300,000 businesses and toll relief for more than 700,000 families and businesses; and the launch of the Service NSW Business Grants and Funding Finder, bringing more than 500 grants across 46 agencies into one place, to make accessing financial support easier for businesses across the state.

The latest changes do not apply to construction businesses.