A quarter of all Queensland government purchases must come from local small and medium-sized business from 1 July, well above the Commonwealth’s 10 per cent target, the state government has said.
“Queensland is home to more than 438,000 small businesses and we want to help them to grow and succeed,” Minister for Employment and Small Business Shannon Fentiman said over the weekend.
“And now more than ever they need our support.”
The target is expected to garner $4.1 billion from the Queensland government to Queensland SMEs from next financial year, before it is lifted further to 30 per cent by 30 June 2022.
“We’re the first state to set a target which is well above the Commonwealth target of 10 per cent,” Ms Fentiman said.
The minister noted the SME sector was crucial to the economy, accounting for 99 per cent of businesses that employ Queenslanders.
“We have a plan for Queensland: unite and recover,” Ms Fentiman said.
“It’s about supporting Queensland businesses and industry as well as supporting Queensland jobs.”
Commenting on the government’s announcement, the Chamber of Commerce and Industry Queensland (CCIQ) said it will give businesses some much-needed confidence.
“Queensland is rich with diverse and capable small businesses. However, there are barriers when competing for government contracts,” said Amanda Rohan, CCIQ’s general manager of advocacy and policy.
“Today’s announcement is a positive first step in removing some of those barriers, and shows the government is serious about doing business with SMEs.”
This latest measure follows the state government’s immediate payment policy for all valid invoices, which will continue until the impact of COVID-19 eases.
To support this interim policy, the government has also committed to reducing payment terms for small businesses from 30 to 20 days from 1 July.
Ms Rohan, however, noted that payment terms need be lowered more significantly.
“Many businesses are restricted due to cash flow, and tighter payment terms will alleviate that pressure,” she said.
“We have been calling for a procurement framework for some time, but it is now more essential than ever.”
Small businesses are being encouraged by the state government to enter their details on the Small Business Register to ensure they can be identified in payment systems. To register, visit www.business.qld.gov.au.