Fresh data from the NSW Government's procurement report has shown small and medium businesses won more than 20 per cent of the government's $40 billion procurement program, totalling $8.3 billion in 2024-25.
The latest figures also show stronger outcomes for regional and Aboriginal businesses. Of the NSW Government's procurement from small and medium businesses from 2022-23 to 2024-25, the amount spent with regional businesses increased from 16% to 18% (+$25 million), while for Aboriginal businesses it increased from 2.2% to 3.3% (+$72 million) over the same period.
While total government procurement expenditure has reduced, in line with the Minns Labor Government's strategy of fiscal discipline, the relative spend with small and medium businesses has remained steady.
The reduction in government procurement spend has been seen across a number of sectors, including a $300 million drop in consultants, contractors and contingent labour. These savings have allowed the Government to prioritise the delivery of the essential public services relied on by families and households. These gains reflect the Minns Labor Government's commitment to using its purchasing power to strengthen local supply chains and deliver fairer economic outcomes for communities right across NSW.
Small and medium businesses make up around 40 per cent of private sector employment in NSW. When government buys from local firms, it supports local jobs and local communities. These businesses provide many of the essential goods and services government needs, from building maintenance and landscaping to office supplies, furniture and business services.
The Minns Labor Government's direct engagement reforms have also continued to assist small and medium businesses win business from government agencies.
The reforms mean that government agencies can purchase directly from small and medium businesses up to a cost of $250,000, up from $150,000 under the previous Liberal-National Government.
As a result, 50% of all goods and services contracts between $150,000 and $250,000 were awarded to SMEs in 2024-25, up from 47% in 2022-23 and 48% in 2023-24.
The Minns Labor Government has also reduced red tape by allowing small businesses to provide insurance details after a contract is awarded, rather than during the tender process.
These changes complement broader reforms supporting small and medium businesses, including planning system improvements and workers compensation reforms.
In 2026, the Minns Labor Government will continue to build on procurement reforms with the establishment of the Jobs First Commission, a new Local Procurement Policy and a replacement program for Business Connect.
Quotes attributable to Minister for Domestic Manufacturing and Government Procurement Courtney Houssos:
"Small businesses are the backbone of our economy. They deliver clever solutions, support families and households, and help drive economic growth across NSW.
"Our reforms are helping local small and medium businesses win a greater share of the Government's $40 billion spend - supporting local jobs, strong communities and economic development right across the state.
"We will continue working to create even more opportunities for small businesses to grow and succeed."
Quotes attributable to Minister for Small Business Janelle Saffin:
"It is incredibly rewarding to see more regional and Aboriginal businesses winning government contracts. This isn't just about procurement; it's about ensuring the wealth of our $40 billion spend reaches every corner of the state
"Local small businesses are the experts on their own communities. When the government buys local, we aren't just getting a service-we are supporting local jobs and families. When a small business wins a contract, the entire local economy thrives.
"By slashing red tape and modernising our Business Connect program, we are ensuring small firms have the best possible chance to partner with government. We are backing the backbone of our economy by making it simpler and faster for local businesses to grow and succeed."
