Government procurement shake-up puts Aussie small businesses first

The federal government is putting its money where its mouth is when it comes to supporting local suppliers. From mid-November, new government procurement rules will make it easier for Aussie-owned businesses to snag government contracts and harder for dodgy operators and foreign giants to muscle in.

Aussie suppliers to the front of the queue

Starting 17 November 2025, only Australian businesses will be invited to tender for government contracts worth less than $125,000. For construction work, that threshold expands to a whopping $7.5 million.

According to Finance Minister Katy Gallagher, this marks the first time in more than two decades that the tender threshold has been raised.

“This is about making sure more of the Commonwealth’s purchasing power flows directly to Australian businesses, creating local jobs and supporting our economy,” Gallagher said.

Commonwealth procurement is big business. Around 31,000 contracts worth close to $2 billion are expected to be impacted, based on last year’s figures.

“For the first time in more than two decades, we’re raising the tender threshold and prioritising Australian suppliers,” Gallagher added. “That means small and medium enterprises will have better access to government contracts worth billions of dollars each year.”

Supplier Portal to simplify the process

In an effort to make things easier for small businesses navigating the red tape jungle, the government is rolling out a new Supplier Portal on AusTender. The portal will give businesses more control over their profiles, letting them flag if they’re a First Nations business, SME, or women-owned operation.

“The new Supplier Portal will also make it easier for businesses to put themselves forward, giving them more visibility and more opportunities,” Gallagher said. “It’s a practical reform that will help level the playing field.”

The portal launches this month for selected suppliers and will be open to everyone by July 2026. From 2026–27, the government also plans to start reporting on the number of contracts awarded to women-owned businesses, marking another tick for transparency.

Cracking down on unethical suppliers

It’s not all carrots, there’s a hefty stick in play, too. As The Mandarin reports, the government is also tightening the screws on unethical suppliers, introducing a new requirement for agencies to consider the ‘ethical conduct’ of firms bidding for work.

Buried in the fine print of the updated Commonwealth Procurement Rules, this change means departments must now weigh up a company’s track record and behaviour,  not just its price tag, before handing over taxpayer dollars.

The move comes after a string of high-profile scandals, including PwC’s tax leak saga and the Robodebt-linked debt recovery mess.

“The new requirement will force agencies to pay far closer attention to value for money principles when spending taxpayers’ money,” The Mandarin reports.

Levelling the playing field

Between the ethical crackdown and the new local-first tendering rules, the Albanese government is signalling a shift to supporting small, homegrown operators and keeping taxpayer dollars onshore.

“This is a big change in the way government does business,” Gallagher said. “It’s about backing Australian capability and making sure taxpayer dollars support Australian jobs.”

The end result could mean more opportunities, less bureaucracy for small business owners hoping to get a slice of the procurement pie.

For more information on the new rules, visit sellingtogov.finance.gov.au.

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