Understanding the IPP’s mandatory minimum Indigenous participation requirements
The Australian Government’s Indigenous Procurement Policy (IPP) plays a key role in creating long-term economic opportunities for Aboriginal and Torres Strait Islander peoples. Introduced to increase Indigenous participation in the economy, the policy uses the government’s purchasing power to drive real, measurable change across the public and private sectors.
One of the key components of this policy is the introduction of Mandatory Minimum Indigenous Participation Requirements (MMRs). These are targets for Indigenous employment and supplier engagement that must be included in certain types of Commonwealth procurement contracts. Their purpose is to ensure that Indigenous businesses and workers are actively included in large-scale government projects—even when they’re not the head contractor.
MMRs apply to Commonwealth contracts that meet three key criteria:
They are wholly delivered in Australia
They are valued at $7.5 million or more (GST inclusive)
They involve more than 50% of the contract value being spent in one or more of nineteen specified industry sectors
When these criteria are met, contractors must include clear plans to create opportunities for Indigenous Australians—either through direct employment or by engaging Indigenous-owned businesses within their supply chains. These measures are not suggestions; they are mandatory and must be reported on and tracked throughout the life of the contract.
This is particularly important for smaller Indigenous businesses, which often don’t have the capacity to tender for large government contracts independently. The MMRs help level the playing field by encouraging larger suppliers to work with these businesses as subcontractors or partners. This opens new pathways to market and supports the long-term sustainability of Aboriginal and Torres Strait Islander enterprises.
The real strength of this approach lies in its reach and influence. Through its role as a purchaser, the Commonwealth is shaping broader private sector behaviours—encouraging contractors of all sizes to think critically about their approach to diversity, equity and inclusion. Rather than limiting Indigenous participation to specialist services, the MMRs position it as a core part of mainstream project delivery.
Ultimately, every significant Commonwealth supplier should now be able to show a clearly articulated and measurable strategy for employing Indigenous Australians and using Indigenous businesses. This includes not only meeting baseline targets, but also demonstrating how Indigenous participation is embedded in their organisational values, project planning, and day-to-day operations.
The MMRs are a powerful tool for economic development, cultural recognition, and community empowerment. When applied effectively, they benefit not just Indigenous communities—but the broader Australian economy as a whole.