A new services hub backed by the Wirrpanda Foundation and $10 million of government funding aims to fill market gaps for indigenous businesses.
Eight months after securing $10.3 million in funding from the federal government, the Wirrpanda Foundation is set to open its indigenous business and employment hub.
The new service, which will trade as Wirra Hub, is designed to help indigenous businesses take advantage of a growing number of commercial opportunities.
Led by general manager Shane Devitt, the hub is part of the federal government’s indigenous business development strategy.
“If you increase the involvement of Aboriginal and Torres Strait Islander people in business, that’s going to have a multiplier effect on families, communities, employment,” Mr Devitt said.
“Aboriginal businesses are more likely to employ Aboriginal people,” she said.
Instead it will focus on bolstering indigenous businesses and liaising with big companies and contractors, helping them make connections so they can maximise Aboriginal employment.
One of the key growth drivers has been contracting opportunities in the resources sector, particularly in the Pilbara.
Another has been the federal government’s Indigenous Procurement Policy (IPP).
A total of 1,470 indigenous businesses have won 6,880 contracts worth $1.83 billion since the policy was launched in 2015.
The WA government’s Aboriginal Procurement Policy, launched last year, has also been positive.
In its first year, 92 businesses won 197 contracts worth $167 million.
Mr Devitt said the Wirra Hub was aiming to fill gaps in the market, starting with physical space that could be booked for offices, meetings and training seminars.
Its premises in Burswood, officially opened this month by Minister for Indigenous Australians Ken Wyatt, aims to plug that gap.
“There is also a need, especially in WA, for tender-writing support and prequalification support, that’s one of the biggest gaps,” Mr Devitt said.
In addition, the hub will assist indigenous businesses with business development and gaining access to finance.
It is aiming to have staff from multiple service providers co-located with the hub, including Indigenous Business Australia, microfinance group Many Rivers, and the Small Business Development Corporation.
Mr Devitt said service providers would be invited to conduct training in the hub, which would also be a one-stop shop for information on funding, grants and government services
“Another area that some Aboriginal businesses thought was a high priority was advice on mergers and acquisitions or joint ventures,” he said.
“But then we have the issue of black cladding that comes out.”
Black cladding covers a range of practices, including where indigenous owners have little or no say in the management of their joint ventures.
It also covers situations where indigenous joint ventures win contracts but the work is undertaken by the parent company.
In its 2019 review of the federal government’s IPP, consulting firm Deloitte found growing concern over black cladding.
“There is a high perception of an increasing incidence of black cladding on a wide variety of contracts,” Deloitte concluded.
Mr Devitt said joint ventures needed to be properly structured.
“Is it a true joint venture? Does it specify what skills each party brings to the joint venture? How does that change over time?” he said.
The Deloitte review said another issue was the limited education and English language skills of many indigenous people, especially in remote areas.
It also found a perception there had been a shift away from longer-term, higher-value contracts, which made it harder for indigenous businesses to employ more people and commit to training.
Wirra Hub’s launch comes after the state government contracted three Aboriginal consulting groups to deliver similar services across WA.
IPS Management Consultants, Morrgul, and Keogh Bay People deliver information and training on four key topics: tendering skills; business development; internal governance; and contractual compliance requirements.
The three-year funding agreement for the hub is a major boost for the Wirrpanda Foundation, which reported total revenue of $6.4 million for the year to October 2018, for its training and mentoring programs.
The opening of the Hub coincided with Fortescue Metals Group announcing the extension of its waste management services contract with PTK Environmental Services, an Aboriginal business owned and operated by Palyku member Tammy O’Connor, for a further five years.
This brought the total value of contracts and subcontracts awarded to Aboriginal businesses and joint ventures by Fortescue to $2.5 billion since the program began in 2011.
Fortescue chief executive Elizabeth Gaines said the company partnered with 120 Aboriginal businesses and joint venture partners.
During the latest half-year, Fortescue has awarded $258 million in new contracts to 16 Aboriginal businesses.