NSW Government Surpasses $10 Billion Annual Spend with Small and Medium Businesses

The New South Wales Government has reached a significant milestone by spending over $10 billion annually with small and medium enterprises (SMEs) based in New South Wales. In the 2023-24 financial year, the government's expenditure with local SMEs rose to $10.1 billion, up from $8.7 billion in 2021-22. This represents nearly a quarter of the government's total $42 billion spending on goods, services, and construction.

To further support local businesses and create job opportunities across the state, the government increased the direct procurement threshold for agencies from $150,000 to $250,000 in 2023. Since this change, more than 1,500 contracts valued between $150,000 and $250,000 have been awarded to small and medium businesses, with approximately 51% of these contracts going to small enterprises.

Small businesses across NSW supply a broad range of essential goods and services to government, including office supplies and furniture, maintenance and repairs for government buildings, landscaping services, and catering for state museums and galleries. These businesses form the backbone of the state's economy, employing around 1.7 million people and making up 97% of all NSW businesses.

In addition to increasing procurement opportunities, the Minns Government has reduced bureaucratic red tape by allowing small businesses to submit insurance information after a contract is awarded, rather than during the tender process. This reform is designed to make it easier for small businesses to participate in government contracts.

The government's efforts build on broader support measures, including proposed reforms to workers compensation. However, the Workers Compensation Legislation Amendment Bill 2025 is currently being delayed by opposition in the Legislative Council. Without these reforms, business premiums are projected to rise by 36% over the next three years.

Minister for Domestic Manufacturing and Government Procurement Courtney Houssos said:
"Small businesses are the backbone of our economy. They deliver world-class solutions, support families, and drive economic growth. Our reforms are helping them secure a greater share of the government's $42 billion spend, which supports jobs and communities across NSW. We know businesses face many pressures, and these changes, along with workers compensation reforms, will help them thrive. We remain committed to creating more opportunities for small business growth."

Minister for Small Business Janelle Saffin added:
"Small businesses are vital to the NSW economy-not only for their products and services but also for employing over a million people statewide. Increasing their access to government procurement benefits both sides: the government gains a larger supplier base, and small businesses grow and serve their communities. We will keep working to support their success."

Dan Hunter, CEO of Business NSW, commented:
"Small and medium businesses aren't asking for handouts-they just want a fair chance to compete for government contracts. The updated procurement rules are leveling the playing field and benefiting communities. Buying locally-from accountants to caterers and construction firms-strengthens regional and national economies. For many emerging businesses, securing their first government contract can be transformational. In a global market with rising input costs, policies that promote fairness are wins for business and the community."

Chris Watts, General Manager of Flavours Catering & Events, shared:
"Flavours Catering is a family-run business with 45 employees based in Artarmon. We've been serving NSW Government agencies for over a decade, delivering meals to around 350 jurors daily across four court locations and supporting other agencies. Our partnership with the government was especially crucial during COVID-19, providing meals to contact tracers. This collaboration gave us stability and helped us grow our team to where we are today."