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Backing black business: greater financial inclusion for Australia’s Indigenous business sector
The Australian Indigenous business sector has grown significantly in the past two decades, with conservative estimates suggesting there are currently more than 12,000 predominantly small Indigenous businesses generating an annual economic contribution of approximately $8.8 billion in the 2020 financial year. These businesses employ thousands of Aboriginal and Torres Strait Islander people, with at least 30% of the workforce of Indigenous businesses being Aboriginal and Torres Strait Islander people - compared to 2% in the broader economy.
This project, undertaken by PwC’s Indigenous Consulting for the Minderoo Foundation, identifies the factors that limit the ability of Indigenous businesses and Aboriginal and Torres Strait Islander entrepreneurs to access the financial products and services they need across the business lifecycle, with the objective of contributing to the ongoing discourse and efforts to better support Indigenous businesses.
- The Indigenous business sector is well supported by both the government and corporate sectors, with key policies that encourage procurement of goods and services from Indigenous businesses. The Australian Government’s Indigenous Procurement Policy, as well as similar state and territory government policies, has resulted in significant growth in government spend.
- Aboriginal and Torres Strait Islander people continue to be financially excluded. The extent of, and reasons for, financial exclusion at an individual level has been well documented. As a consequence of a number of social, cultural and economic factors, 50% of Aboriginal and Torres Strait Islander people live with regular ‘severe financial stress’ compared to 10% of the broader Australian population, and only one in ten Aboriginal and Torres Strait Islander people is considered to be ‘financially secure’.
- The establishment of a First Nations Bank would have as its sole focus supporting Aboriginal and Torres Strait Islander people and communities, and their enterprises. This institution could serve to centralise and coordinate a range of products for both Aboriginal and Torres Strait Islander people and their businesses (including debt finance, equity investment and advisory services).
- Although treaty negotiation processes are likely to be complex and take many years, once signed, treaties at a State and Territory level are anticipated to create new opportunities, and potentially access to capital and assets, for Aboriginal and Torres Strait Islander nations and peoples. In time, this may start to redress some of the historical reasons for financial exclusion outlined in Section 4 and result in an increase in the average size and total number of Indigenous businesses.