New data has revealed the proportion of government contracts awarded to Northern Territory businesses dropped last financial year to its lowest level since the NT's Buy Local Plan was established.
Figures from the 2022-23 Buy Local Compliance Report show NT-based enterprises were allocated 71.3 per cent of all NT government contracts, down more than 5 per cent from the financial year before.
For the first five years after the plan was initiated in 2016, between 80 to 81 per cent of government contracts were won by locals.
In 2022-2023, the government spent a total of $1.22 billion in contracts.
Almost 82 per cent of that went to NT companies — down nearly 9 per cent from the year before, when a record proportion stayed in the territory.
Contracts were awarded across numerous sectors such as construction, information technology, cleaning and consultancy.
The person tasked with auditing the plan's effectiveness, Buy Local Industry Advocate Denys Stedman, said last year's decrease was "very disappointing given the progress that had been made over previous years".
"These year-on-year declining results indicate that the primary objective of the Buy Local Plan – to ensure that the largest possible proportion of every dollar spent by the NT government is retained within and delivers benefits for the territory economy and community — was not delivered over the last financial year," he said.
"Sustained benefit for the Northern Territory will only be attained where the focus by government on the application of the Buy Local Plan and its policy intent delivers consistent year-on-year spending with territory enterprises."
Government data 'unreliable'
Mr Stedman said the Buy Local program had "not been effective" in 2022-23, but stressed that determination was based on the "incomplete and unreliable nature of … available procurement information".
The NT government doesn't monitor or report data for tier one contracts – those under $15,000 — or from corporations it owns.
"The continued lack of reliable procurement data makes the task of measuring the effectiveness of the Buy Local Plan difficult," Mr Stedman said.
"It should be noted that the data upon which this conclusion was reached does not cover all NT government procurement spending … care needs to be exercised when drawing this conclusion.
"If I don't have the tier one information, how would I even know, firstly how much it was, and secondly, who it was spent with."
Mr Stedman said it was "common sense" to assume a "significant proportion" of tier one contracts were spent with territory businesses, but that he could only guess.
He also said he remained disappointed with the government's slow progress in actioning many of his recommendations to improve the program.
This included "no progress" on a recommendation to establish a "management and reporting procurement system to facilitate, monitor and report on … whole-of-government procurement activities at all procurement tier levels".
NT Chamber of Commerce chief executive Greg Ireland said tier one contracts "added up to quite a bit" and they "require[d] some scrutiny".
"If we can't see every spending activity that goes through procurement, then it's very difficult to get a full and clear picture of exactly what's happening," he said.
"We certainly do get the data on the larger projects, but it's the small jobs, the regular spends, that we're not seeing all of that information."
Shadow Business Minister Marie-Clare Boothby said the Buy Local Plan was "absolutely necessary" in the jurisdiction and the Country Liberals would "strengthen" it if elected at the NT election in August.
Business and Jobs Minister Joel Bowden said the government was working to maximise the amount of money retained within the territory through procurement practices.
"The NT government has listened to industry calls for greater certainty of work through larger and longer term contracts in order to support local jobs and training," he said.
Industry advocate increases procurement confidence
A survey of local businesses regarding the Buy Local Plan in September 2023 was conducted by the Chamber of Commerce, with 90 people participating.
The question of whether NT government procurement process had improved over the past five years was answered negatively by almost 53 per cent of respondents.
More than 58 per cent of people surveyed said having a Buy Local Industry Advocate increased confidence in the procurement process.
Mr Ireland, who sits on both the independent NT's Procurement Review Board and the Buy Local Industry Advocate Subcommittee, said he'd witnessed "significant focus on supporting local business in the procurement space" since the plan was established.
"[There is] an opportunity for territory businesses to broaden their scope and have a look at what type of work isn't being done here locally and picking up on those opportunities," he said.