Government Purchase in Australia: 2025 Policy, Impact & Industry Insights

Government purchases are a powerful lever in shaping Australia’s economic landscape. In 2025, as the federal and state governments ramp up infrastructure investment, digital transformation, and sustainability initiatives, the impact of government procurement has never been more pronounced. Whether you’re a small business owner, taxpayer, or industry watcher, understanding the mechanics and effects of government spending is essential for making informed decisions.

What Counts as a Government Purchase?

Government purchases cover a broad spectrum — from buying office supplies and vehicles to commissioning major public infrastructure projects. In 2025, the scope is expanding further as governments invest in:

• Renewable energy infrastructure: Large-scale solar, wind, and battery projects driven by the National Renewable Investment Fund.

• Digital transformation: Cloud services, cybersecurity solutions, and nationwide digital identity platforms.

• Health and education upgrades: New hospital facilities, medical equipment, and classroom technology rollouts.

All these purchases are governed by strict procurement frameworks designed to ensure transparency, value for money, and support for Australian industry. In 2025, updated guidelines under the Commonwealth Procurement Rules (CPRs) have sharpened the focus on local content, sustainability, and social procurement outcomes.

2025 Policy Updates: What’s New?

This year has seen significant policy shifts aimed at leveraging government spending to drive broader economic and social goals:

• Australian Industry Participation (AIP) Plans: All government projects over $20 million now require robust AIP plans, ensuring local suppliers get a fair shot at contracts.

• Net Zero Procurement Standards: New rules mandate carbon disclosures and preference for low-emission goods and services in all federal purchasing decisions.

• SME Access Initiatives: The government’s SME Gateway Portal, launched in March 2025, streamlines tendering for small and medium businesses, with an emphasis on regional suppliers.

• Social Procurement Frameworks: Contracts above $5 million must demonstrate benefits for Indigenous businesses, disability enterprises, or social enterprises under the updated Social Procurement Policy.

These policies are already reshaping the market. For example, the recent $2.1 billion Victorian Hospital Redevelopment tender awarded 35% of subcontracts to regional SMEs and Indigenous suppliers, setting a new benchmark for inclusive procurement.

Economic and Industry Impact

Government purchases account for roughly 18% of Australia’s GDP, making them a crucial driver of growth and resilience. Here’s how they’re making a difference in 2025:

• Stimulating Innovation: The Digital Identity rollout, worth $800 million, has catalysed dozens of Australian tech startups, many of which have since expanded into export markets.

• Boosting Local Manufacturing: Defence and infrastructure procurement contracts increasingly favour Australian-made components, revitalising sectors from steel to advanced electronics.

• Driving Sustainability: Under the Net Zero Procurement Standards, recent government fleet upgrades have shifted to 85% EVs, cutting fleet emissions by an estimated 60% compared to 2022 levels.

For suppliers, adapting to evolving requirements — especially around ESG (Environmental, Social, and Governance) — is now essential for winning government work. The introduction of digital procurement platforms has also levelled the playing field, opening opportunities for innovative SMEs to compete against established giants.

Getting Involved: How Businesses and Citizens Benefit

If you’re a business owner, staying up to date with procurement policy is vital. Registering on government tender platforms, understanding new sustainability requirements, and forming partnerships with social enterprises can all boost your chances of success. For everyday Australians, the benefits of smart government purchasing show up in better roads, cleaner energy, modern hospitals, and a more inclusive economy.

• Check the Australian Government Tenders portal for new opportunities.

• Review the latest Commonwealth Procurement Rules for compliance tips.

• Explore partnership programs under the Social Procurement Policy for collaborative bids.