In New Zealand, government agencies spend approximately $51.5 billion, around 20% GDP annually, procuring goods and services from third party suppliers.
Last year in Australia there were 84,054 contracts published on AusTender with a combined value of $69.8 billion. Of these, over $18.7 billion in government contracts were awarded to SME suppliers (just over 27%). We can expect increased SME participation in Australia in the coming years due to recent procurement changes requiring government departments to split up major projects into smaller components.
With barriers lowering, costs of entry more achievable, and a strong, consistent pipeline of government-funded projects at a national and regional level, we can expect to see more competitiveness and participation among SME businesses.
How invoice finance can support SMEs working with government.
Winning a government contract is a great way to generate long term revenue and security. However, as with any expansion there is always a risk of running into cash flow issues as your business balances new and existing commitments. An invoice finance facility is a great solution for businesses working with government.