Supplier Diversity at the ATO

Australian Tax Office

The Australian Tax Office (ATO) realised a number of years ago that it could leverage its purchasing power to create positive social impact for Indigenous business owners and the communities they operate in. The concept was clear: by purchasing from Indigenous businesses the ATO can grow the personal wealth of Indigenous owners and employees, can build capacity and can stoke innovation in our supply chain. Execution, however, would require resources, time, creativity and effort.

Our supplier diversity journey began when we became foundation members of Supply Nation. It reached a symbolic milestone in May when we were nominated as  ‘Government member of the year’ finalists in Supply Nation’s annual supplier diversity awards. By slowly building our efforts and laying the appropriate groundwork we have been able to create a sustainable program with huge growth potential that has seen our engagement with Indigenous Business increase substantively over the past few years.

This steady, but well prepared growth in Indigenous supplier diversity aligns to the ATO’s current Reinventing the ATO program, which is focussed on making the ATO a more contemporary and service-oriented organisation. In addition to the social impacts, we see supplier diversity as an opportunity to lead by example and to challenge ourselves in the way we do business.

The Policy

The new Indigenous Procurement Policy (IPP) was launched on 1 July 2015 this year and set targets for agencies to engage Indigenous businesses in their supply chains. However, the intent behind the policy is about more than targets. It is to give agencies, like ours, the opportunity to step up and start making a positive social impact. The new policy is not viewed internally as a burden, instead it is an opportunity to work with Indigenous businesses and reap the rewards from their innovation and professionalism.

In order to prepare for the IPP, the ATO spent 2014 laying the groundwork for a successful program. We seconded an ATO staff member with Supply Nation for four weeks to get a first-hand understanding of the barriers faced by Indigenous businesses. We took the insights learned from this experience to build supplier diversity as a core element of our Reconciliation Action Plan (RAP) and built a standalone supplier diversity strategy. By doing this we developed a strong foundation from which to build our program.

Our Program

The ATO’s leadership realised that in order to achieve the results it was aiming for, the supplier diversity program would have to properly resourced, measured and integrated. We have pulled together a supplier diversity team, who have begun to establish the mechanisms by which we will achieve these goals.

This supplier diversity team are spearheading the ATO’s engagement with the Indigenous business market, seeking out appropriate opportunities, educating the ATO’s buyers and are analysing spend. They work closely with Supply Nation, have included the ATO’s commitment to supplier diversity into all new contracts and are tasked with proactively improving the way the ATO does business with Indigenous suppliers. They are the go-to team for any Indigenous businesses looking to sell to the ATO and are there to facilitate those relationships.

Our Achievements

The team have already made progress. Through a tier one supplier, Complete Office Supplies (COS), the ATO now purchases its copy paper for all its offices nationally from Muru Group. We are the first government department of agency to move to entirely recycled paper, and we achieved this by working collaboratively with COS and Muru group. Muru group is now able to show other departments that they are ready and able to sell to government and have brand visibility across Australia.

‘We have a great relationship with the ATO and this second tier arrangement has enabled us to build a foundation from which we can grow our engagement with them and other departments.’ said Mitchell Ross, CEO and Founder of Muru Group. ‘We have great brand awareness now, because we have products in every ATO office in Australia. From here we can start to sell directly to them and start to build our profile as a business that can sell direct to government.’

Innovative and pragmatic solutions, like this second tier opportunity with Muru Group, has been a great way for the ATO to get its program started – and we already know that it is making an impact. 15% of Muru Group’s profits are invested into Indigenous community initiatives and Mr Ross is committed to using his business success to further help Aboriginal communities.

When the IPP was launched on July 1 we were able to hit the ground running. We have signed a contract with Australian Indigenous Leadership Centre to deliver a Diploma in Government to our Indigenous employees worth $280,000 as well as engaging Accelerate to deliver the ATO’s occupational rehabilitation services.  We also have another six procurement projects underway across a range of market sectors including construction/fit outs, building maintenance, furniture, contingent labour, business advisory services and cultural awareness training.

We are happy with the success we have achieved so far, but we know that collaboration and innovation amongst government agencies and departments will be key to achieving the goals set out in the IPP. We welcome any opportunity to learn from other agencies, corporate organisations and Indigenous businesses. If you have a story to share or would like more information on the work the ATO is doing you can contact us at supplierdiversity@ato.gov.au

ARTICLE CONTRIBUTED BY THE ATO