What Is Social Procurement in Australia?

Tuesday, 1 September 2026

In Australia, social procurement has moved from a niche concept to a mainstream policy expectation in government procurement. The Queensland Government defines social procurement as buying in a way that generates social value in addition to the goods and services required. Victoria, Queensland, New South Wales and the Commonwealth each have frameworks or policies that embed social outcomes into how the government buys. This article explains what social procurement looks like in Australia, how it works across jurisdictions and what it means for procurement professionals.

What social procurement looks like in practice

Social procurement is not a separate type of procurement. It is a lens applied to standard procurement processes. The goods and services being purchased are the same. What changes is the way the procurement is designed, evaluated and managed to ensure that social outcomes are considered alongside price, quality and delivery.

In practice, this takes several forms. Evaluation criteria can be weighted to include social outcomes, so that tenderers who demonstrate employment of disadvantaged groups, use of social enterprise subcontractors or commitments to workforce training score higher than those who do not. Mandatory participation plans can require successful tenderers to submit and deliver against social procurement targets as a condition of the contract. Set‑asides or direct sourcing provisions can direct specific categories of spend toward social enterprises, Indigenous businesses or Australian Disability Enterprises (ADEs). Contract clauses can require suppliers to report on social outcomes throughout the life of the agreement, creating accountability that extends beyond the initial award.

Victoria’s Social Procurement Framework: the Australian benchmark

Victoria leads the way in Australian social procurement. The Victorian Government’s Social Procurement Framework (SPF), introduced in April 2018, was the first state‑level social procurement policy in Australia. It applies to all Victorian Government departments and agencies and requires them to consider social and sustainable outcomes when they procure goods, services and construction.

The framework is built around a set of social and sustainable procurement objectives, including increasing supply chain opportunities for social enterprises, Aboriginal businesses and ADEs, promoting women’s equality and safety, supporting safe and fair workplaces, contributing to environmentally sustainable outputs and providing opportunities for disadvantaged Victorians. The Committee for Economic Development of Australia (CEDA) reports that the Victorian SPF has generated over $96 million in spend with certified Indigenous businesses and over $68 million with certified social enterprises since its introduction. Those figures show that social procurement at scale produces measurable economic outcomes for the communities it targets.

Social procurement across Australian jurisdictions

Queensland has embedded social procurement into its Queensland Procurement Policy (QPP) 2026, which promotes ethical, sustainable and inclusive procurement. The Queensland Government is a member of Social Traders, has invested $8 million into a Social Enterprise Jobs Fund for capacity building and market development, and has set a 3% procurement spend target for Indigenous businesses through its Queensland Indigenous Procurement Policy. All Queensland local governments now have access to certified social enterprises through a partnership between Social Traders and Local Buy.

New South Wales has modernised its Procurement Policy Framework to include social and regional priorities. The NSW SME and Regional Procurement Policy requires at least 30% of government goods and services spending with small and medium enterprises (SMEs), with targets for regional sourcing. Social criteria now appear in evaluation frameworks for major contracts, particularly infrastructure, with weightings typically between 5 and 10%. A parliamentary inquiry into the procurement practices of NSW government agencies and their social impact is informing further policy development.

At the Commonwealth level, a Commonwealth Social Procurement Framework has been recommended by the Workforce Australia Review and the Standing Committee on Economics. Social Traders notes that the Commonwealth Procurement Rules are under review and that the Department of Finance has sought social procurement policy advice. The Commonwealth’s Indigenous Procurement Policy (IPP) and the Environmentally Sustainable Procurement Policy, which came into effect on 1 July 2024, are already delivering elements of social procurement, though a comprehensive framework is still in development.

The social enterprise sector in Australia

Social procurement depends on a supply base of organisations that can deliver both commercial value and social outcomes. Social Traders reports that there are approximately 12,000 social enterprises in Australia contributing $21.3 billion to the economy and employing 206,000 people. These organisations invest 29% of their revenue into delivering social or environmental outcomes, and 45% of the people they employ would otherwise face significant barriers to entering the workforce. On average, social enterprises are larger than traditional businesses and charities.

Social Traders provides the primary certification system for social enterprises in Australia, verifying that an organisation meets the definition of a social enterprise and is genuinely reinvesting in community outcomes. Supply Nation verifies Indigenous‑owned businesses. BuyAbility provides a directory of Australian Disability Enterprises. These directories give procurement teams a practical starting point for identifying suppliers that can deliver social procurement objectives without compromising on commercial capability.

Social Traders’ modelling suggests that a Commonwealth social procurement policy could deliver 44,000 jobs for Australia’s most marginalised job seekers and generate savings to society of over $4.27 billion by 2030. The scale of potential impact explains why social procurement is attracting increasing attention from policymakers, procurement leaders and the broader business community.

What social procurement means for procurement professionals

Social procurement changes the way procurement is planned and executed, not just what is purchased. It requires procurement professionals to design evaluation criteria that balance cost, quality, delivery and social outcomes. It requires market engagement that identifies and develops social enterprise suppliers who may not respond to traditional approaches to market. It requires contract management that measures and reports on social outcomes alongside commercial performance.

For professionals working in Australian government procurement, social procurement is no longer optional. It is embedded in policy frameworks across multiple jurisdictions, and the direction is toward expansion, not retreat. Procurement leaders who can integrate social outcomes into strategy, evaluation and contract management are better positioned to deliver what their agencies now expect: value for money that extends beyond price to include genuine community benefit.

Building your strategic procurement capability

Social procurement sits at the intersection of procurement strategy, policy compliance, market engagement and stakeholder communication. AcademyGlobal (AG) has been delivering procurement and contract management training for professionals across public, private and not‑for‑profit sectors since 2004. AG is the Chartered Institute of Procurement & Supply (CIPS) Centre of Excellence for Australia, New Zealand and Southeast Asia. AG’s faculty bring direct experience from senior procurement leadership roles in government and commercial organisations.

AG’s Strategic Procurement Leadership program equips procurement leaders with the strategic thinking needed to align procurement activities with organisational goals, including social procurement objectives. Participants learn how to develop procurement strategy, manage supplier relationships strategically, lead high‑performing procurement teams and drive innovation within procurement practice.

Frequently asked questions

What is social procurement?

Social procurement is the practice of using an organisation’s purchasing power to generate positive social, economic or environmental outcomes alongside the goods and services being acquired. It structures procurement so that how money is spent creates broader community benefits, such as employment for disadvantaged groups, support for social enterprises or economic participation for underrepresented communities.

Which Australian states have social procurement frameworks?

Victoria introduced Australia’s first Social Procurement Framework in 2018. Queensland has embedded social procurement into its Queensland Procurement Policy 2026. New South Wales has updated its Procurement Policy Framework to include social and regional priorities. At the Commonwealth level, a comprehensive Social Procurement Framework has been recommended and is in development.

What is a social enterprise?

A social enterprise is a business that trades to deliver social or environmental outcomes rather than distributing profits to shareholders. Australia has approximately 12,000 social enterprises employing 206,000 people. They invest 29% of their revenue into community outcomes. Social Traders provides certification to verify that organisations meet recognised social enterprise requirements.

Does social procurement only apply to government?

No. While government frameworks drive much of the activity, private sector organisations also use social procurement to meet environmental, social and governance (ESG) commitments, Reconciliation Action Plan targets and corporate social responsibility objectives. Any organisation can choose to direct procurement spend toward suppliers that deliver social outcomes.

What skills do procurement professionals need for social procurement?

Social procurement requires skills in strategic evaluation design, market engagement with diverse suppliers, outcomes‑based contract management and stakeholder communication. AcademyGlobal’s Strategic Procurement Leadership program builds the strategic capability to integrate social procurement into a broader procurement strategy.

References

1. Victorian Government, ‘Victoria’s Social Procurement Framework’. Available at: buyingfor.vic.gov.au

2. Social Traders, ‘For Government’. Available at: socialtraders.com.au

3. Queensland Government, ‘Consider Social Procurement’, Queensland Procurement Policy 2026. Available at: forgov.qld.gov.au

4. Committee for Economic Development of Australia (CEDA), ‘Driving Social Outcomes Through the Power of Procurement’. Available at: ceda.com.au

5. Social Traders, ‘Australian Government Backing Social Enterprise to Deliver Multiple Policy Agendas’. Available at: socialtraders.com.au