Businesses that want to work with the Commonwealth government will have to prove that their operations are sustainable in a push to shift Australia towards a circular economy.
As the government attempts to slash the nation's greenhouse gas emissions, Environment Minister Tanya Plibersek says a circular economy - where goods are reused, repurposed, recycled or re-manufactured to reduce waste and pollution - could be the answer.
Efforts began on Wednesday when the government launched the Environmentally Sustainable Procurement Policy.
Government contracts are generally highly coveted by Australian businesses because they are stable and substantial.
For example, in 2022/23, the 83,625 contracts published by AusTender - a government website which publishes procurements - had a combined value of $74.8 billion.
From July 1, businesses bidding for government construction services worth more than $7.5 million will have to meet agreed sustainability outcomes by cutting or repurposing waste or replacing single-use materials with recycled items.
Though this applies to just two per cent of the government's construction services procurement contracts, it captures 50 per cent of this area's value.
From July 2025, this policy will then be extended to tenders worth more than $1 million for textiles, information and communications technology, furniture, fittings and equipment, and may include requirements to recover and recycle worn out uniforms so they can be processed into new materials.
"Just as many Australians look for recycled content or environmentally friendly products at the supermarket, the Australian government will use our purchasing power to back cleaner, smarter, more environmentally sustainable businesses," Ms Plibersek said.
"Our national procurement policy will cut waste to landfill, help boost recycling and reduce emissions - all while supporting good, local jobs."
The policy will also establish a framework that can track environmental outcomes and has been published alongside the Circular Economy Ministerial Advisory Group interim report, which recommends more ways the government can boost domestic manufacturing through a circular economy.
Engineers Australia has welcomed the effort as a step towards sustainability and its CEO Romilly Madew says it presents a unique opportunity.
"Sustainable procurement isn't just about buying products; it's about shaping markets, driving innovation and creating jobs," she said.
"Prioritising sustainable products and services will help drive demand for new technologies, materials and processes that are environmentally friendly, socially responsible, and economically viable."
This is all part of a broader government effort to localise renewables manufacturing through initiatives like the Future Made in Australia Act which is aimed at promoting local manufacturing and safeguarding the nation's control over resources and critical minerals, and the $1 billion Sunshot program, which will support the production of solar panels across Australia.
