Victoria’s Big Build is all over the news at the moment, for a few pretty eye-popping reasons. The less salacious part of the story is that government infrastructure investment is falling and falling fast.
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The state’s own budget papers show spending dropping from $21.4 billion this financial year to an average of $16.5 billion over the forward estimates, settling at $15.3 billion by 2029-30. The Metro and West Gate tunnels are both open now. Fewer big projects mean fewer new construction contracts getting signed – and in Victoria, those contracts have quietly become one of the most important markets for certified social enterprises.
Which is why Social Traders’ latest impact report is worth a second look, particularly the breakdown of buyers by industry. Construction and infrastructure make up 29 per cent of buyers – easily the biggest category. Six of the eight businesses spending over $5 million with certified social enterprises are construction and infrastructure contractors. CPB Contractors is the single biggest spender, at $34.2 million in FY25.
There’s no state by state split in the report, and no clean read on how much of the national growth figure is coming from construction specifically versus everything else. But given how central the Big Build has been to Victoria’s social procurement mandate, I’d bet a meaningful chunk of that growth has construction sitting underneath it.
Victoria has earned its reputation as the national leader on this. Its social procurement framework has been running since 2018, and the Victorian Infrastructure Delivery Authority mandates social procurement on every construction contract it oversees. When the state was pouring tens of billions a year into transport, health and other infrastructure, that mandate really gave social enterprises a clear advantage. So, the real question is: what happens once that money stops flowing?
The social procurement framework was never designed to lean this heavily on construction. Its stated objectives span employment, inclusion, First Nations participation, environmental outcomes and social enterprise procurement more broadly. Construction just happened to become the biggest engine, because that’s where government was spending extraordinary sums. Fine while the engine’s running. Less fine once it slows down – and Social Traders’ research backs this up, noting that diversifying customers and offerings is what cushions social enterprises against market shocks.
Which makes the current ‘Impact’ picture a bit harder to just wave through as simply good news.
Victoria’s social enterprise strategy has expired, and it’s not clear when (and if) it will be replaced. The Social Procurement Framework itself was launched as a key initiative of that first Strategy back in 2018 – it didn’t spring up independently; it grew out of it. So as one of the strongest sources of demand for social enterprise starts to contract, the framework doing all the heavy lifting is now running without the strategy that spawned it. There’s no active State strategy, begging the obvious questions:
- how exposed is this market?
- where’s the next wave of demand coming from?
- what needs to happen to actually diversify it?
The risk isn’t that a few social enterprises miss out on some construction contracts. It’s that an unusually favourable few years of procurement got mistaken for proof of a diversified, resilient market – when it might just have been a good cycle. None of that makes the topline story wrong – it just makes it a lot less reassuring.
There’s a second complication, and it’s a messier one. A report commissioned as part of an inquiry into misconduct on major Victorian construction sites listed alleged “misuse and abuse of social procurement schemes” among the practices under scrutiny, alongside alleged misuse of Aboriginal business enterprise arrangements. The allegations are untested and matters have gone to police – but the reputational risk is creeping up.
Indigenous procurement already has a well-documented version of this problem: black cladding, where non-Indigenous businesses exploit Indigenous business status to access opportunities meant for genuine Indigenous enterprises. I haven’t seen anything proven to be directly equivalent in the social enterprise space, and certification is a genuine safeguard against the obvious forms of misrepresentation. But reputational damage rarely respects tidy category lines. Once values-based procurement starts sounding “rortable” in one corner, the scepticism doesn’t stay contained – and social enterprise, a genuinely different model with different safeguards, can get dragged into it anyway. That’s a real problem for a sector still fighting to be taken seriously as a mainstream part of the economy, not a niche or a favour.
So, what are the organisations supporting the “social enterprise eco-system” saying about all this? And as far as I can tell – not much. There’s a sizeable field of intermediaries working in this space, however, I am yet to see much serious conversation around these specific kinds of pressures – falling infrastructure spend, a buyer base heavily skewed to construction, and rising scrutiny of social procurement inside that same industry.
Instead, the conversation still sounds a lot like business as usual. More certification. More capability building. More procurement readiness. More celebration of a growth story. All useful things – but none of them is a strategy for a market that’s about to look very different.
The recent round of Victorian government funding for social enterprise intermediaries was framed mostly around growth and capability. Social Enterprise Australia’s new national strategy talks about strengthening and growing the sector. What’s mostly missing from both is a serious conversation about concentration, transition and risk – even though Social Traders’ own data is the thing making the case for why that conversation needs to happen.
This isn’t only a Victorian problem in waiting. Infrastructure Australia’s own market capacity data has NSW and Victoria’s major infrastructure pipelines already contracting, while Queensland’s and the Northern Territories are growing. NSW is currently building out its own social procurement mandate – a new “if not, why not” local-supplier requirement introduced in early 2025, explicitly modelled on the Victorian and Queensland approaches – again, just as the construction spend it will lean on starts to soften.
Queensland is the mirror image: a record capital program driven by Brisbane 2032 is currently underwriting its own newly strengthened social procurement policy, but 2032 is a fixed date, and everything built on top of that spending has a cliff-edge on the other side of it. Victoria just happens to be further along the same curve than everyone else.
A good headline year is great when a market’s expanding. Strategy matters more once the ground underneath that growth starts shifting.
I don’t know what comes next for Victoria’s social enterprise strategy. But I do wonder if “the sector” is about to become quiet collateral damage from the Big Build’s own success – a program that built a market and might have built a trap for it too. And for NSW and Queensland, both leaning harder into social procurement just as their own construction booms start their own countdowns, it might be worth watching how Victoria answers that question before they need the answer themselves.
