The state budget has provided $5 million to establish a support service designed to encourage small businesses to provide goods and services to the NSW government.

The Small Business Commission will establish the service under a four-year program, providing small business with practical tips and assistance to negotiate government tenders.

“Many small businesses are not aware of the opportunities that exist or are unfamiliar with the NSW government tendering processes,” finance and small business minister Damien Tudehope said in a statement.

The state government currently spends more than $40 billion each year on the procurement of goods, services and construction.

 Small businesses make up 97.5 per cent of businesses in NSW.

Mr Tudehope says the program will strengthen the NSW Government Small and Medium Enterprise (SME) and Regional Procurement Policy, which requires government agencies to first consider buying goods and services from an SME for all direct procurements up to $250,000.

The policy’s Small Business Exemption allows government departments to buy directly from small businesses for any purchases up to $50,000 even if there is a mandated whole-of-government contract in place.

The new service will develop targeted information and support to help small business put their best proposals forward, Small Business Commissioner Chris Lamont said.

“For some small and medium enterprises it’s hard to know where to start, this measure will provide practical support and assistance,” he said in a statement.

The budget, handed down on Tuesday, will also provide $39.3 million for a three-year extension of the Business Connect program, which provides practical tips and assistance for submitting government tenders.

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