Some of Australia's biggest businesses have banded together to spend more than $3 billion in the next five years helping Indigenous businesses grow.

Business Council of Australia chief executive Jennifer Westacott said the "Raising the Bar" initiative - a collaboration between its members and Indigenous supplier diversity organisation Supply Nation - is "game-changing".

Companies such as Dreamtime Tuka, which supplies Qantas, and Jilpanti Enterprises, which supplies Fortescue Metals Group, are already creating jobs and boosting their communities thanks to Indigenous supply agreements.

Great news for #Indigenousbusiness today with 16 major corporations committing to a target for Indigenous procurement! Raising the Bar with @BCAcomau @SupplyNation @InsidePolicyAU https://t.co/xOozSgXSuE — Laura Berry (@laurakberry) August 11, 2019

"We're already working to foster entrepreneurship, economic partnership and building lasting links with Indigenous suppliers, and this is a chance to do even more," Ms Westacott said in a statement on Monday.

She said Business Council member companies were already some of the biggest employers of Indigenous Australians at more than 20,000 people.

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"Business has a pivotal role in ending the economic exclusion that deprives some communities of the opportunities that only economic growth can provide," she said

"Every Australian should be able to realise their full potential."

Supply Nation chief executive Laura Berry said the initiative would provide a strong framework and accountability to further build and grow Indigenous businesses.

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"Indigenous businesses face many of the same challenges as other businesses but many are on a much steeper growth curve," Ms Berry said.

"Time invested working with Indigenous suppliers will help the sector scale effectively and multiply the overall capability and capacity gain."

Paul Sinclair, Anaiwan man and managing director of Indigenous company Mirri Mirri, said the announcement was a game-changer for small businesses like his.

"As an Indigenous business we want to grow, we want to develop and we want there to be economic benefits out there and these type of opportunities allow us to continue to be competitive in the market and allows us to grow to a point where we may not need these type of initiatives," he told SBS News.

"These type of opportunities allow Indigenous businesses to grow ... as we grow we then create other opportunities for aboriginal and Torres strait islander people that work with us."

He said it was a wonderful feeling to be able to give back to his community by creating jobs for Indigenous people but added that the need for Indigenous businesses goes a lot further.

"I know a lot of overseas visitors, that is the number one thing they want in terms of an Indigenous experience," he said.

The new initiative was launched by Federal Minister for Indigenous Australians Ken Wyatt in Perth on Monday.

BUSINESSES SIGNED UP TO RAISING THE BAR:

Australian Unity

BAE systems

BHP

BP Australia

Commonwealth Bank

EY

Fortescue Metals Group

KPMG

Lendlease

McKinsey & Company

Microsoft

Programmed

Qantas

Rio Tinto

Westpac

WSP

With additional reporting from Jessica Rowe