Questions have been raised after an Indigenous-run organisation had its funding slashed.
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The Regional Enterprise Development Institute (REDI.E) - which works across Dubbo and Western NSW - has been informed that its Community Development Program (CDP) contract would end in October.
The organisation received a letter from the National Indigenous Australians Agency (NIAA) informing them the decision was made due to "consistent underperformance" in the last three reviews.
Member for Parkes Mark Coulton said the decision would be a "devastating blow" not only for the organisation and its clients, but "for all of Western NSW".
"REDI.E is a fantastic service and jobs provider for Indigenous communities in Western NSW, with a proud 25-year history," he said.
"I just cannot understand how the NIAA can justify terminating this contract when it's clear that REDI.E is making positive change."
In Dubbo, REDI.E trains young Indigenous people to work in the hospitality industry at Wilay Cafe and a sandwich shop on Macquarie Street. The organisation also has a popular shearing program.
Further afield, REDI.E operates the Wilcannia store, providing employment for local Indigenous people and enabling the community to buy affordable groceries without a 400-kilometre round trip to Broken Hill.
"Over the years, I've worked closely with CEO Peter Gibbs and have seen first-hand the real, positive outcomes REDI.E is delivering in these communities, providing employment opportunities and training, as well as a range of community services through innovative programs and enterprises," Mr Coulton said.
Mr Coulton said he approached the office of Indigenous affairs minister Linda Burney to ask about the decision.
He said he was told the reason the contract has been terminated is due to "minor compliance issues - not corruption or a failure to meet targets".
"Quite frankly, I'm not satisfied with the explanation they provided... that is simply not good enough," he said.
He said he has also raised the issue with shadow minister for Indigenous Australians Jacinta Nampijinpa Price who was also "appalled" about the decision.
Ms Price visited Wilay Cafe in Dubbo in September 2023 as part of a campaign tour against the Voice to Parliament. REDI.E CEO Peter Gibbs was also a strident supporter of the 'No' campaign.
REDI.E will not be able to apply for another contract until the end of the next financial year, June 30, 2025.
Mr Coulton said excluding the organisation until then could create a "significant gap" in services, affecting the livelihoods of about one thousand Indigenous people.
"For a government that claims to be so supportive of Indigenous Australians, why would they cut the funding of an organisation that is actually making a difference on the ground," he said.
"Someone that was doing a great job, a community leader, has been cut off at the knees."
