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Let the market unchain indigenous communities

By Vladimir Vinokurov - posted Thursday, 8 September 2016


The problem that has sparked the Royal Commission on juvenile detention is much broader than the way in which children are treated in prison. It is the system that led to the mass incarceration of indigenous children in the first place that deserves our attention. This crisis is primarily caused by mass unemployment and a poor education system, although there are other factors at play. We have to address these issues if we are to reduce indigenous disadvantage in our society.

The remote town of Warburton, Western Australia, gives us a glimpse into everyday life for many indigenous Australians. The average life expectancy in Warburton is 45. The population of 800 is mostly unemployed. Most young adults do not go to high school. This is not a normal, functioning town.

Warburton is just one example of the problem that indigenous Australians face. With only 45 per cent of working age indigenous Australians employed, the situation is not much better elsewhere. Crime data indicates that indigenous Australians are 34 to 80 times more likely to be victims of domestic violence. Indigenous people are also far more likely to break the law than other Australians.

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The Federal government's current approach to this problem is a package of law and order measures known as the "Intervention" and social welfare programs aimed at "Closing the Gap." Unfortunately, research indicates that over the last decade or more these programs and their predecessors have not achieved improvements for many indigenous Australians. Their problems appear as severe as ever. These programs aren't working. We need to understand why.

Governments are finding it difficult to test, evaluate and implement working models designed to improve outcomes for indigenous Australians. Indeed, a recent report indicates that over $5.63 billion of taxpayer funds are being spent in indigenous affairs without any evaluation of its benefits. In some cases, it is also very clear that the money is not being spent effectively.

Warburton, for example, has received a $266,000 grant to open a hairdressing salon. A hairdresser opening their own shop or working door to door could achieve more with much less. Similarly, the Indigenous Home Ownership program has 75 employees that are currently approving 75 loans annually to indigenous applicants. A bank operating on those terms would soon go bankrupt. No doubt the officials in charge are doing their best, but these programs simply don't help most indigenous Australians.

The funds spent by taxpayers on these programs would be better spent by individuals investing in businesses or charities involved in the indigenous sector. Investors and donors, unlike taxpayers, can immediately stop funding inefficient programs upon hearing that they are not working.

Program organisers, in turn, are forced to change their methods to produce results or close their doors and make way for others to try their hand.

Taxpayers, public servants and politicians, by contrast, may spend years agitating for adjustments to government programs. Meanwhile, time and money is being lost that could be helping people.

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Businesses and charities operate like individual laboratories of change and experimentation because they are more accountable to investors. It is hard to imagine a successful business or charity that did not inform its investors how its products or strategies were achieving results. A business or charity like that would find it very hard to find support. And so it is with welfare. We need fewer government programs and more laboratories of change to really help indigenous Australians.

The public education sector is a clear example of an institution in need of more experimentation. We need to let educators experiment with differing education models to improve indigenous retention rates, literacy, numeracy and other essential skills. Educators need to own, operate and set the curriculum for their own schools in order to do this. Low-income parents who cannot afford to send their children to these private schools can receive vouchers paying for them to attend the school of their choice. This funding model is the secret behind the success of Scandinavia's world-renowned schools.

For some indigenous Australians further education may not be possible. Their best hope is to find work and learn key life skills, or even a permanent trade, on the job. But an employer is more likely to hire a literate applicant than a barely literate applicant if he must still pay either of them the same minimum wage. Moreover, an employer may not find it economical to hire a barely literate candidate at the minimum wage. In this way, our minimum wage laws are unintentionally denying Aboriginals a start in their working lives.

There are other factors holding indigenous Australians back. The government owns the land on which indigenous Australians in remote communities live, leaving them little reason to use or improve it for their own benefit. Land reforms that allow them to own their own homes may be beneficial.

Our statute books also unnecessarily criminalise behaviours like swearing in public, drinking alcohol in indigenous communities, or drug possession. These acts are harmless at best or irresponsible at worst. But laws punishing people for that behaviour are causing unnecessary encounters with police and real criminals, which could lead offenders to become real criminals. These laws should be repealed.

These sorts of reforms won't solve all of the problems facing indigenous Australians. With time, however, many may benefit from more efficient services, a better education, more employment opportunities, stronger property rights and criminal justice reforms.

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This article was first published by The Spectator.



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About the Author

Vladimir Vinokurov is a solicitor and a deputy Victorian State director of the Australian Taxpayers’ Alliance.

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All articles by Vladimir Vinokurov

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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