The business of Indigenous affairs

The history of Indigenous affairs in Australia over the past half century is a tale of noble aspirations, enthusiastic efforts, modest successes, and significant failures.

Some socio-economic indicators:

• in 2006, Indigenous unemployment was 14.2 per cent compared to 4.8 per cent for the rest of the population;
• an Indigenous person was three times less likely to be self-employed;
• the rate of home ownership was about 34 per cent compared to 69 per cent of the general Australian population. Among Native Americans and Maoris, by way of comparison, it was more than 50 per cent; and
• median annual incomes among Indigenous Australians in 2006 were $14,496. For the rest of Australia they were $24,559.

Cradle-to-grave poverty among Indigenous communities remains one of Australia’s most urgent social issues.

How it all started

The kernel of this disaster was the disingenuous conviction that took hold in 1966 which believed Indigenous Australians should have limited contact with Australia’s capitalist society.

In 1965, the Northern Australian Workers’ Union had applied to the Industrial Arbitration Commission for full-blooded Aboriginal station workers to be paid the same as white workers. The Industrial Commissioners, presided over by Sir Richard Kirby, concluded, “… there must be one industrial law, similarly applied to all Australians Aboriginal or not”. They knew that a likely consequence of their decision was “disemployment”.

Sir John Kerr, representing pastoralists, had argued: “It [is] nonsense to say that men are better off, unemployed in thousands, but maintained in settlement in growing degrees of comfort when they could work in the real world with growing degrees of efficiency and growing economic rewards.”

The consequence of this decision, sure enough, was “disemployment”. The other pernicious consequence of the Commission’s decision was the notion that Indigenous Australians were bound to fail in the labour market and in enterprise. As Dr HC “Nugget” Coombs, that era’s most distinguished supporter of Indigenous Australians, put it, “It is hard to imagine another society whose values were as inappropriate to the demands of an industrial economy”.

A new policy era

Federal leadership on both sides of Parliament knew that after the 1967 referenda Indigenous affairs was at a crossroads. Paul Hasluck, Minister for Territories between 1951and 1963, had declared that all Aborigines should “attain the same manner of living as other Australians and live as members of a single Australian community …”

It was Prime Minister Sir William McMahon who articulated a new approach in his 1972 Statement on Aboriginal Affairs:

… they should be assisted as individuals … to hold effective and respected places within one Australian society with equal access to the rights and opportunities it provided and acceptance of responsibilities towards it. … They should be encouraged and assisted to preserve and develop their own culture …

McMahon shifted Indigenous affairs away from assimilation and social engineering. He raised economic independence and the role of land tenure as part of Aboriginal advancement. He was open to ideas about Indigenous self-determination and self-management. The core business of Indigenous affairs was economic development and effective public service delivery.

Meanwhile, the New Left was in its early ascendancy and Indigenous “separate development” became a key component of the movement. The movement argued that since capitalist society had created racism, dispossession, and disadvantage, creating great distance between the Aborigines and capitalism was both humane and urgent.

Disastrously, this also meant rejecting the expectations and disciplines entailed in market-based employment. At this time, the Australian “outstation” or “homelands” movement understandably began to crystallise.

The Homelands Movement

As outlined in one of the movement’s key documents, A Certain Heritage, the Homelands Movement was essentially restorationalist:

Aborigines hoped that smaller, more dispersed groups would find their traditional hunting and gathering more rewarding and their dependence thereby reduced.

… There is, however, little prospect of employment in the homelands; access to necessities is more difficult; schooling … medical services often unavailable … choice between the lifestyle of homeland and that of the larger settlement or township is inescapable. Aborigines cannot hope to have all or the best of both.

The homelands movement meant accepting low standards of living. As Marcia Langton, a leftwing Aboriginal academic, has pointed out, the New Left failed to notice that as Aboriginal people become more reliant on subsistence activities for survival, their emerging demands for land rights in the 1970s were oblivious to their exclusion from the workforce.

There was more than a touch of irony when Labor’s new Indigenous Affairs Minister, Jenny Macklin, said recently that “decades of failure had spawned, inside our national boundaries, a country within a country. It’s the unluckiest of countries - characterised by neglect, disadvantage and poverty” (National Press Club, February 27, 2008).

Welfare and employment

Indifference towards Indigenous participation in the workforce then conspired with the morbidity of welfare dependence. Beginning in the 70s, elders and communities became increasingly alarmed at the corrosive effects of easy access to welfare.

The Fraser government responded with the Community Development Employment Projects program in 1977. Initially CDEP was set up so that remote communities could forgo unemployment benefits for community obligated projects. This approach grew exponentially. As the largest single Indigenous specific program, it had 37,000 individual places by 2004, many in urban and regional settings, and funding of over half a billion dollars annually.

Despite this growth, it neither linked individuals to local labour markets nor uniformly enforced mutual obligation requirements. Major reforms to the program were commenced in 2005-06, to ensure that Indigenous people in strong labour markets were encouraged to obtain real jobs, and to discourage young people from accepting a form of “work-for-the-dole” for life.

The percentage of Indigenous Australians who rely on government pensions and benefits decreased - from 55 per cent to 50 per cent - in the eight years to 2002. But, the fact that half of a population rely on pensions and benefits sounded alarm bells in commentators as different as ANU Professor Bob Gregory and Noel Pearson, who called this “welfare poison”.

In 1999, the Federal Government established the  Indigenous Employment Policy (IEP) to give better access to private sector jobs for Aborigines and Torres Strait Islanders. The policy now boasts many success stories.

The basic lessons learnt were:

• Indigenous job seekers are not hardwired to fail in employment;
• with goodwill, local jobs for local Indigenous people can be found;
• private sector jobs do not take away Indigenous identity and can restore pride in individual and community achievement;
• private sector jobs are a vital component towards building meaningful economic independence; and
• considerable barriers to employment remain.

The responsibility to fashion a more balanced regime with effective disincentives and incentives is one consequence of reforms to the welfare system. One model is New Zealand’s very effective “work-first welfare-second” reforms. Unemployment among Maoris declined from 16 per cent in 1999 to just 8.9 per cent in five years.

Emphasising economic development

A greater emphasis on Indigenous economic independence - private jobs, incomes and enterprises - is growing in significance to policy makers as the Indigenous population grows. Thirty years ago, Australia’s small Indigenous population of 106,000 people was principally rural. But in 2006 there were 517,000 Indigenous Australians, only one quarter of them living in remote areas. It is also a very young population, with 70 per cent of Indigenous people under 25.

Some successful Indigenous enterprises, ranging from micro business to capital intensive mining operations, are flourishing. Entrepreneurial Indigenous people exist and are supported - but commercial developments, rates of homeownership and self employment are critically low. Indigenous commercial development cannot be examined without a discussion of the development of land rights.

Land rights were given Commonwealth recognition in 1972 by the McMahon government, with funds made available for buying properties not on reserves. Today, Indigenous ownership of the Northern Territory is some 44 per cent, in South Australia nearly 21 per cent; Western Australia, 14 per cent; for other jurisdictions, less than 3 per cent; totaling about 16 per cent of Australia’s land area.

The vast majority of Australians do not begrudge Indigenous communities being rich in sacred sites and natural resources. Nevertheless, when so many communities are simultaneously asset rich and unacceptably poor, something is wrong.

Following the lead of Canada and the US, Australia created a system of land trusts and land councils to manage inalienable communal title. For three decades, workability and development were not seen as priorities. The general working principle was to build a system around subsistence from the land and waters. In turn, barriers to investment and involvement by Indigenous individuals and communities were created.

Under the new system introduced by the Howard government in 2006, traditional owners of communal land are able to lease their holdings to the Commonwealth for a period of 99 years in exchange for money for the use of the land. Closer to the economic mainstream; the government can then sell individual portions to families who wish to build homes or establish businesses.

When this system was threatened under the new Labor government, Warren Mundine - a former National Indigenous Council member and President of ALP National Executive - objected strongly:

We have 30 years of history that shows the failure of the communal land structure … (We must) stop being romantic … We need economic development in these communities. They will continue to live in poverty unless there are big changes.

The Labor Government has since announced that the length of leases will be considered on a case-by-case basis; with a lease as short as 20 years being acceptable. Whether this length is sufficient to allow the investment necessary for economic development remains to be seen. Mundine was pessimistic: “If the lease is shorter, it will limit the investment - that’s not rocket science, that’s economics.” He was supported by Gallarrwuy Yunupingu, who indicated that he was pushing ahead with a 99-year lease of clan land in Arnhem Land.

Worthwhile future directions include fostering financial literacy and capacity building among Indigenous communities to make best use of existing programs. These developments may well successfully tackle overcrowding and poor sanitation in remote and rural communities, provided they are not undermined. The reinstatement of the permit system - is an example of the problem; the permit system - dismantled by the Howard government - encouraged isolation from the mainstream with all the consequential problems of squalor, alcohol and sexual abuse.

An innovative, responsive, agile approach

Shared Responsibility Agreements and Indigenous Co-ordination Centres were at the heart of a new more innovative, and responsive approach to Indigenous Affairs that began under the Howard government. Indigenous communities could nominate initiatives, programs and policies that they need and want from the different Federal agencies through the ICCs in a monitored whole-of-government approach. In return, Indigenous communities had to negotiate some mutual obligation requirements.

For Indigenous affairs, this represented an enormous shift in public service practice and delivery. The progress made, for example, with “no school, no pool” initiatives was heartening. Witness the rapid decline of trachoma among the young in the Mulan community following its “washing-faces-for-a-new-petrol-bowser” deal with the government. Communities appeared to be enthusiastic.

Moving ahead with cautious optimism

Australian policy makers have been slow to realise that private property ownership and workforce participation would be healthy for Indigenous peoples. Despite the gains in land rights, the capacity for greater economic independence was diminished.

What is needed is an ongoing commitment to an Indigenous Economic Independence Strategy, based on two underlying considerations: first, rejecting the notion that Indigenous people are lesser economic beings; second, challenging a welfare culture in favour of an entrepreneurial culture. This is as noble a cause as political equality or addressing dispossession.

The way out of welfare is to build workforce participation and to find the economic and social multipliers that create opportunity and reduce hardship. The way forward needs effective public service delivery of education, health and other essential services. At the same time, recognising some labour markets are limited. Programs of community development should remain an integral component of the new approach; but not  becoming a substitute for real economic participation.

More Indigenous Australians must be given hope and opportunities to participate in the market and economy. Prerequisites for Indigenous economic independence include: gaining a job, owning property, building future generation wealth. If practical reconciliation means anything, it means this.