Jacques on the propensity of fools to draw lessons from strange places

……       and in his brain,
Which is as dry as the remainder biscuit
After a voyage, he hath strange places cramm'd
With observation, the which he vents
In mangled forms.

            As You Like It, Act 2, Scene 7

Innovation to Improve Remote Financial Services: Lessons from Somalia

This week the Government announced the establishment of an advisory committee on financial technology to help make Australia the leading market for financial technology – or FinTech – in the Asia Pacific region.

The Committee has a membership of apparently well qualified individuals involved in the development of the financial technology sector, but no-one with any obvious background in remote issues.

As the Government’s media release makes clear, the main game is in mainstream Australia as financial services is the largest sector of our economy, employing around 450,000 people and contributing over $140 billion to the economy last financial year.

Nevertheless, it is worth reflecting on the potential implications for remote Australia, where market failure in the provision of financial services is endemic, and the concomitant consequences for remote citizens, particularly the 120,000 Indigenous remote citizens are substantial. For a Government which includes ‘economic development’ as one of the two major elements in its Indigenous affairs policy narrative, the desirability of exploring the potential for greater innovation in the provision of remote financial services should be a ‘no-brainer’.

Of course, the Commonwealth is rolling out pilots for the cashless welfare card in the East Kimberley and Ceduna regions, and is exploring a third regional centre. Refer my previous blog post on this topic.

It is already clear that the Government is prepared to support the introduction of new technology in remote communities. Minister Scullion recently announced Commonwealth assistance for the introduction of CCTV into Aurukun, a community with an extremely troubled history of violence and dysfunction.

The National Broadband Network is being rolled out nationally, and while there have been criticisms that the proposed satellite based services to the 7 percent of Australian citizens resident in remote regions will be less effective than the fibre based services in urban and regional Australia, it does seem likely that services will improve in remote Australia post roll-out.

Telstra has been active in engaging with Indigenous issues, and has a range of initiatives which it is pursuing with potential application for improving financial services in remote regions. In particular, the funding of an Indigenous Digital Excellence Hub at the National Centre for Indigenous Excellence in Redfern has terrific potential and appears to be a first for Indigenous Australia. Nevertheless, Telstra’s focus appears to be still focussed on traditional phone based services rather that expanding mobile use into the financial services sector. Its initiatives to date are thus relatively modest and might best be characterised as prescient and far-sighted first steps.

In contrast, one can get a sense of the potential gains from innovation by considering developments in Somalia, a nation which has been a failed state for the best part of the last two decades. Recent media coverage suggests that Somalia is rapidly moving to a cashless society, based on extensive use of mobile phone platforms to replace cash transactions and associated traditional banking services. A report on the role of remittances in the Somali financial sector by Oxfam USA confirms the growing importance of mobile platforms.

The emergence of these innovative solutions in Somalia and other parts of Africa is clearly a response to necessity, and builds on the widespread up-take of mobile technology over the past decade.

We have seen in recent years a similar uptake in mobile usage amongst remote Indigenous communities, particularly amongst younger residents. And clearly, banks are increasingly making access to their services available to mobile phone users. Yet to date, there appears to be little indication that the banks and telecommunications sectors are facilitating the use of mobile technology to underpin widespread improvements to access to financial and banking services amongst remote community residents. The reason for this is partially structural – the remote market is miniscule compared to mainstream markets, and the particular needs of remote citizens, particularly remote Indigenous citizens, are not widely advocated. This is a small, but crucial market failure.

Given the theoretical rationale for Government support of innovation rests almost entirely on the existence of spillovers or externalities which lead to market failure, there is certainly a case for the Government and its new Fintech Advisory Committee to consider further what might be done to improve access to financial services for remote citizens.

Perhaps this is an issue which the Prime Minister’s Indigenous Advisory Council might usefully take up?

Shakespeare on seeing

While Shakespeare appears to have said nothing on government transparency, he wrote much about seeing, sight, eyes as the pathway to knowledge (and love):


When most I wink, then do mine eyes best see,
For all the day they view things unrespected;
But when I sleep, in dreams they look on thee,
And darkly bright are bright in dark directed;
Then thou, whose shadow shadows doth make bright,
How would thy shadow's form form happy show
To the clear day with thy much clearer light,
When to unseeing eyes thy shade shines so?
How would, I say, mine eyes be blessed made
By looking on thee in the living day,
When in dead night thy fair imperfect shade
Through heavy sleep on sightless eyes doth stay?
   All days are nights to see till I see thee,
   And nights bright days when dreams do show thee me. 

Sonnet 43

Indigenous Parity Initiative: through a glass darkly

The Indigenous employment challenge facing Australia is daunting. Indigenous Affairs Minister Nigel Scullion outlined the magnitude in comments to a CEDA sponsored Aboriginal Employment Summit in South Australia in April 2015:

“Governments have committed to halving the gap in employment outcomes between Indigenous and non-Indigenous Australians by 2018,” Federal Minister for Indigenous Affairs Senator the Hon. Nigel Scullion told a CEDA forum in South Australia (SA).

“We need to get another 188,000 Indigenous Australians into jobs to reach parity with non-Indigenous Australians by 2018,” he said.

“That’s 62,000 a year.”

Mr Scullion said the Commonwealth public sector will increase its own Indigenous workforce to three per cent by 2018.

“That’s around 7500 people,” he said.

Mr Scullion said that through the newly formed Employment Parity Initiative, Australia’s biggest employers will also increase their average Indigenous employment rate to at least three per cent of their workforces by 2020.

“That’s an additional 20,000 Indigenous Australians in work,” he said.

Minister Scullion announced this week the latest milestone in the journey outlined above, the finalisation of an Indigenous Employment Parity agreement with MSS Security, a major supplier of security services to both the private and public sector in Australia with operations in all states and in metropolitan, regional and remote locations.

The agreement provides that MMS will increase its Indigenous employees by 350 over the next three years from 124 staff to 474. As MSS has over 5000 staff Australia wide, this amounts to an increase from 2.3 percent to 6.5 percent of MSS’s workforce.

The PMC website provides a succinct outline of the Indigenous Parity Initiative launched in March 2015. Key extracts describing the program are set out below:

The Employment Parity Initiative aims to increase the number of large Australian companies with a workforce reflective of the size of the working age Indigenous population – expected to reach 3% by 2018. Specifically, the programme aims to get 20,000 more Indigenous job seekers into jobs by 2020.

 

Large national employers will be invited by the Prime Minister to become parity employers by increasing the level of Indigenous employees within their organisation.

The Department of the Prime Minister and Cabinet will administer the Employment Parity Initiative and offer tailored contracts to parity employers with payments linked directly to outcomes. This recognises the additional costs of employing and supporting disadvantaged job seekers. To reduce business red-tape, there will be minimal reporting required.

 

Parity employers are only paid an outcome fee when an eligible employee hired under the programme achieves a minimum term of employment with the organisation. Reporting burden and administration is also minimised through simple, quarterly reports.

 

The Employment Parity Initiative does not reward commitments but real, long-term outcomes. Employers will only receive an outcome fee when an eligible employee hired under the programme achieves a minimum term of employment with the organisation. This approach generates a strong incentive for parity employers to meet contractual obligations.

 

The Forrest Review identified that there are untapped opportunities to leverage the goodwill and capacity of large companies to employ large numbers of Indigenous people. The Review received feedback from business that they would employ more Indigenous workers if they had access to more flexible contracts tailored to their individual circumstances.

 

 

To date, the Government has put in place Parity Agreements with a number of major companies. The PMC website lists agreements with only three companies, Accor, ISS, and Compass. A google search suggests that Parity Agreements may also have been signed with Spotless and Crown Resorts.  And now we have the MSS announcement.

 

The National Congress of Australia’s First Peoples has been critical of the lack of clarity around the scheme. In a post-budget media release in May 2015, Congress noted:

 

Under the initiative, financial assistance will be given to ‘top 200’ companies for temporary job placements of Aboriginal and Torres Strait Islander people for 26 weeks.  The employer apparently receives the bulk amount of funding at the end of the placement period.  Ms Parker and Mr Malezer said it was unclear how many ‘real jobs’ or permanent jobs would be created under the scheme.

“On the face of it, it appears that millions of dollars will be paid to large employers with little or no accountability for outcomes,” they said.

 

So what are we to make of all this?

 

Clearly, the aspiration is a worthy one. The Minister and the Government are to be congratulated for setting out on this journey.

 

If the structural under-representation of Indigenous citizens in employment is to be remedied, then clearly the private sector will need to be centrally involved. To their credit, a significant number of our largest corporations are indicating an awareness of the issues we face in driving towards employment parity, and even more importantly, are prepared to step up and be part of the solution.

 

Nevertheless, this is a hugely challenging area, where many un-employed or under-employed Indigenous citizens face a diverse range of deep-seated barriers to transitioning onto what might be termed an ‘employment trajectory’. Sustained success is an extremely challenging benchmark, and will inevitably require supra–normal support for new employees to achieve. Such support will affect the bottom line of the corporations involved (albeit marginally given the size of their operations), and while the Commonwealth appears to be ready to provide financial assistance to business corporations, this support is time limited.

 

Sustained success will require deeper cultural change within business, and government, and this will be best achieved through greater transparency of the numbers of new employees recruited under the Initiative, the sources of those employees (ie are they formerly unemployed or employed), retention rates, and the cost of the financial support being provided by Government.

 

So while the progress over the past year appears to be positive, the lack of comprehensive, up-to-date and detailed published data from Government (even at an aggregate level) leaves open the possibility that this is merely a façade, aimed merely at persuading the electorate and the Indigenous community that positive change is occurring. More importantly, a huge benefit of greater transparency would be that it would assist in driving the cultural change required within the business and public sectors.

 

At a time when the Government is pushing hard to utilise private sector models across the public sector, when business is the recipient of public sector funding part of the deal should be that they sign up for the sort of rigorous analysis of performance which they apply within their own businesses. And government should commit to cooperatively monitoring the sustained impacts of today’s government investments through the collection and publication of retention rates for the new employees recruited under the Parity Initiative in the period beyond the funding support.

 

This post reflects a few hours research, and allows an interested bystander to get a reasonable appreciation of what the Government is attempting to do in this particular area. Yet that research failed to throw up a definitive list of the corporations involved, the funds allocated to the Indigenous Parity Initiative overall, and the funds spent since its initiation, the progress made to date in terms of new recruits, whether or not retention is an issue, the gender breakdown of the new recruits, and whether the corporations are recruiting from the ranks of the unemployed or the previously employed.

 

It is the case that Indigenous Affairs is challenging, or to use a term that I don’t particularly like, involves ‘wicked problems’. Policy failures abound. However, there is much that might be done to drive better policy outcomes, and better community understanding of the challenges faced by the nation as a whole in this area.

 

Moreover, Indigenous citizens will benefit if they are able to see more clearly what is being attempted and how it is progressing. Transparency is a public good! The Indigenous Parity Initiative, given its centrality to the Government’s policy agenda, would be a good placed to start.

Remote Community Access to Infrastructure Planning: an imagination deficit

The processes for access to normal government planning processes for infrastructure in remote Indigenous communities are akin to Oliver Twist’s subordinated status in the Poor House, leaving the only options available for Indigenous interests to be plaintive supplication.

Infrastructure Australia (IA) released an updated version of the Australian Infrastructure Plan on 17 February 2016 which includes an Infrastructure Priority List  of over 90 projects either nominated by states and territories or identified by an audit undertaken by IA in 2015. IA released a number of Fact Sheets including a Fact Sheet on Remote and Indigenous Communities.

IA is an independent statutory body with a mandate to prioritise and progress nationally significant infrastructure.

Infrastructure Australia was established in July 2008 to provide advice to the Australian Government under the Infrastructure Australia Act 2008.

In 2014, the Infrastructure Australia Act 2008 was amended to give Infrastructure Australia new powers, and to create an independent board with the right to appoint its own Chief Executive Officer. The amended Act came into effect on 1 September 2014.

Under the Act, Infrastructure Australia has responsibility to strategically audit Australia's nationally significant infrastructure, and develop 15 year rolling Infrastructure Plans that specify national and state level priorities.

The Act also states that the Minister must not give directions about the content of any audit, list, evaluation, plan or advice provided by Infrastructure Australia.

In May 2015, Infrastructure Australia released two audits: the Northern Australia Audit and the Australian Infrastructure Audit.

The Northern Australia Audit is focussed entirely on economic and commercial projects and ignored the infrastructure needs of remote Indigenous communities on the basis that they were out of scope of the parameters determined for the audit. In the words of the Audit itself:

However the population centre size threshold of 3,000 removed the focus of the study away from the many northern Indigenous communities, which range from tiny outstations with up to 20 people to communities with 1,000 persons or more. The infrastructure needs of these smaller communities are being considered in the parallel Northern Territory Regional Infrastructure Study and a National Remote and Regional Transport Infrastructure Strategy, being led by the Northern Territory Government.

The inclusion of projects in the Infrastructure Priority List is not a guarantee of investment, but provides governments and private investors with a base level of assurance that there is a justified demand for the asset, and thus appears to be an important step towards investment. Most of the projects on the List are transport related and are either listed as requiring ‘option assessment’ or ‘business case development’.

It is clear that the Plan and Priority List include billions of dollars of potential investment, and given the current budget constraints, the likelihood of most projects being funded by the public sector within the next five years would appear to be quite low.

In contrast to the Northern Australia Audit’s silence on Indigenous related infrastructure needs, IA appear to have become more sensitive to the necessity to address Indigenous infrastructure issues in this month’s publications. The fact sheet on remote and Indigenous communities includes a set of suggested actions for Governments. Two are worth noting because they are of specific relevance to Indigenous communities:

·         States and territories should tender the provision of economic infrastructure services and pool investments across communities to establish scale and attract more private sector innovation.

·         All governments should consider investments that support the recent COAG investigation into land administration and use and the White Paper on Developing Northern Australia actions on land, which aim to increase the economic independence of remote Indigenous communities.

In addition, it is a positive development to see two or three projects included in the Priority List which are explicitly directed towards remote Indigenous community infrastructure. In WA, the 2015 audit (and not the WA Government) identified ‘Improved Road access to remote communities’ as a project worth assessing.

In the NT, the NT Government nominated a project to provide ‘Enabling Infrastructure and essential services to remote NT communities’. This project is currently undergoing business case development. The detailed information on the proposal refers to three communities: Wadeye, Tiwi Islands, and Jabiru, but without much detail.

The NT Government also nominated the upgrade of the Tanami Highway as a project, and IA’s assessment proposed that the road be sealed from the Stuart Highway to the Granites mine in the Tanami.

While both Wadeye and the Tiwi Islands are largely indigenous, and Jabiru has a substantial Indigenous population, the Tiwi Islands are the location of a major port development related to the forestry industry and Jabiru is the hub for Kakadu’s tourism industry. Communities in both Wadeye and Tiwi were provided with substantial infrastructure investment by the Commonwealth through the National Partnership on Remote Indigenous Housing as the pre-existing infrastructure levels were unable to support the new dwellings constructed under that program.

My sense is that supporting and underwriting existing economic activity is the primary driver of these nominations rather than the significant needs of remote Indigenous citizens, who are amongst the most socially and economically disadvantaged Australians. While each of these projects would, if implemented, benefit some indigenous communities and citizens, this is more in the nature of a coincidental and collateral benefit.

The unfortunate reality is that large commercial and economic interests are much more influential than disaggregated community interests. Yet, if one was to develop an aggregated proposal to address the housing shortage across some 40 remote communities in the NT, there would be a five billion dollar project to be undertaken. Similarly, essential services such as power, water and sewerage might be aggregated into a substantial infrastructure project. Again the cost would be in the billions.

Yet for reasons I don’t fully comprehend, there appears to be an imagination deficit amongst infrastructure planners. IA have failed to take on board the recommendation they made to state and territory governments in their Fact Sheet quoted above to pool potential investments across communities. They adopted what are essentially arbitrary thresholds on the minimum population size of communities which are in scope, and consequently manage to assume away the aggregated infrastructure deficit in remote communities as not their problem. Similarly, the WA and NT Governments appear seriously disinterested in addressing the infrastructure deficits, implicitly leaving it to the Commonwealth Government. The NT Government’s apparently disingenuous references to Indigenous benefits from its nominations are further evidence of this structural disinterest.

Thus on the same day as the Chief Minister welcomed the release of the Infrastructure Plan, he also issued a media release announcing the allocation of $28m for two remote communities in Central Australia. The media release states in part:

New housing, better roads and more water supplies will be rolled out in the Utopia region as a result of a $28.3 million Northern Territory Government funding injection aimed at improving living conditions in the remote communities.

 “The funding we are announcing today will see new houses built, existing houses upgraded, roads improved, sewerage upgraded and additional water supplies secured,” he said.

“The investment will substantially improve the lives of Aboriginal people living in Arlparra as well as those living in the surrounding outstations of the Utopia region.

 “My Government strongly believes that the integral link between economic and cultural success is through local Aboriginal people gaining access to and participating in a local economy. This is why we are investing more than $1.3 billion in infrastructure in remote communities across the NT.”

Of course, investments such as these are welcome, and will undoubtedly make a substantial positive impact on the communities involved. But my point is that there are similar needs across some 40 communities, and there appears to be no systemic process for documenting the need, and more importantly, for transparently outlining the steps being taken to address that need. The mention of $1.3bn in infrastructure funding is not for Indigenous communities, but for roads bridges and other commercial related infrastructure. These are important investments, but continue the structural blindness to Indigenous needs.

Policymakers in Canberra, Darwin, Perth and other relevant capitals have succumbed to a mindset where they accept the existence of the Poor House, where they cannot imagine that aggregated projects addressing the needs of some 100 remote communities across remote Australia might be of equal or greater significance than upgrading a road, a port or building a dam.

And to be even more pointed, where are the Indigenous policy departments when Infrastructure Plans and their related components such as the one announced yesterday are submitted to Cabinet?

“Please Sir, can I have some more".

Trinculo on our capacity for policy reform

They say there’s but five upon this isle: we are three
of them; if th’ other two be brained like us, the
state totters.

The Tempest Act 3 Scene 2

The 1974 Case for Structural Policy Reform in Indigenous Affairs

The Lifeline Book Fair in Canberra this weekend threw up its usual array of bargains and curiosities. Amongst the thousands of items on sale, I came upon and purchased a copy of the Report on a visit to Yuendumu and Hooker Creek (now known as Lajamanu) by two members of the Council for Aboriginal Affairs (CAA), Dr H.C. Coombs and Professor W.E.H Stanner in March 1974, and published by the Australian Government Publishing Service.

The report reflects Coombs succinct and direct style, and characteristically begins with a summary of the Council‘s recommendations arising from the visit, followed by short descriptions of each community, the key issues they are confronting, and the administrative structures in place to manage the communities.

From a distance of 42 years, the analysis nevertheless retains an unnerving immediacy. The links to the pre-contact traditional world, cosmology and lifestyle of the residents are more clearly in evidence that would be the case in any contemporary reports, but notwithstanding the passage of two or three generations, the issues being addressed are strikingly familiar.

The report pulls no punches in identifying policy failure: ‘Judged form the point of view of the Government’s stated policies Hooker Creek is a disaster area. Our impression was that neither the Aboriginal Council nor the community which it represents believes that it is in fact or is to be trusted with any real authority.’

But it also identifies grounds for optimism: ‘On the other hand the Council includes men and women of impressive quality. Despite drink there is evidence of a sense of social responsibility among the Aboriginal residents….There is potential for achievement both economically and socially….’ (Report page 28).

Coombs and Stanner argue for greater focus on economic activity and paid employment in each community, including through employment of Aboriginal people in government investments in community infrastructure. They also recommend training for youth, and for mentoring processes to be established. Presciently anticipating the Aboriginal art boom, they seek a greater focus on local production of goods and services. They didn’t mention ‘welfare dependency’, but were clearly conscious of its pernicious potential.

Familiar issues around community stores (mentioned at length this week in Senate estimates), improved policing and law and order, alcohol control, substantial housing deficits, and arrangements for more effective community governance all received attention. That these are continuing issues of public interest and political contention confirms that our policy responses are fundamentally inadequate to the circumstances we face in remote Australia. This is not to suggest that the appropriate policy responses are easy or straightforward; they clearly are not.

What then might we do differently? One place to start is to consider the elements of the CAA report which have been discarded or never really taken on board by governments in the implementation of Indigenous policy in remote Australia.

Coombs and Stanner are at pains in their report to push at every opportunity for greater Aboriginal responsibility over their lives and in managing their affairs. Their guiding principle is that of allowing Aboriginal people choice, over both the form of their lives and the pace of change. They accept that there will be a need for specialist advice and assistance in managing complex activities like commercial operations or community governance, but they are unequivocal in articulating a principle of Aboriginal choice and control in decision-making.

Second, they acknowledge Aboriginal links to country and seek to create innovative solutions to allowing economic activities to be operated while allowing community members to reside close to country. They make the case for what they term the decentralisation movement, or what is often referred to today as the outstation movement. I am only too aware that this is not necessarily a static and unchanging aspiration, and involves difficult budget choices for governments and for Aboriginal families, but it does in my view continue to have an important place in public policy settings.

Third, Stanner and Coombs make the case in various ways for greater expertise to be built amongst the cadres of non-Aboriginal employees working in these communities. While they talk of understanding of anthropology and government policy, we might today talk in terms of cross-cultural awareness, cross cultural communication skills, and retention and continuity of skilled personnel. These continue to be issues of real salience, in Canberra as much as in remote regions.

Increasingly, and particularly in the light of the slow progress on Closing the Gap, commentators are arguing that there is a need to fundamentally refocus and re-orient our policy settings in Indigenous affairs. Those who argue for this are in my view correct, however, they almost never articulate what the new policy settings should be, and I suspect that often they do not have a developed set of ideas as to what that new framework would look like.

Moreover, it may well be beyond the political and policy capacity of any government to instantaneously shift from one framework to another. Indeed Indigenous interests would likely prefer gradual policy evolution to chaotic policy revolution.

But what is clear from the vantage point of 42 years is that necessity for change to be gradual and incremental also raises the significant risk that we don’t actually address or resolve the underlying issues we confront in Indigenous affairs. Indeed, it would appear that taking the long view, and adopting the metaphor of Indigenous policy as a radio, governments have largely adjusted the frequency of the dial, but failed to shift from analog to digital settings.

The conclusions I draw from reading the CAA Report are three fold. There is a need to fundamentally adjust our policy settings in Indigenous affairs, but it must involve structural reforms. Governments may need to implement these progressively over time, but there needs to be a system which ensures that reforms are focussed on structural change and not just about allocating the pie (whether it be growing, static or diminishing).

Second, there is a requirement for transparent policy analysis. It is notable, indeed extraordinary, that there is nothing akin to this CAA report issued by government today. The community and regional analyses are not undertaken, and were they to be, they would not be published. Both governments and the commentariat bemoan the lack of positive change in Indigenous affairs, but without transparent, policy relevant, social and economic analysis, the drivers for structural policy change do not exist.

Finally, in assessing the structural policy changes required, governments could valuably reconsider those elements of the CAA advice proffered in 1974 which have yet to be embraced by the nation. Coombs and Stanner were not prophets, they were not always right, and the times have changed, but in matters pertaining to structural policy settings, their instincts were right.

Three Recent Developments of Interest

There have been a number of recent developments of interest in the Indigenous policy space which will likely be overwhelmed by the release of the annual close the gap statement this week. Set our below are brief comments on the release of the NT Government’s new Aboriginal Affairs strategy, a new evaluation report from the Castan Centre on the NT Intervention, and the passage of an amendments package to the AIATSIS legislation.

NT Government Aboriginal Affairs Strategy

The NT Chief Minister and Minister for Aboriginal Affairs, Adam Giles MLA issued a new Aboriginal Affairs Strategy. His press release is here, the policy document itself is here. I confess to mixed feelings in relation to this announcement –the focus of the press release is understandably on Indigenous employment targets, contracting targets for Aboriginal businesses, and public service targets. In each of these areas, progress looks positive.

The policy document ticks all the right boxes (although glossing over the issue of school attendance and focussing instead on ‘retention’), is written in an accessible and easy to read style, and emphasises the Government’s commitment to engagement with Aboriginal Territorians. Moreover, it commits the Government to a detailed monitoring and evaluation process, and reflects a ‘whole of government’ approach to administration of Aboriginal policy issues, which involves the Chief Minister's Department in oversighting line agencies who have functional service delivery responsibilities. The Commonwealth could learn from the Territory in this respect.

My reservations relate to what is not included in the policy document, namely the absence of any description of the choices and trade-offs the NT Government will be making in key policy areas, the absence of any detail on the pathways it seeks to pursue to achieve some of its policy objectives (for example in relation to land policy), and the total absence of any data relating to the levels of resourcing for Aboriginal issues, and particularly for remote communities.

Of course, the Commonwealth is a huge player in NT Indigenous affairs policies, by virtue of the fact that the Aboriginal Land Rights (Northern Territory) Act 1976 is federal legislation, and the fact that the Stronger Futures funding and policy frameworks, which replaced the NT Emergency Response (better known as the NT Intervention), in many respects dwarf the NT Government’s efforts and capabilities. The NT Government’s policy document is thus strangely silent on the Commonwealth’s role in Indigenous affairs strategies in the NT.

 

The Castan Centre Report on the NT Intervention

The Castan Centre for Human Rights Law at the Monash University Law School released a report evaluating the NT Intervention against key human rights principles. I don’t propose to undertake a comprehensive critique, but will content myself with noting that while the initial policy actions were draconian, unjust and arguably misguided and misdirected, the policy framework has been substantially and comprehensively overhauled in the eight years since it was initiated. This makes policy evaluation difficult, but also opens up a risk (to which I would argue many critics have succumbed) that the anti-intervention political rhetoric has not been adjusted to take the subsequent policy changes and developments into account.

Moreover, the process of reconceptualising the NT Emergency Response as the Stronger Futures policy framework involved very substantial levels of investment, in the billions of dollars, over the past decade. While Government policies need to be justifiable on their own terms, and of course ought to meet our domestic and international human rights obligations, the reality is that without the difficult political challenges thrown up by the Howard / Brough actions, Labor would not have made these investments and numerous Aboriginal communities across the NT would be languishing without the facilities and infrastructure which have been funded by the Stronger Futures investments. The critics of the NT intervention invariably ignore these positive outcomes.

Of course there is still a legitimate judgement to be made: do the negatives outweigh the positives? Views will differ on this, but I would make two points: the first is that reasonable people might reach different conclusions on this question; the second is that while it is now hypothetical and notional, arguably Aboriginal people in the NT should have a say in making such a judgment. The elephant in the room here is that our systems of policy development and political decision making do not appear to have found a way to engage Indigenous interests prospectively in these types of calculations.

 

Amendments to the AIATSIS Act

The Parliament has passed an amendments package to the AIATSIS legislation which establishes the Australian Institute of Aboriginal and Torres Strait Islander Studies. The legislation appears to be largely uncontroversial and I understand it was developed in conjunction with the AIATSIS Council. AIATSIS is an important part of the institutional landscape in Indigenous affairs, as its library and collections are unique and extremely valuable resources in documenting the place and achievements of Indigenous peoples within the nation. The legislation has been allocated to the education portfolio under the current Administrative Arrangements Orders, whereas I would argue that if should sit within the culture and heritage arms of Government. A key issue for the future will be funding as these sorts of institutions always have difficulty justifying their budget bids and are in many ways soft targets as budget pressures grow.

 

 

The Challenge Ahead

This is as strange a maze as e’er men trod

(The Tempest. Act 5. Scene 1. Alonso speaking)

I find my zenith doth depend upon
A most auspicious star, whose influence
If now I court not but omit, my fortunes
Will ever after droop.

(The Tempest. Act 1. Scene 2. Prospero speaking)

  

The Pearson Agenda

On 27 January, Noel Pearson outlined his current thinking on the state of Indigenous affairs in a speech to the National Press Club entitled ‘Hunting the radical centre of Australian policy and politics’. It was a typically impressive argument, rhetorically forceful, and loaded with stimulating ideas. Much of the subsequent media comment was derived from the question and answer session which followed.

Pearson stepped carefully through the political maze, quoting Paul Keating, praising Tony Abbott, and expressing his faith that Malcolm Turnbull has the expertise and experience to guide a referendum on constitutional recognition for Indigenous Australians to a successful conclusion.

However he also spoke bluntly of his view that there is a crisis in Indigenous policy, that the current system involving ministerial and departmental oversight is structurally flawed, and expressed his deep scepticism that this system can fix the problems we confront as a nation in the Indigenous affairs domain.

Pearson based his argument around two case studies, the moves toward constitutional recognition, where he outlined his strongly held view that the content of any proposed change had to be structured around the ‘radical centre’ of the political landscape if it was to have any chance of success.

While the challenge of amending the Constitution is clearly in the forefront of Pearson’s mind (as it is in others), I came away from his speech with a stronger sense than I had previously appreciated that his deeper aspiration and objective is to find the achievable settlement which places relations between Indigenous and non-Indigenous citizens on a sure and sound footing. If this is the case, it makes amending the Constitution not the objective, but the means to the end. Intriguingly, and notwithstanding the undoubted significance of the Constitution to our national sense of identity and to Indigenous citizens aspirations, such an interpretation opens up potential options and possibilities which do not rely on constitutional change.

His second case study was an excoriating critique of the lack of response by the Government to the Empowered Communities Report which both the Government and Opposition had signed up to prior to the last election.

A key element of the Empowered Communities report is a proposal for a legislated Indigenous Policy Productivity Council which would act as a referee between governments and Indigenous interests in driving and implementing key structural reforms. The Empowered Communities report outlines at a high level the broad shape of the proposed Council.

Pearson is on the record as having moved away from the recommendations of the Expert Panel established by the Labor Government, in particular the recommendation for entrenching the prohibition on racial discrimination, and instead has proposed in conjunction with a number of conservative constitutional experts the inclusion in the constitution of a provision requiring the establishment of a new institution which ensures Indigenous Australians are engaged and involved in laws and policies related to them. As he argued in his 2014 Quarterly Essay, A Rightful Place:

Constitutional recognition could therefore include the removal of the race clauses and the insertion of a replacement power to enable the Commonwealth parliament to pass necessary laws with respect to indigenous peoples, and incorporation of a requirement that indigenous peoples get a fair say in laws and policies made about us. A new body could be established to effect this purpose, and to ensure that indigenous peoples have a voice in their own affairs (emphasis added).

While I am not aware that he has explicitly said so, it seems likely that Pearson sees the Indigenous Policy Productivity Council proposed in the Empowered Communities Report as the new body which he would like the Constitution to require be established.

In his Press Club speech, he talked about the 97 percent elephant (the wider Australian society) and the 3 percent mouse (Indigenous peoples), and argued that a fulcrum was needed allow the mouse to influence the elephant. He stated that the proposed new constitutionally required body was that fulcrum. Pearson has previously given at least one power point presentation where he represents the elephant and the mouse at either end of a plank, noting that the position of the fulcrum can in theory allow the mouse to lift the elephant.

These arguments reflect Pearson’s assumption that the challenges facing our nation in Indigenous affairs are deeply structural. For example he referred a number of times to the over-representation of Indigenous people in our prison system, and noted that the alternative view that these inequities were not structural would carry the implication that Indigenous citizens are somehow innately criminal.

In my view, Pearson’s analysis of structural inequality and thus the need for a structural solution is extremely persuasive. However, so too is the argument for constitutional prohibition of racial discrimination, especially in circumstances where the race power within the Constitution is proposed to be removed. Pearson is clearly of the view that priority ought to be given to that which he assesses to be achievable.

At present, we have no specific proposal on the table, and developing such a proposal is the task set for the Referendum Council recently established by the Government with Labor support. So I don’t propose to attempt to canvass the comparative substantive and tactical merits of the two proposals at this stage, while noting that in many respects this is the fundamental issue which will need to be decided.

While I consider the proposal for a new constitutionally endorsed institution to have considerable merit, particularly given that current arrangements appear not to be working, much will hinge on the detailed design of the body. Pearson’s proposal for the constitution to require the establishment of a new institution would presumably require the specifications of its functions at high level, but which does not determine its detailed membership and structure. Yet the establishment of such a body will involve both strengths and weaknesses, and these will be exacerbated or meliorated by its detailed design.

Its strengths include the reality that addressing deep structural imbalances such as we face in the Indigenous affairs policy domain requires of any such body a degree of independence and institutional gravitas which ‘constitutional status’ would bring. Moreover, to the extent that circumstances change over time, there would be scope for the design of the body, its membership, its focus, to be fine-tuned and adjusted in the light of experience.

Its weaknesses derive from the reality that there is no guarantee that the body once established will have, and importantly maintain over time, the necessary political and policy capacity to influence Indigenous policy outcomes at a national level. In terms of Pearson’s analogy, the fulcrum might end up in the wrong position along the plank, and not create the requisite leverage to lift the elephant.

Furthermore, one of the enduring lessons I have learned from my own involvement in the public sector is that in institution building there will always be unintended consequences and outcomes. These can be positive or negative, but inevitably mean that in public policy development aimed at addressing structural problems there is no ‘set and forget’ lever. It follows that there will always be a need for vigilance and proactive engagement, and this is particularly the case in Indigenous affairs. The involvement of individuals, whether as a minister, an engaged backbencher, a bureaucrat, an external lobbyist, or an engaged citizen can make a difference. It will be deeply important to the success of the Indigenous Recognition project that Indigenous Australians play active roles in all these contexts over the coming decades. In reality, no one of these roles is privileged over the others in terms of capacity to influence outcomes.

Looking forward, it appears likely that Pearson will use his position on the Referendum Council to build support within the Indigenous community for his proposed model, and to argue its credentials as comprising the best opportunity for achieving a substantive settlement or compact between our Indigenous citizens and the wider Australian community. He may well be right about this opportunity, and in contrast to alternative models, his model at least allows him to make the case to Indigenous citizens that there will be a substantive change to the institutional arrangements governing the interactions between national policymakers and the Australian Indigenous community. The challenge, as ever, will be in the detail. How to design a new institution which is more than a cypher or rubber stamp, and which has a capacity to keep governments across the nation honest, yet which is not so potentially  powerful that it is strangled at birth by its putative critics and opponents.

Pearson has exhibited quite extraordinary determination in pursuing his vision of a new settlement between the ‘triune nation’ of indigenes, anglo-saxons and neo-immigrants, both in terms of intellectual and conceptual advocacy and in terms of the pragmatics of political influence.

In my view, his vision is right; there is a need for a new settlement in the relations between Indigenous citizens, the state, and the wider community. There is a need for redressing structural imbalances. And there is a need to reassess the current political and policy structures governing the administration of Indigenous affairs.

Yet the challenges we face in driving the sort of reforms Pearson is seeking are considerable. Vested interests abound. Change is terrifying to many, and uncertain for most. Institutional and policy inertia is ubiquitous.

All things being equal, Pearson’s proposal deserves our support since it is clear that his vision is the most coherent and best developed alternative to the present deep-seated malaise in Indigenous affairs. However, the proposed model requires further detailed design development if it is to answer its potential critics. Should Pearson fail in his bid to drive fundamental change, it will be our failure too.

I want to end with two related observations. The first is that I disagree with the implied suggestion in Pearson’s comments to the Press Club in relation to the role of external change agents. Pearson has been extraordinarily successful in driving change and reform from outside Canberra. His work on welfare reform has changed the mindsets of policymakers over the past decade. His work on education reform is having a similar impact.

As mentioned above, our system of politics requires inputs from a range of sources, and I doubt that Pearson could have driven the focussed, sustained and extremely successful reform agendas he has over the last fifteen years from within the parliament without suffering the fate of most politicians, namely being diverted to other priorities (at best) or being worn down to mediocrity (at worst). Any implication that there is no capacity to influence policy from outside parliament should be rejected. There is certainly a place for young Indigenous leaders in mainstream politics, but there is as much of a need for younger Indigenous leaders to make a career in the bureaucracy, in the private sector, and importantly in the community and NGO sector.

My second observation is much more speculative, and may well be entirely wrong. I thought it was quite curious that Pearson failed to directly and unequivocally refute the suggestion that he might seek to enter Parliament. Admittedly, he left a strong and deliberate impression that he believed others, younger and more energetic, should pick up the baton. Yet the underlying thrust of his argument was that he feels that he has reached the limit of his capacity to influence and drive his vision for a new settlement (my term, not his) from outside parliament. That and his comments on the desirability of a new middle force in Australian politics left me wondering whether he might not have been approached by Senator Xenophon or others seeking new voices in parliament to throw his hat in the ring for election as an independent senator in the forthcoming federal elections.

Such a move, if successful, would certainly open up new opportunities for policy and political leverage in relation to constitutional recognition, empowered communities, and the shape and structure of Indigenous affairs generally. It would make the idea of the ‘radical centre’ a tangible reality in Australian politics, and bring much needed conceptual focus and quality to the national policy debate on Indigenous affairs.

In conclusion, Pearson’s quest for a new relationship at the core of our nation is widely shared across the Australian community. His vision of the path forward is cogent, pragmatic, principled and innovative. It deserves serious consideration, in terms of both its undoubted substantive merits and the more problematic tactical considerations relating to the pathway forward. It follows as night follows day that the deliberations of the Referendum Council over the next six months, and the subsequent decisions of Government which will inevitably fall on the Prime Minister Turnbull’s shoulders, will be the locus of hugely significant discussions for the future of Indigenous affairs and indeed the face which the Australian nation presents to the world.