Pious Action: the Closing the Gap Refresh

               With devotion’s visage

And pious action we do sugar o’er

The devil himself.

Hamlet Act 3, Scene 1

The Government has launched a public consultation process related to the projected refresh of the Closing the Gap targets adopted by COAG in 2008. A new web site (link here) provides access to relevant background resource materials, and invites submissions which are due by 31 March 2018.

The webpage provides access to a Discussion Paper (link here) and outlines a proposed framework built around the notion of ‘prosperity’ which identifies four components: economic, individual, community, environment (link here). This framework is implicitly contrasted with the existing framework which is allegedly deficit based, and thus fails to acknowledge adequately the success and achievements of First Australians.

The current targets were always designed to be milestones along a longer pathway:  the mortality target is aimed at 2031, and the education and employment targets are aimed at halving, not entirely closing, the gap in those particular metrics. The Closing the Gap targets thus implicitly recognised that achieving structural equality between Indigenous and non-Indigenous Australians would be a long term process.

Notwithstanding the attempt to make the targets realistic and long term, Australian governments have been unable to meet the targets originally set. The Discussion Paper admits that of the seven high level targets, only one is on track.

The adoption and utilisation of targets as a policy tool is not entirely straightforward. By definition it focusses attention on a select number of measureable criteria. It runs the risk that governments will focus on these to the exclusion of other important issues. And to the extent that the targets are poorly specified it can allow governments to claim success where it is not warranted, or lead to resource misallocations which might not otherwise occur.

On the other hand, the case for targets is that it creates a specific focus on issues which are for one reason or another considered to be important and deserving of explicit attention or which might otherwise be neglected. Targets can assist governments to sustain policy attention on issues beyond the normal electoral and policy attention spans determined by legislated electoral terms, and/or the tenure of particular ministers or governments. This has been particularly the case with the Closing the Gap process as the requirement for the Prime Minister to publish a progress report at the start of each Parliamentary year has meant that the high level issue of continuing Indigenous disadvantage has received significant attention above and beyond what would have occurred without the targets. The symbolic importance of this Prime Ministerial involvement has been particularly significant.

The Closing the Gap process has always had its critics, with some commentators arguing that it was effectively based on assimilationist assumptions that all Indigenous citizens aspired to be like most other Australians. One can argue that such assumptions underpin much government policy in the Indigenous affairs domain. In my view, an alternative interpretation is that driving for longer Indigenous lifespans, improved health, educational and employment outcomes is fundamentally ‘choice enhancing’ policy. Longer lifespans, better education, improved health, and employment all enhance Indigenous choices. The radical critique of Closing the Gap as inherently assimilationist is in my view difficult to sustain.

However a second critique, with much more force, is that the Closing the Gap framework suffers from a serious flaw, namely that there is no explicit program logic which links the design and delivery of specific program interventions to particular targets. Instead, the Closing the Gap targets are unattached to particular program activities, and it was always unclear which levels of government were responsible for progress against particular targets. That said, governments are able to make informed decisions when considering particular programs and their funding allocations linked to the annual progress on particular targets. Thus education initiatives aimed at improving outcomes are no doubt informed by the metrics associated with the relevant Closing the Gap framework, and similarly for some other targets. But to maximise the effectiveness of targets, something more than a loose connection between programs and outcomes is required.

There is thus clearly a case for strengthening the effectiveness of the current Closing the Gap framework. Unfortunately, the current refresh proposals appear designed to weaken the framework, not strengthen it.

Minister Scullion in his media release (link here) announcing the refresh discussion paper merely asserts that a refreshed process will lead to better outcomes:

However, it is clear that the Closing the Gap agenda can be better designed and more effectively delivered. This is a view shared among Aboriginal and Torres Strait Islander people, governments and the broader community.

In 2008, the original Closing the Gap targets were developed without consultation from Indigenous Australians and without the direct involvement of state and territory governments – which meant targets were not as effective or as well directed as they should have been.

Apart from the fact that he is prejudging the consultation process, he offers no evidence for these assertions, and only his point about consultation with Indigenous Australians is unequivocally correct. He then goes on to state:

A new approach to Closing the Gap must value the aspirations, strengths and successes of First Australians. Importantly, it must be built on meaningful conversations with Aboriginal and Torres Strait Islander Australians.

New Closing the Gap targets will drive better outcomes for Indigenous communities because, for the first time, state and territory governments will establish targets in areas for which they are responsible and all targets will be designed to drive change, with specific action plans to support targets.

The problem with this argument is that the Minister is conflating the Closing the Gap targets with the policies which underpin it. It is the policies which ought to be built on meaningful engagement. The gaps implicit in each target will continue to exist whether or not there is a target, and these gaps cannot be fixed by focussing on Indigenous strengths (important as such a focus is). And shifting policy focus and responsibilities to state and territory governments is, in my humble opinion, a recipe for non-delivery and non-accountability. The Minister’s proposals provide no indication that either COAG or the Commonwealth itself will hold governments to account for lack of progress against the targets. The current Government has overseen the dismantlement of the COAG reform council which monitored progress against COAG targets across the board, replacing it with a ‘dashboard’ and a suggestion that the Department of Prime Minister and Cabinet would have ‘interim responsibility’ for monitoring the performance of governments (link here).

If the Government wished to focus on Indigenous aspirations and strengths, there is nothing to stop it establishing a policy framework, resourcing it, and pursuing it enthusiastically. But using this rationale as a cover for dismantling the Closing the Gap framework, is in my view not only retrograde, but involves an attempt at deliberate policy deception.

To cut to the chase, the Closing the Gap process is an embarrassment for the Federal Government. It provides regular and tangible evidence the Government’s Indigenous affairs policies are not working; that its policy rhetoric is not aligned with the reality of its actions on the ground; and that Indigenous citizens, particularly in remote regions, remain severely disadvantaged in comparison to most other Australians.

Instead of re-evaluating its underlying policy settings (including funding allocations), the Government appears to have decided that it is better to shift the goalposts. It would prefer to muddy the policy waters rather than improve its own performance.

There may well be a case for ‘refreshing’ particular targets, and there is a case for strengthening the link between the Closing the Gap framework and the underlying programs. However the Government’s proposed consultations are based around an extremely vague and rhetorically slanted discussion paper, with no indication of the sorts of targets it is considering, no commitment to providing information on the specific feedback it is receiving in the consultations to date, no recognition that there needs to be a stronger link between targets and programs, and no acknowledgment that the independent oversight arrangements for COAG activities has been abolished.

The bottom line is that at its core, Closing the Gap is not about the Indigenous community, but is about the commitment of the wider Australian community to support policies which remove structural disadvantage.

Rather than leading a national debate on removing structural disadvantage, and supporting policies which would facilitate such outcomes, the Government appears to be pursuing a policy of focussing on the rhetorical aspiration of ‘prosperity’ (who can object to that?), and shifting the policy focus from the Commonwealth Government to the states.

Add to this a sustained attempt to argue that the problem of continuing Indigenous disadvantage is largely down to a lack of good program evaluation and lack of access to Indigenous data by Indigenous citizens (links here, here and here) and the strategy confection is complete.

The deeply cynical strategy appears to be to direct the spotlight onto the legitimate aspirations of Indigenous citizens for their successes and achievements to be recognised while using the shadows outside of the glare of the spotlight to mischievously shift the Closing the Gap goalposts to avoid the necessity to make substantive policy and program commitments (like resourcing remote housing: link here) which will underpin and drive improved Indigenous life opportunities. 

Three strikes and you’re…..

The Commonwealth decision on remote housing

In a number of posts over the past seven weeks, I have discussed the way the Commonwealth was positioning itself in relation to an announcement on the future of the National Partnership on Remote Housing. Just two days ago in a post on MYEFO, I commented on the likelihood the Minister would deliver an acceptable remote housing program for Indigenous remote citizens, and noted: ‘whether he has the capability or intrinsic motivation to ensure something substantive is done about it will become clear over the coming six months’. Little did I know that the question would be answered within two days, and on both counts, it appears to be a resounding ‘no’.

Information emanating from both South Australia and Western Australia indicates Commonwealth officials have informed the state governments of WA, SA and Queensland that Cabinet has decided to cease any funding for remote social housing from July 2018 when the current National Partnership ceases. The fourth jurisdiction currently part of the National Partnership, the NT, is apparently going to continue to receive funding, though it is as yet unclear at what level and over what terms.

The West Australian Minister for Housing has issued a media release on the matter (link here) and the South Australian social housing minister has made public comments critical of the decision.

This decision will be a disaster for remote Indigenous citizens, will place at risk the current asset stock of housing in remote communities, will effectively waste the previous Commonwealth investment in remote housing as housing asset lifespans are reduced, will exacerbate the demographic shift from smaller remote communities to larger towns, placing further pressure on the states’ mainstream social housing systems, and other social support structures.

Questions which remain to be answered include what is the rationale for maintaining funding in remote NT communities, but not remote housing in adjacent jurisdictions? What is the total allocation going forward for remote social housing, and will it be over a ten year term or some shorter period?

This decision represents a watershed in Commonwealth policy towards remote Indigenous Australia. The Commonwealth is turning away from seeing a role for the public sector in underpinning investment in basic infrastructure. While its rationale will be that these are areas where the states should step up, this ignores the reality that the Commonwealth has the most significant tax base, that the GST distribution system provides no incentive to the states to invest in remote Aboriginal regions (notwithstanding the existence of an Indigenous relativities factor in the equation), and that the Commonwealth has been involved in remote housing for at least forty years precisely because the response from the states was inadequate.

Most importantly, the decision ignores the reality that the most, repeat the most disadvantaged sector of the Australian community are remote Indigenous citizens. For all the rhetoric about refreshing the Closing the Gap metrics (link here), this decision represents a deliberate and deeply tone deaf decision to further marginalise remote residents.

The political calculus underlying this decision includes the Government’s overarching focus on addressing the budget deficit, the fact that because it is a renewal of a longstanding National Partnership, there are no forward estimates allocated and there is no requirement for Parliamentary approval to harvest these savings. Moreover, remote citizens have limited political influence, particularly in the states where the relevant Federal seats affected are dominated by towns servicing non-Indigenous mining populations. In the NT where Aboriginal votes are more significant, the Commonwealth has backed off. In other words, the Government is punishing remote Indigenous citizens because they can.

The Government’s extreme sensitivity over this decision is patently obvious, reflected in the fact that it has been dropped out two days before Christmas, and that there has been no ministerial announcement or correspondence to the relevant state governments.

This decision completes the trifecta for Minister Scullion. He has overseen the disaster of the roll out of the inherently non-transparent Indigenous Advancement Strategy (refer to the ANAO critique of the IAS here, and my post on the topic here); he has driven the rolling disaster associated with the Community Development Program (see the ANAO critique of the program’s establishment here, and my post on the issue here, and a media report on a recent Senate Committee report on the scheme here). And now we have a fundamentally retrograde and highly damaging decision to cease funding the remote housing program in three states.

Three strikes, and you’re ……Minister for Indigenous Affairs.

Unanswered Estimates Questions on Notice

One of my purposes in writing this blog is to address in my own modest way what I consider to be a poor record of transparency by governments generally in relation to public policy generally, and in particular Indigenous affairs policy. Poor transparency increases the likelihood of accountability lapses by and within governments, and undermines the capacity of citizens to hold governments to account.

On 27 October 2017, Senator Scullion fronted the Senate Finance and Public Administration Estimates Committee. The transcript can be found at the link here.

During the Hearings or immediately thereafter, over 40 Questions on Notice were lodged by Senators relating to the responsibilities of the Department of Prime Minister and Cabinet in relation to Indigenous affairs.  A call to the committee Secretariat elicited that the deadline for the submission of answers was 8 December 2017.

The Committee web page (link here) lists the Questions on Notice arising from the most recent Estimates Hearings, and provides an indication of their status (ie answered or unanswered) and where answered provides a link to the answer.

The normal process for dealing with questions on notice is for the Department to draft responses and provide them to the Ministers Office for approval prior to submission to the Senate Committee.

As of today (20 December 2017), over 40 questions relating to Indigenous policy form the Department of Prime Minister and Cabinet remain unanswered, almost two weeks after the deadline.

There appears to be three possible explanations: departmental incompetence, ministerial incompetence, or a deliberate strategy to withhold these answers until the holiday season is well underway. If the latter, one might wonder just what information is so embarrassing that the Minister is reluctant to release it in a timely fashion?

One would hope that the Opposition and the Greens would seek an explanation from the Minister at the next Estimates Hearings, including seeking from the Department the dates that answers were provided to the Minister’s Office.

MYEFO and Indigenous Funding

The Treasurer and Finance Minister released the Mid-Year Economic and Fiscal Outlook yesterday (media release here; link to MYEFO here).  The headline message was an improvement in the expected deficit for this financial year, and a transition to a surplus by 2020-21.

In terms of Indigenous funding, MYEFO had very little to say. It reported on minor modifications to a loan from the Indigenous Land Corporation to one of its subsidiaries, Voyages Indigenous Tourism Pty Ltd, with a current outstanding balance totalling $308m (refer pages 256 and 261 of MYEFO). This loan is itself partly funded by borrowings, from both the private sector and the Commonwealth Government. The Federal Government allocated up to $65m in the 2016 budget (link here and media article here) to assist the ILC in refinancing its borrowings arising from the acquisition of the Ayers Rock Resort.

Here is not the place to trawl over past history in detail, but the bottom line is that the purchase of the ARR in 2010/2011 was contentious and highly problematic (link here) and while the acquisition has undoubtedly been beneficial for those Indigenous people who have obtained employment at the resort, it has severely constrained the ability of the ILC to undertake its statutory functions relating to land management and land acquisition for large numbers of communities across Australia in subsequent years. The acquisition which appears to have the support of Minister Scullion is one of the most expensive job creation programs ever undertaken by the Indigenous affairs portfolio in the Northern Territory.

The Minister recently announced the reappointment for 4 years as a Director of Indigenous Business Australia of the former Chair of the ILC, Ms Shirley Macpherson, who oversaw the decision to purchase the Ayers Rock Resort (link here).

The second and potentially more significant issue relates to remote housing. The first point to note is that contrary to the Minister’s advice to Senate Estimates a year or so ago, but consistent with his dodging and weaving on the matter in the most recent Estimates Hearings (link here), the MYEFO makes no provision for the renewal of the National Partnership on Remote Housing (formerly known as NPARIH). This National Partnership, which provided $5.5bn over ten years to states with significant remote housing requirements, expires in June 2018.

The failure to allocate renewal funding injects a high level of uncertainty into the remote social housing system, and will inevitably lead to a hiatus in construction of new dwellings across the interregnum. This is despite the issue of providing long term funding certainty being one of the key messages of the Remote Housing Review commissioned by the Minister and made public in October this year. My two earlier posts on these issues (link here and here) provide the background on these issues.

One new piece of information to emerge from MYEFO is the advice that the Commonwealth holds over 1800 housing leases in 43 Northern Territory communities which will expire over the forward estimates period (refer pp 243 and 252 of MYEFO). The Department’s latest Annual Report notes that it was not aware of any contingent liabilities at 30 June 2017, so this matter has only recently come to the Department’s attention. These leases have been subleased to the NT Government, and MYEFO notes that if the subleases are not renewed, then the Commonwealth will be responsible for the delivery of property and tenancy management going forward. The Department claims that the cost of the contingent liability is unquantifiable.

This new information is relevant for two reasons. First of all, it provides the NT Government with a greater degree of leverage than other states in any negotiations related to the renewal of the National Partnership. This will go some way to offset the policy leverage the NT gave up when the new Labor Government unilaterally committed a billion dollars for remote housing (link here).

Secondly however, these lease agreements create a direct line of responsibility for the delivery of adequate property and tenancy management to the Federal Minister. Even where the Commonwealth has contracted a third party to deliver these services, the Commonwealth has a clear political and legal responsibility (and presumably legal redress available) where the third party fails to deliver the property and tenancy services. As it happens, there have been widespread reports over the past year of the failure of Territory Housing to deliver these services in many remote locations (here is a link to the most recent fiasco), so the question must be asked: what has Minister Scullion done to ensure that the NT is meeting its landlord obligations under the subleases?

The shortcomings in the delivery of remote social housing programs are well known and serious. They play into the extreme levels of disadvantage confronting the vast majority of remote indigenous citizens. Minister Scullion campaigned hard on remote housing issues from Opposition. He was responsible for cutting $95m from the remote housing program allocations for property and tenancy management in 2015. It is therefore impossible to believe that he is not aware of the issues facing the remote housing sector. Whether he has the capability or intrinsic motivation to ensure something substantive is done about it will become clear over the coming six months.

The lead up to the next budget will be crucial for the remote housing sector. The focus evident in MYEFO in bringing the deficit under control will give the Government every incentive to find ways to fudge the issue. Unfortunately, housing is central to so much else, from early childhood health, school attendance, maternal health, job readiness, and more. A failure to invest in remote housing assets and infrastructure is a short cut to widespread and deeper social problems in the future.

Declaration: I am a former CEO of Northern Territory Housing (2002-6), an adviser to then Minister for Indigenous Affairs Jenny Macklin (2008-2011) and a former CEO of the Indigenous Land Corporation (2013-15).

Indigenous Procurement Policy review

In 2015, the Government released its new Indigenous Procurement Policy aims at expanding the take up of government contracts by Indigenous business. The policy is outlined on the PMC website, which provides a very useful introduction to the key objectives, targets and background documents. Link here. 

As an aside, this web page is admirable for its succinct synthesis of the policy, key data and a sense of what the policy is seeking to achieve. Unfortunately, the same cannot be said for all of the Department’s program web pages.

The Department of Prime Minister and Cabinet has recently published the Year One review of the Indigenous Procurement Policy (link here). This policy appears to be one of the stand out successes of the current Government‘s policy approach in Indigenous affairs.

The review documents significant progress across the board in allocating government contracts to Indigenous businesses, which total close to a quarter of a billion dollars a year,  and confirms that progress has been extremely positive over the past two years. The first two paragraphs of the Executive Summary state:

The detailed analysis of the raw data, in conjunction with the qualitative interviews and surveys, has found that the IPP, in its first 12 months, has exceeded its planned outcomes. The clear majority of contributors expressed a motivation to continue to contribute to the success of the policy objectives, indicating strong alignment with governments’ commitment to Closing the Gap on economic outcomes for Aboriginal and Torres Strait Islander Australians.

All portfolios met the original 2015-16 target of 0.5%, and in total the year one target was exceeded by a significant margin, with 1,509 contracts actually awarded to Indigenous businesses. The original first year target was 256. This is an increase from a total of 78 contracts awarded to Indigenous business in 2014-15.

The Executive Summary goes on to identify a number of potential issues worth considering further. In particular, it notes that the level of achievement across some 19 Commonwealth portfolios was not consistent, that relational approaches to procurement were most effective, that while the average value of contracts issued to Indigenous businesses was around $188k, the median value was $19k, and that there were a very high number of contracts given valued at less than $10k. Finally the summary noted that the profile of Indigenous businesses structures was opaque and there was scope to dig deeper in understanding how they related to outcomes. The heading in the text that ‘Business structure requirements are in alignment with the needs of stakeholders’ does not reflect the text, signalling to me that there are potential issues here.

Finally the report foreshadows an evaluation of the IPP in 2018, and usefully list a range of issues which ought to be taken up and examined as part of the evaluation.

While the story here is largely positive, and the Government’s policy aspirations are clearly worthy of support, there are two high level policy risks which will need to be managed carefully over the coming five years or so.

The first relates to the finding that relationships play a key role in driving better IPP outcomes. The report mentions the focus which suppliers put into building relationships with procurement teams in Canberra and elsewhere, and sees this as a positive. However, there is always the risk that stakeholders and relevant procurement officers will drift into inappropriate activities and even fraud or corruption. Prudent risk management suggests that rigorous fraud mitigation frameworks should be in place in all portfolios.

Second, it is clear that the potential for non-Indigenous businesses to structure activities with an Indigenous ‘front’ or joint venture partner to win government business is a real risk. This is often referred to as ‘black-cladding’ and was part of the review’s terms of reference. The review hints in various places that this may be an ongoing issue, but doesn’t provide any real line of sight to how much of an issue it is, or could become. Again, this is an issue which the forthcoming evaluation of the IPP ought to delve into in considerable detail.

At a much broader level, it seems clear that the IPP is part of the government’s philosophical approach which is aimed at raising the profile and importance of the private sector over the public sector in Indigenous affairs. Clearly Indigenous interests are significantly under-represented in private sector activities, and there is nothing intrinsically wrong with such a philosophical predisposition. Where there is a risk however is in creating private sector expansion by squeezing the public sector, and in particular, the community sector. There may be an ‘infant industry’ argument for supporting Indigenous private sector activities off the back of the public sector, but ultimately, the vast bulk of emerging Indigenous businesses need to sink or swim in the private sector. These are balances and trade-offs which are virtually impossible to objectively assess, but one which nevertheless have important policy consequences over the medium term and deserve our attention.