Indigenous Employment within the APS: a policy recommendation

 A recent seminar at the ANU on Indigenous employment in the APS by ANU researchers Dr Julie Lahn and Samantha Faulkner managed to shock me. In particular, it mentioned (almost in passing) data on the level of Indigenous representation in the senior levels of the public service, generally known as the Senior Executive Service or SES.

The seminar reported on the findings of a report (link here) commissioned by the Australian Public Service Commission on ‘enablers and barriers which act to support or impede career progression of Aboriginal and Torres Strait Islander employees to senior levels in the Australian Public Service (APS)’.

In laying out the context within which these issues play out, the report presented a snapshot of the relevant data:

The 2018 State of the Service report indicates that representation of Aboriginal and Torres Strait Islander people across the APS has improved in recent years and currently sits at 3.3% (Australian Public Service Commission 2018, p. 58). This is a significant achievement in terms of having met the Commonwealth Aboriginal and Torres Strait Islander Employment Strategy 2015-2018 target of 3% representation.

Despite this achievement, employment of Aboriginal and Torres Strait Islander people within the APS is concentrated at the lower levels. The majority are employed at APS6 and below and the largest proportion (27%) are at APS4 level.

In contrast, employment at senior executive levels is very small, just 1%. Over a ten year period, representation at the Senior Executive Service levels has remained disappointingly small while Executive Level employment has declined.

The proportion of Indigenous APS members mirrors the proportion of the Australian population who identified as Indigenous in the 2016 Census. Recently published analysis by Nick Biddle and Danielle Venn provide some broader context for these figures:

For both men and women, the public sector accounts for a considerable share of employment, either through direct employment in government at Commonwealth, state or local level or in industries where public sector employment is high, such as education, healthcare and public safety. In 2016, just over 20% of Indigenous employment was in the public sector, compared with 15% of non-Indigenous employment. 

The majority of Indigenous employment in the public sector was with state/territory governments. Indigenous women were more likely than Indigenous men to be employed by Commonwealth or state/territory governments, but Indigenous men had higher employment rates in local government than Indigenous women. 

[Biddle & Venn 2018 ‘Recent Trends in Indigenous Employment’ Journal of Australian Political Economy vol 82, summer 18/19,  link here].

In other words, public sector employment is comparatively more important to Indigenous citizens than private sector employment. However, it needs to be remembered that Indigenous employment is much lower than for mainstream citizens, with less than 45% of Indigenous citizens aged 15+ being employed in 2016 (See Biddle & Venn: Figure 2).

The Lahn & Faulkner report sourced their data on SES employment from a submission to the APS Review from the APS Indigenous Steering Committee. This submission is available at the Review’s submissions page (link here).

That submission provided more detailed data on SES employment in the APS:

At the SES level, the discrepancy is larger, with 25 Indigenous SES officers compared to 2,326 non-Indigenous SES officers (1%).  Furthermore, this discrepancy has continued over the last ten years…

The submission also provides data that makes clear that the proportion of Indigenous SES officers has barely moved over the past decade. Moreover, when we consider the data from different perspectives, the magnitude of the issue becomes apparent. There are just over 150,000 Commonwealth public servants (see the appendix to the Lahn & Faulkner report). Of these, just over 5000, or 3.3% are Indigenous. However, of the 5000 Indigenous public servants, only 25, or 0.5%, are Indigenous SES officers.

The Lahn & Faulkner report to the APS was based on interviews with around 50 Aboriginal and Torres Strait Islander staff across the APS, and includes a series of recommendations for policymakers, Indigenous employees and non-Indigenous employees, all of which make intuitive sense.

The Indigenous Steering Committee submission to the APS Review also included a small number of tentative recommendations. I encourage readers to check out both sets of recommendations.

However, my reaction as a former policymaker to both these sets of recommendations was sceptical. Not because they do not have merit, they do. But because they are too fine grained, too detailed, and too amorphous to ensure that policymakers at political and bureaucratic levels focus on them. As a result, notwithstanding their merits, they are unlikely in my view to be implemented and thus are unlikely to be the lever that will make a substantive difference in terms of making the APS an Indigenous friendly environment, and perhaps more importantly, in facilitating policies more attuned to substantive partnerships with First Nations.

Shortly after attending the ANU seminar, the APS Review released their Interim Report titled ‘Priorities for Change’ (link here). I was thus quite interested to see what was proposed in relation to Indigenous employment in the APS, and in particular if they had any ideas for greater Indigenous employment at SES levels.

The report is necessarily very high level, and addresses a range of crucial issues for the future of the nation. I do not propose to summarise or even critique the report more generally, (but see recent reporting in the Mandarin link here) and note that a report such as this will inevitably have little opportunity to deal with Indigenous policy and employment issues in any detail. Nevertheless, it seems useful to summarise what the Review Committee has to say on Indigenous issues.

At page 17 under the heading of partnerships, they note:

Nowhere is the importance of genuine partnerships truer than in supporting the aspirations of, and pursuing outcomes with, Aboriginal and Torres Strait Islander peoples. Now is the time for the APS to reconceptualise how it works with Aboriginal and Torres Strait Islander peoples.

On page 37, a graphic on diversity mentions the key data on Indigenous employment along with that of other specific groups, under a heading that states: ‘The APS struggles to attract and retain diverse employees, particularly at SES levels’. 

On page 49, at the conclusion of a section on Developing stronger internal and external partnerships, the Review included a text box which made a number of points regarding Indigenous issues. I encourage readers to read the whole text. Key paragraphs included:

The panel’s emphasis on the importance of relationships recognises that the APS cannot meet its purpose of serving all Australians unless it works openly and with integrity with partners across the community. Nowhere is this truer than in supporting the outcomes and aspirations of Aboriginal and Torres Strait Islander peoples….

…If pursued, the priorities for change outlined in this report provide an opportunity for the APS to work profoundly differently with Aboriginal and Torres Strait Islander peoples. Creating a genuine partnership would be fundamentally transformative.

Such a partnership needs to operate at different levels. Locally, it will often mean working collectively on community-led or place-based initiatives. This will require the APS to work with much greater humility and to focus on building the strength and impact of Aboriginal and Torres Strait Islander organisations.

Nationally, Aboriginal and Torres Strait Islander peoples must be able to participate meaningfully in matters affecting them. The panel believes this simple proposition should be a guiding principle for the APS. Achieving it will require supporting mechanisms and institutions that provide for national participation and representation…

…It is also critical that the APS supports and develops its Aboriginal and Torres Strait Islander employees, including fostering the development of senior leaders across the service.

These comments are well directed and are intuitively appealing. Again, what they lack is any guarantee or mechanism that will ensure they are implemented. Given this is an interim report, it is incumbent on potential sceptics or critics to wait for the final report. Nevertheless, there appears to be little appreciation that changing the deeply embedded culture of stasis and implicit exclusion will be a major challenge for the APS even if its leadership is fully committed to implementing the new approaches being hinted at by the Review.

Which brings me back to the question I asked myself as I sat in the seminar at the ANU and sought to come to terms with the data on under-representation of Indigenous citizens in the APS, and in particular, what this meant for the capability of the APS to deliver effective policy and programs for Indigenous Australians:

What is the single policy change that might make a difference to Indigenous outcomes and APS employment levels over the medium term?

The answer I came up with is based on my view that it should be a policy change that is easy to implement, that is relatively visible and not easily ignored, and should have ongoing impacts that flow to a broad range of circumstances. My answer is also influenced by the fact that increasingly, it is mainstream policies and programs which impact, for good or bad, on Indigenous citizens, and thus there is a need for mainstream agencies to be sensitised to the issues facing Indigenous Australians.

Accordingly, if I were an incoming Minister for Indigenous Affairs, I would seek an undertaking from the Prime Minister for a commitment to double the number of Indigenous SES officers to 50 within four years, and to double it again to 100 within ten years.

Moreover, such a target should be met by appointments across the breadth of the APS. If the authorising environment at political levels encourages greater Indigenous SES representation, the senior levels of the bureaucracy would do all they could to find ways to meet the commitment. If we had two or three Indigenous SES officers in each of Health, Home Affairs, Finance, Treasury, and so on, they would begin to establish an inclusive environment and context that would encourage the promotion and retention of more junior officers. 

Similarly, more Indigenous friendly working environments would organically and informally encourage and facilitate the sorts of recommendations made in the Lahn/Faulkner report and the submission to the review by the APS Indigenous Steering Committee. These recommendations go to ensuring that the APS retains talented Indigenous entrants and gives them every opportunity to pursue a career to the very top of the APS.

Finally, for those interested in reading more about Indigenous employment in the public sector, the publications listed on this page will be helpful.

Addendum 1 April 2019

I have just seen PMC's Communique Number 10 (link here), which reports on the deliberations of the Secretaries Equality and Diversity Council, and includes a section on Indigenous employment. The bureaucratic formulations are tried and tested, but hardly engender confidence that the Equality and Diversity Council is infused with a reforming zeal:

"The Council will explore further retention and development strategies as part of the next Aboriginal and Torres Strait Islander Strategy....noted the value of the Strategy as a catalyst for change....agreed ....to the APSC exploring opportunities..."

It is worth reading the document inits entirety.

Disclosure: In my ‘day job’, I am a Visiting Fellow at CAEPR.

Remote area tax concessions and payments: a new review is underway

The Productivity Commission has released an Issues Paper on remote area tax concessions and payments (link here) as part of a review into these issues commissioned by the Treasurer.

The APO web site (link here) summarises the review in the following terms:

This study focuses on three long-standing measures that provide support to individuals and businesses in remote areas, namely the:

·         zone tax offset (ZTO)

·         fringe benefits tax (FBT) remote area concessions

·         Remote Area Allowance (RAA).

There have been concerns within the community that these measures have failed to keep pace with demographic, cost of living and infrastructure changes in Australia. In response to these concerns, the Australian Government has asked the Productivity Commission to evaluate these measures’ objectives, design, operation and effects, and to consider alternatives to them.

The issues paper is an early step in the review and identifies a range of potential issues requiring consideration. One of the obvious issues that will require detailed research is the absence of data relating to both the demographic makeup of recipients of each measure, and the costs to the budget of each measure. Other issues at the core of the review will be policy rationale, policy design, and alternative options for meeting existing or new policy objectives.

The three measures under study are each mainstream measures, and are available to any residents of the relevant geographic areas (which span most of remote Australia) who meet the relevant criteria.

One of the potential issues embedded within the Productivity Commissions remit is the impact of the measures in meeting broader Indigenous policy objectives, noting that remote Indigenous citizens remain amongst the most disadvantaged citizens in Australia.

Commendably, the Productivity Commission has acknowledged this, stating in the issues paper at page 7:

Due to this study’s focus on remote areas, we will evaluate the effects of remote area tax concessions and payments on remote Indigenous communities, as well as any interaction with other government policies designed to assist those communities.

I don’t propose to undertake a detailed analysis of the Issues Paper and the issues it raises for Indigenous policy, but note that there is a substantial overlap insofar as remote Indigenous citizens are affected (for better or worse) by each of the three measures. Indigenous employees / taxpayers are recipients of the zone tax offset, Indigenous businesses take advantage of the FBT concessions, and Indigenous citizens make up a substantial proportion of income recipients who are entitled to the RAA.  

There are however a number of obvious issues which will need consideration and attention.

The RAA was originally introduced to provide an equivalent payment to welfare recipients to extend the benefits of the ZTO to non-tax payers in remote Australia. Given the over-representation of Indigenous citizens in the income support cohort, and the under-representation of Indigenous citizens in employment, the disparity in rates between ZTO and RAA impacts disproportionately on Indigenous citizens, and deserves to be reconsidered.

A further potential issue relates to the impact of conditional welfare in remote Australia (ie the CDP program: link here) and the increasing evidence that as a result of punitive penalties (link here), significant numbers of remote Indigenous residents are not accessing their welfare entitlements and thus not accessing RAA.

One of the challenges is assessing the utility of these policy measures, is that they were primarily devised to assist and benefit mainstream interests, particularly mainstream taxpayers and businesses. Consequently, it can be easy to overlook Indigenous perspectives in assessing the changes in underlying rationales over time. As the Commission notes:

A range of justifications have been advanced for special assistance for people living and/or working in remote areas (box 3), although many of these are contentious. For those justifications drawing on the isolation and arduousness of life in the outback, the changes in transport, communications and living conditions over the past seventy years mean that their strength has diminished (at least in many parts of the country). Such arguments have also been challenged on the basis that ‘individuals have a free choice whether or not to live or work in remote areas and to compensate them, if they so choose, would lead to resource misallocation and reduced growth for the country as a whole’ (see Cox et al. 1981, p. 15).

While there have been improvements in the circumstances of remote citizens, the circumstances of remote Indigenous citizens are still highly disadvantaged. Moreover, they may not have the same level of flexibility in their choice of residence as mainstream citizens. These are less obvious factors that the Productivity Commission will need to grapple with as it progresses its review.

I am sure that as the review progresses, a range of new issues of relevance to Indigenous interests will arise. Hopefully the various Indigenous peak bodies will step up and lodge submissions to the review.

Perhaps the substantive take out from the release of this issue paper is to reinforce once again how mainstream programs and policies are increasingly important for any assessment of Indigenous wellbeing and opportunity.

Trade agreements and Indigenous policy: implications

The Government recently (4 March 2019) announced the finalisation of negotiations with Indonesia on a proposed trade agreement (link here and here), the Indonesia – Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

The agreement is highly significant, as the following two paragraphs form the Minister’s statement (link here) indicate:

The deal marks a new chapter in Australia’s partnership with one of our closest friends and neighbours. Indonesia offers significant economic opportunities right on our doorstep. Our neighbour has one of the fastest-growing economies in the world, averaging five per cent growth over the past two decades.

Most predictions have Indonesia on track to be the world’s fifth-largest economy by 2030. With a population of 270 million people – an expanding middle-class – the world’s third-largest democracy and most populous Muslim nation – our agreement with Indonesia helps build economic prosperity for both our nations and the region.

The agreement is yet to come into force, as it requires further ratification steps in both Australia and Indonesia (link here).

The DFAT summary of the agreement (link here) notes, under the heading Services and investment, that:

Australia’s services and investment commitments in IA-CEPA lock in Australia’s existing open policy settings, similar to those in other trade agreements. These commitments include exceptions that preserve policy flexibility in sensitive areas such as: • public health and education • social services • culture and broadcasting • indigenous policy • maritime transport (emphasis added).

The text of the agreement (Annex II: Schedule of Australia) states, inter alia:

Trade in Services and Investment

Australia reserves the right to adopt or maintain any measure according preferences to any Indigenous person or organisation or providing for the favourable treatment of any Indigenous person or organisation in relation to acquisition, establishment or operation of any commercial or industrial undertaking in the service sector.

Australia reserves the right to adopt or maintain any measure with respect to investment that accords preferences to any Indigenous person or organisation or providing for the favourable treatment of any Indigenous person or organisation.

For the purpose of this entry, an Indigenous person means a person of the Aboriginal and Torres Strait Islander peoples.

Existing Measures: Legislation and ministerial statements at all levels of government including Australia's Foreign Investment Framework, and the Native Title Act 1993 (Cth).

Implications

I wanted to make just three broad points regarding these developments.

The first is to acknowledge the preparedness of Australian negotiators involved in the IA-CEPA to carve out an exception that will allow continued policy measures designed to support Indigenous inclusion in economic and commercial development.

Second, and of most policy significance, the negotiation of these provisions by the Australian negotiators is tangible demonstration that mainstream policy settings, and in this case, mainstream international policy settings, have an increasing potential to impact on Indigenous issues.

For example, one of the current Government’s most successful policy initiatives has been the Indigenous Procurement Policy. The Government has recently published new data on the performance of the program and adopted new targets (link here and here). I remain concerned that the IPP may operate in many cases to benefit non-Indigenous firms more than promote Indigenous business engagement (link here and here). The only evaluation of the program so far published by PMC (link here) noted:

It is acknowledged that business structures will continue to vary, and some arrangements will continue to raise questions about alignment with the ‘spirit’ or ‘intent’ of the policy. The qualitative data suggested that the 50 per cent ownership structures may not work in the interests of Indigenous business partners, and due diligence was required by all parties to ensure no disadvantage.

Notwithstanding these concerns, there is little doubt that the IPP has substantial potential and has already taken Indigenous business policy to new levels. In these circumstances, it is extremely important that Australia’s international trade agreements do not constrain the capacity to strengthen the Indigenous economic policy sector further.

Third, it follows on from point two that Indigenous advocacy bodies and peaks will increasingly be required to build their capability to engage with mainstream policymakers, including international trade negotiators, to ensure that Indigenous policy interests are protected. My guess is that the provisions in the IA-CEPA related to excluding Indigenous related policy measures are not the result of lobbying or advocacy from Indigenous interests, but rather have been included at the instigation of Australia’s negotiators to ensure that existing government policies are not adversely affected. This is positive as far as it goes, but provides little guarantee that in the future, Indigenous interests will be prioritised.