Industrial relations horse-trading: mainstream reforms impact the Indigenous policy domain.

 

 

All things are ready, if our minds be so.

Henry V, Act 4, scene 3.

 

The ABC interviewed Tony Burke, the Minister for Employment and Workplace Relations, this morning on the status of negotiations with the cross-bench. He claimed that the Government now had the support of Independent Senator Pocock to pass the Government Industrial Relations Bill. In explaining the terms of the Government’s concessions, he listed a third change outside his portfolio dealing with the establishment of an independent panel of experts to provide public advice on welfare payments prior to each budget. The ABC is reporting the proposal in the following terms (link here):

Finally, the third change sits outside the scope of these laws but could be consequential for people on government support payments such as JobSeeker.

An independent panel will be established every year to review the level of support payments — such as JobSeeker — ahead of each federal budget.

That advice to the government will have to be published at least a fortnight before the budget is handed down.

Senator Pocock said he was happy with the changes, and the new review of support payments was a "game-changer" for those living below the poverty line.

 

The Guardian’s report (link here) emphasised the role of the Committee in providing advice on the structural challenges of inclusion:

On the ABC’s Insiders Burke revealed that a third plank of the deal would create “a new statutory advisory committee made up of experts that, in the lead-up to every budget, will provide independent advice as to the structural challenges on economic inclusion”.

The committee would review “the different rules and the levels of payments to provide independent advice to the government, as those budgets are put together”, Burke said.

 

I wanted to make two brief points regarding this proposal.

 

First, if implemented, it will amount to a fascinating precedent of the Parliament and the Executive Government being prepared to make policy decisions under a carapace of public independent advice. While it will not constrain the freedom of movement available to governments and the Parliament, it represents a sensible and overdue addition to the public information base on policymaking decisions that will, for better or worse, substantially affect the poorest quintile of the Australian population. This change can only add to the quality of policymaking in a domain where governments have traditionally been prone to disregard the very tangible impacts of their policy decisions on people’s lives. Given that the panel is described as a ‘statutory advisory panel’ it seems that Senator Pocock has — wisely in my view — ensured that these changes will be legislated.

 

The parallels with the proposed Indigenous Voice are obvious and provide a clear rationale for why a legislated mechanism for the Voice is overdue. Of course, there is a world of difference between a focussed expert Advisory panel with a remit to provide key structural advice on one narrow set of issues, and a proposed Indigenous Voice with a remit across numerous functional issues including health, education, social security, environment, heritage, land rights, and so on. Mastering the technical policy expertise to add value on a broader front will be a major challenge for the Indigenous Voice if and when it is established.

 

The second point worth considering is that this mainstream mechanism will impact proportionally more Indigenous citizens than mainstream citizens. The AIHW (link here) has noted that Aboriginal and Torres Strait Islander people disproportionately receive government cash pension or allowance as their main source of income compared to non-Indigenous Australians.

 

My very rough back of the envelope calculations suggest that the indigenous proportion of the lowest income quintile is around 7 percent, almost double the Indigenous  share of the population overall.

 

Whatever the actual proportion, the key takeout is that the effectiveness of the newly proposed mechanism is of major significance to Indigenous interests, as its analysis and recommendations will disproportionately impact the 45 percent of the Indigenous population whose major source of income comes from government payments. These citizens are not limited to the lowest income quintile (see below).

 

To my mind, this is a structural reform with huge potential over time for mitigating the poverty levels within the Indigenous community and more generally amongst the poorest Australians.

 

 

Appendix for those who are interested in the derivation of the 7 percent figure.

The calculations below are back of the envelope only and in particular depend for their accuracy on the income levels of those newly identified Indigenous citizens added between the 2016 and 2021 censuses.

 

The ABS (link here) reports that

As at 30 June 2021 there were 984,000 Aboriginal and Torres Strait Islander people, representing 3.8% of the total Australian population. This is an increase of 185,600 people (23.2%) since 30 June 2016.

 

In other words, the 2016 Indigenous population was around 800,000

 

The AIHW reports (link here) that

The 2016 Census of Population and Housing (Census) found that almost 4 in 10 Indigenous adults (37%) were living in households with the lowest equivalised gross weekly household income (1st quintile), almost twice the proportion of non-Indigenous adults (20%). One in 10 (10%) Indigenous adults were living in households with the highest income (5th quintile). Among non-Indigenous adults, there was an even spread across all five income quintiles.

 

The same link notes that:

The 2018–19 National Aboriginal and Torres Strait Islander Health Survey (Health Survey) found that the main sources of income for Indigenous Australians aged 18–64 were employee cash income (44%; 195,700) and government cash pension or allowance (45%; 200,200) However, based on responses from the 2014–15 National Aboriginal and Torres Strait Islander Social Survey, 47% of Indigenous Australians aged 18–64 received a government cash pension or allowance as their main source of income, compared with 14% of non-Indigenous Australians.…..

….There exists a large gap in understanding the implications of income support and its association with health, despite 45% of Indigenous Australians aged 18–64 receiving income support as their primary source of income in 2018–19.

 

If we take just the lowest quintile, 37% of the 2016 population equates to 296,000. If we assume the Indigenous proportion in the lowest quintile is roughly the same as in 2016, the Indigenous population in the lowest income quintile will be around 364,000. The Australian population is estimated at just above 25.9 million in 2022 (link here). If we assume the mainstream population remains evenly spread across the five income quintiles, then the lowest income quintile will have a population of around 5.2 million. The indigenous proportion is around 7 percent, almost double their share of the population overall.