The Commonwealth policy pivot to Indigenous economic empowerment

  

And thus the native hue of resolution

Is sicklied o’er with the pale cast of thought;

And enterprises of great pith and moment,

With this regard, their currents turn awry,

And lose the name of action.

Hamlet Act three, Scene one.

 

According to Senator Lidia Thorpe, the Prime Minister’s speech at Garma last week was an exercise in ‘optics” (link here). An editorial by the National Indigenous Times (link here) headed ‘Economic partnership or political theatre? Government’s Garma plan questioned amid worsening outcomes’ opined:

Yet there is reason to question whether this latest suite of announcements represents real change or another layer of process wrapped in new branding. Closing the Gap targets remain in crisis. Many indicators are worsening, particularly in the Northern Territory where Indigenous incarceration rates are among the highest in the world and child health outcomes lag far behind the national average.

The Prime Minister’s speech at Garma (link here) represents the culmination of the Government’s post referendum pivot to economic empowerment first articulated by the Prime Minister at Garma in his 2024 speech to Garma titled Economic Empowerment for Indigenous Australians (link here). In his 2024 speech he committed his government to take up the challenge to pursue a ‘comprehensive economic policy challenge for Indigenous peoples.’ He announced that the Government was creating a new First Nations economic partnership building on the work of the Coalition of Peaks and the nascent First Nations Economic Empowerment Alliance.

The recent 2025 speech was followed by a more detailed media release outlining the specific details of what is being proposed (link here). The key announcement is the release of the text of the new First Nations Economic Partnership Agreement between the Commonwealth and the Coalition of Peaks and the First Nations Economic Empowerment Alliance (link here). To be clear, this Partnership Agreement is national in scope and represents a new and complementary addition to the institutional framework established in 2020 with the establishment of the National Agreement on Closing the Gap.

There are two new elements to the structural architecture of this agreement: the first is the addition of the First Nations Economic Empowerment Alliance (FNEEA)  (link here) as a formal party to the Agreement; the second is the absence of the states and territories from the Agreement (in contrast to the National Agreement on Closing the Gap). I can see arguments both for and against having the states and territories involved, and on balance see the undoubted and direct involvement and engagement of the Commonwealth as a strong positive. There is no reason why the Commonwealth could not engage with relevant states and territories on relevant issues either through the regular meetings of the (so called) National Cabinet, through the Joint Council on Closing the Gap, or through targeted engagement with relevant states and territories as needed.

The key institutional changes foreshadowed in the PM’s speech and the associated media release were the references to making better use of capital and equity in special investment vehicles such as the North Australia Infrastructure Fund (NAIF) and the Australian Renewable Energy Agency (ARENA) and ‘ensuring’ these agencies ‘are delivering for First Nations communities across Australia’. Both of these foreshadowed changes remain opaque however as they are subject to detailed development by the parties to the new Partnership Agreement.

I have long been a critic of the NAIF’s failure to allocate resources to infrastructure investment in remote Indigenous communities (link here and link here). The latest review statutory review of the NAIF undertaken by former Member for Lingiari, Warren Snowdon, Dr Lisa Caffery and Professor Peter Yu was delivered two months late (link here) to the Minister for Northern Australia, Madeleine King in February this year and is yet to be publicly released (link here). One might be forgiven for thinking that the report has been warehoused to inform and feed into the new Partnership’s deliberations. On my reckoning it must be published by 1 September (the NAIF legislation requires the minister to table it within fifteen sitting days of receipt). Whether the Review’s yet to be revealed recommendations will emerge unscathed from the further prolongation of partnership review and the possible necessity for legislative amendment are moot.

A second potentially important institutional change is a proposal for the Partnership to consider ways to enhance the work of Indigenous Business Australia and the Indigenous Land and Sea Corporation, two key statutory corporations in the Indigenous Australians portfolio with economic development focus. Again, it is not clear what is intended here, although there are suggestions in the publications on the website of the FNEEA that they see potential for the considerable financial assets of the ILSC’s associated Land Fund and the IBA’s very healthy balance sheet to be made more accessible for commercial investment across the Indigenous estate.

For those who wish to dig even deeper, the NIAA FOI log (link here) includes a series of detailed policy recommendations prepared in 2019 by the Indigenous Reference Group to the Ministerial Forum of Northern Australia which canvass the issues of access to capital, land tenure reform, and NAIF reform in considerable detail. In 2019, the IRG was chaired by Professor Peter Yu. I would merely note that the devil is in the detail on these types of suggestions.

In terms of financial announcements, the Prime Minister announced an intention to make available $75m in additional funding for Prescribed Bodies Corporate (PBCs), the entities that are established to legally hold native title. I have long been an advocate of the Commonwealth moving to provide universal core funding for these bodies (link here), yet again it is unclear if the funding will be made available immediately or be delayed while the new Partnership decides on the scope of the reform of the funding model. According to data sourced from the NNTT, in August 2024 there were 280 PBCs (link here). Assuming the $75m is appropriated over three years there will be less than $90k available for each PBC each year in additional funding. This suggests that the prospect of allocating the funds equally across all PBCs will not be feasible, but the deeper take out is that the proposed funding allocation is entirely inadequate. Even were the $75m an annual appropriation, this would remain the case. The Treasurer’s comment (attached to the Prime Minister’s media release) that ‘we’re investing to equip Traditional Owners to leverage their land and sea assets to get better deals and bring jobs and wealth to First Nations communities’ is arguably factually accurate, but simultaneously an over-exaggeration of what is being provided. It will no doubt provide significant and welcome assistance to some native title groups but is not the wide-ranging reform that the Commonwealth’s media spin meisters would have us believe.

On closer examination, the Prime Minister’s announcement of $70m in Clean Energy funding refers to an Expression of Interest process which will feed into the development of a series of funding allocations to yet to be determined Clean Energy projects. The first step initiated on 4 August is to seek expressions of interest from potential project proponents. The available $70m will be allocated over three years (ie around $23m per annum) and the process by which the expressions of interest will be transformed into funding appears quite opaque (link here). What seems most likely is that the Department will allocate the available funds to projects which are already planned or underway. While the amount appears significant, and no doubt the successful applicants will appreciate the assistance, the reality is that this is a sophisticated form of virtue signalling rather than a developed strategy to drive significant impetus to expand existing energy provision frameworks.

The inarguable modesty of the Government’s funding announcements belie the Prime Minster’s rhetoric. Speaking of the significance of Garma, and framing his speech with the gravitas and aspiration accorded to the rites of serious policy contributions, the Prime Minister extolled:

this is a place for ideas, ambition – and accountability. Where we learn from the past, are honest about the present and ‘look up to the future’.

Given this ceremonial tone and rhetorical over-reach, what are we to make of this Prime Ministerial ritual at Garma? What is its purpose? What does it mean?

Perhaps the first point to make is that I am far from alone in expressing a degree of scepticism regarding whether to take the Prime Minister’s announcements at face value. The National Indigenous Times has reported critical comments from a number of prominent Indigenous individuals. As well as Senator Lidia Thorpe, Megan Davis (link here), Wayne Bergman (link here), Katie Kiss (link here), Denise Bowden (link here), all expressed either explicit or implicit reservations about aspects of the Prime Minister’s Indigenous empowerment strategy.

My own scepticism derives from the combination of four quite separate arguments. However, before listing those arguments, it needs to be stated up front that creating the conditions that facilitate improved economic security for Indigenous citizens, especially those who reside in remote Australia must be a key policy objective of Australian Governments.

Economic security is multifaceted and can not be encompasses by focussing solely on metrics such as income, or wealth, or employment status, or wellbeing. These are all useful measures but have complex causation and varying levels of durability and utility. Absolute measures are important, but so too are comparative measures as these play into complex issues such as relative status, degrees of social and political inclusion or exclusion. Further, both absolute and comparative measures of economic wellbeing or status are impacted by the social, political and economic environment within which thy exist. To make an extreme point, a healthy bank balance is no help in a famine. Or to make the same point in a more relevant way, for so long as there is an alcohol and drug epidemic across remote Australia (and I am not referring only to Indigenous people), then the underpinnings of Indigenous economic security will be unachievable (link here).

In turn, it becomes clear that ‘economic empowerment’ may well be a useful shorthand to describe a particular policy agenda, but unless carefully defined, it runs the risk of being utilised for essentially ideological reasons. In particular, there are indications in the FNEEA publications that the implicit policy agenda being developed under this terminological carapace is designed to shift policy priorities away from so called ‘welfare’ or ‘social’ sectors and towards institutional reforms and government funding allocations designed to support and benefit Indigenous access to revenue or profits-based wealth creation activities (commercial projects). Clearly there is a place for a focus on wealth creation and enterprise in any economic strategy, but in my view not at the expense of more basic economic foundations.

The arguments which suggest that the Prime Minister’s policy pivot to Indigenous economic empowerment should not be taken entirely seriously encompass both inherent shortcomings in the strategy itself and importantly what is not there or is under-emphasised.

First, the strategy represents a shift away from focussing on improving and reforming the foundations of economic security (which I would list as comprising education, employment, health / ableness, housing and community order). Each of these five elements are under enormous pressure in remote Australia and as I have argued for almost two decades (link here) these government shortfalls mean remote Australia is approaching a point of systemic breakdown or failure. Shifting policy attention to wealth creation (or economic empowerment) while ignoring essential reforms addressing deep-seated and ongoing government failure in the underlying elements of economic security would be fundamentally flawed policy.

Second, the strategy represents a pathway which can be utilised to reframe the public debate around the closing the gap agenda (yet again) in ways that allow governments to escape the annual reminders of their unwillingness and incapacity to allocate the intellectual and political resources as well as the funding necessary to successfully and substantively close the gap. Short term tactics work in the short term but ultimately don’t deliver strategic reform. The economic empowerment agenda sounds plausible and will buy the government time, and if Treasury can find an acceptable political path forward, it may buy time for another decade. However, eventually such a policy approach will fail because it is not based on rigorous policy analysis, ignores the fundamental drivers of economic security, and is not based on a transparent dialogue with all affected interests.

Third, the strategy creates the preconditions for the systemic co-option of the Indigenous leadership. Negotiations in private, combined with the increasingly parsimonious approach to transparency by the Commonwealth and other governments means that the temptation to ‘buy’ support from the Indigenous leadership for sub-optimal policies will be difficult to resist going forward. While the FNEEA Charter (link here) includes apparently robust individual conflict of interest provisions (see clause 10.5) related to the business of the Alliance, and the Partnership Agreement (link here) similarly includes sections on managing individual conflicts of interest and transparency (see sections 66 to 70), the inherent ‘commercial’ confidentiality involved in some aspects of the Partners’ discussions, the deep-seated reluctance of the Commonwealth to engage the wider public in policy issues, and the ultimate power imbalance between the Commonwealth and the First Nations partners means that there will inevitably be a heightened risk of inappropriate influence being applied either to individuals or to the Partners as a whole. The only effective protection against this is much greater commitment to transparency. For example, all funding to the First Nations Partners should be automatically made public, and the responsible Ministers should be required to make an annual statement to Parliament detailing all significant communications with, and funding decisions taken relating to, the First Nations Economic Empowerment Partnership.

Fourth and finally, the elephant in this policy room is the failure of the Commonwealth to address in any meaningful way the existing and ongoing use, and in some cases misuse, of financial benefits flowing from resource development on Indigenous land. The challenges involved are extraordinarily complex and raise difficult ethical and philosophical questions that cannot be addressed by unilateral government fiat. At a minimum, there is a need for much more robust regulatory oversight, and much more proactive financial literacy education. Most importantly however, there is an urgent need for an ongoing and open discussion around the overarching policy frameworks guiding the use, allocation and distribution of negotiated financial benefits by Indigenous landowners, and the potential alternatives which might be considered to ensure more equitable distributions overall, and greater savings and investment by beneficiaries rather than immediate consumption. The current free-for-all around the distribution and use of financial benefits reflects extremely poorly on the Commonwealth governments of the last thirty years. Any attempt to ‘empower’ Indigenous landowners without addressing the underlying rationales and impacts of these substantial and essentially unregulated financial flows is akin to using a fuel bowser to fight a fire.

Taken together, these four arguments constitute an overwhelming case for a comprehensive reconsideration of the current policy pivot by the Commonwealth. Unfortunately, the short-term political calculus strongly favours what I would characterise as a cynical policy framework with enormous opportunity costs, substantial risks (which will be borne by current and future generations of remote Indigenous citizens) and a limited contribution to the longer term public interest.

For an alternative view, I recommend readers take a look at the submission to the upcoming Productivity Round Table by Indigenous Business Australia (IBA) (link here). IBA is a member of FNEEA.

Conclusion

The Albanese Government pivot to Indigenous economic empowerment is in my view deeply flawed policy. It is not based on the rigorous policy analysis necessary to underpin a major shift in policy and political focus. The pivot will raise expectations but not deliver except for a minority of commercially and politically astute Indigenous entrepreneurs. Because institutional reform is so hard, it risks devolving into a focus on picking a slew of individual projects where Indigenous involvement can be facilitated and subsidised. Picking winners is fine until you begin picking losers. The pivot will steal oxygen from the policy discussions necessary to reform the underlying policies constraining the sustainable delivery of the real elements of economic security and thereby avoid the hard discussions with the states and territories who control many of those policy levers. The substantive import of the flawed logic appears to be: why argue about reforming housing provision, education, disability reform, employment, alcohol harm or hyper incarceration when the prospect of universal wealth is within our grasp. Additionally, the pivot portends the overhaul of the closing the gap policy framework by creating a plausible and intuitively attractive alternative policy framework.

The fundamental problem with this policy pivot by the Albanese Government is its role in allowing the Commonwealth to avoid the fundamental and necessary reform challenges in those crucial policy sectors that ensure economic security especially in remote Australia where Australia’s most disadvantaged citizens reside. It is an economic policy in name only; like Rumpelstiltskin, it promises to spin straw into gold.

 

6 August 2025