Pathways toward Indigenous self-determination: hollow constructs and managed illusions

 

Neither a borrower nor a lender be;

 For loan oft loses both itself and friend,

And borrowing dulls the edge of husbandry."

Hamlet, Act one, Scene three.

A recent post on the ANU Development Studies Blog examined the structural basis of regional autonomy in Indonesia (link here). Reading it suggested largely unacknowledged parallels with Indigenous aspirations in Australia for greater self-determination. Hence this post.

First Nations aspirations for greater self-determination are most often articulated in calls for adherence to  international law and informal proclamations (such as the United Nations Declaration on the Rights of Indigenous Peoples); for the implementation of policies and programs that require community-controlled service delivery; and for the negotiation of treaties and other agreements related to land rights, water rights or other property rights. To be clear, these are all legitimate aspirations, although the devil is often to be found in the detail of the substantive terms of the arrangements put in place, and especially in the implementation phase of these arrangements. Of course, there are always opportunities for First Nations to exercise various cultural and other rights vis a vis their own membership that can be conceptualised as the assertion of parallel or shared sovereignty, a concept referenced in the Uluru Statement from the Heart. Neil Westbury and I explored the scope for greater acknowledgment of shared sovereignty in our 2019 CAEPR Policy Insights Paper titled Overcoming Indigenous Exclusion: Very Hard, Plenty Humbug (link here; pp 78-81).  

Close readers of this Blog would be aware however that I am sceptical that these aspirations for greater self-determination on their own offer a viable pathway to greater Indigenous autonomy. There are a range of reasons for my scepticism, which I won’t seek to lay out comprehensively here. But a key element underpinning greater First Nations autonomy continues to be the retention by governments of formal and often informal constraints over independent Indigenous agency. While not the only mechanism, perhaps the most common control mechanism is the retention by governments of authority over the allocation of funding even in contexts where Indigenous interests appear to have independent powers of decision making. 

The Development Policy Blog post was titled How fiscal centralisation undermines Indonesia’s regional autonomy and provides a detailed description of the operation of Indonesia’s fiscal federalism. It concluded as follows:

Indonesia’s decentralisation is thus a story of political empowerment without fiscal substance. The illusion of autonomy persists, but beneath it lies a structure of dependency reinforced by discretionary transfers. If Indonesia is serious about strengthening its regions, it must redesign its fiscal architecture to include predictable, rule-based sharing of national taxes, … granted not as temporary grants but as earned entitlements tied to governance performance. This would create a genuine incentive structure for local governments to innovate, attract investment and compete productively.

Until such reform takes place, Indonesia’s regional autonomy will remain a hollow construct. Local leaders may hold the wheel of governance, but Jakarta still controls the engine, and as long as that remains true, decentralisation will be remembered not as a triumph of empowerment, but as a managed illusion of freedom [emphasis added].

One does not have to look far to find examples of governments retaining fiscal control, and increasingly exercising influence through the use of implicit threats of funding cuts and the selective rewarding of organisations that operate within self-imposed constraints. I don’t propose to provide a list of examples here, although I have discussed several examples in posts in this Blog over recent years. While accepting or acceding to this type of government pressure is a legitimate and often a rational choice for First Nations interests, its adoption will rarely allow or lead to the development of effective advocacy pressure on governments to drive structural or systemic change aimed at enhancing Indigenous inclusion and/or self-determination.

For these reasons, I argue that one of the most worthwhile strategies available to First Nations involves building their organisational and analytic capability for public policy advocacy.  Effective advocacy involves building broad policy alliances and developing the capacity to identify emerging issues (often beyond the narrow remit of Indigenous specific policy issues). It involves engaging transactionally with other mainstream interests. It involves identifying policy priorities and a capacity to both publicly and privately make the case for the adoption of those priorities over extended periods (sometimes years).

While identifying which priorities are most important is for Indigenous interests to determine, I argue that one of them should be a focus on achieving and sustaining fiscal independence wherever possible. Step one is for the core advocacy organisations to find ways to be fiscally independent of government. Step two is for their ongoing advocacy to progressively free key Indigenous organisations of the (often hidden) fiscal constraints and controls retained by governments.

A key rationale used by governments to retain control over financial arrangements and funding is the argument (rarely admitted publicly) that they do not trust Indigenous organisations to operate accountably. The only effective and sustainable response to this argument is for Indigenous interests to ensure that they prioritise financial probity and accountability, and more importantly, that they insist that governments establish effective and independent regulatory oversight where significant funding flows benefit Indigenous interests and/or flow via community-controlled organisations.

Without a sustained commitment to full transparency and effective regulation, both on their own part and in turn from governments, First Nations interests will never surmount the arguments against the retention of government controls over funding. In other words, a focus on transparency and accountability by both governments and by First Nations interests is the sine qua non for greater self determination of key First Nations organisations and institutional frameworks. I canvassed related aspects of this argument in a recent post on Integrity in Public Policy (link here)

Crucially, if Indigenous interests cannot surmount governments’ arguments for retaining financial control over key institutional policy frameworks, they will never break free of the ‘hollow construct’ and ‘managed illusion’ of independence that infects most of the current and developing institutional frameworks across Indigenous Australia that are asserted to constitute or contribute to self-determination.

 

28 November 2025