The Yunupingu High Court Decision: some downstream policy issues

 

When clouds are seen, wise men put on their cloaks;

When great leaves fall, then winter is at hand;

When the sun sets, who doth not look for night?

Untimely storms makes men expect a dearth.

Richard III, Act two, Scene three.

 

The Federal Court decision which led to the appeal to the High Court in this case was handed down in May 2023. I published two posts following that decision (link here and link here). In those posts I contemplated the potential policy implications in the event that the High Court ultimately were to endorse the Federal Court’s decision.

In early March this year, the High Court handed down its decision and upheld the Federal Court decision. I will leave the technical textual analysis to the lawyers, but it seems to me that the analysis I offered in May 2023 continues to hold true in broad terms. I recommend readers re-read those posts as they have continuing relevance. For a good summary of the implications of the High Court decision, I recommend the brief by international law firm Ashurst (link here).

The High Court decision has implications primarily for the NT, but also in theory for the ACT and perhaps other territories (link here).

In terms of the core future policy implications, I would nominate three related (and arguably intertwined) issues which will shape the ultimate outcomes:

1.    The nature of the compensable native title interests that were extinguished;

2.    The quantum of potential compensation likely to flow both to particular native title holding groups and overall; and

3.    How best to manage whatever compensation benefits ultimately flow.

As I pointed out in my previous posts, and as was reiterated by Ashurst, the flow-on effects of this decision will take time to emerge, and there may be an attempt by the Commonwealth to short-circuit future litigation and potential expansion of liability by negotiation of wider agreements along the lines of what occurred in Western Australia following the Mabo decision. Whether these flow-on implications arise from litigation or agreements, one insight which is indisputable is that the compensation funds that flow will essentially be one-offs (even if they flow over some negotiated period). Indigenous interests therefore have an incentive to prepare by building their capability to manage significant compensation flows. The obvious starting point therefore is to consider the feasibility of the development and use of mechanisms and policies which deliver perpetual benefit-flows. There are also strong arguments in favour of Indigenous interests considering the best policy architecture for managing such flows. However, the successful implementation of these types of arrangements are not straightforward.

Perpetual Funds

At present in Australia, we have a spectrum of governance arrangements for managing native title benefits rangeing from the ad hoc arrangements applying to native title payments operating in Western Australia (where there is limited visibility of their effectiveness) through to the more structured arrangements in Victoria where the Victorian Traditional Owners Funds Limited (link here) provides a financial investment service to the various Traditional Owner Trusts which have negotiated agreements with the Victorian Government. The NT of course has its own existing high level governance arrangements for managing royalty flows and native title financial agreements plus a range of subsidiary mechanisms essentially controlled or at least influenced by individual land councils or their constituents. Obviously, the NT’s existing overarching policy architecture will be the starting point for any consideration of necessary future arrangements. However it is clear (at least to me) that these extant structures are sub-optimal and require reconsideration and substantial improvement to meet future circumstances. In the rest of this post, I seek to outline at least in broad terms why I believe the current institutional architecture for managing financial benefits for Traditional owners in the NT are not fit for purpose.

The Aboriginals Benefit Account

The starting point for any consideration of the policy architecture for land rights and native title payments in the NT is the Aboriginals Benefit Account (ABA) established by the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA). This account is an institutional policy mechanism whose roots can be traced back to Paul Hasluck’s time as Minister for the Interior. It involves the Commonwealth appropriating an equivalent amount to the mineral royalty revenues accruing to the NTG (and the Commonwealth in relation to uranium).

The ABA is effectively controlled by the commonwealth minister for Indigenous Australians and its funds are allocated for various legislatively specified purposes: land council administration, land council distributions to corporations representing those impacted by mining, and various sundry costs such as township leasing. In addition, the ALRA legislation provides for various payments to the recently established NTAIC, now known as Aboriginal Investment NT (AINT), comprising a one-off capital injection of $500m and three annual payments of $60m, as well as annual administration costs. Importantly, there has always been an element set aside for beneficial grants to the wider NT Aboriginal community.

The ABA does not represent the totality mining related payments to Aboriginal Territorians as payments negotiated by land councils are outside the ABA, and so are some older trusts such as the Groote Eylandt Aboriginal Trust established by missionaries before the advent of land rights.

Aboriginal Investment NT

According to the most recent financial statements for the ABA (which can be found in an appendix to the NIAA Annual Report: link here), the ABA currently holds assets valued at $1.47bn offset by liabilities of $566m comprised primarily of the (tautologically described) ‘initial one-off endowment of $500m’ to NTAIC plus a further payment of $60m being the last of three legislated $60m payments designed to provide funding certainty to AINT its establishment phase. Any additional funding for the Future Fund and/or the Community Ready Fund is at the entire discretion of the Minister of the day. The ABA’s residual current net asset base is thus $907m. The annual appropriation to the ABA is based on the quantum of mining royalties levied by the NT Government which in turn is influenced by production levels in the various mines on Aboriginal land in the NT. By far the largest contributor to the NT Government mining royalties is the GEMCO manganese mine on Groote, scheduled for closure in the early 2030s.

According to the AINT financial statements in its annual report (link here), and its Strategic Investment Plan (SIP)(link here), AINT has allocated $500m to its Future Fund which is intended to finance its Community Ready Fund which is used to make community grants, and to invest in sector development and what the Plan terms nation-building investments. The Future Fund is designed to accumulate for at least ten years with the aim of providing a funding source into the medium/longer term. Its target rate of return is CPI +3%. The SIP notes that the AINT Board had allocated $155m to the community ready fund. The 2023-24 financial statements list AINT’s net equity holdings (assets less liabilities) as just under $680m.

There are two implications arising from the legislated framework for AINT. First, while its annual operational costs will be funded from the ABA, the funds available for distribution from its Community Ready Fund over the next decade will essentially be in the hands of the Government. This is the Fund which makes beneficial grants to community organisations across the NT.

Second, and importantly, the idea of a perpetual Future Fund is essentially a chimera. Assuming AINT achieves its target rate of return of CPI + 3%, then by 2035 it will have grown to $672m in 2025-dollar terms. From there on the use of an assumed 3% returns for distribution to the Community Ready Fund would finance a grant of $20m per annum in 2025 dollars in perpetuity. When one considers that previous annual grant levels from the ABA were around $40m per annum, and have recently dropped to around $25m, it becomes apparent that unless investment returns greatly exceed the target, the AINT Future Fund will require further endowments merely to ensure AINT can keep doing what the ‘old’ ABA was doing.

The more general and most important point deriving from this analysis is that the notion of establishing a perpetual fund to finance the economic transformation that is required in the NT (and the rest of remote Australia) is much more difficult than governments and the Indigenous leadership in the NT (which negotiated and agreed to the legislated architecture of the AINT) have been prepared to admit.

Implementation Challenges

The AINT was a signature reform, yet it will not deliver transformational change as presently funded and I would argue as presently designed. I will expand on what I consider will be necessary to drive such transformational change in a later post. While it is possible that a future Government will allocate more capital to the AINT from the ABA and/or that the AINT’s investment performance will be substantially better than its target, there is also a significant downside risk that governments will prefer to retain direct control over the balance of the ABA (and its significant automatic annual accretions) and/or the possibility of either poor or unlucky financial management by AINT. Moreover, the provision of automatic operational funding for the administration of AINT is in my view a potential structural flaw as it removes the crucial incentive that ensures management is financially rigorous and replaces it with an incentive to be politically attuned. Ultimately, this may be to the disadvantage of Indigenous interests in the NT.

Apart from highlighting the challenges of establishing financial Trusts or Future Funds that will maximise the longevity of any compensatory benefits that flow from expanded compensation arrangements due to Yunupingu, I wanted to focus on the ABA and AINT, because they each appear to provide a mechanism that could be used (or arguably misused) to fund compensation payments arising from future litigation in the NT.

When AINT [then referred to as the NT Aboriginal Investment Corporation or NAIC] was first foreshadowed during Minister Ken Wyatt’s term, there was widespread opposition from some quarters to its design. I was amongst those with concerns and published two posts on this blog (link here and link here). One of the concerns I raised then was that the establishment of the AINT was only partial leaving considerable funding in the hands of the minister. Moreover, this funding discretion was unfettered as the establishment of the AINT was the rationale for abolishing the ABA Advisory Committee. It is now crystal clear that the Minister retains considerable leverage over the AINT by virtue of her power to approve or not approve operational funding and the additional endowment top ups which will be necessary merely to maintain current levels of beneficial grants.

In my second post, I pointed to the major increase in funding for the land councils announced by Minister Wyatt and suggested that it was not coincidental in ensuring that the land councils supported the amendments. I thought then, and think now, that this was a short-sighted decision by the land councils. Whether the land council leadership realised it or not, an objective assessment suggests that they and their advisers were outmanoeuvred and collectively co-opted by the Commonwealth.

The most recent ABA financial statements indicate that last financial year the Minister approved over $80m in grants to private sector entities from the ABA (it was $60m in the previous year) [see page 186 of the ABA financial statements (link here)] with minimal transparency while the AINT committed in principle grant funding of $20.6m and $8.7m (see pages 27 and 29 of the annual report) and actually spent only $9m (see page 75 of the Annual Report). The ABA’s revenue growth has slowed over the past year following damage to the wharf at Alyangula, however it can be expected to continue at around $300 to $400 million per annum over the next decade. In other words, the ABA’s financial assets are growing at a faster rate than AINT’s financial assets generally and particularly the AINT Future Fund.

The bottom line was that the Minister retained access to the largest slice of the ABA pie with unconstrainted flexibility to make beneficial grants from the ABA while Aboriginal interests have through AINT gained access to a smaller slice of the pie, with constrained flexibility and high expectations from the communities seeking to overcome economic and social disadvantage.  

Risks

The design architecture of the ABA following the establishment of the AINT creates a significant risk that is considerably heightened by the Yunupingu decision. Given that the ABA is funded by appropriations to be spent for the benefit of Aboriginal people in the NT, it is theoretically possible that the Commonwealth might decide to utilise the ABA funds under the control of the Minister to finance any compensation liabilities it accrues into the future because of the High Court Yunupingu decision. More likely (given that the Commonwealth has form in this respect) the Commonwealth might seek to use its control and the financial heft of the ABA to negotiate a financial settlement of all potential litigation with the land councils and their constituents (either separately or together).

We are already seeing the Commonwealth seeking to constrain the likelihood that the land councils will ‘rock the boat’. It is clear that the political salience of the land councils has increased in recent years as both sides of politics have searched for ways to engage with disenchanted voters across the NT (link here).

The risk for Indigenous interests generally is that the land councils have a limited policy remit and perspective yet effectively operate as proxies for Aboriginal interests generally. The risk for land based Aboriginal interests is that the land council leadership and bureaucracies become increasingly vulnerable to co-option by governments.  The level of payments to the land councils from the ABA has increased considerably over the past five years. In just one year, from 2023 to 2024, ministerially approved administration payments to the four NT land councils rose from $109m to $138m, an increase of $28.9m or 21%. This generosity does not come free; it has an ulterior purpose and also has an opportunity cost in foregone investment by the ABA in pressing Indigenous priorities.

Of course, a new conservative government might revert to the earlier tactics and seek to dismantle what they see as the hegemony of the land councils (link here). Either way, Indigenous interests stand to lose out.

Way forward

In my view it is time for the Indigenous leadership in the NT to reconsider their strategic vulnerabilities and begin to strengthen the ramparts defending their key institutions. A key element in such a reconceptualised strategic approach would be to focus on building stronger governance capabilities, committing to stronger transparency (no matter how uncomfortable it seems) as an insurance against poor governance, and working harder to build a unified advocacy capability. Self determination is never handed to anyone on a plate; it must be argued for and grasped. And once gained it must be defended and used carefully. It is not possible for any group entirely dependent on government funding to exercise real self-determination.

The Yunupingu decision is the latest in a long line of High Court decisions seeking to remediate the incapacity and unwillingness of executive governments through time and across the nation to address deep-seated disadvantage, inequality and discrimination. The decision is important, but transforming newly acquired rights for Indigenous interests into tangible and transformational gains requires building the advocacy capabilities to reform institutions and the political unity to protect the incremental gains made in previous times. In both these arenas, a commitment to high quality governance and maximum transparency will be the friend and not the foe Indigenous interests, not least in undermining the proclivity of governments to co-opt those whose interests they decide to ignore or set aside. There are reasons that governments avoid transparency and seek to operate in the shadows.

Conclusion

The downstream policy implications of the High Court decision in Yunupingu are potentially significant. The expand the footprint of Indigenous rights in the Territories and particularly the Northern Territory. Yet taking advantage of those rights will not be easy and will require not just the preparation of new compensation litigation, but the development of strategically sophisticated political and advocacy capabilities, and a preparedness to resist the propensity of governments to co-opt emerging leaders who might otherwise constrain their attempts to maintain the status quo ante.

 

17 April 2025

 

Misdirected focus: the case for institutional policy reforms to alcohol supply

                                            To weep with them that weep doth ease some deal,

                                        But sorrow flouted at is double death

Titus Andronicus, Act three, Scene one.

The House of Representatives Standing Committee on Health, Aged Care and Sport has recently released a report titled Issues paper relating to the health impacts of alcohol and other drugs in Australia (link here). The report is effectively an interim report and is designed to form the basis of a more comprehensive report assuming the next Government is prepared to renew its terms of reference. While the terms of reference span mainstream society, the report unsurprisingly addresses Indigenous issues at various points.

Like most Parliamentary reports of this nature, this Issues Paper carefully navigates its way through what is a complex and at times prickly thicket. Its value in the Indigenous policy context is to remind readers of the multitude of ways in which AOD, the report’s acronym for alcohol and other drugs, impacts indigenous people and communities. Thus, there is mention of Foetal Alcohol Syndrome (FASD), criminal justice, numerous health impacts and in passing the potential influence of poor social and environmental infrastructure in driving AOD use and abuse. It is not my intention to seek to summarise the report, but rather I intend to cherry pick a number of propositions as a stepping stone to further discussion.

The report provides an excellent introduction to the overwhelming numbers of research activities, advocacy NGOs and treatment and service providers all operating across the mainstream system.

In the Chapter on AOD services, at paras. 4.19 to 4.36, the report provides an extended discussion of Indigenous issues related to AOD use, relying in large measure on submissions from NACCHO and the Queensland based Institute for Urban Indigenous Health.  These submissions were largely premised on arguments for community-controlled service provision based on evidence that Indigenous people are over-represented in the statistics depicting the adverse impacts of AOD abuse. At para 3.58, the Committee records this plea:

The Institute for Urban Indigenous Health submitted that Aboriginal and Torres Strait Islander-led research and evaluation of AOD services must be recognised as a separate, dedicated stream of research and evaluation component of the AOD system. Such an approach would recognise that AOD has a disproportionate effect on Indigenous communities. According to the Institute, more Aboriginal Australians die due to drug and alcohol-related causes than any other disease group, including suicide and cardiovascular illnesses. Among young Aboriginal people aged 15 to 24, alcohol is the number one contributor to the burden of disease.

In a discussion of the links between AOD use and the prison population generally, the report notes (para 459):

People entering adult prison are more than four times as likely to report recent illicit drug use than people in the general community, and seven times more likely to drink to excess, according to the Legal Aid Commission of New South Wales (Legal Aid NSW). Mental health conditions also tend to be over-represented in the prison population.

Given the over-representation of Indigenous citizens in the prison system, these correlations are likely to apply to that subset too.

Chapter Five of the report deals with preventing and reducing harm caused by alcohol and other drugs. This strikes me as the crucial set of issues for policymakers. At para 5.18, the report notes a submission arguing:

 there is growing evidence to support a shifting of focus away from the law enforcement response, ‘especially with regard to communities disproportionately impacted by policing, including LGBTQ+ people, but also First Nations communities and people experiencing complex mental distress’.

The crucial issues for reducing the harm of alcohol across the community are somewhat buried within the report. At para 5.18 and following, there is a discussion of regulatory oversight policy issues including product labelling. At para 5.100, there is an important point made by the Foundation for Alcohol Research and Education regarding the extent to which the current regulatory regime in Australia is out of date and in effect unfit for purpose. At para 5.97, the report notes:

Multiple submissions, … drew the Committee’s attention to the World Health Organization’s three key strategies … in the regulation of alcohol beverages to reduce health harms from drinking: • restricting exposure to alcohol advertising • increasing excise taxes on alcohol beverages, and • restricting the physical availability of retailed alcohol.

There is discussion in the report in relation to each of these points, albeit largely anodyne and descriptive. There is no criticism of the fact that advertising of alcohol appears to be largely based on industry formulated schemes. As is the way with these reports, the views of diverse interests are laid out without detailed analysis or critique. It is largely an exercise in ‘He said / she said’…. Perhaps we are meant to be reassured by the Committee’s observation (para 5.123) that:

In their submissions to the inquiry, industry representatives highlighted that the majority of Australians were drinking responsibly and in moderation.

The Committee’s final commentary (para 5.131) is carefully framed to acknowledge the range of points raised, but it assiduously steers clear of suggesting that there may be a role for government in controlling alcohol advertising, and crucially in limiting access to alcohol or in raising taxes to reduce demand and to remove inconsistent volumetric rates for tax on alcohol. The Opposition members’ addendum goes further making very clear that the current report has no status whatsoever and is merely an issues paper. They go on to make crystal clear that commercial interests must be engaged before reaching any substantive policy positions:

In chapter two, in relation to the regulation and effects of alcohol there is a need to hear from both sides before coming to any concluded views. In chapter three there are a range of controversial observations that have been made about harm minimisation and the approaches of law enforcement—these need to be tested with evidence from state and territory police. In chapter five, a range of highly contested policy responses are raised. It will be important that the Committee receives submissions and takes evidence from a much wider range of stakeholders to test the evidence, on all matters contained in that chapter, before reaching any conclusions.

For Indigenous interests, this report provides a case study which should cause them to rethink their advocacy strategy in relation to alcohol. The advocacy voices representing Indigenous prison inmates, Indigenous victims of family violence, Indigenous families of individuals suffering acute health issues, Indigenous children growing up in alcohol induced poverty and trauma are either non-existent or severely muted. Instead, the Indigenous interests making submissions to this inquiry are service delivery organisations with a particular focus on accessing the resources necessary to ensure service delivery is effective. These are important and legitimate interests, but they are not the whole picture. The consequence is that the report is able to effectively ignore these hidden or muted perspectives in favour of a focus on service delivery. This amounts to a structural blind spot that will only be filled when Indigenous interests adopt a broader advocacy strategy. In my view, the Coalition of Peaks (which I acknowledge is fundamentally under-resourced) should make addressing these systemic issues a priority for its advocacy efforts. The absence of such a broader systemic perspective in Indigenous advocacy leaves the field open to those mainstream interest groups arguing against reform.

The clear if implicit message from the major parties is that they do not wish to upset the apple cart vis a vis the major alcohol industry interest groups. Instead of policy reforms aimed at reducing access to alcohol and other drugs, the major parties will focus on the provision of health services and other supports. The report made no attempt to address the particular issues facing remote Indigenous communities (but see para 6.4) notwithstanding that they arguably bear the brunt of lax regulation and encompass the most vulnerable subset of the Indigenous population. The submissions to the Committee by NACCHO and the Institute for Urban Indigenous Health (available on the Committee website link here) were premised on making the case for community-controlled service delivery and largely ignored the importance of institutional reforms to reduce easy and cheap access to alcohol, and the issues associated issues around incarceration and domestic violence. The NIAA submission ( #140 at this link but not available on its website) focusses on its financial support for AOD treatment:

Through the IAS, the NIAA provides approximately $70 million annually to deliver around 90 AOD activities across Australia. IAS AOD funding is supplementary to Health and state government funding and prioritises treatment that is culturally safe and tailored to First Nations clients. These services offer evidence based, and trauma informed models of care for First Nations people and their families. This includes individual and group based therapeutic care, client-based family support, case management, referrals, and AOD prevention and education activities.

In relation to regulation, the NIAA states:

There are various regulations, laws and restrictions that aim to reduce alcohol related harms in jurisdictions around the country. While some laws, such as the legal drinking age, are in place across Australia, the majority of alcohol regulation is the responsibility of the states and territories. The weight of evidence suggests measures to reduce the availability of alcohol through strengthened controls on price and promotion can contribute to reducing harm and improving public safety.

The submission’s conclusion states:

While substance use impacts all Australians, it disproportionately affects First Nations people. The NIAA emphasises the importance of working in partnership and taking a strengths-based, trauma informed, culturally safe and holistic approach to addressing harmful AOD use. It is critical that First Nations voices are elevated throughout the Inquiry, and that the Committee’s recommendations are informed by the unique histories, cultures and experiences of First Nations people.

The subliminal message from the NIAA then is don’t look to the Commonwealth to drive institutional policy reform, its someone else’s responsibility. See this page on their website too (link here). For what it’s worth, I just don’t buy that argument.

The appendix to the NIAA submission ( #140 at this link) which I strongly recommend readers seek out and read very usefully provides a comprehensive and powerful snapshot of the impacts of alcohol on various sectors. Here are a few data points I have cherry picked from the NIAA submission appendix:

… First Nations people were 4.2 times as likely to die from alcohol-related causes as non-Indigenous Australians. They were also 3.8 times as likely to die from alcoholic liver disease, and 4.7 times as likely to die from mental and behavioural disorders due to alcohol use….

AOD are involved in more than half of all police-reported family and domestic violence incidents in Australia, and are likely to be involved in a substantially greater proportion of all family and domestic violence…. For homicides in the period from 1989–90 to 2016–17, 72% of First Nations offenders were under the influence of alcohol at the time of the incident, as were 71% of First Nations victims…

If those data points don’t make the case that a national crisis exists and is ongoing for Indigenous communities in relation to the use of alcohol, then what will?

For those still unpersuaded or just interested in exploring the issues further, the following posts deal with various aspects of alcohol policy in remote Australia (link here, link here, and link here). The consistent theme of these posts has been to point out the excessive influence of the alcohol industry in shaping remote alcohol policy, to encourage the Commonwealth to engage proactively in driving reforms including in relation to the accessibility of alcohol.

Conclusion

If Australia was serious about reducing Indigenous incarceration, we would implement significant policy reforms in relation to alcohol advertising, taxation and retail availability.

If Australia was serious about reducing family violence within Indigenous contexts, we would implement significant policy reforms in relation to alcohol advertising, taxation and retail availability.

If Australia were serious about improving Indigenous health status, we would implement significant policy reforms in relation to alcohol advertising, taxation and retail availability.

If Australia were serious about improving socio-economic status within the Indigenous community, we would implement significant policy reforms in relation to alcohol advertising, taxation and retail availability.

If Australia was serious about closing the gap, the Commonwealth would step up and lead, and one of its first steps would be to implement significant policy reforms in relation to alcohol advertising, taxation and retail availability.

Unfortunately, it is quite clear from a close reading of this report that neither the Government nor the Opposition are serious about any of these issues.

 

18 March 2025

Indigenous housing system reform: alternative approaches

 

How shall your houseless heads and unfed sides

Your loop’d and window’d raggedness, defend you

From seasons such as these? O, I have ta’en

Too little care of this!

King Lear Act three, Scene four.

This month, AHURI published a new paper titled ‘Indigenous housing support in Australia, the lay of the land’ (link here). Authored by a team led by Associate Professor Megan Moskos, the paper is one element in a larger inquiry into developing a suggested architecture for a long-term governance and resource framework for sustainable and effective Indigenous housing in Australia (link here). The research team has substantial expertise in research into Indigenous housing issues.

This is an important research report as it lays the foundations for the development of what is planned to be a comprehensive proposal for a national policy reform agenda for Indigenous housing in Australia. A second research paper will present evidence collected in eight case studies of different elements of the Indigenous housing system, and a third research paper is planned to combine reports one and two to present a national Indigenous housing governance and resourcing framework. I strongly recommend the report to readers, as it combines comprehensive analysis, builds on and references a deeper literature related to Indigenous housing, and begins the process of exploring potential policy and reform options.

However … the report and the larger inquiry are seriously ambitious as they are seeking to develop an analytic framework that encompasses a truly diverse and complex set of institutional and administrative arrangements across eight jurisdictions, that are themselves confronting rapidly changing demographic circumstances spanning major urban centres to very remote communities and homelands.  Moreover, the public sector environment within which policies are developed and implemented is itself facing significant change in the face of societal level political pressures and ongoing social, economic and technological change both nationally and globally. The report itself acknowledges this when it refers to ‘a very dynamic policy and program environment’ as the first key point of the Executive summary.

The report does an excellent job of summarising at a high level the state of Indigenous housing governance, resourcing and regulation across the nation. It avoids assessing the trajectory of the Closing the Gap strategy in relation to both mainstream and community-controlled housing (I am not optimistic). But it is more definite in pointing to the absence of a single agency with overall responsibility for developing a strategic direction for Indigenous housing policy and for comprehensive reporting on its outcomes. I would have been more critical, as this is a role that a proactive Minister and NIAA could and should run with. Their failure to do so is likely a reflection of more systemic constraints. Instead — notwithstanding the Commonwealth’s powers granted in the 1967 referendum — decisions on strategies and funding allocations have in recent years increasingly been left to the states and territories. The Commonwealth does retain some specific funding in the NT (and thus concomitant influence over policy should it wish to exercise it) because at the prescient insistence of the Land Councils, a substantial number of social housing leases on Aboriginal land were granted to the Commonwealth and are sub-leased to the NT Government.

The report argues that the tenure profile of Indigenous households nationally differs fundamentally from that of mainstream households. Over two thirds of Indigenous households live in private-sector tenure (home ownership or private rental) and around one quarter of Indigenous households are in social housing (in contrast to only 4 percent of mainstream households). The report argues that high rates of homelessness, overcrowding and housing affordability stress along with the distinctive distribution of the Indigenous population necessitates a very different set of policy responses than those for non-Indigenous households. This is a conclusion that warrants reconsideration in my view.

A crucial element in the analytical edifice the report constructs is an assessment of what is termed Unmet Core Housing Needs.  Utilising an established methodology for assessing housing needs, the report estimates that in 2021, some 47,700 Indigenous households had unmet core housing needs. This comprised three elements: over 81% arose from rental stress (ie rent payments above 30 percent of household income), 14% arose from severe overcrowding, and 4% arose from inadequate housing. According to the report:

Areas with the greatest levels of unmet need include many parts of New South Wales and Queensland, where rental stress is concentrated, and remote Australia, where much of the unmet need arises from overcrowding in social housing (page 4).

The report goes on to identify ‘a strong need’ for the development of a national strategic framework underpinned by robust, needs based, evidence and accompanied by state and territory strategies that set clear targets. It also argues for a national body to be established by legislation. Such a body, the report argues, should provide a mechanism for local and regional housing interests to be represented and heard at the national level. The policy frameworks established should be flexible and responsive and adopt a ‘pathways approach’ from homelessness to social housing and from private rental to home ownership.

Finally the report argues that:

Any policy development should also account for the geographical and demographic diversity of Indigenous populations… flexible strategies are required that provide for representation and responsiveness to local contexts and needs. … Most importantly, it means the focus on remote housing does not come at the expense of urban housing but remains [focussed] on the distinctive needs of Indigenous people in both urban and remote areas (page 5).

As one would expect, the report’s data analysis is rigorous and perceptive. Where I diverge from the perspective of the report’s authors  is in the normative assumptions that are embedded within the report’s vision for the future.

My high-level critique of what is proposed is as follows:

First, the proposed architecture for the Indigenous housing strategic framework essentially mirrors the closing the Gap architecture put in place in 2020, where in effect the NIAA vacated the field and rather than playing the role of ringmaster, adopts a more passive role of being just one jurisdiction among nine. This is not what the electorate voted for in 1967, and it has led to a leadership vacuum in the closing the gap process, with the Coalition of Peaks trying to push the unresponsive Commonwealth and the other jurisdictions as if they were pushing lengths of rope. Moreover, there is not one system, but nine separate administrative, programmatic and political systems. We currently have that in the Indigenous housing sector too, but maintaining it is not reform. While a legislated body could theoretically create an effective leadership framework with the Commonwealth in partnership with Indigenous interests in the driver’s seat, the political will to implement such legislation does not exist at present. In my view, setting out to establish a separate policy framework for Indigenous housing will inevitably end up in the same swamp the Closing the Gap process is bogged down in.

Second, while I understand the desire to create a unified Indigenous housing framework that somehow removes the structural tensions that exist between remote and non-remote Indigenous populations, the implicit assumption that rental stress is on par with overcrowding and inadequate housing as the third element of unmet core housing needs is in my view counterproductive. Rental stress is as much an outcome of poverty as of housing policy deficiencies. While I accept unreservedly that non-remote Indigenous populations have significant socio-economic disadvantages to overcome, hyper-incarceration being perhaps the most egregious and obvious example (link here), the elevation of rental stress to a statistical equivalence with the consequences of overcrowding and inadequate housing as currently experienced in many remote communities is high risk and thus a policy mistake.

In my view, the policy priority ought to be unequivocally built on removing all overcrowding and inadequate assets in the social housing system. The inevitable outcome of not doing so would be that more numerous non-remote Indigenous interests would incentivise government to redirect urgently required resources for new housing and infrastructure towards urban and regional populations that are already the beneficiary of basic essential services. I will happily admit that my views here reflect my own normative value framework that sees the circumstances of remote Australia as being a national disgrace and therefore an overarching priority. In defence of those views however, I would argue that housing is crucial, and the appalling state of remote housing is (along with low employment, declining education outcomes and ongoing health issues) a core driver of the rock bottom socio-economic status of a substantial cohort of remote citizens and a key driver of the social crisis that currently envelops many remote communities (link here).

Third, given recent shifts in public opinion post referendum, and indeed recent shifts in global politics which will inevitably place extraordinary pressure on national budgets whatever the partisan makeup of the government in office, there is in my view a very strong argument for rethinking any strategy based on establishing a separate Indigenous housing system. Instead, I am inclined to a view I have heard articulated more generally by the Shadow Indigenous Australians Minister, Senator Price, namely, to shift to a mainstream model built around social housing provision, scope for community housing solutions to complement the social housing asset base, and broad access to Rent Assistance, with a robust needs-based criterion for the allocation of funding resources at its core.

Such a model if implemented effectively would maximise the chances of new and ongoing social housing funding being allocated by governments over the coming decades. Indigenous citizens are over-represented in the social housing cohort, so would be significant beneficiaries while not having the burden of arguing for specific indigenous based funding allocations.

My perspective on this issue is reinforced by the reality that the nascent Indigenous advocacy capabilities across the Indigenous housing policy domain are comparatively weak and are no match for competing interest groups who will want to get access to any available funding. While mainstream social housing advocacy capability found primarily in NGOs is also comparatively weak vis a vis corporate interests, it is more robust than the Indigenous advocacy capability. I am confident that the extent of Indigenous housing needs across the board are such that Indigenous interests would inevitably obtain a substantial proportion of available resources providing a robust needs-based system applied. I might note in this context that the AHURI report tiptoes around the issue of Indigenous advocacy capabilities. Yet any realistic assessment of the scope for building greater self-determination throughout the Indigenous housing policy system must address this issue.

I should note that accepting a mainstream needs-based funding model does not mean that there is no scope for community-controlled entities to pay a significant role in program delivery in particular locations or regions and even in devising more innovative policy arrangements such as greater use of community housing organisations. It is worth remembering in this context that the most successful community-controlled organisations in the country are the medical services that are built on the foundation of access to a mainstream needs-based funding model, namely Medicare.

Finally, given I have been relatively freewheeling in my critique, it is incumbent on me to outline at least in brief my own vision for a future housing policy framework:

Some of it I have mentioned already. A needs-based mainstream policy framework for allocating resources for social housing. A stronger Commonwealth role in shaping the national social housing policy system. A mainstream policy focus addressing rental stress as part of a wider strategy to address economic exclusion and inequality in society generally. Prioritising addressing overcrowding and inadequate housing over rental stress. Prioritising the needs of disabled citizens in both social housing design and management. A push to considerably expand the use of community housing organisations (whether Indigenous controlled or not) which both own and manage housing stock across both remote and non-remote Australia at a scale that makes them commercially viable. A recognition that there is market failure present in the provision of private housing in remote communities and this requires the use of innovative leasing solutions and/or community trusts which sit between the private and public systems. The AHURI website includes some research papers by Louise Crabtree and others on Community Trusts as a policy solution for remote communities (link here).  A renewed focus on infrastructure provision in remote contexts, including by expanding the remit of the NAIF in financing social infrastructure (link here). A much stronger focus on equitable access to renewable sourced power in remote communities (link here). A stronger role for strengthened Indigenous advocacy within high level mainstream policy forums for the housing system (noting that part of the process of strengthening capability is to strengthen internal transparency and governance).

Such a broad model would not remove the ongoing challenges. It would however avoid fracturing the social housing system into artificial silos, such as for Indigenous citizens, for disabled citizens, for recent immigrants, for mainstream citizens…instead it argues for a single overarching model with robust needs-based systems driven by evidence. The advantages of such a model are more than ideological unity; they include minimising the risk of multiple queues based on differing criteria and thus moving at different speeds in terms of waiting times for access to housing, waiting times for repairs and maintenance, waiting times for ancillary support, and maximise choice while reducing risk of governance failure. These risks are not trivial; the history of Australia is that when the nation has a choice, it chooses to prioritise the non-Indigenous queues.

The bottom line is that reform of the national housing system for Indigenous people is desperately overdue. But so too is the mainstream social housing system in need of fundamental reform. Whatever the design of the new model, it will require more than additional funding. It requires the Commonwealth Government to step up. It will require innovative thinking and focussed perseverance at all levels. It will require leadership and deep consultation. Yet it is almost impossible to get wider community engagement on the issues involved. This report (and hopefully the follow up reports) provide a platform for wider discussion of these issues. AHURI and the report authors deserve congratulation for their efforts. While they have deepened the community’s knowledge base on these issues, I hope that over the coming months they and the various peak Indigenous housing bodies can also communicate their ideas to the wider community and broaden our knowledge base as well as taking the first steps in building the case for real housing reform.

 

27 February 2025

The Missing $41m payment from AMT to ARAC: a trust deficit

 

Round and round the cauldron go;

In the poisoned entrails throw….

Sweltered venom, sleeping got,

Boil thou first i’th’ charmed pot.

Macbeth, Act four, Scene one.

 

In my previous post (link here), I provided commentary on a number of the Questions on Notice asked by Senator David Pocock. I mentioned in that post that I would deal with this question in a separate post. Unfortunately, it involves both a convoluted narrative of events and some accounting issues. The bottom line however is much simpler: a Senator asked a question in good faith based on allegations made in correspondence from residents of Groote Eylandt, and received a dismissive, misleading and probably substantively incorrect response from the NIAA which we must presume had the endorsement of the Minister which raises more questions than answers.

Here is the question and answer provided:

Senator David Pocock’s Question #8

In an article dated 20 July 2024, The Saturday Paper referred to correspondence to your predecessor signed by dozens of Groote residents which alleged that an amount of $41m was paid from the Anindilyakwa Mining Trust (AMT) to the Anindilyakwa Royalties Aboriginal Corporation (ARAC) but which has not been accounted for. A recent review of the relevant publicly available financial statements pertaining to ARAC appears to confirm this. There is also explicit evidence that the ALC effectively controls ARAC and has a direct role in managing ARAC finances. Is the Minister/NIAA aware of the $41m payment and if so has the matter been investigated? If not, will the Minister instruct the NIAA or ORIC to advise her regarding the $41m payment and the circumstances of its payment by the AMT and receipt/utilisation by ARAC?

NIAA Answer #8

The NIAA has made enquiries regarding the recognition of payments made from the Anindilyakwa Mining Trust (AMT) to the Anindilyakwa Royalties Aboriginal Corporation (ARAC) and has been informed that reporting differences arose because of the entities recognising these transactions in different financial years. The NIAA notes that the accounting records of both entities are subject to independent audit. Detailed questions regarding the recognition of financial transactions of the ALC and associated entities should be directed to the ALC.

Below I set out my detailed commentary on the answers to the question and various related issues:

Comment mcd #8

I have previously posted contextual comments on this issue in three posts. The posts were titled Royalties, flawed governance and non-transparency: a potent brew (link here) dated 26 July 2024; The Anindilyakwa Royalties Aboriginal Corporation: micro accountabilities; macro policy implications (link here) dated 3 August 2024; and Annual Reports on Groote: an unconventional assessment (link here) dated 18 January 2025. I strongly recommend that readers keen to understand the context within which the AMT, ARAC and the ALC operate read these posts, especially the first two.

In the light of the NIAA answer provided above I sought to revisit the financial statements for the relevant periods. I was surprised to find that the 2022 Audited Financial statements for ARAC had been removed from the ORIC website without explanation. I find this somewhat strange especially given its relevance to the issues raised by the correspondents form Groote referred to in the Saturday Paper article. I requested a copy and was provided one, but as of 24 February 2025 it has not been published on the website. Financial statements for the previous years which I had obtained from ORIC in 2024 have still not been published on the ORIC website. Given that section 35(2) of the Aboriginal Land Rights (Northern Territory) Act 1976 requires land councils to distribute section 64(3) royalty equivalent payments on to CATSI corporations, there would seem to be substantial merit in the Registrar ensuring that the financial statements of CATSI corporations in receipt of such payments are published on the ORIC website. In any case, should readers wish to read the relevant financial statements I cite below, I suggest you contact ORIC direct.  

The basic facts are as follows.

The 2022 AMT financial report lists under the heading Grants a payment to ARAC of $41,324,957.

The 2022 audited financial statement for ARAC under the heading Revenue records a s.64(4) grant from the ABA of $9.6million (which would have been approved by the Minister) and a grant of $14.3m in s.35 payments from the ALC (the equivalent amount in 2021 was $34.8m). Total income is listed as $23.0m. There is no record of any grant being received from the AMT.

The 2023 audited financial statements for ARAC identify a series of grants and other revenue, including $31.9m in section 64(3) payments from the ALC.  Total income for 2023 is $40.2m. In addition, an amount of $8.1m in investment income is recorded. There is no record of a grant or payment for $41.3m being banked in the 2023 year.

In neither ARAC financial report is there a line item showing a payment of $41,324,957. The explanation provided to the Senate by NIAA that the payment was recognised in a different financial year is thus prima facie incorrect. Moreover, it has the effect of misleading the Senate and the wider community. That is not to say there may not be a perfectly appropriate explanation, but without a forensic audit that identifies the bank account(s) into which the AMT payment was deposited, we will never know.

The comment in the NIAA answer about the financial affairs of the relevant entities being independently audited reeks of either naïveté or an attempt at gaslighting. Auditors can make errors or be provided with incorrect information.

As pointed out in my previous post on ARAC (link here) and extracted in the Appendix below, the ARAC 2022 financial statements identify the cancellation of an infrastructure debt commitment (for $39m) from AMT to ARAC. Whether the auditor was misinformed or failed to follow up the issue, it is clear that the $41m was not deposited in the 2022 year (and not in a later year) and that this is reflected in black and white text in the 2022 financial statement. This reinforces the conclusion that the unidentified person who the NIAA consulted regarding the transaction has misled them; they in turn have misled the Minister and she in turn has misled the Senate (given that Ministers approve or are responsible for answers to Questions on Notice).

Rather than focussing on the independence of auditors while providing incorrect information, NIAA should perhaps focus on the persons who do have the requisite knowledge, namely, the Directors of ARAC. The Directors of AMT and of ARAC were identical and apart from independent Directors were also ALC Board members (see the discussion in my earlier post ‘a potent brew’ (link here). Both the AMT and ARAC Boards considered and formally resolved to approve and certify as true and correct the financial statements for the respective entities in the 2022 year. Prima facie (even on a hypothetical assumption that the NIAA explanation is correct) there appears to have been a failure of the ARAC Board to identify the absence of the $41m grant in ARAC’s revenue for 2022 and 2023. Has the Minister or NIAA requested the Registrar of Aboriginal Corporations to investigate this prima facie error? In this context, see the comments in my recent post on annual reports (link here) related to the ARAC Board’s decision to purchase at considerable cost (sourced from funds notionally provided for the benefits of traditional owners) personal liability insurance for the Directors. Did this decision raise any concerns with the Registrar or the NIAA when it was reported in the ARAC financial statements? And if not, why not?

The assumption that in the face of allegations of a missing $41m, that NIAA, the ALC’s regulator, would ask a person they fail to identify for an explanation and then accept that explanation without being taken through the detailed figures that would allow the allegation to be put to rest, seems at best naïve and incompetent. The fact that this explanation is confidently provided to the Senate as if there is nothing to see here is extraordinary. It reeks in my view of indifference, deliberate disregard, obfuscation and disrespect.

The whole purpose of the Estimates process is to allow Senators to obtain an explanation from the Executive arm of the activities of agencies and corporations within a legislative framework that is entirely the responsibility of the Minister. If the NIAA can’t provide the assurance the Senate seeks, they should themselves take the action necessary to obtain it for Senate. ARAC is not an entity that appears before the Estimates Committee and is incorporated under the CATSI Act that comes within the Minister’s portfolio. The ALC which appears to exercise effective control over ARAC and assists with its bookkeeping and preparation of financial statements is within the Minister’s portfolio. The former CEO oversighting ARAC’s bookkeeping has been dismissed by the ALC at a meeting attended by the NIAA on grounds which the Minister has seen fit not to make public. The former CEO’s spouse (who has not been mentioned in any of the public statements related to the termination the CEO by the ALC and the Minister) was at various times an employee of the ALC working in the Royalty Development Unit that assisted corporations such as ARAC with their finances and operations.

Conclusion

Given the complex web of potential and actual conflicts of interest in play, and the fact that there is a missing $41m also in play, the Minister and the NIAA have an obligation in my view to do much better than they have with this answer and the others discussed in my previous post.

Indeed, given the extraordinary refusal to agree to commission an independent forensic investigation (bearing in mind that not all malfeasance will necessarily be corrupt or criminally illegal), it is difficult to avoid the conclusion that the Minister and NIAA are, through their inaction and deliberate obfuscation, contributing to the social and economic harm that will inevitably emerge once the full ramifications of the maladministration on Groote becomes apparent.

The Minister and her agency are accruing a substantial trust deficit through her unwillingness to be transparent on what has transpired within the ALC and its associated entities. Given the standard of answers provided to the Senate in response to Senator Pocock’s questions, that trust deficit will inevitably continue to grow unless decisive action is taken. My recommendation is that the Minister should immediately request the ANAO to undertake or commission a comprehensive and independent forensic audit of the operations of the ALC and its associated entities over the past seven years.

Without such decisive action, the levels of distrust will at some point reach a tipping point where wider political consequences will take hold and potentially destroy the current institutional framework of land rights as we know it. In the meantime, the fallout will inevitably have adverse impact not just on the constituents of the NT land councils, but on those nominal servants of the public interest who have been prepared to look away while the cauldron of distrust boils over.

 

Appendix

The following text is taken from my previous posts and provides more contextual detail on the information above. It has been lightly edited.

Extract from Royalties, flawed governance and non-transparency: a potent brew

The AMT/ARAC financial transactions

The notes to the 2016 Financial statements for the AMT which are available on the on the ACNC website (link here) include the following text:

12 Commitments During the year ended 30 June 2016, Anindilyakwa Mining Trust committed to contributing $3,500,000 to the Economic Development Unit (which has been established by the Anindilyakwa Land Council) on or prior to 30 June 2018. The first instalment of $500,000 was made during the 2016 financial year. 

The notes to the 2017 AMT Financial Statements state that the first instalment of $500,000 was made during the 2016 financial year and the second instalment for the first year of $500,000 and the first instalment for the second year of $750,000 was made during the 2017 year.

The notes to the AMT 2018 financial statements comment:

12 Commitments During the year ended 30 June 2016, Anindilyakwa Mining Trust committed to contributing $3,500,000 to the Economic Development Unit (which had been established by the Anindilyakwa Land Council) of which $1,000,000 was paid during the 2016 financial year and $750,000 was paid during the 2017 financial year. During the 2018 financial year, an instalment was made for $1,250,000. Therefore, as of 30 June 2018, the Trust has a $500,000 outstanding commitment.

During the year ended 30 June 2017, Anindilyakwa Mining Trust committed to contributing $51,122,311 to Anindilyakwa Royalties Aboriginal Corporation (ARAC) for costs associated with the purchase of infrastructure and funding of the operational budget. During the year, $6,000,000 was paid to ARAC. Therefore, as of 30 June 2018, the Trust has a $45,122,311 outstanding commitment. [mcd comment 24 Feb 2025: it is worth noting that the payment of $6m from AMT to ARAC was transparently listed in ARAC’s revenue for the 2018 FY. A clear contrast with 2022 and 2023.]

The 2019 AMT financial report included a note indicating in relation to the 2016 commitment, a further instalment of $500,000 had been paid thus meeting that initial commitment. The note also states that in relation to the 2017 commitment, the AMT had paid an instalment in the 2019 FY of $5,975,000, thus leaving an outstanding balance to be paid of $39,147,311.

The 2020 and 2021`AMT financial reports note that no payments had been made and the outstanding commitment remained at $39,147,311. The Notes to the 2021 AMT financial report note that the outstanding amount was paid in FY 2022; this suggests the payment was made in the first half of the financial year. The 2022 AMT financial report lists under the heading Grants a payment to ARAC of $41,324,957. No rationale is provided for why the amount has increased from $39m to $41m.

There are no further payments reported in the 2023 AMT financial report.

The 2022 financial statement for ARAC was previously available on the Registrar of Aboriginal Corporations website. It has been taken down (link here). Under revenue, it records a s.64(4) grant from the ABA of $9.6million (which would have been approved by the Minister) and a grant of $14.3m in s.35 payments from the ALC (the equivalent amount in 2021 was $34.8m). Total income is listed as $23.0m. There is no record of any grant being received from the AMT. Nor is there any record of such a grant being banked in the following financial year.

That a payment of $41m appears to have disappeared is somewhat strange. It is even stranger when one considers that the AMT has no staff and its administration appears to be undertaken by Mutual Trust, an established and highly experienced financial services firm, that ARAC has no staff (see the 2022 ARAC General Report) and its office is at 58-62 Macleod Street Cairns, the same address where the Commonwealth transparency portal lists ALC’s Finance and Royalty Development Unit (RDU) employees being located. The staff servicing ARAC Board meetings and probably implementing Board decisions (including managing income and payments) are likely part of the ALC’s Royalty Development Unit, a small team in Cairns. Clearly a forensic audit is required to determine the reason for the apparent disappearance of these funds. I should acknowledge that I was alerted to the issues around the missing $41m by the recent story in the Saturday Paper (link here).

 

Extract from The Anandilyakwa Royalties Aboriginal Corporation: micro accountabilities; macro policy implications

Each of the six ARAC financial reports from 2017 to 2022 inclusive include a statement, signed by two Directors and resolved by the Board, outlining the corporation’s purpose as follows:

The Corporation's operations purpose [in its first year] has been, to hold assets and manage statutory royalty equivalents and negotiated royalties in such manners as determined by the Anindilyakwa Land Council, consistent with its goals for effective, responsible and sustainable use of such royalty flows [emphasis added].

This statement appears to make plain that the ALC exercises direct control over the operations of ARAC….

… In my previous post I noted that the payment of $41m from the AMT to ARAC did not appear to be accounted for in the ARAC 2022 financial statements. With the availability of the previous year’s reports, it was possible to track the recording of an amount of $39,147,311 as an ‘AMT infrastructure debtor’ in the ARAC 2020 and 2021 financial reports. In 2022, the year that the AMT paid ARAC $41,324,957, there was no record in ARAC’s Financial statements of any such grant being received. However, there was a line item now called Payment in Advance (whereas it was previously termed AMT Infrastructure Debtor) which showed an outstanding debt of $39,147,311 in the previous year, but nil in the current 2022 FY. Rather than resolving the problem, this treatment of the outstanding commitment, whether intentional or not, obscures the recipient of the payment while acknowledging that the commitment no longer applies. [The discrepancy between the amount of $39m and $41m appears to be related to differing CPI treatments of the original commitment by the AMT and the ALC].

 

24 February 2025

Nothing to See Here: NIAA’s answers to recent Senate Questions related to Groote

Let’s talk of graves, of worms, and epitaphs,

Make dust our paper, and with rainy eyes

Write sorrow on the bosom of the earth.

Richard II, Act three, Scene two.

The NIAA has provided answers to a series of Questions on Notice lodged By Senator David Pocock following the last Estimates Hearings in November 2024 (link here). The questions related to the ongoing situation on Groote Eylandt, the status of various issues within the Anindilyakwa Land Council and the NIAA’s actions throughout this rather sorry and complex saga.

Given that there appears to be few external parties taking an interest in these issues (apart of course from the ongoing NACC investigation which may not report for months), I feel it is incumbent upon me to provide some commentary if only for the record. For the larger context, I recommend readers look at my previous post and in particular, the article I co-authored with Bill Gray in the Mandarin (link here).

In this post, I have focussed on those answers which I consider to be inadequate. In a subsequent post, I will address the issues raised by the answer to Question #8.

I have italicised the questions and the NIAA answers and indented my comments in relation to each answer.

 

Senator Pocock Question #1

Will the Minister initiate an independent, comprehensive, forensic audit into the administration and operations of the ALC and of those Aboriginal Corporations that received funding determined by the ALC, so that the new Board of the ALC can move ahead in confidence to regain the trust of the Anindilyakwa community and other key stakeholders, and achieve the standard of governance that will ensure the ALC can properly represent its people and achieve its mission? If not, why not?

NIAA Answer #1

The former Minister for Indigenous Australians, the Hon Linda Burney MP referred concerns regarding Anindilyakwa Land Council (ALC) governance and operations to the National Indigenous Australians Agency (NIAA) for review and action as required. In response, the NIAA commissioned an independent review of the ALC’s responses to the Australian National Audit Office (ANAO) governance audit and has subsequently been overseeing the ALC’s actions to improve its governance, transparency and accountability.

The NIAA has and will continue to refer all relevant matters to law enforcement and other agencies as required. 

Comment mcd #1

A preliminary and more general point: The NIAA is under the direct control of the Minister. Both she and her agency have regulatory responsibility for the ALC (and for the Registrar of Aboriginal Corporations who is the regulator for CATSI Corporations who are the beneficiaries of section 64(3) payments). Any shortcomings of the NIAA are ultimately the responsibility of the Minister. Any failure to answer questions asked are a failure of the Minister as well as her agency.

The Minister/NIAA have not answered the question regarding the forensic audit. The so-called ‘independent’ review commissioned from BellchambersBarrett was constrained in its terms of reference and focussed only on the formal ANAO recommendations and not on the wider issues which were identified by the ANAO in its fine-grained analysis. The NIAA and the ALC were involved in finalising the BellchambersBarrett Report, and for this reason it was clearly not independent. The answer refuses to contemplate an independent forensic review and fails to provide any assurance that this is covered off in some other way. The deeper question this raises is why? Why won’t the Minister initiate the action required to get to the bottom of what has transpired on Groote? Why doesn’t she want to the public to know?

Senator Pocock Question #3

Can the Minister confirm that the conflicts of interest identified by the ANAO in May 2023 and again more recently in the BellchambersBarrett review of August 2024, have now been addressed to the satisfaction of the Minister and NIAA?  If not, what are the issues still outstanding?

NIAA Answer #3

The ALC has developed a schedule of activity to address the ANAO and Bellchambers Barrett recommendations, including those associated with conflicts of interest management. The NIAA has been overseeing the ALC’s performance of those activities and is satisfied that implementation of acceptable arrangements for conflict of interest management will be progressive over the forthcoming months. The conflicts of interest noted in relation to the former ALC Chief Executive Officer (CEO) have been resolved following the termination of Mr Hewitt and his removal from positions in all associated entities. The current ALC Board Chair does not hold any of the positions that gave rise to the conflict of interest concerns in relation to the former Board Chair.

Comment mcd #3

The question has not been answered. The answer makes clear that the Minister is not yet in a position to be satisfied (“acceptable arrangements for conflict-of-interest management will be progressive…”), yet they have not gone on to identify the issues that remain in progress.

The unqualified assertion that the termination of Mr Hewitt and the election of a new Chair addresses the conflicts of the past is problematic. It ignores the complex web of influence previously exercised by the former CEO and his spouse, and the inevitable expectations on Groote that the benefits flowing form those prior arrangements will continue. The current status and oversight of the various positions and financial interests previously held by Mr Hewitt’s spouse remain completely obscure.

One important but unintentional revelation of this answer is the reference to Mr Hewitt’s ‘removal from positions in all associated entities.’ How was this achieved? Did the Minister and NIAA give Mr Hewitt and his spouse some kind of ultimatum to resign (and if so what was the quid pro quo) or did the ALC direct the ‘associated entities’ to dismiss him, thus confirming that they in fact exercise control over these entities? The public interest requires that clarification and answers to these questions be provided.

Senator Pocock Question #4

Has the Minister/NIAA approved any arrangements for the management of the conflicts of interest that were identified in the ANAO and Bellchambers Barrett reports? If so, will the Minister please table those arrangements.

NIAA Answer #4

Formal approval of the ALC’s conflict of interest arrangements is the responsibility of the ALC Board in consultation with the ALC Audit Committee and ALC management.

Comment mcd #4

The implication is that the Minister and NIAA have not approved any arrangements for the management of conflicts of interest. The ALC has been riven with actual and potential conflicts of interest for at least six years; this Blog has previously identified and discussed many of them. Without ministerial engagement and approval of the actions being put in place, there is no guiderail in place to prevent the re-emergence of conflicted influence over decision-making in the future. Moreover, without a forensic audit, it is unclear whether the pre-existing conflicts of interest led to misallocation of funding and resources (with detrimental impacts on individuals and corporations on Groote), and whether there is remedial action required to rectify such misallocations. The laissez-faire approach of the Minister and NIAA is patently inadequate and represents in my view a serious lapse of ministerial responsibility. The minister has numerous and far-reaching powers under ALRA to play a direct role in the ALC’s administration for however long it takes to establish a new set of watertight operational procedures.

Senator Pocock Question #5

Can the Minister confirm that the Aboriginal residents of Groote Eylandt have not been subject to predatory commercial behaviour and financial losses arising from the actions of the former CEO, his spouse and the former Chairman of the ALC? If not, what action is she taking to ascertain the extent of the potential losses to the community?

NIAA Answer #5

As previously noted, the former Minister referred concerns regarding ALC to the NIAA for review and action as required. The NIAA has and will continue to refer all relevant matters to law enforcement and other agencies as required.

Comment mcd #5

One obvious problem with this answer is that not all commercially predatory behaviour will be illegal or corrupt. If it is the case that legal and non-corrupt predatory behaviour has occurred, the question becomes: is the Minister prepared to allow the officers and staff of agencies within her portfolio to engage in such behaviour, and more directly, why was she not prepared to take action within her regulatory powers when she became aware of such activities rather than hiding behind the convoluted and time-consuming processes of law enforcement agencies?

Given the deliberate policy of minimising the disclosure of relevant information, we do not know if the issue of potential predatory commercial behaviour was even of concern to the Minister or her predecessors, nor whether it is of concern to her today.

What were the concerns that she referred to the NIAA and onwards to law enforcement? When were those concerns formally referred to the various agencies? Which agencies received referral? How long transpired between the Minister and her agency becoming aware of the concerns and referrals being made? Why won’t she indicate the general nature of those concerns? I am sure the people who are the subject of any investigations understand that investigations are underway. Why keep the public in the dark? What has the Government got to hide?

The bottom line is that the answer to this question is deliberately designed to hide crucial accountability information. This is not in the public interest.

Senator Pocock Question #6

According to the ALC website, in the period 2019 – 2023, the ALC distributed $361m of s64(3) monies to various corporations and organisations on Groote Eylandt. Can the Minister/NIAA confirm that these distributions were determined by the ALC in compliance with the provisions of the ALRA, including s23(3) & s23 AA of the Act?

NIAA Answer #6

Distributions were determined by the ALC in compliance with the provisions of the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA).

Comment mcd #6

This answer exudes unwarranted confidence. In my view it is both misleading and wrong. Section 23AA requires the ALC to undertake its functions inter alia, in a fair manner. The ANAO identified a series of payments to corporations where the ALC CEO played a major role in the application and/or was on the Board or had a conflict. The obverse of this favouritism is unfairness to the traditional owners who might otherwise have been beneficiaries.

The ALC’s effective control of associated corporations (in my view implicitly acknowledged in the actions taken by the NIAA to have Mr Hewitt vacate all his positions on associated entities) is itself an effective breach of the legislative requirement that land councils pay 64(3) payments to (independent) corporations and not to an entity it controls.

The provision (s.23(1)(ea)) that allows land councils to assist local corporations has a rider that such assistance must not cause the land council ‘to incur financial liability or enable it to receive financial benefit’. The ANAO found instances where the ALC could not demonstrate that this was the case. More substantively, where a land council effectively controls a corporation, then the liabilities of the corporation are those of the land council. This inevitably leads to a breach of section 23(1)(ea).

In a grave error of judgment, the NIAA and Minister appear to have lost sight of both the first and second Laws of Holes (link here). They should stop digging, and the Aboriginal citizens on Groote are still in a deep hole.

Conclusion

The answers to the questions above are in my view deliberately obfuscatory, are incomplete and by failing to provide the full story have the effect of misleading the Senate. In some cases, they are just wrong. This is a continuation of the approach adopted from the first day the ANAO tabled its performance audit in May 2023, which is best described as a policy of ‘nothing to see here!’ At best, this involves putting the political interests of the Government above the public interest. At its worst, it is much more serious than that. It erodes trust in Government and diminishes the quality of our democracy.

The failure to get to the bottom of what has transpired on Groote (not all of which will necessarily meet the definition of corruption, or criminal behaviour) will lead to ongoing and deep-seated disadvantage to the Aboriginal population of Groote Eylandt and may have wider implications for the viability of the core institutions established by the Commonwealth’s NT land rights legislation. These disadvantages will certainly be political, and financial, but most importantly they will also have social consequences for the fabric of community life on Groote. This is the tragedy that is unfolding.

 

21 February 2025