Our
doubts are traitors, and make us lose the good we oft might win, by fearing to
attempt."
Measure for Measure, Act one, Scene four
The Economic
Inclusion Advisory Committee: 2026 report to Government has been published
on the DSS website (link
here). The separate Appendix is of particular salience in relation to the
consideration of reform priorities and options in the Indigenous policy domain
as it includes a letter to the Treasurer and Minister for Finance (link
here) signed by Jenny Macklin (Chair of the Advisory Committee) and Pat
Turner (Lead Convenor of the Coalition of Peaks) summarising the outcomes of a December
2025 roundtable convened by the Advisory Committee on Indigenous economic
inclusion.
In 2024, I
published a post on this Blog in relation to that year’s Economic Inclusion
Advisory Committee Report (link
here). There is a direct line of sight from the recommendations in that
report to this most recent one. The Committee (and its Chair) is nothing if not
persistent!
Writing recently
in The Conversation, Advisory Committee member Peter Whiteford, and
economists Jenny Gordon and Roger Wilkins, provide a highly useful and
accessible summary of the Advisory Committee Report (link
here). I recommend interested readers of the report begin with this
overview which provides a useful contextual background to the impressively
comprehensive span of the Report. Here is a short extract from their article:
Disadvantage
is a concept that goes beyond income poverty to encompass people’s outcomes,
including deprivation and social exclusion….
…
By far the highest rates of deep social exclusion in 2022 were experienced by
people who are unemployed (38.8%), public housing tenants (36.5%), people
receiving income support (20.5%), people with long-term health conditions or a
disability (16.3%), people with low educational attainment (16.3%), lone
parents (15.7%), and Indigenous Australians (15.5%).
For
public housing tenants, people who are unemployed, people receiving income
support and those with low educational attainment, rates of deep disadvantage
have increased significantly.
For
Indigenous Australians, rates of deep disadvantage nearly doubled between 2010
and 2014, but then fell back, although still higher than in 2010.
Turning to the
issue of the salience and significance of exclusion (or low levels of economic
inclusion) for Aboriginal and Torres Strait Islander citizens, the Report is an
extraordinary resource, filled with insightful, analytically valuable and policy
relevant data. However, (and this is not a criticism) the Report mirrors the
reality of mainstream politics and policy insofar as the bulk of its analyses
and discussion relates to the broad span of mainstream policy issues relevant
to poverty, deep disadvantage and economic exclusion. There is a focus on
programs and policies that deliver benefits to individuals either universally
or based on needs-based criteria of one sort or another. This leads to an
implicit bias against policies and programs for corporate interests (eg the
diesel tax rebate) and/or focussed on capital investments such as
infrastructure of defence investments. This is a function of the Committee’s
terms of reference but does mean that there is a potential blind spot in terms
of the incidence or impacts of these latter policies on citizens. For example,
defence or infrastructure expenditures create employment ― and opportunity
costs ― which have an impact (for better or worse) on equity and inclusion. While
the Report’s analysis only occasionally mentions or utilises Indigenous
specific data points, the focus of the analysis is invariably on issues where Indigenous
citizens are over-represented amongst those most disadvantaged.
An important,
but unstated element of the Report’s analysis arises from the reality that the most
significant drivers of deep disadvantage for Indigenous citizens are primarily
reflected within the statistics cited in the Report on mainstream unemployment,
mainstream health, mainstream education, and mainstream housing. This would
also be the case with the extent of economic exclusion of disabled citizens or
any other group of citizens (though these are not generally mentioned as a
separate category unlike the treatment of the category ‘Indigenous Australians’).
My point is that Indigeneity per se is not a driver of disadvantage or poverty,
but rather, that the drivers of poverty and disadvantage affect Indigenous
people disproportionality. The Report (and the extract above from The
Conversation) is potentially confusing on this issue. This is not merely an
academic argument; it has real world consequences. The solutions to addressing Indigenous
disadvantage (in the main) lie in applying needs based (or means tested)
reforms to mainstream drivers of disadvantage (while of course not being blind
to the incentives we might be creating in doing so).
The point I am
making was recognised by the Indigenous negotiators of the National Agreement
on Closing the Gap when they insisted on the inclusion of the Priority Reforms
in the Agreement, and in particular Priority Reform One directed to reforming
mainstream institutions to make then more inclusive.
The major
exception to this point is where mainstream institutions (policies / programs)
have, for one reason or another, been supplemented or replaced by Indigenous
specific programs. These are a comparatively small proportion of Commonwealth
outlays and are generally (but not always) utilised in remote regions where
mainstream institutions have not been developed, or where the rights of Indigenous
peoples are sui generis such as cultural heritage protection and native
title. The classic example combining both remoteness and cultural rights
relates to communal and inalienable land tenure which make individualised
ownership difficult (but not impossible) in many remote communities.
The import of
this discussion is that Indigenous interests and their peak bodies should be
focussed not just on those elements of the report which identify an Indigenous
aspect, but they have a strong imperative to support and advocate for the
entirety of the Advisory Committee Report’s reform recommendations. Improving the
effectiveness and needs basis of mainstream policies and programs will
inevitably benefit disadvantaged Indigenous citizens, because Indigenous
citizens are over-represented amongst the poorest and most in need clients and
beneficiaries of mainstream policies and programs.
Bearing in mind
the lengthy caveat above, I now turn to several issues identified in the Report
as being of specific interest to Indigenous interests.
The Remote
Area Allowance
The first
issue worth mentioning
is the discussion on pages 11-12 and 37-39 of the Remote Area Allowance.
The Committee notes that most RAA recipients are Indigenous Australians.
The Committee
acknowledged the Government has moved to subsidise food in remote stores where
grocery prices are some 40 % higher than in urban and regional Australia, but points
to a continuing gap in the cost of living in remote regions. Recommendation 4
states:
Substantially
lift the Remote Area Allowance: • Substantially lift the Remote Area Allowance
by indexing it in line with Consumer Price Index growth since its introduction
in 1984, lifting the single rate to $54.20 per fortnight. • Fund the Australian
Bureau of Statistics to develop a remote area index that will guide ongoing
indexation of the Remote Area Allowance, in partnership with remote communities
and informed by remote area costs data. Once developed, the payment should be
benchmarked at a rate that reflects remote area costs and regular ongoing
indexation to this new index applied. • Review and adjust the payment’s
geographic boundaries to ensure it is available to people living in remote and
very remote areas.
Second, the Committee makes a sustained and
detailed argument in favour of Employment Services Reform (pages 16-19
and 39-40). It states, inter alia,
Effective
employment services can be a powerful policy lever for creating a more
inclusive society. But Australia’s employment services system has become
harmful and punitive. It has been badly underperforming for some time and major
reform is needed. Delayed for far too long, employment services reform must now
become a national priority. The system needs to be made fit for the future and
must be regarded as a necessary component of national economic reform.
While this
discussion is focussed on mainstream Employment Services, the NIAA remote
employment programs, the Remote Jobs and Economic Development (RJED) program
and the Remote Australia Employment Service (RAES) which have their own issues
not considered by the Committee (link
here) are effectively a subsidiary element of the mainstream programs. They
too require reform.
Third the potential
for reform of the Indigenous Housing sector
On page 52, the
Report reproduces an extract from a letter arising from a roundtable with the
Coalition of Peaks and other Indigenous (published in full in Appendix 3). This
argues, inter alia, for the ring fencing of a dedicated allocation from within
all mainstream social housing allocations by the Commonwealth for Indigenous
housing. The Committee limits its recommendation in the housing area to arguing
for increases in mainstream Commonwealth Rental Assistance (CRA). For my part,
I have previously argued against ring fencing these programs and instead
relying on needs-based allocations (link
here).
Fourth: the
analysis of nationwide Disadvantage
Chapter Six of
the Report comprises a detailed and sophisticated analysis of the composition of
disadvantage across the nation. The discussion at the beginning of this post is
relevant here. The Report considers a range of analytic measures to measure
disadvantage including income poverty, deprivation, social exclusion, but makes
no specific recommendations. One salient point is that the Report notes (page
151) that the data in the HILDA survey utilised to compile the Report’s
analysis of disadvantage is not reliable for remote and very remote regions,
and this may lead to an undercount of the level of disadvantage among
Indigenous Australians.
Fifth: the
summary of the Roundtable with Indigenous interests
Appendix 3 to
the Report comprises a letter sent to Ministers from the Chair, Jenny Macklin
and the (then) Convenor of the Coalition of Peaks Pat Turner (link
here). The summary of the outcomes of that Roundtable is as follows:
The
Roundtable emphasised that economic inclusion for Aboriginal and Torres Strait
Islander people is underpinned by four key interrelated enablers:
•
Adequate and accessible social services and income support, so people
can meet immediate material needs, address poverty, and safely access the right
income support payments when they need.
•
Stable, secure, appropriate and affordable housing, as a foundational
requirement for participation in employment, education and community life.
•
Affordable, accessible, high-quality and culturally safe early childhood
education and care, to support children’s development and enable parents
and carers to participate in work and study.
•
Education, training and employment opportunities that empower people,
support flexible employment participation and offer meaningful career pathways,
including within the community-controlled sector.
I strongly
agree that these priorities are crucial to addressing Indigenous economic
inclusion. However, as is often the case, the devil is in the detail. Will the
quantum of support underpinning these priorities be adequate, and will
implementation be effective and target those most in need. These are matters
beyond the scope of this post to address.
Discussion
At 178 pages
plus appendices, this report covers an extraordinary amount of the policy
landscape, in varying levels of detail. In Chapter Seven, the Report provides a
high-level assessment of Government responses to the Economic Inclusion
Advisory Committee’s recommendations since its establishment in 2022. This
makes clear that this Report is in fact merely one element of a much larger policy
project. The headings of the cumulative recommendations made by the Committee
which clearly reflect in very large measure the longstanding concerns and
priorities of the Chair Jenny Macklin, make clear the extraordinary ambition of
the policy project. I list them below:
7.1
Adequacy of working age payments and rent assistance
7.2
Full employment, and reducing barriers to employment and participation
7.3
Supporting children and families
7.4
Addressing disadvantage in the places where it is concentrated
7.5
The culture, purpose and intent of the social security system
7.6
Legislated measures on economic inclusion and poverty reduction
A key
characteristic of this ambitious project is that it is, by virtue of its
complexity, its combination of technical economic, demographic and statistical
components, and its financial and economic significance for the nation’s public
expenditures (an element that is barely mentioned in the Report) is in very
large measure an insider’s agenda. I can think of very few comparable policy
analysts in Australia who combine the technical mastery of their subject matter
with the political skill and influence that Jenny Macklin brings to this
project.
A careful and (dare
I say) critical reading the responses by agencies to the six reform topics
listed in Chapter Seven makes clear that the inertia and incrementalism of
government is quite extraordinary. The Committee, clearly influenced by
Macklin, is very selective in its recommendations, clearly cognisant that this
Government (and indeed any recent Australian Government) is risk averse to
major reforms that have virtually irreversible budgetary implications. The
recent experience with the NDIS merely serves to reinforce the mindset that the
key bureaucratic agencies will bring to considering such an ambitious agenda. It
is to Macklin’s credit that she doesn’t give up, and as the Report notes at the
beginning of Chapter Seven (page 158):
In
its first three reports the Committee made a total of 40 recommendations, of
which: • 6 have been implemented in full. • 23 are still live and have been
implemented in part. • 11 have not yet been advanced.
Three
substantial, still live recommendations from reports 1 to 3 are advanced and
updated in this report:
• In all three reports, the Committee has
called for the Government to commit to a timeframe for full increases in
JobSeeker and related payments. (R3 2023, R2 2024, R2 2025) …
•
In all three reports, the Committee recommends the Government commit to a
full-scale redesign of Australia’s employment services system to end harm
caused by the compliance system. (R4 2023, R6 2024, R7 2025) …
•
In reports 1 and 2 (2023, 2024) the Committee called for reform of the way FTB
A interacts with the Child Support Scheme. (R33 2023, R15 2024) Recommendation
8 of this report calls for a comprehensive modernisation of the objectives of
the Family Payments and Child Support Scheme to guide further reform – these
include reducing child poverty and improving economic security for women.
The point I
would make related to Indigenous disadvantage and why Closing the substantive
Gap is so difficult is that each of the three dot points above where the
Committee has made repeated recommendations, the implications for Indigenous
Australians are substantial, while simultaneously, the absolute numbers of
Indigenous citizens who would benefit are comparatively low. Indeed, Indigenous
Australians would arguably be amongst the biggest winners were these reforms to
be implemented because they are over-represented amongst those most adversely
affected.
In turn, this
raises the much larger question: are the current institutional arrangements,
and particularly the targets and priorities set down in the National Agreement
on Closing the Gap fit for purpose in laying out a pathway to close the
substantive gap (as opposed to the rhetorical gap that governments invariably
discuss). My intuition tells me that the answer is no, and that a more
streamlined and focussed framework built around the high-level priorities
identified in the letter to Ministers in Appendix 3 to the Report would be a
much better way forward. This is a separate point to the argument I have made
elsewhere (link
here) that the current framework is not working. But taken together the
argument for reform of the Closing the Gap framework is intellectually
irrefutable.
Clearly the
Committee sees its role as primarily seeking to influence the policy debate on
the issues that matter from ‘inside the room’. It doesn’t criticise but merely
keeps knocking on the door. When the stars align, the arguments in favour of
reform will have been laid out. Ultimately though, it is up to the electorate
to elect representatives who are prepared to pick up the baton and run with it.
For both
broader mainstream interests advocating for greater equity and inclusion in
Australian society, and for Indigenous interests such as the Coalition of
Peaks, the Advisory Committee’s cumulative reports offer, albeit in the arcane
code of economics and bureaucratic policymaking, both a coherent and persuasive
argument for pursuing reform, and (between the lines) a roadmap for how to
approach government seeking to influence policy. There is a place for public
advocacy, even criticism, but it will be most effective if it is focussed on a
limited number of consequential priorities framed around sustained and coherent
evidence-based articulation of the agenda they might seek to put forward. Even
so, that will often not be enough to overcome the innate inertia that suffuses
policymaking in Australia, and success will ultimately depend upon an ‘alignment
of the stars’. The alignment of those stars will invariably be a function of
politics as well as wider contextual pressures and opportunities.
While this may
seem too pessimistic, it strikes me that to one extent or another, it was ever
thus. Every major institution in existence today, every major reform, every
legal framework, is the result of a good idea being developed, framed and taken
forward in a way that persuaded a government to act notwithstanding the
political headwinds of those who were opposed. For every institution in
existence, the stars in fact aligned.
To be blunt,
rhetoric serves some purposes, but it is never adequate on its own to drive
reform. There is always a need for hardheaded and detailed policy analysis at
all stages of the reform process. I would venture to say that Australia is
suffering from a long-term decline in such analysis, and the Indigenous policy
domain is not immune from this disease. For this reason, the work of the
Economic Inclusion Advisory Committee is both inspirational and a roadmap. It
deserves to be studied closely by anyone interested in seeing the emergence of
a better and more inclusive society.
Declaration
of interest: I was
employed as a ministerial adviser in the Office of Jenny Macklin from 2008 to
2012.
29 April
2026
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