Recent developments in WA Remote Essential Services Reform

In July this year, I published a post, Infinite space and bad dreams: the WA Government's roadmap for remote communities, outlining the WA Government’s revised approach to remote essential services after its earlier disastrous suggestions of wholesale closures of communities.

This week, the WA Government announced the next steps in its roadmap, identifying ten remote communities which would receive upgrades in power, water and municipal services over the next few years. The quid pro quo is that they agree to the introduction of water charges, and it seems that each of the ten communities have done so.

The initiative has been named the Essential and Municipal Services Upgrade Program. The web page for the program states that the expected benefits include:

-          improved drinking water and environmental health

-          essential and municipal services infrastructure that meets minimum standards

-          consumer protections that apply elsewhere in Western Australia

-          more opportunities for local jobs and training

In turn, individual households will be metered and charged for power and water services.

These are welcome developments, and the announcement notes that the ten communities encompass around 20 percent of the population of remote Aboriginal communities in WA.

The ABC have reported the announcement, including the reaction of some Aboriginal leaders, the KLC, and raised questions regarding the non-inclusion of a number of other major communities. ABC reports are here and here.

While welcoming the announcement, there are a number of issues which in my view require further attention.

The timeframes appear announced appear slow; it will take a further 18 months to consult the ten communities and develop implementation plans, and capital works are set to begin in 2018. This effectively means that completion dates for this first tranche of communities are likely to be in 2020 or beyond.

Second, there appears to be no sense of urgency, no plan for ramping up implementation for the later tranches, with the result that we could be looking at the best part of two decades before the essential services shortfalls currently experienced by remote Aboriginal community residents are finally put to rest. There would be merit in the Reform Unit developing an overall implementation plan for addressing these needs. It is hypocritical for government to claim credit for “historic upgrades” which meet the most basic and urgent essential services needs of 20 percent of remote residents, but to not have a plan for addressing the needs of the outstanding 80 percent.

Third, the background information provided in relation to the Upgrades Program is very light on; the community profiles give no sense of the existing state of essential services and housing infrastructure in the ten communities identified (or for that matter, the communities yet to be identified); the budget for the program is similarly light on, with the Frequently Asked Questions section indicating that there is $52 million available from the Royalties for Regions Program in 2017-18 to 2019-20, but no indication of the community by community allocations, nor of the split between water, power and other infrastructure.

Fourth, there is no update or indication of how this announcement links into the previously announced plans to upgrade tenure in communities.

Fifth, and perhaps most importantly of all, there is no suggestion that local governments will be required to take on the ongoing maintenance of the existing and new infrastructure. This is despite the fact that the Commonwealth provided the WA Government with $90m in 2013 to take over these responsibilities (refer to answer to Question 210). Without incorporating the responsibility for ongoing upkeep of this infrastructure into the local government system, remote Aboriginal communities will be subject to a perpetual battle to obtain funding over coming decades, and will be extremely vulnerable to ill thought out proposals for closure from future governments seeking to make budget ends meet.

Clearly, there is a long way to go on the issue of remote essential services in WA. To the Government’s credit however, they have put in place a reasonably transparent process, and appear to be progressively moving forward. Other states and territories could take a leaf from the WA book.

Indigenous Procurement Policy: Progress and Next Steps

As mentioned in a recent post, this is an area where the Government can point to substantial policy success. It aligns with the Government’s focus on economic development and clearly benefits Indigenous interests. It has the ancillary benefit of signalling to the majority of Indigenous Australians who live in non-remote areas that the Government is doing something for them, by supporting Indigenous owned businesses, and via the employment effect arising from the fact that Indigenous owned businesses are more likely to employ Indigenous people.

Here is the PMC webpage on the IPP. Here is the link to the key policy document.

Here are the current high level statistics on IPP performance taken from the PMC website:

The Indigenous Procurement Policy supports Indigenous economic development

·         1,509 contracts

·         valued in total around $284.2 million

·         493 Indigenous businesses 

In the first full year of the Indigenous Procurement Policy, targets were exceeded

·         Target: 0.5%>

·         Actual: 2.9%

Commonwealth procurements with Indigenous businesses increased from $6.2 million in 2012-13 to $284.2 million in 2015-16

Contracts were awarded to businesses of all sizes, across Australia:

·         Average value: $188,326

·         63 valued at over $1 million

The Parliamentary Library blog FlagPost recently published this excellent post on the IPP, which draws attention to the fact that the vast bulk of the financial benefits flowing to date from the IPP can be traced back to the Defence Department’s success in implementing the policy.

The genesis of the IPP can be traced back to the emergence of SupplyNation (formerly the Australian Indigenous Minority Supplier Council) which was founded by Michael McLeod and Dug Russell in 2009 and was modelled on the US National Minority Supplier Development Council. The then Government provided three years of funding as a pilot in 2009. See the short history of SupplyNation here. Over the past seven years, SupplyNation has received in excess of $11m in government grants, plus raised substantial revenue in membership fees. It appears to have had quite regular turnover in Board members (which include both Indigenous and corporate Directors) and senior staff. 

SupplyNation has clearly been well supported by the business sector and some key corporations.

For reasons which are unclear, SupplyNation have not published annual reports for the 2015 and 2016 financial years. However, SupplyNation’s most recent financial reports are available here on the ACNC website.

While the IPP has made huge progress in a relatively short period, admittedly off a very low base, it appears to have considerable potential for further progress.

This raises the question: what fine tuning would best prepare the program to take on the challenges of the next decade?

Answering that question requires answering a number of subsidiary questions. What is the role of SupplyNation in driving current performance? Is it operating effectively? Are the IPP targets currently set appropriate? They appear to have been exceeded by such a margin that there may be a case for raising them significantly. What is the relationship between numbers of contracts and contract value? Where do the benefits flow – in more contracts, or in higher value contracts? What is the Indigenous ‘employment effect’ of winning a government contract? Can it be leveraged further, and if so, how? Where is the potential for greatest future growth, both in terms of portfolios, industry sectors and geographic regions? And what have been the challenges for individual portfolios?

Other issues requiring ongoing attention include risks and risk mitigation which are essential elements in successful programs. For example, are there issues related to Indigenous businesses over-extending themselves, or becoming over-reliant on government contracts? Is there potential for gaming the program by non- Indigenous businesses utilising Indigenous front men and women to create the appearance of an Indigenous entity and thus gain a competitive edge? How effective is the cross portfolio coordination in awarding IPP contracts? And is there scope to broaden the base of potential Indigenous business suppliers to Government and if so, how might that be best encouraged.

These are all complex questions to which there are no obvious answers at present. The obvious way to begin to answer them would be a forward looking review or evaluation of some kind. Such a step appears timely and would go a long way to ensuring that what has arguably been the current Governments greatest policy achievement in Indigenous affairs is placed on a secure foundation and positioned to consolidate and expand over the next decade.

Of course, the larger issue in Indigenous policy relates to the role of economic development in addressing Indigenous disadvantage. While there is undoubtedly an important role for encouraging Indigenous participation in business, and in employment, other policy sectors such as health, education, social security, law and justice and even the arts require sustained policy attention, and can deliver substantial policy dividends (which can even include economic benefits) if successfully managed. The challenge is to successfully address the whole policy spectrum and find policy solutions which deliver gains in each sector.

This is a long winded way of saying that simplistic nostrums (such as private sector good, public sector bad) will not work. The IPP will be most successful to the extent that it supports, reinforces, and supplements a more sophisticated and balanced set of policy approaches across the span of Indigenous citizens aspirations. The jury is still out on whether the government can transform the considerable success of IPP to date into a sustained and substantive driver of more effective social transformation across the Indigenous policy spectrum.

COAG Indigenous Outcomes

COAG met yesterday. The full Communique is here. I have extracted the section on Indigenous issues below:

Indigenous affairs Leaders reaffirmed that improving the lives of Indigenous Australians is a priority of COAG’s strategic forward agenda and agreed that the ‘Closing the Gap’ framework has played a significant role in driving unprecedented national effort to improve Indigenous outcomes. With the current framework approaching its 10 year anniversary and some targets due to expire in 2018, Leaders have committed to work together and with Indigenous leaders, organisations and communities to refresh this agenda with renewed emphasis on collaborative effort, evaluation and building on what works in each jurisdiction.

The Prime Minister has also extended an invitation to Premiers and Chief Ministers to join him for the 2017 ‘Closing the Gap’ statement in Canberra.

 COAG noted the report on progress to improve Indigenous school attendance and attainment. Leaders agreed that individualised learning strategies for Indigenous students at risk of not achieving their full potential will be important to improving Indigenous educational outcomes and faster progress toward the critical year 3 ‘Closing the Gap’ reading target.

COAG released the Prison to Work Report, which recognises the alarming rates of Indigenous incarceration and recidivism. Leaders indicated a shared commitment to better coordinating government services, especially in-prison training and rehabilitation programs, employment and health and income support services. The report will inform consultations with Indigenous and other stakeholders as governments develop action plans to implement these important reforms.

Leaders also confirmed their commitment to supporting Indigenous economic development, recognising that governments hold significant levers to increase Indigenous employment  and support Indigenous businesses through public sector employment policies, government purchasing practices and government-funded infrastructure projects. Jurisdictions agreed to consider establishing state-specific whole-of-government Indigenous procurement policies, Indigenous employment and indigenous business targets and reporting mechanisms, and making policies easier to find and understand. COAG noted the potential of the NDIS roll out to open up opportunities for Indigenous enterprise in regional and remote communities. Leaders agreed to provide progress updates at the next COAG meeting.

All jurisdictions noted the Commonwealth-led Referendum Council will begin its Regional Dialogues this month, and will report by 30 June 2017. Leaders reaffirmed their shared commitment to the recognition of Aboriginal and Torres Strait Islander peoples in the Commonwealth Constitution. All jurisdictions noted the importance of nationwide activities next year to celebrate the 50th anniversary of the successful 1967 Referendum.

This is all mostly positive.

On Closing the Gap, it is correct that it has driven “unprecedented national effort”, but the more fundamental question, which COAG appears not to have asked, let alone answered, is whether that effort is well directed, and is it adequate.

Indigenous incarceration is an extremely important issue, and it is terrific that COAG have turned their attention to the issue. The Prison to Work Report released by COAG originated in the Prime Minister’s 2016 Closing the Gap Statement, and was led by the Ministers for Indigenous Affairs and Employment. It is an impressive research effort over a relatively short period, and is based on extensive stakeholder engagement. I haven’t had a chance to read the report closely, but it is clear that its recommendations and findings are on their face sensible, and deserve serious attention. The Communique suggests that jurisdictions will now develop action plans.

It will be important that there be further discussion around this issue, that state, territory and the federal Governments’ action plans are tabled and considered by stakeholders, and most importantly, that actions are robust, coordinated, and actually implemented. Unfortunately, the COAG Communique gives no commitments to any such process. While the focus of the Report on employment is important, there are a range of other aspects to post-incarceration life, and these too need attention in due course.

COAG’s focus on economic development and in particular to further strengthening procurement strategies builds on what has been perhaps the Government’s most significant achievement since coming to office. It will be important that the actions at the federal level to expand Indigenous procurement are reinforced by states and territories. While there is potential for the NDIS to expand Indigenous business opportunity, it will be important that the Commonwealth actively monitor progress in this area (and publish data on take up of the opportunities), and there would be substantial merit in the development of a business support strategy to assist Indigenous businesses to take up these opportunities.

As for the shared commitment of First Ministers to seeing Indigenous peoples recognised in the Constitution, I merely note that it is approaching ten years since John Howard went to an election promising it. The issue is devilishly difficult, and appears to have lost momentum. I am not holding my breath.

Homelands and Remote Essential Services

The recent Senate Estimates Hearings on 3 November 2016, and in particular the response to Questions on Notice lodged by Senators in the week or so following the Hearing (link here) has thrown up a range of interesting new information. This post is limited to just two closely related topics both of which have been the subject of earlier posts (See here and here).

In Question 210 on the topic of “Review on Homeland/Outstation Assets and Access”, Senator Rachel Siewert asked a series of questions related to this review which had been jointly commissioned by the Australian Government and the NT Government in March 2015.

I had previously raised the failure to release the report in my post on Homelands Policy in March this year.

Senator Siewert asked a series of questions regarding its status, and was told in response that it had been finalised in February 2016, the Minister had been briefed on 10 March 2016, and it had been published eight months later on the Centre for Appropriate Technology (CAT) website on 7 October. 

The decision to delay publication, and then arrange for the report to be published on the CAT website, without any statement by the Minister is quite strange, particularly as the answer to the Question on Notice confirms that the report cost $1,080,000 including $775,000 from the Commonwealth.

One can only assume that the Government did not wish to attract attention to the report, and in particular, did not wish to be asked what its intentions were in relation to specific findings of the report. Perhaps this is something which Senator Siewert might explore in future Estimates Hearings.

The other interesting information revealed in the answer to Senator Siewert’s question are the amounts provided to the states in one-off grants to persuade them to take over funding responsibility for municipal and essential services in remote communities.

The answer provides the following information:

Queensland $10.3 million from 1 October 2014; Victoria $15 million from 1 October 2014; Tasmania $15.9 million from 1 October 2014; Western Australia $90 million from 1 July 2015; South Australia (areas outside APY Lands) $15 million from 1 July 2015; and Northern Territory $154.8 million from 19 September 2015.

These amounts total $301m. It is not clear what terms and conditions applied to the funding, but my guess is that there were no conditions requiring jurisdictions to allocate the funds to remote essential services. In other words, it is not clear that Indigenous interests gained any tangible benefits whatsoever from the payment of these funds from the Indigenous affairs budget allocation.

Further, the lack of transparent reporting from jurisdictions on progress (WA is perhaps the exception) suggests that there is no process in place from the Australian Government to monitor and hold accountable the states and territories in relation to the discharge of their responsibilities for delivering these essential services. Again, this is a matter which Senators might wish to explore in future Estimates Hearings.

Turning to the CAT Report itself, a quick read suggests that it is highly informative and confirms the complex and fluid demographic dynamics of remote outstations and homelands in the NT. The report throws up a series of difficult and complex issues for both Governments and landowners. For example, the report identifies a number of outstations with potential water contamination issues (p 33), in 76 outstations, energy safety issues were identified (p36); and in 101 outstations CAT identified safety or maintenance concerns related to sewerage systems (p 37).

The report undertakes an analysis of the physical and social assets in each of the 400 outstations surveyed and ranks them. It finds that 274 (or 74 % of outstations surveyed) locations exhibit high functional assets and high social asset rankings. This is a very positive result, and reinforces the utility of this choice for the 5 to 10 thousand remote residents who choose to reside in homelands or outstations.

I have not attempted to summarise the Report, and commend it to interested readers. The Findings appear sensible, but do not take the next step of recommending to Government specific courses of action.

The Australian Government has a continuing “policy stewardship” responsibility for these remote settlements. It was the Australian Government which initially encouraged the moves to outstations for good policy reasons. Those reasons are still relevant and applicable. Outstation residents have better health outcomes, maintain links to country, and are able to exercise choices which sustain social and cultural well-being. The Australian Government also administers the Aboriginal Land Rights Act in the NT, which provides the land tenure basis for most remote outstations in the NT.

While it is desirable that governments continue to respect the choices of those remote residents who choose to reside in homelands or outstations, it is nevertheless important that Governments regularise the provision of core citizenship services.

It is positive that the Minister is considering allocating $40m from the ABA, however one might legitimately ask why it has taken so long to get this underway given that this proposal has been on the table for least five years.

More fundamental questions relate to the fact that remote residents are entitled to an appropriate level of citizenship services, including access to communications, essential services, and community safety from mainstream funding sources such as local governments, the NBN, and at the risk of flogging a dead horse, the Northern Australia Infrastructure facility. 

Government Response to the National Infrastructure Plan: Omission and Obfuscation

Our very eyes / Are sometimes like our judgments, blind

Cymbeline Act IV, Scene 2

The Government has recently released its response to Infrastructure Australia’s Australian Infrastructure Plan. Here is the Prime Ministers speech to Parliament. Here is the link to the response.

The Government Response is primarily focussed on mainstream issues and challenges and I make no serious attempt to assess the adequacy of the document in relation to those issues. However, in relation to Indigenous policy, the Response highlights two areas of significant challenge and policy underperformance in Indigenous affairs – in one case by obfuscation, in the other by omission.

The Infrastructure Australia Infrastructure Plan included a section on Remote and Indigenous Communities (Chapter 8, pp53-56). I commented on the release of the Plan in February in this post.  Much of the critique in that post stands.

The Government’s Response is a classic government response to a review or evaluation. Very carefully worded, often vague to the point of meaninglessness, caveated throughout with the annotation that “this is an area of state and territory responsibility”. Embedded in this caveat is an issue of general concern, namely, the reluctance of the Commonwealth to take seriously its overarching stewardship role (to use a term adopted by the Productivity Commission amongst others) for the results and outcomes of Commonwealth investments delivered by third parties including the states and territories.

While it is crystal clear that the Government is focussed on improving transport policy particularly in major urban centres, the actual substance of their response in relation to Indigenous citizens is much less clear. The Prime Minister did not mention Indigenous issues in his speech listed above.

It is also useful to focus on the recommendations which were not supported (a number of others were supported “in principle”, a classic bureaucratic response which opens the way to back away, or slow implementation).

The three recommendations not supported were recommendation 2.2 which recommended the development of a 50 year National Population Policy; recommendation 5.9 which proposed that Treasury should merely evaluate the viability of reporting debt under a more transparent structure at all levels of government; and recommendation 6.12 which proposed working with the states and territories to establish an independent national water body to deliver a National Water Plan and drive market reforms across metropolitan and regional water sectors.

The refusal to develop a national population policy will potentially reinforce the structural blindness in relation to Indigenous citizens, across urban, regional and remote locations. The decision to avoid improved transparency of debt, particularly at state and local government levels, will reinforce the structural blindness in relation to the capacity of those levels of government to service their citizens effectively, particularly in relation to capital investment. The decision on the National Water Plan will benefit regional interests aligned with the National Party at the expense of urban mainstream interests.

In relation to Indigenous citizens, the Response will impact in a very general sense on the majority of Indigenous people who live in South Eastern Australia. As the Response notes, over the next thirty years, the proportion of the population in the four biggest cities will grow (and the centre of gravity of the national Indigenous population is likely to remain concentrated in these locations too). To the extent that infrastructure for the regions where they reside improves, they will benefit. While there is no easy way to measure these benefits, it is important to acknowledge them, and to acknowledge that Indigenous policy challenges extend beyond remote Australia.

Important general recommendations supported by the Government which have potential applicability in key Indigenous programs – though this ambitiously assumes program managers take active steps to implement them – included:

• ·        the pooling of programs to ensure more effective prioritisation (rec.1.6);
• ·         investing in leveraging existing infrastructure through improved asset management (rec 1.7); and
• ·         targeting policy to the shape of community needs (rec 4.3).

Turning to the Response to the recommendations on Remote and Indigenous Communities, I don’t propose to undertake a point by point analysis. Rather, I will make some general comments which respond to the recommendations and response.

The issues around essential service provision remain fraught. This post dealt with the current state of play in WA. While the Commonwealth appears to have vacated the field, it has not put in place any policy oversight mechanism which provides an assurance that state and territory governments will pick up the responsibility and implement their responsibilities to provide essential services equitably or effectively. Another instance of a failure to recognise a ‘stewardship’ role for the Commonwealth.

This is a major gap in the Commonwealth policy framework on this issue, and will over time inevitably lead to incremental pull backs in state and territory service delivery provision. 

For example, the Jumbun Community in north Queensland appears to have been a casualty in this Commonwealth – State game. The Howard Government used the army to construct the community’s sewerage system in the 1990s, but now neither the Commonwealth nor the Queensland Government are prepared to accept responsibility for funding municipal service provision in Jumbun.

The North Australia Infrastructure Facility (NAIF) is touted as a major source of Commonwealth investment, but its focus is clearly intended to be on “economic” infrastructure, and it operates through the provision of concessional finance to major projects. Notwithstanding NAIF’s ‘engagement’ with Indigenous stakeholders, it is far from clear that it will lead to any specific Indigenous outcomes.

Finally, recommendation 8.4 proposes that Governments should consider infrastructure investments that support reforms to increase the economic independence of remote Indigenous communities.

The single most effective infrastructure investment in remote communities which would support economic development would be to top up the current NPARIH/RHS program with a further $6bn over ten years for remote social housing. This previous post refers.

Unfortunately, the Government’s Response makes no mention of housing, and instead focusses on three issues: employment and Indigenous procurement, where the Government has made good progress (albeit without releasing data in a comprehensive and transparent way which would allow scrutiny of where that progress is being made). And third, on land tenure issues. On land tenure, the extent of progress is much less clear.

Set out below are the three paragraphs in the Response on land tenure. I have added emphasis to focus on some key points:

The Australian Government supports this recommendation, noting this is also a matter for state and territory governments.

The Australian Government is working with state and territory governments and Aboriginal and Torres Strait Islander stakeholders to improve land administration and use by implementing the findings and recommendations of the COAG Investigation into Indigenous land administration and use (the Investigation) and the White Paper on Developing Northern Australia.

The Investigation makes recommendations to support Indigenous peoples' use of their rights in land and waters for economic development. These include recommendations that go to reducing red tape arising from overlapping types of Indigenous land tenures, removing legislative barriers to bankable long-term leases, supporting native title determination processes and better engagement between governments and Indigenous land owners and also with particular sectors such as the banking industry. The Council of Australian Governments agreed jurisdictions would implement the recommendations of the Investigation’s report, subject to their unique circumstances and resource constraints. The Commonwealth Minister for Indigenous Affairs will report back on implementation of the recommendations after 12 months.

Under the White Paper, the Government has allocated $10.6 million over four years to support a small number of land tenure reform pilots. The pilots will broaden commercial development on land in northern Australia and increase the diversity of activity in business and Indigenous communities.

The very first post on this blog dealt with the COAG and the adoption of the COAG Investigation into Land Administration Policy. Since the report was considered by COAG, the Government has made no further statements on its implementation – see the relevant PMC webpage here which also links to the report and the submissions provided to the review.

To date, it is not clear that any action whatsoever has resulted from this Report, and the COAG decision to “implement” it. There has been no progress report from the Minister though arguably his report has only just become due. Nor has there been any advice or publication on the progress of the funds allocated to land tenure reform pilots.

Turning back to the Infrastructure Plan Response, while it is positive that a national plan and its response deals specifically with Indigenous issues, it is much harder to discern the tangible changes for Indigenous Australians which will emerge from the process.

The real challenge for COAG and the Australian Government in remote Australia is to reinvigorate and sustain the investment of almost $6bn over the last eight years in remote social housing provision and upgrades. Overcrowding remains a major issue, and it has significant and serious flow on impacts for health, community safety, schooling and employment, all issues the Government professes to be concerned about.

The apparent arbitrary exclusion of social housing provision form the definition of infrastructure is a major mistake in its own right. However it also means that the needs of remote communities for power, water, sewerage, and internal roads are made invisible as these services are intrinsically linked to the provision of housing, and this is substantially under-provided. The under-provision of acceptable remote housing is one of the most egregious policy blind spots in public policy in Australia, and our national preparedness to remain blind to this issue is a major contributor to the severely constrained life opportunities for the 100,000 plus Indigenous citizens residing in remote communities.

The fact that this is not seen as a priority, and does not deserve a mention in the Plan and the Australian Government’s response provides grounds for deep pessimism regarding the ability of the nation to address deep-seated Indigenous disadvantage over the next few decades.

A New Productivity Commission Issues Paper on Human Services

The Productivity Commission is engaged in a review of the Human Services sector. Terms of Reference for the Review require an inquiry into Australia's human services, including health, education, and community services, with a focus on innovative ways to improve outcomes through introducing the principles of competition and informed user choice whilst maintaining or improving quality of service. Link to the Terms of Reference here.

The Productivity Commission has released a Study Report as part of its review of the Human Services Sector. The Study Report identifies a number of sectors which would benefit from further reform. Included in the sectors identified are human service provision in remote Indigenous communities.

The Commission notes that

There is a lack of transparency around service provision and funding, and evidence on the effectiveness of programs, all of which are important for policy design and implementation. Gaps and overlaps in service provision cannot be readily identified or addressed without information on what services are provided, where and to whom. Services cannot be targeted to improve outcomes without an understanding of what works (p135).

The Study makes a number of Findings on remote Indigenous service provision, reproduced below:

FINDING 7.1

Indigenous Australians living in remote areas are more likely to experience poor outcomes than other Australians. Inadequate access to human services is one factor that contributes to these poor outcomes.

• The service delivery arrangements for Indigenous Australians living in remote Indigenous communities are complex and fragmented.

• Greater responsiveness to community needs through user choice, place-based service models or greater community engagement could improve outcomes.

 • Many services are already contestable, but approaches to contestability are poorly designed and are not effective at meeting intended outcomes. Redesign of these arrangements is needed which, coupled with better coordination between governments, could improve outcomes including the efficiency of service provision.

• More stable policy settings and clearer lines of responsibility, could increase governments’ accountability for improving service outcomes for Indigenous Australians living in remote communities.

Key issues identified by the Commission include the need for improved data and transparency; the crucial role of Government not only in designing effective policies, but its stewardship role in ensuring that policies are implemented effectively, particularly when services have been outsourced to non-government service providers, and finally the desirability of increased policy stability.

There is in my view a persuasive argument that these factors individually and together play crucial roles in the effectiveness of remote service provision, or to put it another way, their absence (in whole or in part) are in large measure responsible for the shortfalls which are so apparent, and which are responsible for the persistent and deep-seated Indigenous disadvantage in many remote locations.

The Productivity Commission plans to finalise their report on Human Services reforms in December 2017.

Two insightful Indigenous policy research papers

I don’t propose to say much about these papers, but will let them speak for themselves.

The first spans two fields in which I have virtually no expertise: health and demography. The AIHW has published the following research paper:

Australian Institute of Health and Welfare 2016. Spatial distribution of the supply of the clinical health workforce 2014: relationship to the distribution of the Indigenous population. Cat. no. IHW 170. Canberra: AIHW. Link here

With what strikes me as both an innovative and yet conceptually simple idea, it undertakes a spatial analysis of the provision of health professionals across the nation, but then overlays an analysis of the population density of Indigenous people, thus allowing a region by region assessment of the adequacy of the health workforce in servicing the health needs of the indigenous population. The conclusions are unsurprising!

The second research paper is a compilation of an introduction plus eight short notes by a number of academics assessing different aspect of the remote employment and income support arrangements. The central focus of the paper is a critique of the current CDP program. These assessments, which include extremely revealing case studies  on how the design and delivery of CDP actually affects both the providers delivering the program, and more importantly, the communities on the ground, lead inexorably to the conclusion that the program needs a comprehensive overhaul. Usefully, the contributors provide a conclusion where they discuss what a reformed or replacement program would need to look like to be effective. In my view, this Research Paper is essential reading for anyone with an interest in remote Australia.

Jordan, K. and Fowkes, L. (eds) 2016 ‘Job Creation and Income Support in Remote Indigenous Australia: Moving Forward with a Better System’, CAEPR Topical Issue No.2/2016, CAEPR, Canberra. Link here.

Postscript
The Ministers media release in response to the report on CDP is available at this link:
https://ministers.dpmc.gov.au/scullion/2016/facts-dont-back-anu-report-cdp 

The Commonwealth Grants Commission 2013 Review of Local Government Financial Assistance Grants

Diseases desperate grown / By desperate appliance are relieved / Or not at all.    Hamlet IV,iii,9

In November 2012, the then Treasurer, Wayne Swan commissioned a review from the Commonwealth Grants Commission (CGC) on various issues related to the allocation of local government Financial Assistance Grants (FAGs) within the current fiscal envelope available to each state.

Here is the link to the Terms of Reference, which included a specific request for the CGC to examine funding adequacy for local governments which service remote communities (para 3(d) of the Terms of Reference). This post is focussed primarily on this latter term of reference. The system of fiscal equalisation built into the Commonwealth financial assistance program is fundamentally flawed, and has been criticised for over a decade including my me, but the Terms of Reference effectively ruled out any reconsideration of that fundamental issue.

On the CGC web site there are a number of documents relating to the review, including an Issues Paper (link here), copies of submissions (link here), and notes taken by CGC staff of discussions with the WA and SA Local Government Grants Commissions (link here).

The Issues Paper sets out the Commission’s proposed approach to the Inquiry. I reproduce some select extracts below:

14. Further, consistent with the funding envelope direction, we will not consider options which improve effectiveness by increasing the funds available from the Commonwealth or the States, or which change the interstate distribution. However, a different intrastate distribution of funding, or a different grant design, might improve effectiveness or encourage greater effectiveness over time…

26. We also note the Act requires the Minister to prepare a report on the operation of the Act as soon as practicable after 30 June in each year. We think our review should examine the impact of that report and if there are options to change this reporting which would increase the effectiveness of local governments and their ability to improve services.

The Commission also canvassed issues such as the merits of tied grants, and the impact of the minimum grant principle.

At Attachment A, the Commission included an appendix titled The Current Arrangements for Financial Assistance Grants. This reproduced extracts and associated discussion  including the ‘Objectives of The Local Government (Financial Assistance) Act 1995, amended 2012’; the National Principles governing the allocation of FAGS within each jurisdiction (a requirement of the legislation), and the Reporting requirements of the legislation.

In relation to the Objects, of the legislation, section 3(2) provides that ‘The Parliament wishes to provide financial assistance to the States for the purposes of improving: (e) the provision by local governing bodies of services to Aboriginal and Torres Strait Islander communities’.

The National Principles provide, inter alia, ‘5. Aboriginal peoples and Torres Strait Islanders Financial assistance shall be allocated to local government bodies in a way which recognises the needs of Aboriginal peoples and Torres Strait Islanders within their boundaries.’

In relation to accountability, the Issues Paper notes:

Accountability requirements

8 The Act requires the Minister to prepare an annual report relating to the operation of the grant processes and addressing a range of other matters such as the efficiency of local government, as soon as practicable, after 30 June each year. The reporting requirements are listed in Box A3.

9 However, it appears the 2008-09 report is the last, publicly available one.

In relation to the Commission’s 2001 Review of the legislation, the Issues Paper noted, inter alia,

The Aboriginal Peoples and Torres Strait Islanders purpose is not being achieved. This is not a relevant purpose for an Act that provides for the distribution of untied assistance.

Transparency of and accountability in the grant distribution process can and should be improved.

And added:

The Aboriginal Peoples and Torres Strait Islanders Principle has not been consistently addressed by LGGCs. The Principle should be retained and strengthened to make explicit that the needs of Indigenous people must be recognised in equalisation assessments.

It is beyond the scope of this post to assess each of the submissions provided to the Commission, but I reproduce an extract from the WA and NT Local Government Grants Commission submissions respectively:

Remote Indigenous Communities - the provision of local government services to remote Indigenous communities is a significant and ongoing issue which is still subject to funding negotiations between the State and Commonwealth in Western     Australia. While the WALGGC recognises Indigenous populations within its General Purpose methodology, it also acknowledges that many of these communities receive little or few services from their respective local governments. This remains a significant and ongoing concern for the WALGGC.

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In concluding, the methodology can only go so far in delivering equity and improvement in the delivery of local government services when the real issue is insufficient funding from both the Commonwealth pool and an inability for shire councils to generate own source funding.

Graphic examples of this are Geelong receiving a grant in excess of the total NT general purpose allocation to deliver local government services in one small urbanised environment and the South Australian supplementary road funding which is the equivalent of the total NT road funding allocation.  We know the arguments about the invalidly of such comparisons, but you can’t escape the fact that the per capita approach to interstate distribution, the contradictory principles, unequal population spread across jurisdictions, and the head start the states had on the Northern Territory, all combine to produce perverse outcomes.

The submission by the Department of Regional Australia, Local Government, Arts and Sport is almost entirely process oriented, and does not express a view on the issues related to the provision of local government services to remote Indigenous citizens.

The CGC Staff Notes of the discussions with the Local Government Grant Commissions for WA and SA include the following comment in relation to WA (emphasis added):

Local government services in indigenous communities. While some councils provide specialist Indigenous services, such as language centres, interpreters and child care, indigenous communities reported that some councils were not providing services in Indigenous communities. The old methodology recognised indigenous needs through an indigenous assessment (based on indigenous populations) and a dispersion assessment (recognising the number of Indigenous communities in a council area). To better assess council Indigenous needs, the new methodology no longer recognises indigenous communities in the dispersion assessment although it still includes an indigenous population assessment. This reduced the level of funding to councils with indigenous communities. The amount allocated to indigenous needs in the new methodology is $7 million. It is not based on what councils are actually spending on Indigenous services.

It is clear from the information available on the CGC website that the Review considered a range of substantive issues related to remote communities and in particular that options for more effective provision of local government services to Indigenous citizens was under active consideration. A number of the most salient issues were probably outside the Terms of Reference provided by the then Treasurer. This does not mean however that they are not issues which demand attention by policymakers, and which have an ongoing deleterious impact on the quality of life of remote Indigenous citizens.

There are also suggestions that the Review would likely have made recommendations relating to improving the accountability and transparency in Australian Government funding for local government.

The CGC website notes that

The commission reported to the Treasurer in mid-December 2013 on tangible measures for improving the impact of the Local Government Financial Assistance Grants (FAGs) on the effectiveness of local governments and their ability to provide services to their residents within the current funding envelope. 

The report has not yet been publicly released.

Earlier this month, when the Productivity Commission released its Overcoming Indigenous Disadvantage Report, a chorus of voices, including Minister Scullion, claimed that part of the reason for lack of progress relates to a lack of effective evaluation of Commonwealth funding to Indigenous citizens. This is a view which had previously been articulated by the Secretary of the Prime Ministers Department. See my earlier post on this issue here.

The CGC review is an example of a policy relevant review by a reputable and independent body of a significant Australian Government mainstream program with an explicit mandate to address Indigenous disadvantage. Yet the Review appears to have been shelved, its recommendations hidden, and no action taken.

It is not clear why the Government has not released the Commission’s Report. It is however clear that shortfalls and deficiencies in the arrangements for funding local government services by the Commonwealth are having an adverse impact on remote citizens, most of whom are Indigenous. It is time that the Commonwealth put its shoulder to this wheel.

A first step would be to provide the Australian public and relevant stakeholders with the benefit of the Commonwealth Grants Commission’s report on these issues. A second step would be to provide an Australian Government Response. A third would be to initiate public discussion and dialogue around options for reform.

The importance of effective local government services for remote communities has been increased by the policy shifts under the present Government (achieved through one off financial incentives to key states and territories) to confirm that states and territories should take on responsibility for the provision of essential services in remote communities. These are largely services that are delivered by local government. See my previous post on this issue in relation to Western Australia here.

The fact that important issues relating to the effectiveness of local government and essential services funding for remote communities can be effectively ignored and receive no public attention raises questions regarding the effectiveness of parliamentary oversight (the Senate Estimates Cross Portfolio arrangement does not include the agencies which deal with local government), and the effectiveness of key stakeholder groups. There is no peak body for remote local governments, the Australian Local Government Association appears to be a creature of the hundreds of local governments throughout settled Australia (and thus does not appear to advocate enthusiastically for remote services), and peak Indigenous bodies appear not to have a focus on monitoring key developments in local government.

Of course, one would hope that the Minister for Indigenous Affairs and his Department would play an active role in encouraging other agencies and portfolio ministers to drive positive reform for Indigenous Australians. Based on the outcomes to date on this issue, the performance of the Indigenous affairs portfolio has been less than optimal.