The Remote Area Allowance: the case for wider reform

 

Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt."

Measure for Measure, Act I, Scene 4.

 

Francis Markham, one of the most insightful and competent data and policy analysts in the Indigenous policy domain has just published a short blog post on the case for reforming the remote area allowance (RAA). His post (link here) is titled: The Poor Pay More: Why the Remote Area Allowance Needs Urgent Reform, and is highly recommended.

The post links to a 2020 Productivity Commission (PC) study (link here). The Executive Summary of that report is also worth reading.

I don’t propose to summarise Markham’s arguments which are succinct, persuasive and data driven.

What struck me as I read his post however is that it raises broader issues regarding remote employment, and in particular the need for radical reform of the Community Development Program (CDP).

In 2019, in response to the PC’s Issues Paper, I published a short post (link here) identifying a number of issues that would also come into play. Unfortunately, I failed to review the PC report when it was finally published in 2020….I must have been asleep at the wheel.

Below is an extract from that earlier post which in my view is still relevant, notwithstanding that the punitive tone of the CDP program appears to have moderated under the current Government:

A further potential issue relates to the impact of conditional welfare in remote Australia (ie the CDP program: link here) and the increasing evidence that as a result of punitive penalties, significant numbers of remote Indigenous residents are not accessing their welfare entitlements and thus not accessing RAA.

One of the challenges is assessing the utility of these policy measures, is that they were primarily devised to assist and benefit mainstream interests, particularly mainstream taxpayers and businesses. Consequently, it can be easy to overlook Indigenous perspectives in assessing the changes in underlying rationales over time. As the Commission notes:

A range of justifications have been advanced for special assistance for people living and/or working in remote areas (box 3), although many of these are contentious. For those justifications drawing on the isolation and arduousness of life in the outback, the changes in transport, communications and living conditions over the past seventy years mean that their strength has diminished (at least in many parts of the country). Such arguments have also been challenged on the basis that ‘individuals have a free choice whether or not to live or work in remote areas and to compensate them, if they so choose, would lead to resource misallocation and reduced growth for the country as a whole’ (see Cox et al. 1981, p. 15).

While there have been improvements in the circumstances of remote citizens, the circumstances of remote Indigenous citizens are still highly disadvantaged. Moreover, they may not have the same level of flexibility in their choice of residence as mainstream citizens. 

Markham’s arguments on reforming the RAA and the comments I made in 2019 together strengthen the argument for a radical reconsideration of the Community Development Program (CDP). In December last year, I published a post on employment issues where I endorsed what in effect amounted to a recommendation for a pilot employment creation program to be established (link here). Upon reflection however, the case for moving decisively to reform CDP is overwhelming: lives are not just at risk but will be drastically shortened unless action is taken.

It is time Governments looked seriously at shifting the totality of the 30,000 CDP participants across remote Australia into real Government funded jobs focussed on working on country, housing maintenance, NDIS support roles, construction, language and cultural advice within the education system, climate change readiness, disaster readiness, and community health. I mentioned some of these options when my views were sought for a recent article by Michelle Grattan in The Conversation (link here).

The rationale for such a radical reconceptualisation of the CDP is an amalgam of a number of factors: the existence of market failure in job creation in remote regions; the opportunity costs of not providing opportunities for real employment, the reduction in social security payments that would go some way to offsetting the costs of job creation; and the very real benefits to individuals, families and communities that would flow not just over the short term, but the long term.

I think of this as a macro-economic intervention across remote Australia in response to what is an ongoing economic, social and environmental disaster across remote Australia. It would be aimed at creating the foundations for a viable remote Australian economy. It would require vision, and sustained commitment from Government, as the present crisis (link here) is rooted in deep-seated market failure. In effect, it would be akin to an Australian version of Roosevelt’s New Deal.

Of course, the meta-issue worth considering is how is it that Governments have done nothing following the PC’s 2020 report on RAA, and more concerningly, have been incapable over at least four decades in ensuring that real employment opportunities are available for remote residents.

My own view is that Indigenous interests just do not have a sustained and powerful advocacy capability that governments find it impossible to ignore. Moreover, the Indigenous advocacy capabilities that do exist are both overwhelmed by competing mainstream interests whose claims on government effectively limit the funds available for investment in indigenous priorities. This is the fundamental reason that Government do not listen to Indigenous interests; they are just too busy listening to other interests.   

Finding the solution to that challenge is the real constraint on closing the gap, even for just 30,000 unemployed citizens across remote Australia, a cohort that totals less than 0.3 percent of AUstralias employment base, and which Francis Markham describes as ‘the most economically disadvantaged groups within Australia’.

 

 

12 February 2024