I like not fair terms, and a
villain’s mind
Merchant of Venice, Act one,
Scene three
Last week the Nobel prize in economics was awarded to three
economists, Daron Acemoglu, Simon Johnson and James A. Robinson “for studies of
how institutions are formed and affect prosperity” (link
here). There have been several prominent economists write short overviews
of the prize winners’ work (link
here and link here).
The economic historian Adam Tooze wrote a thought provoking critique (link
here) which questions the prize winners’ interpretation of the modern
history of China’s rise, but implicitly endorsed the underlying importance of
institutions. The overview I found most useful was by Alice Evans (link
here).
Evans succinctly summarises the considerable academic
output of AJR (as the prize winners are often referred to) in a very accessible
way. She emphasises the importance of institutions (defined as ‘the rules of
the game’) in shaping policy outcomes, the role of inclusive institutions in
driving sustained social and economic equity, and the more recent research of
AJR in exploring the complementary roles of expectations and prestige in
shaping the ideological frameworks within which institutions operate and which
thus shape societal outcomes. I recommend interested readers have a look at her
Substack post as she explains these issues in very accessible terms.
The bottom line is that ARG have made an enormous
contribution to explaining the importance of institutions in shaping and
determining policy outcomes, and point to the underlying roles of elites,
dominant coalitions of interest groups, and ideology in the creation and
protection of institutions that allocate benefits to those dominant interests,
in maintaining institutional stability over time, and by implication in
weakening institutions which either no longer serve their interests or which allocate
societal resources in ways they dislike. A core element in ARG’s analyses is to
argue that inclusive institutions (ie institutions that allocate societal
resources more broadly) lead to stronger economic and social development;
whereas non-inclusive institutions lead to weaker outcomes and ultimately to state
failure.
How then might we describe the institutional
frameworks which shape the Indigenous policy domain in Australia? The
summary below is more a thumbnail sketch than an attempt at absolute accuracy
and comprehensiveness.
The first point to note is that mainstream
institutions are the predominant influence over Indigenous policy outcomes: the
Constitution, the Parliament, the dominance of the Executive Government over
the Parliament, the Commonwealth’s extraordinary reach across mainstream policy
sectors such as education, health, employment, social security, the disability
support policy, taxation, the economy, and so on. The Commonwealth retains very
strong institutional influence over Territories both direct and latent (notwithstanding
legislation providing for self-government), and its mainstream legislation
outlawing racial discrimination has had an outsized influence over Indigenous
policy. Mainstream state and territory institutions focussed on essential
services and mainstream land laws, housing regulation, social housing provision
and criminal justice are also extremely influential in shaping Indigenous life
opportunities across urban, regional and remote contexts. While these are
generally considered inclusive institutions, the reality is that in many cases,
particular institutions, or the synergies between institutions lead to exclusionary
outcomes for particular segments of society. Indigenous interests are strongly represented
amongst those disadvantaged segments as the Productivity Commission Closing the
Gap dashboard demonstrates very clearly.
The second point is that Indigenous specific
institutions are in a state of prolonged stasis:
there has been virtually no new Indigenous specific institutional initiatives
for almost three decades. A high-level list of Indigenous specific
institutional initiatives over the past half century would include the
following policy measures and reforms.
The Whitlam and Fraser Government enacted land rights
legislation in the NT in 1976. States such as NSW, SA, Queensland and Victoria
enacted much more limited land rights regimes during the seventies and eighties.
The Fraser Government enacted the Aboriginal Councils and Associations Act in
1976 (updated in 2006 as the CATSI Act) and the Aboriginal Development
Commission in 1980. The Hawke Government enacted ATSIC in 1989 (incorporating
the ADC) and established alongside a more commercial entity now known as
Indigenous Business Australia. The Native Title Act was enacted in 1993 by the
Keating Government after the High Court forced the Commonwealth’s hand when it
handed down its decision in Mabo No.2. In 1995, the Keating Government
legislated the Indigenous Land Corporation and an associated Land Fund
acknowledging the reality that native title did not benefit all Indigenous
people. In 2007, the Howard Government (with ALP support) initiated the
Northern Territory National Emergency Response, involving the deployment of
unarmed ADF personnel and a suite of largely time limited legislative measures
to ensure Commonwealth freedom of action in undertaking various mainstream and
Indigenous specific measures. This legislation included provisions over-riding
the operation of the Racial Discrimination Act.
Most recently, in 2023, the Albanese Government took a referendum
on constitutional reform built around the proposal for a Voice to Parliament to
the Australian people, and following the loss of bipartisanship, it was
comprehensively defeated. Had the referendum been successful, it would have
made a significant contribution to the recognition of First Nations people at
an institutional level. However, the contribution of the Voice to driving
better policy outcomes was never guaranteed, as it depended on subsequent legislation
to scope out the detailed design and mechanics of is operations. There is no
guarantee that this subsequent legislation would have been effective (much like
expectation that the National Anti-Corruption Commission appears to have been
substantially weakened by the compromises made during the design and passage of
its establishing legislation (link
here).
Perhaps the highest profile non-legislated Indigenous
specific institution is the Closing the Gap framework established by COAG in
2008 along with the National Indigenous Reform Agreement which provided around
$16bn in associated funding over ten years (link
here: pages 7/8) and fundamentally revised
and updated in 2020. These latter revisions saw the reframing of the Closing
the Gap framework in a National Agreement signed by all Australian Governments
and the newly established Coalition of Peaks. The new National Agreement was fundamentally
flawed insofar as there was no overarching long-term funding package built into
it, and it was deliberately designed by governments to ensure that political
accountability was both deferred and widely shared, thus undercutting the
likely impetus for substantive ongoing reform. As a result of the large number
of ‘targets’, the devolution of responsibility to states and territories, the
complexity of the measurement approaches adopted, and the absence of any direct
alignment between targets and financial investments means that its
accountability frameworks in relation to government performance are effectively
non-existent. The ‘codesign’ of the
Agreement was in my view effectively a sham and has not worked for Indigenous
interests. The establishment of the Coalition of Peaks was necessary to make
this sleight of hand work, but the Coalition has not been funded adequately to
engage with governments across the huge breadth covered by the Agreement and
Closing the Gap framework. The refresh of Closing the Gap by the Morrison Government
was institutional change, but not institutional reform; it was a means of
shifting the goalposts with the result that Indigenous interests have, in my
view, been thwarted at virtually every turn. My submissions to the Productivity
Commission Review of Closing the Gap made this argument at some length but were
effectively ignored (link
here and link
here).
The third point to note is that notwithstanding
the 1967 referendum, the Commonwealth has for the last decade
been actively shifting Indigenous policy responsibilities to the states and
territories, in the process reducing the Commonwealth’s Indigenous policy footprint
in regional and remote areas, and thus limiting its capacity to know and
understand what is actually happening amongst the most disadvantaged segments
of the Indigenous population. I won’t seek to spell out every instance, but the
following examples are illustrative of the wider trend. IN 2018, the former LNP
Government discontinued the National Partnership Agreement on Remote Indigenous
Housing and its associated $5.5bn in funding (except in the NT) when the ten-year
term expired arguing it was a state responsibility. More recently, following
the Voice referendum defeat, the Albanese Government has left the treaty and
truth telling processes its formerly promised to the states and territories (link
here).
The combined effect of these three points is to build a
very strong case for the proposition that there has been virtually no
significant institutional policy reform directed to the Indigenous policy domain
over the past thirty years. I use the word ‘reform’ to mean ‘positive change’,
not just change. This is the institutional stasis referred to above. But this
institutional stasis has been reinforced and amplified by a series of major
institutional setbacks for Indigenous interests which have undoubtedly had a
cumulative impact.
So over those same thirty years we have seen (even as
increasing amounts of land have been recognised as native title) largely
retrograde amendments to the Native Title Act including the so-called Wik
amendments; the pre-emptive abolition of ATSIC in 2005; the retrograde
imposition of punitive policies under the Northern Territory Intervention
(which continue to resonate in First Nations’ narratives even after the actual
policies imposed have run their course); the failure of the Closing the Gap
framework to drive tangible improvements in Indigenous socio-economic status
(for reasons I explored in two related Discussion Papers in 2021: link
here and link
here). Indeed, key socio-economic indicators have been worsening over time
(I wont rehearse the data available in the Productivity Commission Closing the
Gap Information Repository (link here). To pick out two that I find incomprehensible,
extraordinary national incarceration rates and the extremely concerning
education outcomes in remote regions and the concomitant levels of social
dysfunction particularly amongst school age youth point to a conjunction of
multiple social, economic and cultural crises which adjectives such as
‘deep-seated disadvantage’ and ‘deep poverty’ do not do justice.
Perhaps the most significant institutional reform failures have
been successive governments’ unpreparedness to take up opportunities that have
one way or another been proposed. The Australian Law reform Commission
delivered a major report on potential reforms to the Native Title legislative
and policy framework in 2015 (link
here); it sank without trace and without a Government response. In June
this year, the Attorney General commissioned a new review of the Native Title
Act Future Acts regime (the core of the legislation) (link
here) to report by December 2025. My prediction is that it too will sink
without trace. To take one native title example that particularly annoys me,
through all these reviews, governments have known that the Prescribed Bodies
Corporate that are required to be established under the Act to hold
native title have no comprehensive operational funding framework and are
beholden to siphoning fees off third parties (such as miners and developers)
seeking access to native title lands to fund their operations. Yet governments prefer
to undertake reviews rather than take decisions to adequately fund bodies
established by legislation of the Parliament. Another lost opportunity is the
failure of governments to respond to the Indigenous Evaluation Strategy review
undertaken by the Productivity Commission in 2019/20 (link
here). And of course, the failure of the referendum related to the proposed
Indigenous Voice to Parliament is another lost opportunity to reform the
institutional framework that shapes the Indigenous policy domain.
While it is possible to argue about the detail of each of
the retrograde changes and lost institutional reform opportunities of the past
thirty years, the absence of major reforms with the substantive financial and
intellectual capital resources to make a difference (summarised by the cop out
phrase ‘Indigenous affairs policy is intractable’) and the sheer accumulation
of retrograde changes over the past thirty years provides irrefutable evidence
that there are deep and powerful systemic or structural forces at work (link
here).
The existing coalitions of interests that benefit from the
institutional status quo (often referred to as ‘elites’) are not prepared to
give up their shared benefits and allow new interests access to the ongoing
implicit negotiation of institutional adjustments with their concomitant
adjustment of shared benefits. Those with the power and influence to force
their way to the negotiating table are included, and those without the power
and influence are ignored and effectively excluded. The latter group includes
the vast majority of Indigenous interests, particularly in regional and remote
Australia. It is this dynamic that Alice Evans described when she wrote in the
Substack linked above:
Contending coalitions are
constantly vying for ideological and institutional dominance. In the past, they
primarily sought conquest. But now it’s a battle for persuasion - in which
prestige reigns supreme.
The problem for Indigenous interests is that they are not
losing just one or two fights. They are losing comprehensively, and
continuously. In the battle for institutional influence, Indigenous interests
are either excluded by governments (who are the mediator between contending interest
based coalitions) either by ignoring Indigenous aspirations, or by using delay,
complex processes and ultimately window dressing to ensure that the status
quo ante between the powerful interests is not upset.
The challenge then for Indigenous interests is how to pull
themselves up by their bootstraps and somehow gain a guaranteed and
unquestioned seat at the table at least when key issues of concern are being
discussed (or are sought to be ignored). The Indigenous Voice to Parliament as
conceptualised by Noel Pearson and Megan Davis was an attempt to be granted, by
constitutional right, a seat at the table in relation to the consideration of
laws affecting Indigenous interests. That opportunity has been refused at best for
the next decade or two, and at worst perhaps forever. But it is not the only
opportunity on offer, and nor was it the only pathway forward.
What then are the strategies available to
Indigenous interests to increase the likelihood of gaining seats at the table
when key decisions are being taken on institutional design and development that
impacts their interests and their lives? That is the topic I turn to
in Part Two of this post.
21 October 2024
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