We
must not make a scarecrow of the law,
Setting
it up to fear the birds of prey,
And
let it keep one shape till custom make it
Their
perch and not their terror.
Measure for Measure Act two, Scene one.
A pervasive
issue across the Indigenous policy domain is the absence of effective ― or in
many cases any — regulation of both private and public sector activities
impacting Indigenous citizens.
Conceptual scene
setting
This is a much
wider issue than just the impacts on Indigenous communities, organisations and
citizens, but there are some factors that make it a more serious issue for
these Indigenous interests.
First, the poor effectiveness of regulation
across mainstream domains is the result of sustained lobbying and advocacy
(much of it behind closed doors) by interest groups with a vested interest in
loose or non-existent regulation.
To cite just a
few examples, sub-standard regulation has received extensive media coverage in
the past decade in the banking, financial services, aged care, disability
services, out of home care, funeral insurance, alcohol retail, food labelling
and gambling industries to mention only those areas that immediately come to
mind. There are two elements involved in considering this issue: one is the
adequacy of the regulatory oversight of existing regulations; the second is the
degree to which the existing regulations are adequate or alternatively not
required. Both elements play into the issue of regulatory failure.
In many of
these cases of regulatory failure, the persistence of poor social or economic
outcomes has led to the commissioning of one or more national or state level
reviews, coronial inquiries, or royal commissions. It is rare for the results
of such reviews and inquiries to be implemented wholeheartedly and quickly; the
normal response of governments is to initiate further consultations or reviews
which slow the impetus for reform and are then the subject of further lobbying
and pressure from the interest groups with most to lose from substantive
reform. In my observation, governments rarely do more than resort to minimal
reforms, while leaving the industry interests that would be impacted by
substantive reform substantially unaffected. The status quo ante is usually
maintained and indeed often reinforced.
The reason
these mainstream regulatory failures are more serious for Indigenous interests
is that Aboriginal and Torres Strait Islander citizens are more likely to be
economically and socially disadvantaged and are thus more vulnerable and at
greater risk of being adversely impacted by mainstream commercial activities
that avoid proactive regulatory oversight.
Second, Indigenous interests are not (yet?) as
well organised as the industry-based interest groups to exert countervailing
advocacy pressure, particularly on mainstream policy issues which are
nevertheless crucial elements in their social and economic lives.
Third, the cultural and ideological narratives
that are ubiquitous across the Indigenous community (e.g. the importance of self-determination,
or community control in service provision), and which are crucial elements in
building and maintaining notions of Indigenous identity and culture have unintended
negative side-effects insofar as they shift the focus of Indigenous
organisations and even peak advocacy organisations away from mainstream issues
and towards Indigenous specific issues.
Fourth, the reality is that the regulation of
many mainstream issues falls to the states and territories, and this means that
the challenge of monitoring regulatory failures, proposing solutions,
pressuring governments to pursue reform and devising policy solutions spans not
just one national policy domain, but an additional eight state and territory policy
jurisdictions. The result is that effective monitoring requires the creation of
multiple state and territory based Indigenous advocacy organisations with the
capacity to follow an expansive portfolio of public and private sector
activities within their sectoral remit.
Of course,
regulatory failure is not just an issue in the mainstream. It is endemic in the
Indigenous specific policy domain, and in many instances, because of the nature
of the composition of the Indigenous policy domain, the activities that are in
effect under-regulated are operated by Indigenous controlled corporations
serving their Indigenous constituencies. There are at least three factors that
contribute to sub-optimal regulation across the indigenous policy domain. First,
governments who are loathe to regulate robustly in the mainstream do not wish
to regulate to a higher standard in the Indigenous policy domain. Second,
government regulators do not wish to be perceived as racist, or to be
compromising Indigenous self-determination. And third, increasingly,
regulators in the Indigenous policy domain report to Indigenous ministers, or
are staffed by Indigenous bureaucrats, who may be reluctant to robustly address
governance and service failures by Indigenous controlled entities.
Regulatory
failure (or even regulatory weakness) whether in the mainstream or the
Indigenous domain is not in the public interest. It disadvantages consumers in
private sector markets and contexts, and service delivery constituencies in
public sector contexts. Once embedded, it creates the preconditions for future
sub-optimal performance with concomitant adverse impacts on intended beneficiaries.
It is under-reported by the media with most publicity focussed on the
deficiencies of organisations or individuals, and not on the absence or
systemic weakness of the regulatory oversight that might have prevented the
fraud or corruption or service mismanagement that attracted the media attention.
A key reason for under-reporting is that regulatory failure is invariably
systemic in its impacts, and it extends beyond the time horizon of most
journalist and media reporting. Another is that it is not as susceptible to
being framed as a simple narrative.
Another reason
it is not in the public interest is that regulatory failure is a form of
government failure, and in many cases, it is the result (whether intentionally
or unintentionally) of implementation failure by governments. It thus
contributes to the much more common elements of government dysfunction, at
policy, program and even project levels; failures that inevitably contribute to
the decreasing levels of trust in government in Australia (link here). While trust in government in
Australia is higher that the rest of the world (link here), a trust level of fifty percent is
hardly a ringing endorsement.
Regulatory
failure is thus simultaneously endemic and invisible; it has multiple causes
and is often both complex and systemic in its impact.
Real world
examples
To bring this
discussion down to tin tacks, I want to briefly point to two separate sets of
media reports that recently caught my attention, both of which involve
substantial and serious regulatory failure, and both of which have had, and
continue to have, a disproportionate adverse impact on Indigenous citizens. The
discussion of each of these cases focusses on the high-level regulatory
implications, and I do not attempt to summarise or consider every aspect of
each case.
On 9 May 2025,
the AFR ran an investigative report headlined How a Sydney billionaire
became the pokies king of Alice Springs (link here). This was followed up on 23 May 2025
by a report (link here) based on an interview with former NT
Chief Minister (and longstanding backroom political operative) Shane Stone.
Headlined Former NT chief’s pokies regret: ‘I wish we never had them’. Taken
together, these articles point to extraordinary levels of on-site gambling in
the NT’s casinos and other premises, extremely high rates of Aboriginal
participation in gambling at these venues, low to non-existent levels of
regulation of the use of gambling machines, high levels of revenue to the NT
Government and extraordinary levels of influence by gambling industry interests
over the NT Government (whichever party is in power), and non-existent levels of accountability and
responsiveness of elected governments for the community harm flowing from widespread
gambling addiction. According to the AFR, the NT has the highest per capita
expenditure on gambling of any jurisdiction in the nation, and the highest per
capita government revenue from gambling:
The
Northern Territory is the state with the least scrutiny, the loosest probity
and the lowest taxes… “I would argue that the regulators, particularly in the
Northern Territory, are not active participants in the regulatory process,”
gambling expert Charles Livingstone says. “By and large, it’s left up to the
venues to regulate themselves, which is entirely like the fox looking after the
hen house.”
The AFR report
spends considerable time explaining how little oversight is applied by ASIC to
the owners of the major gambling venues in the NT and contrasting the numerous
community activists calling for gambling reform with the slow and in-camera
legal processes applied to any challenges to even the most minimal expansion of
access to gambling in Territory towns. Increasingly, community activists are
calling for national intervention.
Shane Stone’s
statements to the AFR are simultaneously an apparent mea culpa and
change of heart (“If I’d had the courage of my convictions, I would have
wound back the [poker machine] numbers, but I didn’t do that,”) and a
nuanced and politically astute nudge of the political discussion towards
subsidiary issues such as limiting access to cash within gambling premises while
making a strident argument against national intervention and in favour of state
and territory led reform processes. Yet the states and territories are both
part of the problem and less visible to the national constituency necessary to
drive national reform. At the risk of being accused of extreme cynicism, I am left
wondering whether the former Chief Minister is yet to find the courage his
convictions require. The AFR sought and obtained comment from current federal
ministers with gambling related responsibilities. Compared to the mountain of
regulatory reform required in the NT and beyond, their comments amount to a
hill of beans. I recommend interested readers take a close look at both
articles.
The bottom line
is that mainstream and national regulatory disinterest and failure in relation
to on-site gambling has had, and continues to have, seriously adverse impacts
on vulnerable Aboriginal citizens in the NT. This impact is not felt just by
those who gamble, but by their families and intimate partners. Recent ANU
research (link here) suggests that between 5 to 8 percent of
the national mainstream population is adversely affected by gambling. Those
most at risk are low income and economically disadvantaged. These figures are
likely to be higher for Aboriginal residents in the NT.
The second case
worth mentioning was published on the front page of the Sydney Morning Herald
on 24 May 2025 and in The Age (link here $) under the headline ‘Health bosses
rack up $400, 000 travel bill’. The report deals with what appears to be
endemic and enduring dysfunction within a major community controlled Aboriginal
medical service, CTG Aboriginal Health Services, operating across at least
three major western NSW towns and providing a wide range of medical services. CTG’s
funding last year exceeded $11m and was sourced from the Commonwealth, the NSW
Government, and Medicare rebates according to its annual report (link here). The headline focusses on what
numerous complaints allege is unwarranted travel by senior executives while
financial constraints limit the provision of health services to its
constituency. There is no allegation of fraud, but it is clear that there are
serious internal management issues not to mention an extraordinary lack of
judgment by the organisation’s leadership. The article cites numerous sources
alleging that the provision of health services to Indigenous residents across a
large part of western NSW have suffered. Notwithstanding its ongoing funding,
its annual report provides no information on its incorporation status, no
financial report, and no information on its governance processes including how
its Board is appointed and the extent to which it represents the wider
Indigenous community across its geographic span.
These shortcomings
reflect poor governance practices and, in my view, do not meet the requisite
levels of downward accountability to the community let alone upward
accountability to the funding agencies and taxpayers generally. It is easy to
criticise the organisation, and on the facts described in the SMH article, such
criticisms appear warranted. Yet in my view, these shortcomings reflect a
deeper level of regulatory failure by the relevant areas within the
Commonwealth Department of Health, Disability and Ageing and the NSW Government.
The standard of
public accountability provided in CTG’s annual report in my view is far below
what a funding body should expect in exchange for its continued funding. There is
also a suggestion in the SMH report that the ongoing dysfunction has been going
on for some years without being resolved. This raises the further question: if
the regulation of this organisation is so lacking, then what is the quality of
regulation over other similar organisations? How widespread is this regulatory
failure which allows internal management dysfunction to endure for extended periods
in key health services delivery organisations utilising government funds, and which
adversely impacts the most disadvantaged Australians.
Again, the
bottom line is that poor upward and downward accountability for key health
services in one of our largest states and across an expansive area of regional
communities appears to be tolerated and is likely the default modus operandi
for regulatory oversight. This poor regulatory performance is a key driver of
sub-optimal management performance by outsourced organisations delivering
taxpayer funded programs and leaves the most vulnerable and disadvantaged
citizens to ultimately pay the cost.
Conclusion
Mainstream
regulatory failures in gambling, and the Indigenous specific regulatory
failures in health services are contributors to the systemic drivers of
deep-seated disadvantage. To the extent that these regulatory failures are
widespread, and the default assumption must be that they are, then they work
against closing the gap. It is worth emphasising this point: regulatory
failure, which is a matter of technical capability for government, is
conceptually a prime contributor to any effort address disadvantage. To the
extent that the regulatory failure spans multiple sectors, or even spans the
entire breadth of government responsibilities, the prospects of removing
Indigenous disadvantage would be fatally undermined.
Closing the Gap
(however you wish to frame it, and whatever targets you decide to use) is built
upon a near ubiquitous implicit assumption that governments know what they are
doing, are focussed on the public interest (and not private interests), and
partner with or contract with entities that are fit for purpose. In turn, these
assumptions (which take on the form of an ideologically based view of how our
democratic system works), are based on a precondition of the effective
regulation of entities operating within our economic and social realms to
ensure that they are acting consistently with the public interest. If they are
not acting in the public interest, then our political system is not fit for
purpose.
The key to ensuring
that private sector entities (operating behind a corporate veil designed to
protect individuals against commercial losses and to encourage the risk taking
that market economies rely upon) and public funded entities engaged to deliver
outsourced government services are acting in the public interest is to focus on
the quality of regulation of their activities. To the extent that regulatory
oversight is defective, deficient or non-existent, the public interest will
suffer, and in the real world, the victims will likely be disproportionately
found amongst the disadvantaged whether in mainstream or Indigenous specific
contexts.
Where
regulatory failure is endemic, there is no easy fix. Governments will not pull
themselves off the ground by their shoelaces. Those who are committed to seeing
the public interest protected must find ways to exert strategic political
influence, and to pursue, piece by piece, step by step, greater transparency by
governments of their use of taxpayer resources and greater public dialogue
encompassing the systemic issues that operate to undermine the public interest.
For Indigenous
interests, and in particular the Indigenous leadership, there will be
considerable benefits in pursuing strategies that build their organisational capabilities
to monitor and exert persuasive influence on policy. Risks include the
likelihood that governments or other interest groups will seek to co-opt
Indigenous advocacy, and that internal dissension and external criticism will
undermine the persuasiveness of Indigenous advocacy. The development of internal
organisational processes and mechanisms that are both upwardly and downwardly
accountable and as transparent as possible will serve to minimise such risks.
27 May 2025
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