Christmas fudge: eight ways to mislead the Senate - an update on Minister Scullion, the ILC, and the treatment of Senate Estimates Committees

‘Tis an ill cook that cannot lick his own fingers

Romeo and Juliet, Act IV, scene 2

Further to my recent post (link here) on the Minister for Indigenous Affairs’ failure to comply with his statutory obligations, the Minister has now belatedly provided his response to the question taken on notice during a recent Senate Estimates hearing.

In essence, the issue relates to the reasons for the failure of the Minister to terminate an ILC Director who missed five consecutive meetings in early 2018.

Section 192H(4) of the Aboriginal and Torres Strait Islander Act 2005 (ATSI Act) states:

If an Indigenous Land Corporation Director who holds office on a part-time basis is absent, except on leave granted under section 192C, from 3 consecutive meetings of the Indigenous Land Corporation Board, the Minister must terminate the appointment of the Director.

I recommend readers re-read my original post as I will cross reference key information therein in analysing the adequacy of this response.

Here is the question and the answer submitted on 17 December and copied verbatim from the Parliament web site (link here):

Senator the Hon Kristina Keneally: asked the Department of the Prime Minister and Cabinet on 2 November 2018

During Estimates, Senator Keneally asked:

Senator KENEALLY: I want to be clear. My concern is not so much with Mr Martin's actions. It is with the actions of the minister in accordance with the act. As you have flagged, if there are particular challenges of people being able to attend meetings or being supported to do so, could you also provide advice as to what you are doing to address that. Senator Scullion: I will take that on notice. I appreciate your comments, Senator. This is about me and this is about the board and reporting on the act. I do appreciate that that is what the questions are about. I will provide a comprehensive answer to that on notice.

Can the Minister advise what steps he has taken in this matter?

Answer — The Indigenous Land Corporation Chair wrote to the Minister for Indigenous Affairs, Senator the Hon Nigel Scullion, about the absences of Mr Martin and subsequently confirmed on 31 August 2018 that Mr Martin had been granted leave of absence from these meetings.

Perhaps the easiest way to analyse this answer is to focus on how many ways it manages to mislead the Senate.

First, the Minister promised a ‘comprehensive response’. He acknowledged that the question was about his actions (or inactions), about the Board’s involvement, and about the reporting from the ILC of relevant information.  He provided his response in one sentence of 42 words, with no explanation of his role and actions, vague reporting of the ILC Board’s role and involvement, and no information on the adequacy of the reporting of relevant information in relation to the requirements of the Act. This is patently not a comprehensive response. On the basis of this response, the Minister’s statement to the Estimates Committee that he would provide a comprehensive response was patently misleading.

Second, the ILC Chair wrote to the Minister about some but not all of the relevant absences of Director Martin (see my previous post for details). The answer provided states that the Chair wrote to the Minister about the absences, but in fact he did not mention all the absences. It is misleading in this respect.

Third, the Chair of the ILC wrote twice to the Minister (see previous post for details), once on 4 May advising that the requirements of the legislation relating to termination of the Director had been met and requesting that Director Martin be terminated in accordance with the Act, and later in July reversing his position and suggesting termination was no longer required (notwithstanding the clear intent of the legislation). The Minister’s failure to outline and explain this is misleading by omission.

Fourth, the response states that the ILC Chair had confirmed in a letter dated 31 August 2018 that Director Martin had been granted leave of absence from ‘these meetings’ (ie the incomplete set of meetings). The Minister’s response omits to mention that the granting of leave of absence was retrospective, and is thus misleading by omission.

Fifth, the response fails to mention that while the ILC Chair did confirm that leave of absence had been granted, the ILC had subsequently formed the view that the Chair’s purported actions in granting retrospective leave of absence were beyond his authority, and thus of no effect (see previous post for details). The Minister should have been advised of this discovery particularly as it meant that the 31 August letter to the Minster was substantively incorrect. By the time the Estimates questions were answered, the relevant information was available on the ILC FOI log and had been the subject of an article on 14 December in the Mandarin (link here). There seems little basis for an argument that the Minister or PMC were not aware that the 31 August letter was substantively incorrect (and if they were not, they should have been), yet the Minister went ahead and used it as the basis for his lack of action in his response to the Senate. The response was thus fundamentally misleading in relying on the ILC Chair’s 31 August letter without further explanation.

Sixth, the response omits to mention that the Minister and the Chair had discussed the issue in June (refer previous post). The response not only fails to indicate the tenor and content of those discussions, but avoids any mention of the meeting notwithstanding that it was clearly a crucial element in the Minister’s consideration of the events. Given that the question explicitly refers to ‘what steps’ the minister took, the response appears to be deliberately misleading in relation to this meeting albeit by omission.

Seventh, the response omits to deal with the issue of the delay between the third consecutive missed meeting (on 9 March 2018) and the eventual effective granting of retrospective leave of absence on 1 November, a period of almost eight months. Even were we to grant the Minister the benefit of the doubt and use the purported granting of leave of absence in August as the relevant date, the delay amounts to almost six months.

Eighth, the response provides no information or any explanation for the Minister’s failure to act in a timely way to comply with his statutory obligations under the legislation. It is clearly deliberately misleading in this respect.

What might we make of all this. I focus on two general points.

The first relates to the particular issue relating to the minister’s statutory obligations, and the analysis in my previous post. The Ministers ‘explanation’ offers no alternative explanation which might cast doubt on my earlier analysis.

It leaves major questions unanswered concerning the quality of governance within the ILC under the current Chair’s tenure, the quality and accuracy of information provided to the Minister, the processes put in place by PMC to ensure the Minister is in a positon to carry out his statutory obligations under the Act, and to oversight more generally the activities and operations of a statutory corporation within his portfolio. Further, while it implicitly lays blame and attention on the information provided by the ILC, it fails to acknowledge that that information was in many respects incorrect, misleading and inaccurate, and it fails to identify what action the Minister has taken or intends to take to rectify these deficiencies in the future.

Most importantly, the response and ‘explanation’ fails to address the likelihood that the Minister played a direct role in encouraging the Chair to change his formal advice and instead request that the Minister defer action while a retrospective leave of absence for Director Martin was put in place.  Determining what transpired in relation to this issue goes to the heart of determining what has occurred here, and has significant implications for the independence of the ILC. It also raises serious questions about the capacity and preparedness of the ILC Chair and ultimately the Board to carry out their statutory responsibilities independently of Ministerial interference. All in all, the extreme parsimony of the Minister’s response only adds to the weight of suspicion that he was involved in an inappropriate plan aimed at avoiding the necessity for him to carry out his statutory duty.

The second point relates to the apparent disdain with which this Minister treats the Senate and in particular the Senate Estimates Committee. He promised a comprehensive response and delivered what amounts to a deliberately misleading fudge. He missed the key deadlines in terms of the provision of answers. And he comprehensively failed to adequately explain why it is that he failed to act in accordance with his statutory obligations.

Of course, this is an issue which goes beyond this Minister, and appears to be part of an inexorable slide in the influence of the Parliament vis a vis the Executive. It is time that the Parliament stood up to the Executive, demanded substantive accountability from Ministers. 

In particular, it is to be hoped that the Senate will refuse to accept the self-serving fudge this Minister serves up to them and in turn, to the Australian people.

Are statutory obligations optional for ministers: the Minister for Indigenous Affairs and the Indigenous Land Corporation.

                                                                        The laws are mine, not thine

                                                                        Who can arraign me for’t  ?

                                                                        King Lear, Act 5, 3.                       

Trust in our institutions, including the rule of law, is widely viewed as being in serious decline (link here). The causes are complex, and the implications for democracy and for the integrity of public policy are serious. The Indigenous affairs policy domain is not immune from these wider societal trends and forces.

As a community, we have two broad choices: to bury our heads in the sand, and watch as a slow motion disaster unfolds. Or to seek to engage when we see issues, call them out, and require our public institutions to account for their actions.

At the Senate Estimates Hearing on 26 October 2018, the issue of Minister Scullion’s compliance with his legislative responsibilities under the Aboriginal and Torres Strait Islander Act 2005 (ATSI Act) was raised by Labor Senator Keneally (link here; pages 19-20).

Section 192H(4) of the ATSI Act, states:

If an Indigenous Land Corporation Director who holds office on a part-time basis is absent, except on leave granted under section 192C, from 3 consecutive meetings of the Indigenous Land Corporation Board, the Minister must terminate the appointment of the Director.

The ILC Annual Report (link here page 57) had indicated that one Director, Mr Bruce Martin, had missed five consecutive meetings without leave of absence over a period of three months and over the course of the year had missed 8 out of 12 meetings of the Board in all. The discussion in the Estimates Committee was, as is often the case, somewhat confused and at cross-purposes. The Minister, after apologising to Senator Dodson for providing him with unspecified inaccurate information before the hearing, first suggested that the reasons for Mr Martin’s non-attendance related to ‘cultural and business responsibilities’, then shifted to arguing the exigencies of remoteness and communications were the issue. Then he shifted to a slightly different argument:

There was a short period of time in which this individual was unable to attend the meetings. These were not anticipated. At each occasion, some unanticipated things happened…

He went on to state:

It was understood that a leave of absence wasn't granted before the meeting because he wasn't able to communicate that he wasn't going to be there at the meeting. When the extenuating circumstances were provided to the chair, he understood that leave should have been granted should he have known beforehand. In any event, we'll take that on notice.

In response, the following exchange occurred:

Senator Keneally: I want to be clear. My concern is not so much with Mr Martin's actions. It is with the actions of the minister in accordance with the act. As you have flagged, if there are particular challenges of people being able to attend meetings or being supported to do so, could you also provide advice as to what you are doing to address that.

Senator Scullion: I will take that on notice. I appreciate your comments, Senator. This is about me and this is about the board and reporting on the act. I do appreciate that that is what the questions are about. I will provide a comprehensive answer to that on notice.

As of today, the Minister’s promised answer is not on the Senate Estimates Committee website, and is, along with scores of other unanswered questions, listed as overdue. In the light of the information below, it is to be hoped that the Minister’s answer is comprehensive and detailed.

Following the Senate Estimates discussion, a Freedom of Information request was lodged with the ILC for documents related to these issues, and this week a cache of relevant documents was posted on the ILC FOI log (link here). These documents raise numerous issues of concern, not all of which are dealt with here. In particular, they confirm that for an extended period of almost eight months the minister failed to comply with his legislative responsibilities under the ATSI Act. The Minister’s obligation was only resolved when the ILC Board retrospectively granted Director Martin leave of absence on 1 November 2018.The documents also raise an array of serious questions regarding the governance of the ILC.

Like Senator Keneally, I do not wish to raise concerns regarding Mr Martin’s actions, as I do not have adequate information to make an informed assessment. Notwithstanding multiple references to ‘extenuating circumstances’, nowhere do the documents which include formal advice to the ILC Board and to the Minister make clear what exactly those circumstances were.

The following discussion is based on the documents released under FOI. References to item numbers are to documents published on the ILC FOI log.

The released documents outline a rather different sequence of events to the narrative portrayed at the Estimates Committee hearing. Director Martin missed Board meetings #220 on 1 February 2018; #221 on 21 February 2018; #222 on 9 March 2018; #223 on 18 April 2018; and #224 on 11 May 2018.

On 17 March, the ILC CEO advised the Chair that Director Martin had missed three consecutive meetings [item 14]. On 18 April, the ILC Board removed Director Martin as Chair/Director of AIA, an ILC subsidiary (a remunerated position) [item 13]. On 23 April, the Chair wrote to Director Martin giving him the option of resigning to ‘avoid the Minister actually taking the step of terminating your appointment’ [item 16]. The Chair received no response.

On 4 May 2018, (seven weeks after Director Martin missed his third consecutive meeting), the Chair wrote to Minister Scullion indicating that Director Martin had been absent from three consecutive Board meetings without written leave of absence and noting ‘his appointment should now be terminated’ [item 19]. This letter was misleading in that it only mentioned three meetings whereas Martin had now missed four consecutive meetings. The letter also listed the first, second and fourth meetings (#220, #221, and #223), but referred to them as consecutive meetings.

There was no formal response from the Minister to this advice.

On 3 July 2018, unbeknown to other ILC Board members and ILC management [item 40; item 58], the ILC Chair wrote again to the Minister, but abruptly reversing his position in relation to Director Martin [item 21]. He wrote inter alia:

I wrote to you on 04 May 2018 requesting the termination of ILC Director Bruce Martin, who was absent from three consecutive Board meetings without leave granted. With consideration for the Board achieving the best possible outcomes going forward, I would like to rescind this request and I seek to retain Director Martin as a part-time Director.

As discussed when we met in Adelaide on 14 June 2018, the personal extenuating factors which led to the absence of Director Martin now allow him to return to his position and carry our his full duties on the Board…

This letter reeks of a political stitch up. It continues to refer to three missed meetings whereas by this point, Martin had missed five consecutive meetings. Its tone is one of a request from the chair of a statutory corporation for a discretionary decision from a minister, rather than reflecting the mandatory obligation on the minister. Most revealing of all is the reference to the meeting of 14 June between the Minister and the Chair where the issue was discussed. There are two possibilities.

The less likely possibility is that the Chair unilaterally, and without consultation with his Board, changed his mind. There is nothing in the documentary record which provides any rationale for such a change of mind. If this scenario was the case, the Chair could and should have convened a Board meeting and argued for a Board decision to grant Director Martin retrospective leave of absence for his missed meetings, and then advised the (very tardy – two months tardy!) Minister that termination was no longer appropriate. Instead, he secretly wrote to the Minister, and sought to have the termination process stopped. The Minister’s response (see below) acknowledging the requirements of section 192H(4) of the ATSI Act, and seeking confirmation that leave of absence had been granted, and the Chair’s further letter to the Minister were also withheld from the Board and management.

The more likely scenario, however, is that the Minister, acting either on his own, or in response to a communication from Director Martin (who the Government had previously appointed to the Prime Minister’s Advisory Council), sought to avoid terminating Director Martin as was required by section 192H(4) and instead arranged with the Chair for the provision to Director Martin of retrospective leave of absence and a letter rescinding his earlier notification of missed meetings to provide cover for the minister’s non-decision. This scenario is supported by the obsequious tone of the Chair’s 3 July letter which resorts to banality (‘I seek to retain Director Martin as a key Indigenous refreshed participant for the future success of the Board…’) and the weight put on the 14 June meeting with the Minister. Moreover, the obsequious tone continues in the subsequent 31 August letter (see below) which thanks the Minister for the opportunity to retain Mr Martin as an ILC Director, and which includes a further paragraph which only now relays a firsthand discussion between the Chair and Director Martin, and which contrasts with the vague wording of the 3 July letter which links the resolution of the ‘extenuating circumstances’ to the discussion on 14 June, and not to any firsthand discussion between the Chair and Director Martin.

Either scenario is problematic. If it was the first scenario, the Minister was misled as to the number and the dates of the relevant meetings, and the ILC Board was kept out of the loop. Hardly good governance. If it was the second, the Minister was effectively engaged in a collusive process explicitly designed to subvert his clear statutory obligation to terminate Director Martin.

On 20 August, the Minister wrote to the ILC Chair [item 25], ignoring the letter of 4 May:

Thank you for your letter of 3 July 2018 about Mr Bruce Martin continuing as a Director of the Indigenous Land Corporation.

I note your advice that Mr Martin was absent from three consecutive Board meetings due to extenuating personal factors and that he is now able to carry out his full duties as a Director. I would appreciate clarification in writing form you confirming if Mr Martin has been granted leave of absence for the period he was away due to extenuating personal circumstances. [The letter went on to mention the Board’s powers to grant leave of absence and the requirement to terminate a Director who is absent from three consecutive meetings without approved leave of absence].

On 31 August 2018, the ILC Chair replied [item 26], continuing to refer misleadingly to the three meetings, and confusing the dates (again), and stated:

I write to confirm to you, that I have written to Mr Martin, on behalf of the ILC Board, to grant him leave of absence from these Board meetings, due to extenuating personal circumstances.

On the same date, the Chair wrote to Director Martin [item 27] purporting to grant leave for the three missed meetings. Again, these letters were drafted and sent without input from ILC management. Nor was there consultation with, or provision of copies to the ILC Board.  

Following the discussion in Estimates, and an article in The Mandarin (link here), a flurry of activity broke out within ILC and PMC management. A subsidiary issue, which I have not focused on, related to the ILC Annual Report, and its accuracy. During this process, it became apparent to ILC management, following queries from PMC officers, that the Chair did not have a delegation from the Board to unilaterally grant retrospective leave of absence to Directors who did not notify him in advance [item 48]. The consequence was that the Chair’s letter of 31 August to Director Martin purporting to grant leave of absence was beyond power, and consequently the Chair’s ‘confirmation’ to the Minister that leave of absence had been granted was substantively incorrect. It was then decided to convene a Board meeting to formally grant Director Martin retrospective leave of absence, to address the uncertainties around the Annual Report, and in particular to fix the defective efforts by the Chair to grant leave of absence. The final Board paper [item 65] hedges around the defective attempt by the Chair to grant retrospective leave of absence to Director Martin, and somewhat disingenuously references a Board meeting in February 2018 where an in camera session discussed Director Martin’s poor attendance, but no outcomes were recorded. The Board paper goes on to state:

Considering the scrutiny that this has already attracted from the Senate Standing Committee [sic], it is prudent for the ILC to take a very conservative approach to the issue and obtain a clearly recorded Board decision to retrospectively approve Director Martin’s absences from the meetings.

The problem with this too clever by half formulation is that there is absolutely no evidence that the Board delegated to the Chair the power to grant leave of absence during the in camera session, and nor does it square with the Chair’s 4 May letter to the minister advising him to terminate Director Martin.

The Board paper recommended that the Board:

Retrospectively approve Director Martin’s absence from ILC Board meetings 220, 221 and 223 dated 1 February, 21 February and 18 April 2018.

The Board paper also dealt with the Annual report issue by proposing the insertion of a footnote into the 2017/18 Annual Report on the ILC website clarifying the situation. The footnote will state:

The ILC Board approved leave of absence for Director Martin (meetings 220, 221 and 223) in the 2018/19 financial year. Retrospective leave of absence was granted pursuant to s192C of the ATSI Act.

There are a range of issues with the Board Paper and the recommendations.

Nowhere does the Board paper deal with or bring to Directors’ attention the fact that the Minister was misled in various respects by the Chair’s secret correspondence, and nor does it propose any action to address or remedy that. The proposal to grant leave of absence for only three non-consecutive meetings (which reflect the original error in the Chair’s correspondence and which were then listed in the Minister’s reply does not align in any logical way with the ostensible reason for granting Director Martin the retrospective leave of absence, namely the so called ‘extenuating circumstances’. It is as if ILC management (perhaps under the direction of the Chair) are focussed solely on relieving the Minister of his statutory obligation rather than addressing Director Martin’s ‘exceptional circumstances’ (whatever they were). 

The issue with the recommendation in relation to the Annual Report is that it ignores the fact that Annual Reports are provided to the Minister for tabling in Parliament, and this has already occurred. Any change to the Annual Report (even to add a footnote) should therefore mean that the revised document is tabled in Parliament. As of today, the Annual Report does not appear to have had a footnote added to the relevant table.

The Board meeting on Thursday 1 November 2018 approved both recommendations [item 70]. The various versions of the draft minutes are edifying to read, and include a number of rather self-absorbed statements by the Board, and an apparent complete absence of appreciation that the Board has a responsibility to account for its actions. In an email from one Board member who could not attend the meeting and which was circulated to five Board members [item 58], he listed the various instances where the Chair had acted unilaterally without Board involvement, but makes no criticism of the Chair, and suggests no remedial actions. Nor do the draft minutes indicate that Board members expressed any concern at the actions of the Chair. Indeed, the response of the Board, presumably influenced by the views of the Chair, was to suggest that the Chair should have greater power to act unilaterally. One paragraph states:

The lesson learnt from this are that the 2013 resolution [on delegations relating to leave of absence] need to be changed to give greater flexibility to the Chair to deal with exceptional circumstances…

This led to two actions being identified: one to provide the Chair with greater flexibility to approve retrospective leave of absence; another to seek an amendment to the legislation to give the Minister ‘flexibility to decide not to terminate the appointment of an ILC Director if they have missed three consecutive meetings without leave in exceptional circumstances’, notwithstanding that the Minster had explicitly rejected this in his comments to the Senate Estimates Committee. It seems clear that the Board’s underlying focus was squarely on addressing the problem facing the Minister and not substantively on the issue of providing retrospective leave of absence to Director Martin on its merits.

To an outside observer, this seems extraordinary, and raises substantial questions regarding the underlying purpose of the Board’s decision making and its capability to adequately fulfill its statutory responsibilities.

To sum up, what are the implications of this sorry tale.

In relation to the Minister, the documents demonstrate that he comprehensively failed to meet his statutory obligation to terminate Director Martin. Director Martin missed his third consecutive meeting on 9 March 2018. The Minister was only advised formally on 4 May 2018. Effective retrospective leave of absence was only granted on 1 November 2018, almost 8 months later. During this whole period, the Minister took no action to fulfill his statutory responsibilities, and relied for only part of that period on the inaccurate information provided by the ILC Chair that leave of absence had been retrospectively granted as of 31 August. Second, there is strong circumstantial evidence that the Minister actively sought to engineer a situation which would allow him to avoid terminating Director Martin, as he was legally obliged to do. The secrecy surrounding the outcomes of the meeting of 14 June, his reluctance to advise the Senate that he had sought and received confirmation of the (ineffective) retrospective granting of leave of absence, his mysterious inaccurate advice to Senator Dodson prior to Senate Estimates (for which he apologised in the transcript) and his shifting explanations of the ‘exceptional circumstances’ all point to an effort to hide or disguise his involvement in this process.

In relation to the Chair and Directors of the ILC, the documents demonstrate deep-seated governance issues within the ILC. In particular, the failure to inform the Minister in a timely way in relation to Director Martin’s three consecutive absences, and the repeated failure to accurately inform the Minister, arguably in contravention of their responsibilities under section 19 of the PGPA Act 2013, as those absences accumulated. The Chair’s preparedness to act unilaterally without informing his co-Directors and management, contributed to the provision of misleading advice, which taints the reputations of all Board members.

In particular, the Chair’s secret 180 degree turn following his meeting with the Minister raises the possibility that there was some ulterior motivation involved. If such an ulterior motivation came from the Minister, the Chair’s actions in facilitating it would effectively involve the ILC in assisting the Minister in avoiding his statutory obligations. Such assistance would amount to an improper purpose, and would fundamentally infect the granting of the retrospective leave of absence on 1 November. 

In these circumstances, the apparent failure of Board members to hold the Chair to account is deeply problematic, and reflects a fundamental absence of core corporate governance capabilities. While the reticence to take action probably reflects their perception that a strong relationship exists between the Minister and the Chair, it clearly opens up the possibility of poor governance, and as in this case outcomes, which are not consistent with the expectations of the Parliament as reflected in the ATSI legislation. In a worst case circumstance, a mode of operation where the Chair operates without effective Board oversight increases substantially the potential risks of fraud or corruption. It seems highly unlikely that the ILC’s risk management plans and fraud control frameworks (as outlined on page 61 of the most recent Annual Report link here) canvass these types of risks.

Of course, the Minister appoints the Chair and the directors, and has legislated powers to oversight (but not interfere) in the operations of what is an independent statutory corporation. While the Chair and Directors may be primarily responsible for poor governance outcomes within the ILC, the Minister cannot evade responsibility either, particularly insofar as he appoints the Chair and has various regulatory oversight powers.

I began this post by pointing the loss of trust in our institutions. Citizens are normally expected to comply with the laws of the land. When a Minister of the Crown who is responsible for the operation of a particular law fails to comply with a clear statutory obligation in that law, loss of trust is magnified. And if a Minister actively seeks to influence a theoretically independent statutory corporation to retrospectively remove the conditions that require the Minister’s statutory compliance, and is not required to explain his actions, then loss of institutional trust will be even greater.

While the circumstances outlined above may appear to be quite narrow and technical, they provide a window into the mode of operation of the current Minister for Indigenous Affairs in relation to the portfolio bodies for which he is responsible. They also point to the risks which emanate from excessive politicisation of Boards of statutory entities, and the shallow regulatory oversight applied to Commonwealth statutory corporations. The issues involved are hugely significant particularly for the potential beneficiaries of the statutory bodies. In the ILC’s case, it has a highly important compensatory role emanating from the recognition that the recognition by the Parliament that the Mabo High Court decision would not address the needs of those Indigenous citizens whose native title rights had been extinguished by the Crown without compensation.

Indigenous citizens deserve an ILC which is operating according to the highest standards of corporate governance and without inappropriate interference by ministers.

Ministers need to accept that Australian laws ‘are thine, not mine’. If Ministers are not prepared to accept that they too are bound by the laws of the land, they do not deserve to remain in their privileged positions.

Declaration of interest: I was formerly the Chief Executive Officer of the ILC from 2013 to 2015

Mingled Yarn: A New Indigenous Land and Sea Future Fund

'The web of our life is of a mingled yarn, good and ill together.'

All's Well That Ends Well, Act 4, Scene 3. 

On 28 November 2018, the Parliament passed three Bills related to the remit of the Indigenous Land Corporation (ILC). In particular, the ILC’s functions were expanded to allow it to purchase interests in and over waters and seas, the funding arrangements for the Aboriginal and Torres Strait Islander Land Account were amended to provide for its funds to be managed and invested by the Future Fund Guardians under expanded investment parameters, and the names of the ILC and the Land Account were amended to reflect these changes.

The ILC Chair’s media release (link here) states, inter alia:

Mr Fry said the corporation would be renamed the Indigenous Land and Sea Corporation (ILSC), that will come into effect mid 2019…

…“Our expanded operations will now enable us to invest in water-based projects in partnership with Indigenous groups, which could include purchase of commercial fishing licences or allocations in water markets…

…Mr Fry said the three Bills passed today would also broaden the ILC’s main source of income through the establishment of the Aboriginal and Torres Strait Islander Land and Sea Future Fund, replacing the Land Account.

“In recent years returns from Land Account investments, restricted by legislation, had been insufficient to maintain its capital base while providing a fixed annual allocation to support the ILC’s land acquisition and land management functions,” Mr Fry said.

“This reform will enable the new Aboriginal and Torres Strait Islander Land and Sea Future Fund to be invested by the Future Fund Board of Guardians, increasing its returns and allowing funds held in perpetuity for Indigenous Australians to grow in line with mainstream long-term investments managed by the Future Fund.

Minister Scullion’s media release states, inter alia:

The ILC, and the Land Account which funds the ILC, hold an important place in Australia’s land rights movement. Established following the High Court’s Mabo decision, these institutions serve to enable Indigenous Australians who are unable to assert native title to regain control of their land.

Despite this, the Land Account has been plagued with low rates of return, jeopardising the financial security of the ILC and meaning lost opportunities for the Indigenous estate.

The Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018 replaces the Land Account with a new Land and Sea Future Fund to better support the ILC to grow the Indigenous estate over the long-term. Land Account assets will be transferred to the new Fund.

The changes are incorporated into amendments to the Aboriginal and Torres Strait Islander Act 2005, and in a new Aboriginal and Torres Strait Islander Future Fund Act 2018. The relevant Explanatory memorandums for the two substantive Bills are available on the APH website (link here and link here).

The core rationale for the changes was the narrow investment parameters included in the original 1995 legislation at the Department of Finance’s insistence. There is no doubt that Indigenous interests have been severely disadvantaged by that short-sighted and excessively risk averse policy decision. While it is commendable that the Government has agreed broaden the investment parameters, it is arguable five years too as the era of high interest rates has long gone, and the Government refused to consider a 2014 Greens Bill which addressed both these issues, and was based on a Bill prepared by the then ILC Board. Contrary to the (different) rationales provided by the Minister and the Chair, the reason there is a need to fix the funding formula is that the ILC receives all real returns above inflation, which means that the Land Account could never grow in real terms. The ILC was never in jeopardy from the formula, although it did receive less than optimal returns due to the narrow Land Fund investment parameters.

There are however a number of more fundamental criticisms which arise from the legislative changes enacted. Most fundamentally, and as I pointed out in an earlier post (link here), the changes reinforce the trend of substantially increased ministerial control over the land fund, and thus weaken its independence as a capital fund dedicated to indigenous purposes. While the legislation ostensibly provides for this, its formal status as a special account within the Commonwealth and the explicit control of ministers in approving and determining drawdowns weaken Indigenous control, and thus self-determination. As an aside, this analysis is entirely missed by the pro-forma analysis of compliance with human rights obligations included within the Explanatory Memorandums.

Secondly, despite all the rhetoric, there is no attempt to assess the adequacy of the funds in the Land Account, and consequently no effort to add to the capital base. The two arguments for doing so are first, that the Commonwealth had a fiduciary obligation to ensure that the funds invested in the Land Account earned a reasonable return, and patently failed to meet this obligation. Second, it is now much more apparent that the extent of extinguishment is much more extensive than might have been imagined in 1995 when the Native Title Act was passed, and in particular, the 1998 Wik amendments further constrained the extent of native title.

Over and above these technicalities, there is a social justice argument for adequate compensation for the extensive dispossession of indigenous people since colonisation. The adequacy of the initial allocation of $1.2bn to the Land Account has never been revised or reconsidered, and it is time that governments turned their focus to this issue. The rhetorical suggestion of the Government originally floated by then Prime Minister Turnbull and repeated more recently by the Australian Financial Review (link here) that the changed investment parameters will leave Indigenous interests $1.5bn better off over 20 years are political spin pure and simple. The Government has provided no calculations to back this claim up, and the flexibility in the legislation which allows Ministers to draw down funds means that there is no absolute guarantee that the fund will even retain its current value over the next twenty years.

While the changes legislated apparently with unanimous support of the Opposition and the Greens include some very positive elements, they also contain elements which could severely disadvantage Indigenous interests into the future. These are not ‘landmark reforms’, and nor is it a ‘new era’ and a ‘historic day for Aboriginal and Torres Strait Islander Australians’. Instead of fundamental reform, we have patchwork upon patchwork, creating a very mingled yarn indeed.

While it is important that the Aboriginal and Torres Strait Islander Land and Sea Future Fund continues to grow over the medium and long term, the crucial element in the structure is the effectiveness of the ILC in utilising and investing the funds which are drawn down. This requires high levels of governance, administrative competence and efficiency and each of these characteristics will be more likely to emerge and be sustained if there is a robust regulatory oversight framework. Under current arrangements, it is the Minister who is responsible for maintaining that framework.

At present, there are a range of issues which suggest that the ILC is operating sub-optimally in terms of its governance and administrative competence, and this raises serious questions regarding the quality of the outcomes being delivered to Indigenous Australians. This however is an issue for another day.

The devil in the detail: the Government’s proposed Indigenous Land Fund legislation

The spirit that I have seen
 May be the devil: and the devil hath power
 To assume a pleasing shape.

Hamlet Act 2, scene 2

On 12 February this year, as part of the Close the Gap statement to Parliament, the Prime Minister announced (link here) a series of changes to legislation relating to the Indigenous Land Corporation and the Aboriginal and Torres Strait Islander Land Account which provides the Indigenous Land Corporation’s annual funding. Prime Minister Turnbull stated:

A new Aboriginal and Torres Strait Islander Land and Sea Future Fund represents a significant reform in the land rights journey of our country, as the $2 billion land acquisition fund set up following the Mabo (No 2) decision has been plagued with poor returns, meaning lost opportunities for the Indigenous Estate. Our reform will see the fund transferred to the Future Fund, delivering a $1.5 billion benefit over 20 years.

These additional funds will also mean that the Indigenous Land Corporation (ILC), the Commonwealth agency that acquires land on behalf of Aboriginal and Torres Strait Islander Australians can now have its remit expanded to include sea country.

The Government has now introduced three Bills into the Parliament to implement the changes previously announced. Minister Scullion announced the introduction with a media release (link here) where he announced further details of the proposed changes: a name change for the Indigenous Land Corporation to the “indigenous Land and Sea Corporation’, accompanied by an extension of its statutory remit to allow it to acquire and provide management assistance to Indigenous owners of sea and freshwater country, including offshore. The second Bill establishes a new Land and Sea Future Fund to replace the Land Account which will be managed by the Future Fund Board of Guardians. Minister Scullion emphasised:

Proposed reforms have been co-designed with communities following significant consultations with Aboriginal and Torres Strait Islander Australians across the country.

A third Bill (link here) deals with consequential amendments and is largely technical.

A summary of the consultation process and final recommendations, which was led by the Indigenous Land Corporation, has been published on the ILC website (link here). This is good practice and the ILC and Government are to be commended for laying this out so clearly.

The latest meeting communique (dated 25-26 October 2017) of the Prime Ministers Advisory Council on Indigenous Affairs (link here) notes the conclusion of the consultations, but does not appear to have offered any substantive advice on the proposals. Their communique states:

Indigenous Land Corporation: welcomed the consultations on possible reforms to the Aboriginal and Torres Strait Islander Act 2005 (ATSI Act) regarding water related activities and the financial sustainability of the Land Account have concluded and the findings and recommendations are now being considered by Government (sic).

In relation to the outcomes of the consultations with respect to the financial sustainability of the Land Account, the ILC consultation report notes, inter alia:

During discussions on the potential for [Future Fund] management, the issue of Indigenous control and oversight of the investment framework was raised across the sessions. This was seen as an important aspect of managing the Land Account into the future, and needing to be included in any legislative changes. ILC representatives were able to discuss the Expert Panel’s recommendations on a proposed strengthening of the current Consultative Forum on the Investment Policy of the Land Account to a Land Account Investment Committee comprised of Indigenous representation and investment expertise.

In what appears to be an addendum to the Report, a section headed ‘Current ILC  Board position in relation to governance of Land Account investments’ states:

The consultation process revealed some complexity in regard to the proposed management and governance arrangements of the Land Account. Feedback from the Department of Finance and The Treasury is that the proposed Land Account Investment Committee is incompatible with the structure and operations of the Future Fund Management Agency, if the FFMA were to be responsible for the Land Account.

After further consideration, the ILC Board’s preferred option is to see the Land Account invested by the FFMA to achieve the desired rates of return on investment while managing risk. It is advocating that the current Land Account Consultative Forum (established by s193G, ATSI Act) be retained in an enhanced form as the conduit for information to the ILC Board on investments of the Land Account. At present the Forum receives six-monthly reports; these would double in frequency as the FFMA provides quarterly updates, giving the Forum more current information. The Forum would maintain a ‘watching brief’ on investments made by the FFMA.

The Proposed Legislative Changes

So what do the Government’s Bills actually do?

The first Bill (link here), dealing with the name and remit of the Indigenous Land Corporation is largely uncontroversial, apart from the fact that the name change will involve numerous changes to documentation, and runs the risk of raising expectations which will not be fulfilled. The same substantive effect could have been achieved with a simple change to the definition of ‘land’ in the ILC’s establishing legislation to include ‘seas and freshwater country’. These substantive changes are uncontroversial and have merit, so I do not propose to spend time analysing this Bill.

The second Bill, the ‘Future Fund Bill’ (link here), is designed to establish a new Fund to provide annual funding to the ILC managed by the Future Fund, and thus accessing a much broader range of financial assets than previously available. The broadening of the potential investment pool for the Land Fund is a desirable change, and the use of the Future Fund to manage those investments is also positive insofar as it utilises a source of investment advice and management of undoubted expertise, and one which operates within the public sector and thus in accordance with established governance principles.

That said, there are serious criticisms to be directed at the approach adopted by the Government to achieve these aims, and in particular, in relation to the governance framework which surrounds the Land Fund. In my view, not only is there devil in the detail, but the issues are so fundamental that they raise questions regarding the desirability of enacting the Bill in its current form.

I don’t propose to address the third Bill (link here) which deals with consequential amendments.

The first major issue with the Future Fund Bill is that it fails to formally acknowledge the underlying purpose of the land fund. While some of the background documentation available (the ILC consultation summary and the ILC media release of 13 February 2018 – link here) do acknowledge this history, it is important that the formal legislative provisions do so. The Second Reading speech delivered by Minister Wyatt missed the opportunity to lay out this background, merely noting that:

The existing Aboriginal and Torres Strait Islander Land Account was established to provide ongoing funding to the Indigenous Land Corporation to assist Indigenous Australians to acquire and manage assets.

While this formulation mirrors the objects of the Fund in the current 2005 legislation, in fact, a persuasive argument might be made for the reverse, namely that the ILC was established to implement and operationalise the objectives of the Land Fund, objectives which over the past 25 years have been progressively erased from the statutory record.

Indeed, the Land Account was canvassed in the Native Title Act, and the Preamble to that Act still includes the following text:

It is also important to recognise that many Aboriginal peoples and Torres Strait Islanders, because they have been dispossessed of their traditional lands, will be unable to assert native title rights and interests and that a special fund needs to be established to assist them to acquire land.

The original ILC was established as a separate Part of the ATSIC legislation which also had a Preamble to contextualise the aims and objectives of establishing the Commission and its ancillary institutions. With the reconstitution of the legislation following ATSIC’s demise, and now the proposed establishment of the Land and Sea Fund in separate legislation, those contextual provisions have disappeared entirely. This is not merely a symbolic matter, but means that any future judicial consideration of the operation of the Fund will be done without the benefit of any contextual framing which can be taken into account by the courts. This needs to be rectified.

The second major issue is that the Bill is replete with provisions which make absolutely clear that the Fund is to be treated as merely another special account under the PGPA Act (link here) and thus within the Government’s standard financial architecture. Thus for example, the Bill provides a range of mechanisms for consultation and provision of advice and information between Ministers, and between the Future Fund and the Minister for Finance, but there is no requirement for information to be provided to the ILC Board, and indeed the current statutory Consultative Forum on the Investment Policy of the Land Account (refer s193G of the Aboriginal and Torres Strait Islander Act 2005) which provided Indigenous interests with a guaranteed mechanism for monitoring the operations of the Fund disappears. In the Explanatory Memorandum (link here), which is admirably clear and useful, the Government makes clear that it considers the Fund to be a creature of the Government’s financial architecture. In the introductory section on ‘Context’, it states:  

The Bill gives effect to the Government’s decision to establish a dedicated financial asset fund – the ATSILSFF – to support the making of annual and discretionary additional payments to the ILC….

…The Government wishes to invest in financial assets with the aim of achieving investment returns to support the ILC financially. (emphasis added).

Or in the section on clause 13, which establishes a mechanism for the crediting of extra amounts to the Fund, the Memorandum notes that the provision is ‘a tool for the Government to manage its financial arrangements’. In other words, it is all about administrative convenience.

This may seem like quibbling, and I suspect it is the product of historical ignorance rather than malevolent intention, but it creates a context in which the Fund which was established with a clear intent of going some small way to addressing the dispossession of Indigenous peoples from their lands is itself being progressively removed from their influence and / or control, thus reinforcing the original physical dispossession with institutional dispossession. The bureaucratic consequence is that anything to do with the Fund is seen as ‘government’ in nature, and design issues (both now and importantly into the future) will be determined on the basis of administrative convenience.

It is important to note that this trend towards separating the Fund from its formal origins is a continuation of a process which first emerged in the 2005 amendments which coincided with the legislative amendments necessitated by the abolition of ATSIC. In particular, in 2005, the Land Fund was renamed the Land Account, reinforcing its status as a special account within the government financial system rather than a ‘fund’ directed to Indigenous purposes. The reversion to the terminology of Land Fund in the current Bill is welcome, but is offset entirely by the substantive provisions which reinforce the Fund’s legal status as a government special account, and with an overarching preoccupation of making the Fund work in total alignment with the prerogatives of government financial priorities and systems rather than Indigenous priorities or concerns.

The third set of concerns relate to the design of the proposed arrangements, and the potential risks which emanate from the design features chosen. The issues involved are technically complex, and I propose to simplify in many respects.

The current relationship between the Land Account (ie the Fund) and the ILC can be summarised as follows. The Land Account, which is managed by the Department of Prime Minister and Cabinet, has a current balance of around $2bn. It is invested primarily in bank term deposits because the constituting legislation from its inception (and now the PGPA Act) provided that the Fund must only invest in bank deposits or government bonds. The ILC Board has consistently over the past ten or so years sought to have these investment parameters broadened.

Originally, investment returns from the Fund were prioritised first to sustaining the Fund, and above a certain threshold were passed on to the ILC, however this led to difficult to manage variations in annual revenue for the ILC. In 2010, the arrangements were amended to provide for the Fund to provide the ILC with a guaranteed amount of $45m (indexed to the CPI) with any surplus returns to go to the ILC. While this effectively resolved the issue of revenue variability of the ILC, it also meant that the Fund would never grow in real terms (as surplus returns went to the ILC) and if in any years returns were negative, then the Fund’s capital would be progressively diminished. This issue needs to be fixed.

The proposed design structure in the Future Fund Bill continues the $45m indexed provision, but adds a provision for an annual discretionary payment to be made by Ministers. The Bill requires the Finance Minister and Treasurer (the ‘responsible ministers’) to issue an investment mandate to the Future Fund so as to provide a ‘mechanism for articulating’ the Government’s expectations and for providing ‘strategic guidance’ (refer para. 95 of the EM). This approach is consistent with the approach adopted with other funds invested by the Future Fund Board, but again provides no input for Indigenous interests. The Bill also requires the Future Fund Board to utilise an investment manager, an approach which is already being utilised by PMC albeit under much narrower investment parameters.

The shift to Future Fund management under wider investment options increases the likelihood that the basic payment to the ILC will be available, and the Bill provides that in deciding whether to make an additional annual payment the Finance and Indigenous Affairs ministers must seek formal advice from the Future Fund Board and have regard to the impact of any payment on the sustainability of the Land and Sea Future Fund. The crucial variable will be the annual returns obtained by the Future Fund from its investments, but it seems clear that over the medium to longer term, the likelihood will be that investment returns will exceed the current bank deposit arrangements.

The Bill establishes a much more complex design architecture of the Fund than at present, which has the unfortunate result of making the operations of the Fund even more opaque to Indigenous interests. Instead of simple payments from the PMC managed Land Account to the ILC, the Bill establishes a series of special accounts. The Future Fund Board owns and manages the Fund’s assets. It transfers funds from its asset/investment fund to the Aboriginal and Torres Strait Islander Land and Sea Future Fund Special Account as required. This account, which the Explanatory Memorandum makes clear is owned by the Government (refer para. 95) is used to pay any internal expenses of operating the fund, but also to transfer funds to ILC Funding Special Account which is controlled by PMC and which in turn is used to make annual payments to the ILC and any discretionary additional payments.

What this complexity disguises is that the proposed legislation not only broadens the investment parameters available in managing the fund, but it also significantly increases the control of ministers in controlling the flow of resources to the ILC. Two implications are worth drawing out.

First, over time, the gap between the guaranteed amount available for the ILC and the potential discretionary funding available which would not threaten the sustainability of the Land and Sea Fund will grow larger. This will likely have the effect of making the annual discretionary payment a routine event, to the point that the financial independence (as opposed to its statutory independence) of the ILC which was a deliberate feature of its original design, will disappear.

The second implication relates to the structural tensions which will inevitably exist between the short term interests of the ILC Board and Ministers and the longer term interests of the wider and more diffuse Indigenous interests who would wish to see a Land Fund exist in perpetuity. While the architects of the current Land Fund/ILC arrangements were aiming at a perpetual fund, the current proposals set up a structure which could allow Ministers to progressively reduce the capital base of the Fund through the use of additional payments to the ILC.

While the Bills do include checks and balances to constrain such behaviour, there is no statutory impediment to a Minister (perhaps in conjunction with an ILC Board which after all he or she appoints) allocating significant sums to the ILC for projects within its statutory remit. And in response to those who might scoff and argue that such behaviour in our system would be unthinkable, I merely point to the actions of a previous ILC Board which purchased (with apparent political support from a government in waiting) a major asset it could not afford (link here), and which has necessitated (without any comprehensive review of the circumstances) a subsequent government bail out to finance the acquisition (link here). Had the proposed Bill been in effect in 2013, the outstanding acquisition liabilities might have been funded by the simple expedient of drawing down the necessary funds from the Land Fund, and justifying the course of action on the basis that it creates Indigenous employment.

The Future Fund Bill includes a number of other minor matters worth commenting on briefly.

Clause 55 provides for a review of the Act to be commissioned by the responsible ministers (ie the Treasure and the Finance Minister) before the tenth anniversary of the Acts commencement. This appears to be a rather cursory nod towards good governance, and provides no assurance of Indigenous involvement in the process nor any assurance that the review will be made public and/or acted upon. The fact that the responsible ministers do not include the Indigenous affairs minister reinforces the technocratic blindness towards potential Indigenous concerns which suffuses this Bill.

The Statement of Compatibility with Human Rights prepared by the Department (appended to the Explanatory Memorandum) is in my view flawed insofar as it merely asserts that because the Bill ‘will enhance the Commonwealth’s ability to make payments to the ILC, and as a consequence will enhance the ILC’s ability to pursue its statutory purposes…the Bill indirectly engages the right to self-determination, rights to equality, and non-discrimination…’.  In my view, the more fundamental issue is whether the Bill will enhance the capacity of the Commonwealth to sustainably address (in an admittedly limited fashion) issues of ongoing dispossession. For the reasons outlined above, the answer to this question is far from straightforward.

Potential Improvements to the Bill

The following suggestions are not meant to be comprehensive, but emerge from the analysis of the Bill outlined above.

The Bill ought to be revised to incorporate an appropriate Preamble and potentially other substantive provisions to reinstitute the primacy of the objective of addressing dispossession which has been progressively stripped out of the legislation.

The Bill ought to be revised to substantially strengthen Indigenous engagement at all levels. This should extend to considering placing the Bill within the current legislation dealing with the ILC and Land Account; giving the Minister for Indigenous Affairs a stronger oversight role; and establishing an independent policy oversight advisory committee which monitors the operations of both the Land Fund and the ILC with a mandate to focus on issues which may place the long term sustainability of both institutions at risk. Such a body would provide statutory acknowledgment that both institutions are part of a single policy initiative to acknowledge and partially address the ongoing impacts of dispossession of Australia’s First Peoples.

The Bill ought to be expanded to include a provision which makes clear that whatever the internal administrative requirements, the Fund is established and operated by the Commonwealth on the basis of a fiduciary obligation to sustain the Land and Sea Fund in perpetuity and thus maximise the impact of the Fund (and ILC) operations in addressing the impact of dispossession on the nation’s First Peoples.

Consideration might also be given to adopting a much simpler approach where the current legislative provisions stipulating narrow investment options are broadened, and allowing the Department of Prime Minister and Cabinet to decide whether to make an arrangement with the Future Fund or continue to utilise a contracted investment manager.

Finally, if we are to take the Prime Minister’s claims seriously that these amendments represent a ‘significant reform in the land rights journey of our country’, shouldn’t we expect to see increased funds allocated by government to accelerate the accretion of the Fund’s capital base? The original Keating Land Fund legislation was based on the statutory appropriation over ten years of $140m per annum, which built the fund to $1.4bn. Investment returns over twenty years have taken it to $2bn today. A persuasive case can be made that the funds allocated were paltry compared to the value of the land that was taken without compensation form Indigenous peoples (let alone the economic, social and cultural losses that also were involved). A further contribution of say $200m per annum over ten years would go some way to acknowledging that fact, and to rectifying the notional losses to the Fund arising from the fact that government has, for the past decade, not been prepared to treat the Land Account in the same way that it treats the superannuation funds of its public servants (to make appoint first made by Noel Pearson). Such a provision would serve to give a modicum of credibility to the Prime Minister’s claims of ‘significant reform’; its absence merely serves to confirm the government is more concerned with rhetoric than substance in this area as in so many others.

Some policy ruminations

It strikes me that the appearance of these Bills says much more about the current state of Indigenous public policy than is covered in the proposed legislation (important as that is).

The Government has stretched beyond breaking point its rhetoric on consultation and co-design, with a close comparison of the consultation outcomes and the final Bill making clear that there is a huge gap between what Indigenous interests said they wanted and what is proposed. Moreover, the Government conveniently fails to mention earlier calls of the previous Dawn Casey led ILC Board for these reforms (among others); matters which were taken up by the Greens in a Bill introduced in the Senate, but which failed to find major party support. The gap between rhetoric on consultation and reality is not a one-off occurrence in the Indigenous policy domain.

The way in which the Prime Ministers Advisory Council appears to have ‘ticked and flicked’ this agenda item raises important issues around what Indigenous interests might expect, and in fact are getting from this peak appointed Indigenous advisory body. The way in which the ILC Board’s position on its proposed investment consultative committee was first overturned, and then ignored, also says something about the respect accorded by the Government to its own appointed statutory officeholders.

The intricate technical complexity of the legislative process, and the ways in which the bureaucracy can slowly over time shift the way key Indigenous demands and principles are interpreted or even applied are under-appreciated dynamic in the Indigenous policy domain. Proposed changes to Indigenous legislation will always benefit from the inclusion of historical perspective within the policy process. Governments increasingly assume that policy development is a-historical and the only context which is important is the current political objectives of the Government. This is ultimately short-sighted and counterproductive to the national interest, and both governments to actively support the retention of staff with deep background knowledge and requires Indigenous interests to step up and strengthen their advocacy capabilities as a counter-weight to the bureaucracy’s structural short-comings.

All legislation is invariably complex. Because it is a primary mechanism for effecting institutional change, its impacts are long lasting. The process of legislative degradation – for that is what it has been – over the past twenty five years in relation to the Land Fund has gone on under the radar. It seems technical, it is not necessarily controversial, the consequences of legislative change can take decades to emerge and have a tangible impact. The Land Fund was provided for in the Native Title Act and yet was progressively transformed from a social justice initiative into one of a myriad ‘special accounts’ within the byzantine Commonwealth financial architecture.

That this occurred, and could well continue to occur, is perhaps one of the strongest reasons for establishing the Indigenous Voice proposed in the Uluru Statement from the Heart.

The devil in legislation is in the detail. But without strong Indigenous oversight of this and other crucial Indigenous institutions, the detail can be used to hide the devil at work.  

Declaration of Interest:

Michael Dillon is a former public servant and currently a Visiting Fellow at the ANU Centre for Aboriginal Economic Policy Research. He worked on the Keating Land Fund legislation in 1995, and is a former Chief Executive Officer of the ILC.