The semiotics of the 2023 Intergenerational Report

 

But thou didst understand me by my signs,

And dids’t in signs again parley with sin…

King John, Act four, Scene two.

 

The Commonwealth recently published the 2023 Intergenerational Report (link here). The thumbnail description on the Treasury website states:

The 2023 Intergenerational Report projects the outlook of the economy and the Australian Government’s budget to 2062-63. This is the sixth report. Its analysis and projections of the key drivers of economic growth will help inform and improve public policy settings to better position Australia for the next 40 years. The report considers 5 major forces affecting the coming decades:

·         population ageing

·         technological and digital transformation

·         climate change and the net zero transformation

·         rising demand for care and support services

·         geopolitical risk and fragmentation.

 

The Treasurer’s Foreword states (inter alia):

The Albanese Government’s first Intergenerational Report provides a big picture view of the forces that will shape our economy and fiscal position over the next 40 years as we work to create prosperity, expand opportunity, and build a stronger, more sustainable and more inclusive nation. Digitalisation and the adoption of new technologies, shifts in our industrial base, the energy transformation, demographic change, and serious geopolitical uncertainty are already changing the shape of our economy and this will continue over the coming decades. 

 

There has been a plethora of commentary over the past week which I do not propose to replicate. Instead, this post will focus on what the Report says (or does not say) regarding Indigenous people, and what this means for future policy directions.

 

The Report makes a series of passing mentions of Indigenous policy issues: life expectancy at birth for First Nations people are about 8 years lower than the mainstream population (p. 43); First Nations people have a ‘significantly younger’ age profile than the general population (p. 49); and participation rates for First Nations people are low:

The share of Aboriginal and Torres Strait Islander people in employment remains lower than for other Australians. Census data suggest that the gap in employment rates has narrowed slightly from 25 percentage points in 1991 to 22 percentage points in 2021 (Chart 3.11). The employment rate of First Nations people is lower in more rural and remote areas (pp.72-3).

 

It seems likely however that the uptick in participation rates noted above are the result of higher levels of identification rather than any underlying policy response. Even so more than four in ten Indigenous persons between ages 25 to 64 are unemployed, a level of under-participation that has existed for over thirty years.

 

The Report asserts the Commonwealth ‘is making significant investments in closing the gap’ (p. xvii). In this statement, the word ‘significant’ is bearing all the weight, and is open to varying interpretations. An amended version, stating the Commonwealth is making ‘significant but not adequate’ investments would perhaps better reflect the reality.

 

In a discussion of critical minerals, the Report notes that 80 percent of the continental land mass is under-explored for critical minerals and that this might offer ‘opportunities’. There is no mention of the fact that the Indigenous estate comprises around 57% of the continental land mass (not all in direct Indigenous ownership: link here), and thus there is no discussion of the implications either for the supply of critical minerals nor for the economic and other impacts on First Nations communities of this sui generis institutional framework.

 

In relation to pre-school enrolment, the report notes (p. 181) that 99% of First Nations children in the year before school age cohort are enrolled in preschool, a 225 increase since the 2016 census. The report also reports encouraging school retention rates for all Australian students including First Nations of 97 percent (p. 182) but falling mainstream and First Nations attendance rates since 2015, with First Nation student’s attendance being some 12 percent below mainstream rates (p.182). Not mentioned are the geographic differences, with remote attendance rates and levels being much lower than the national figures. For example, the most recent ACARA national report on schooling in Australia (link here) contains data suggesting in very remote regions, Indigenous attendance levels (ie the proportion of students who attend more than 90 percent of available school days) is only 8.7 percent nationally and drops to only 4.4 percent in the NT. The gap between very remote non-Indigenous students and Indigenous students’ attendance levels is 33 percent. Unsurprisingly, Indigenous educational outcomes are sub-optimal. Along with the recently released NAPLAN figures, ACARA (the Australian Curriculum Assessment and Reporting Authority) released a two page short commentary on the results for each of the years 3, 5, 7, and 9 (link here). Each commentary included the same text:

Non-Indigenous students’ average NAPLAN scores are substantially above and significantly different from those of Indigenous students in all 5 testing domains.

 

The most consequential mention of First Nations in the Intergenerational Report comes in the very last paragraph of Chapter Seven on Government Spending. The Chapters major points are summarised at the front of the chapter (p. 143):

Total Government spending is projected to increase by 3.8 percentage points over the next 40 years, rising from 24.8 per cent of GDP today to 28.6 per cent in 2062–63.  Major spending pressures include health and aged care, the National Disability Insurance Scheme (NDIS), defence and interest payments on Government debt. These are projected to rise from 8.8 per cent of GDP today to around 14.4 per cent in 2062–63.  Demographic ageing alone is estimated to account for around 40 per cent of the increase in Government spending over the next 40 years.

In a discussion of non-modelled ‘other payments’, the report notes (p. 187; emphasis added):

Non-modelled payments includes spending on all other areas not elsewhere included in this chapter, including environmental protection and conservation, national parks and world heritage area management, supporting First Nations people and communities, the arts and the film industry, and the Australian Public Service. Payments that are not modelled are assumed to grow in line with GDP so are held as a constant share of GDP over the projection period.

 

Of course, in the scheme of things, these payments are comparatively minor, and arguably any variations will not be statistically significant. Yet there is also an inference here that notwithstanding the significant shortfalls in health, education, infrastructure, housing, and justice outcomes, and the consistent failure to make a dent in closing the gap, that there is no substantive pressure to increase the proportion of GDP that is allocated to these issues.

 

Moreover, notwithstanding the Report’s silence, the salience of mainstream programs in addressing (or not addressing) Indigenous disadvantage is increasingly acknowledged in policy circles, not least in the National Agreement on Closing the Gap, and in particular in its Priority Reforms. Considering the five major forces shaping the future, it is worth considering how those forces might impact Indigenous interests and communities.

 

An ageing mainstream population is not aligned with the current and likely continuing youthfulness of the Indigenous population, and will likely engender a shift in the political pressures shaping governments’ policy priorities towards the concerns of an older mainstream community, and at the expense of younger cohorts. This is a potential risk for Indigenous interests that is rarely mentioned let alone considered in depth. There is a related issue of the surging growth in the national Indigenous population, driven by increasing self-identification. The report makes a glancing reference to ‘changing First Nation identification rates’ in a footnote (p.49), but does not consider whether the recent trends will continue into the medium term, nor what the implications then might be.

 

The coming technological and digital transformation will adversely impact the least educationally qualified segments of the Australian population, and Indigenous interests are over-represented in that cohort.

 

The accelerating impact and risks of climate change and the potential of the net zero transformation will impact remote and regional Indigenous interests significantly. The increasing salience of energy insecurity in remote communities is just one example (link here). The commercial and economic opportunities are significant, but rely on the development of widespread (not isolated pockets) commercial and economic expertise amongst Indigenous communities as well as the structural and systemic changes to the institutional frameworks designed to facilitate the taking up of those opportunities. The existence of the potential will require sustained and complex policy engagement by all governments, but particularly the Commonwealth. Unfortunately I see little evidence that policymakers are prepared (in both senses of the word) to focus on making these opportunities realities. Moreover, the risks of climate change, especially if global temperatures rise to 3 degrees or above (as the Report canvasses and as many scientists are predicting) will have huge and adverse consequences for the viability of many First Nation communities across remote and regional Australia, and perhaps for the medium to long term viability of human habitation in these areas.

 

The rising demand for care and support services will impact Indigenous interests severely given their existing vulnerabilities in the health, mental health, disability and other sectors. There may be a silver lining in terms of increasing employment opportunities for Indigenous people in these sectors, but it is difficult to suggest that the net impact will be unequivocally positive.

 

Finally, the increasing strains of geopolitical risk and fragmentation will impact Indigenous interests in variable ways. The biggest risk of rising international tension will be to distract policymakers from focussing on the needs of the most disadvantaged and to divert funding away from social and ‘soft’ priorities towards military spending aimed at enhancing our strategic priorities. While there may be opportunities for Indigenous interests in some of this activity, the risks are considerable and the shift towards sophisticated and technologically complex military systems (including support systems) does not bode well for the least educationally qualified members of society, a segment where Indigenous interests are over-represented.

 

Conclusion

The Intergenerational Report is designed not as a definitive prediction of the future, but as a mechanism for building support for the policy reforms required to address the challenges the nation faces over the coming forty years. It is also deliberately framed so as to lay out a narrative that makes the Government’s current policy priorities appear rational and necessary. In doing so, it is inevitable that it unintentionally provides signposts to the Government’s underlying priorities, and to the pace at which it wishes to prosecute those policy agendas.

 

In terms of the Indigenous policy domain, the Intergenerational Report appears to signify a deep-seated complacency, and preparedness to merely keep kicking issues down the road. There are a plethora of systemic policy challenges that have been around for decades and continue to remain under-addressed and under-acknowledged. Moreover, the future trends identified by the Report are (on the whole) going to impact far more seriously and more adversely on First Nations than on the mainstream community. In other words, without systemic reform, the trends identified will contribute to greater social and economic inequality between First Nations and the mainstream community.

 

Implicitly, the policy settings of the current Governments appear to signify a commitment to business as usual. Clearly, the efforts to establish an Indigenous Voice is the major exception to that assessment. The proposed Voice is clearly important and would be a major institutional reform if the referendum succeeds. Yet notwithstanding the merits, importance and potential of the Voice, there remains a responsibility on governments to govern and to invest in desperately needed infrastructure and services.

 

The deep-seated comparative shortfalls in First Nations lifespans, education outcomes, in First Nations incarceration levels, in remote housing, in health issues such as FASD and suicide and mental illness, in alcohol and drug abuse, in domestic violence and the extraordinary levels of First Nations children in out of home care are all scandals in their own right. Taken together, they represent a human catastrophe which will endure well beyond the timeframe covered by the Intergenerational Report. In these circumstances, the inaction and lack of substantive policy focus by governments appears incompetent at best and malign at worst.  It is incomprehensible that any government focussed on advancing the public interest could in good faith merely assert these issues must wait while a mechanism is put in place that will itself inevitably call on governments to act on these very issues. Yet this is the underlying signal that the Intergenerational Report sends First Nations, and the wider community.

 

1 September 2023

 

 

Recent developments in mainstream evaluation: implications for Indigenous interests

 

Are these things then necessities?

Then let us meet them like necessities.

2 Henry IV, Act 3, scene 1

 

In this week’s budget, the Government has allocated new resources to improve the quality of public sector evaluations, and ultimately the quality of mainstream public sector investments across the board. It is a very minor outlay described in a short note on page 213 of Budget Paper 2 (link here):

$10.0 million over 4 years from 2023–24 (and $2.1 million per year ongoing) to establish a central evaluation function within Treasury to provide leadership and improve evaluation capability across Government, including support to agencies and leading a small number of flagship evaluations each year

 

It is too early to know what approach the new evaluation function (which hereafter I will refer to as an ‘Office’) will adopt, and thus how it is likely to impact Indigenous programs and thus ultimately Indigenous citizens and communities.

 

To provide some context, it is worth considering two separate developments from the last five years. The first development relates directly to evaluation.

 

In April 2019, then Treasurer Frydenberg commissioned the Productivity Commission to develop an Indigenous evaluation strategy. In his Direction Letter, the Treasurer described the scope of the proposed work in the following terms:

The Commission should develop an evaluation strategy for policies and programs affecting Indigenous Australians, to be utilised by all Australian Government agencies. As part of the strategy, the Commission should:

• establish a principles based framework for the evaluation of policies and programs affecting Indigenous Australians 

• identify priorities for evaluation 

• set out its approach for reviewing agencies' conduct of evaluations against the strategy.

 

The Productivity Commission published its report Indigenous Evaluation Strategy (link here) on 30 October 2020. The strategy was quite brief, but attached was a 500 page Background Paper.

 

On page 2, the Background Paper provides a one page summary of key points, which I have drastically cut back even further:

Key points

• Evaluation can answer questions about policy effectiveness, but both the quality and usefulness of evaluations of policies and programs affecting Aboriginal and Torres Strait Islander people are lacking…

• There is also no whole-of-government approach to evaluation priority setting. And while policy makers agree that evidence is critical for good policies, in practice there is little reliance on evaluation evidence when designing or modifying policies. 

• The Indigenous Evaluation Strategy (the Strategy) sets out a new approach. It provides a whole-of-government framework for Australian Government agencies for evaluating policies and programs affecting Aboriginal and Torres Strait Islander people. 

• The Strategy puts Aboriginal and Torres Strait Islander people at its centre….

• The Strategy’s proposed governance arrangements [which are essential architecture for an effective Strategy] include an Office of Indigenous Policy Evaluation (OIPE) and an Indigenous Evaluation Council (with all Aboriginal and Torres Strait Islander members). The OIPE and the Council would work in partnership to: monitor and report on agencies’ progress implementing the Strategy; identify evaluation priorities and potential cross-agency/topic evaluations; and provide evaluation leadership and guidance.

• A central clearinghouse for evidence on the effectiveness of policies and programs affecting Aboriginal and Torres Strait Islander people would strengthen accountability for undertaking good evaluations and improve diffusion of knowledge. 

 

While the PC’s Indigenous Evaluation Strategy is not without its flaws, its overarching message that evaluation has the potential to improve policy outcomes is certainly one worth taking seriously, particularly in circumstances where virtually everyone with any detailed knowledge of the Indigenous policy domain concludes that policy outcomes over the past few decades leave much to be desired.

 

Unfortunately, over the almost three years since the proposed Strategy was published, neither the former Government who commissioned the Productivity Commission’s work, nor the current Government have taken up the opportunity to expand the use of, and focus on, evaluation within the Indigenous policy domain, and as a consequence no government has sought to implement the recommendations included in the proposed Strategy either in part of in full.

 

This simple fact ‘bells the cat’ on the real levels of commitment by governments of all complexions to ensuring policy development and outcomes at least in the Indigenous policy domain are in fact fit for purpose. See my previous post (link here) for further detail. The deep scepticism of the Executive Branch to independent evaluation of policy and programs is driven by at least two sets of pressures:

·       for politicians, they are deeply averse to any process of independent evaluation that has the potential to provide ammunition to their political opponents (and thus to constraint the political opportunities that are available);

·       for bureaucrats, they abhor any process that expands the deeply constrained levels of transparency that ensure that the scope for flexibility in shifting administrative priorities and resource allocations incrementally is not constrained.

 

These two drivers are mutually reinforcing, and their combined impact is antithetical to effective democratic accountability and high quality governance.

 

The second contextual development was the successful negotiation of the National Agreement on Closing the Gap (link here), and in particular, the commitment of all parties, including all Australian jurisdictions to four priority reforms. Of particular importance in my mind is Priority Reform three:

58. The Parties commit to systemic and structural transformation of mainstream government organisations to improve accountability and respond to the needs of Aboriginal and Torres Strait Islander people. Priority Reform Three was strongly supported by the 2019 engagement process [emphasis added].

 

This institutional commitment is paralleled by the longstanding and inexorable increase in the comparative importance of mainstream programs to the quality of life of Indigenous citizens. One positive feature of this week’s budget was the focus on APS reform, and part of that is an explicit recognition that the National Agreement requires mainstream agencies to do better in relation to Indigenous issues and outcomes. See 2023 Budget Paper 4 at pages 8-9 (link here).

 

Given this background and context, the decision of the current Government to establish a new whole of government evaluation Office within the Treasury portfolio is to be welcomed. The Assistant Treasurer Andrew Leigh has been a longstanding advocate for greater use of evidence in policy development, particularly Randomised Control Trials.  It can be seen as a heavily cut down version of the proposal championed by Nicolas Gruen (link here) for an office of Evaluator General to be established to focus on public sector effectiveness and thus complement the focus of the ANAO in ensuring accountability and efficiency of public sector outlays (link here).

 

The challenge will be to identify a series of strategically important and high profile evaluation opportunities that lead directly to positive reform agendas. The new evaluation Office is too small to have an immediate impact, and will require time to build momentum and capability. The risk is that it will be vulnerable to abolition should it fail to demonstrate its utility in driving improved public sector outcomes. Of course, the new Office has a potential synergy with the Productivity Commission which may well be the subject of further reform over the next 12 months (link here). There may thus a strategic opportunity to build further evaluation capability across the public sector along with any future refocussing of the Productivity Commission.

 

While the ultimate shape of the new evaluation Office is still unclear, the obvious question for our purposes is what will this mean for evaluation in the Indigenous policy domain? It is too early to make definitive assessments on this issue, but it is clear that there will be a number of challenges over and above those facing mainstream agencies and policy sectors.

 

The first relates to the issue of involving Indigenous interests in evaluation activities that impact them. This becomes difficult when the subject of the evaluation is a mainstream program, especially if the data available is constrained. A second challenge is the extent to which Commonwealth policies and programs are implemented and delivered by the states, a trend reinforced by the policy architecture embedded within the National Agreement on Closing the Gap. 

No doubt there will be other issues that may arise: will the new evaluation Office differentiate between policy and programs; will the new Office have the capacity to evaluate the effectiveness of tax expenditures; what will be the relationship with the ANAO and other relevant agencies, and what will the coordination and working arrangements look like. All of these issues, and how they are decided, will impact Indigenous interests, for better or worse, but they will in very large measure be intangible impacts difficult to ascertain without the sort of close consideration that high quality evaluations might bring.

 

As someone who has taken an interest in the evaluation of Indigenous policy over thirty years, it seems useful if I lay out succinctly the key principles and policies that I would hope the new evaluation Office adopts in relation to evaluation in general and in particular in relation to the Indigenous policy domain. These are not intended to be comprehensive, but I do consider that they are among the necessary principles required to ensure mainstream evaluations make a positive contribution to the quality of policy outcomes, and importantly, to identifying potential reform agendas.

 

First, I would hope that the new evaluation Office adopts a rigorous and focussed approach to oversighting the quality of the entire approach to evaluation of each major agency. There is a potential overlap here with the role of the Department of Finance. The Office should develop a checklist of core competencies and create an overarching and publicly available data base of agency performance against a small number of core competencies. Of course, it will not be in a position to assess each agency every year, but as it does make assessments, they should be added to the data base and be published on the evaluation Office’s web site.

 

Second, I would hope that the new evaluation Office gives particular priority to assessing the independence of evaluations undertaken by agencies, rating them on a consistent scale.

 

Third, I would hope that the evaluation Office develops a mechanism which allows it to assess the extent of an agencies policy and program footprint that has been subject to evaluation over the past ten or fifteen years. See the discussion at pages 208-9 of the Indigenous Evaluation Strategy Background Paper.

 

Fourth, I would hope that the evaluation Office makes an assessment of each agency’s commitment to ensuring that ‘evaluation relevant’ data is being collected and ideally progressively made public. In the Indigenous space for example, it is now eight years since the last National Aboriginal and Torres Strait Islander Social Survey was undertaken by the ABS (link here). The funding of the NATSIS is contributed by relevant policy agencies, and a document released by the ABS in 2017 indicated that the aim was to undertake the survey every six years. Unfortunately, this has not occurred and there appears to be no current plans to undertake another version (link here).

 

Fifth, I would hope that the evaluation Office assesses and reports on the comparative performance of agency transparency in relation to publishing evaluation results in a timely fashion.

 

The Government has identified that the new evaluation Office will undertake a small number of flagship evaluations each year.  There will be a risk that the new Office gets lost in the detail of particular exercises, and ends up keeping busy on evaluations and issues that are tangential to the overall effectiveness of the Commonwealth’s evaluation efforts. In my view, it is this latter objective that should be the primary focus for the new Office. This is the real necessity. If the Office performs that task well, it will create substantial incentives for agencies, including the NIAA and its associated entities, to undertake policy and program evaluations in a much more effective manner than has been the case over the past few decades.

 

Addendum

For those interested, I have previously published posts on this blog related to evaluation issues (link here, link here, link here, and link here).

A more comprehensive conceptual treatment of the link between evaluation and policy can be found in my policy insights paper, Evaluation and review as drivers of reform in the Indigenous policy domain, available on the CAEPR, ANU website (link here).