Some thoughts on the implications of the coming Federal Budget for Indigenous Australians

Budgets used to be important for Indigenous Australians. Governments would hold back major funding announcements for the year ahead, and there was a much closer link between announced policy and budget decisions than we see today.

Now, governments make funding announcements through the year, and processes such as MYEFO facilitate parliamentary approvals of appropriations between annual budgets. Importantly, the forward estimates process is used by governments both to disguise the ongoing impact of past budget decisions, and to hide the cessation of programs. The majority of budget decisions involve allocations over multiple years and the gap between the decision to allocate resources and the program cessation can seem like an eternity, often with different ministers responsible, different portfolios arrangements oversighting the programs and different national political priorities in play.

In addition, the shift in the modus operandi of governments, particularly in the delivery of services away from direct government provision and towards outsourcing and commissioning of deliverables by third parties further diffuses the links between decisions and outcomes. All these processes mean that it has become virtually impossible even for engaged and interested citizens to discern and identify the link between the decisions announced in any one year in the budget and the impact of those decisions on the ground.

Nevertheless, governments continue to see the need to target key interests and garner political kudos in return for funding and policy favours of various kinds, but this occurs largely in the shadows. Individual groups know and are advised of the funding they receive, but overall summaries and metrics on program and sub-program funding levels and distributions are nowhere to be found. One-off media releases are issued to herald particular funding initiatives, social media used to celebrate the accessibility and generosity of ministers and governments, while key internal metrics for public servants managing programs relate to the preferences of ministers, the location of particular organisations and in particular the electorates in which the funded organisations operate.

Of course, the annual budget process continues to be important, particularly in terms of setting and managing the macro-parameters for the economy and for national financial management: public expenditure, tax (including tax expenditures) and revenue, and public sector borrowings. And also for controlling the operations of portfolios and the departments which dominate each portfolio.

However, for Indigenous citizens, the annual budget is not what it used to be. Indigenous specific programs are progressively becoming less significant in Indigenous citizens’ lives than mainstream programs and policy settings. Indigenous citizens are over-represented within the most disadvantaged segments of the Australian population, and thus are over-represented as clients within the mainstream programs which are directed towards disadvantaged citizens. To take one example, the gap between expenditures on aged and other pension payments and unemployed benefits (Newstart) has widened over the past twenty years (link here). Indigenous citizens under-represented amongst pensioners (due to their shorter lifespans) and over-represented within the unemployed.

 

In remote Australia (where 20 percent of the Indigenous population reside, but less than 2 percent of non-Indigenous Australians), disadvantage is deeper. The Community Development Program replaces Newstart in remote Australia, and 80 percent of its clients are Indigenous. It has higher participation requirements, involves staggering levels of breaches, and is largely income managed in the NT and selected other locations (link here). Hypothetically, any budget decisions to change the rate of Newstart (and thus CDP) benefits beyond current automatic indexing would not necessarily change the actual impact of the program on most Indigenous citizens as the program design features are not level with other Australian citizens. 

Or to take another example, the Commonwealth provides huge subsidies to homeowners and its largest budget program for disadvantaged housing is Commonwealth Rent Assistance (CRA) (link here), but in remote Australia Indigenous people have extremely limited access to home ownership and there is virtually no private rental market which means that Indigenous people are reliant on social housing (which is funded by the Commonwealth and the states jointly). The Federal Government is in the process of exiting its support for remote Indigenous housing leaving the most disadvantaged Australians bereft of federal financial support even though the Commonwealth is the dominant national funder of disadvantaged housing through CRA.

The introductory comments above are a long winded way of saying that budget decisions are by their nature incremental and operate at the margin to influence, for good or bad, more fundamental underlying structures. Indigenous citizens across the nation continue to face structural disadvantages which will not be remedied merely by a single set of budget allocations, but which will require more fundamental reform. Over time, sustained investments in strengthening Indigenous capability, education, health, housing and community development will all make a positive difference.

Unfortunately, our political system operates on the basis of governments allocating substantial resources to their primary constituencies (think corporate tax cuts link here) and allocating lesser amounts designed to give the appearance of policy action and initiative to excessive forestall criticism while progressively constraining expenditures directed to interests which are not part of the government’s core constituencies.

I have little doubt that the forthcoming budget will accord with these longstanding practices.

To finish up, I propose to do two things. First, set out a list (not necessarily comprehensive or complete) of potential but in practice unlikely budget initiatives which would make a substantive, as opposed to rhetorical, contribution to addressing Indigenous disadvantage and to beginning the process of removing structural disadvantage. And second, to make some intuitive guesses about the likely Indigenous related budget decisions and in particular the type of initiatives the Government will actually fund in the budget.

Potential Budget Initiatives to address Indigenous disadvantage:

Here are ten potential and sorely needed budget decisions which would start the process of removing Indigenous structural disadvantage:

·         A series of multi-year allocations directed specifically at the Closing the Gap targets. The absence of any direct linkage between the COAG endorsed Closing the Gap targets and funding via well designed programs is a major flaw in the Closing the Gap system (link here). A major program or programs directed to closing the gap targets would encompass health and preventative health, education including early childhood education, and employment. In remote Australia, given the almost complete absence of employment opportunities, consideration would need to be given to funding a major direct employment program, redolent of the ‘New Deal’ programs of the 1930s in the US.

·         A multi-year program directed at prevention and treatment of sexually transmitted infections across remote Australia (link here).

·         A policy change with related funding to implement the Productivity Commission’s recent recommendation to expand access to Commonwealth Rent Assistance to all social housing tenants along with a shift to market based rents (link here).

·         A decision to renew the current National Partnership on Remote Housing which expires in March this year and has involved an average allocation of $540m per annum for the last ten years (link here).

·         A decision to establish and fund a major program with the states to address the over-representation of Indigenous citizens in prisons, with a particular focus on youth incarceration (link here).

·         A decision to invest say $200m per annum for ten years in expanding the Indigenous Land Account (shortly to be renamed the Aboriginal and Torres Strait Island Land and Sea Future fund) (link here).

·         A decision to increase the base rate of Newstart, and to address the discriminatory treatment of Community Development Program recipients in remote Australia vis a vis Newstart recipients elsewhere in Australia.

·         A policy and resourcing decision to direct Infrastructure Australia to give greater attention to Indigenous specific infrastructure needs across Australia and to ensure that the current Northern Australia Infrastructure Facility is refocussed to remove the current blind spot in addressing Indigenous related infrastructure shortfalls across northern Australia (link here).

·         A decision direct the Grants Commission to reconsider its current methodology for addressing Indigenous disadvantage in its overall formula for distribution of GST revenues to the states (link here).

·         A decision to commit to complete transparency of public sector funding decisions directed to addressing Indigenous disadvantage in an accessible and continuously updated public web-site.

Likely Budget Focus for Indigenous Citizens

My intuition tells me that the forthcoming Budget will fall well short of the benchmarks laid out above.

It seems clear that the Federal Government has made a decision not to renew the Remote Housing National Partnership Agreement, and instead has decided to replace it with a series of lesser ad hoc and short term payments to some states. We are probably looking at a net reduction against previous expenditure levels of at least around $300m per annum from this decision alone.

There will likely be an investment to address the epidemic of STIs in remote Australia given the political heat recently generated, but it will likely be in the region of only $50m to $100m over four years.

There will likely be a swathe of business related budget initiatives, emanating from the release of the Indigenous Business Sector Strategy (link here) in February this year, and which included a $27m Indigenous Entrepreneurs Capital Scheme funded at $27m over four years. There may also be extra funds for Indigenous business (or jobs) hubs, and possibly for IBA directed to increasing their Indigenous business support in northern Australia. The forthcoming meeting of the Ministerial Forum for Northern Development may mean that the Government is focussed more than usual on northern Australia as a site for budget related initiatives, potentially with a focus on water infrastructure and support for native title landowner groups (known as PBCs) to engage in business.

Finally, the Government may feel obliged to make some modest contribution to addressing the recommendations of the Royal Commission into Youth Detention in the NT (link here) which was established at the initiative of the Prime Minister.

All in all, I would be surprised if the Government allocated funding much in excess of $200m over four years towards addressing Indigenous disadvantage in this year’s budget. But I would be happy to be proved wrong.

Conclusion

What is absent from this analysis is a detailed examination of the actions of key Indigenous advocacy groups such as NACCHO, the National Congress of Australia’s First Peoples, and the National Native Title Council, to name a few. Any advocacy they undertake is not necessarily in the public domain. My strong sense however is that their efforts pale in comparison to the efforts of larger mainstream advocacy outfits such as the BCA, the Minerals Council and the National Farmers Federation. The area of policy advocacy, particularly in mainstream areas relevant to Indigenous concerns, is in my view an area where Indigenous interests need to do much more if they are to successfully resist the sorts of arbitrary decisions which appear to have occurred in relation to remote housing, in an environment where government tax revenues have been rising faster than expected (link here).

In the world of realpolitik, budget policy making at its core is not an exercise in discerning the national interest, or even discerning substantive need. It is fundamentally an exercise governments undertake as part of their ceaseless odyssey to maintain a politically dominant coalition of support within the community. Such a process will always involve winners and losers, and any objective assessment would have to conclude that Indigenous interests are still ‘bogged to the axels’ on the losing side of the ledger. The forthcoming federal budget will reflect this reality for Indigenous interests.

Budget prophylaxis: the RACP pre-budget submission and Indigenous sexual health

The Royal Australian College of Physicians has released its pre-budget policy submission for the 2018-19 budget (link here). The RACP pre-budget submission includes sections on a range of key health issues including Indigenous health.

The May budget may appear to be over the horizon, but work will have already started within government on developing the budget. Agencies will have developed and costed proposals, Ministers will be sieving and choosing which proposals to take to the Expenditure Review Committee of Cabinet (ERC). The Department of Finance will shortly provide agencies and Ministers with various budget parameters and rules for considering the proposals. Cabinet may have set down the broad parameters within which proposals for new spending will be considered, including the levels of off-setting savings required for each proposal. And soon ERC will begin its more intensive rounds of meetings.

The bottom line is that there are no free lunches. Every program is vulnerable to be included on a Finance Department hit list of potential savings. Every budget proposal undergoes a process of multiple review and sieving, is critiqued by the Finance Department, and then more formally by ERC. To be successful, it needs to be rigorously developed, have identified offsetting savings, outshine competing claims from within the relevant agency, be supported by the relevant Minister, and then be supported by ERC which requires that it be aligned with the Government’s overarching budget and policy strategy.

The publication of pre-budget submissions by advocacy groups and peak bodies thus operate to raise the public profile of key issues, and can assist a minister in arguing for his or her new spending proposals by pointing to external support for particular initiatives. Unfortunately, too often these submissions come too late, or fail to be backed up with more intensive media follow-up by the authors. As a result, they can often be entirely ignored by government.

I thought I would use the release of this submission to draw attention to sexual health within the Indigenous community as a policy issue which demands greater attention and understanding both in the general community and within the Indigenous community. It is a topic I know very little about, but recognise as one which is of increasing significance and concern given the youthful demographic profile of the Indigenous population nationally.

The RACP pre-budget submission has this to say (footnotes excluded):

Sexual Health

There continue to be ongoing outbreaks of infectious syphilis across Australia affecting Aboriginal and Torres Strait Islander people, which has occurred in the context of increasing rates of other Sexually Transmitted Infections (STIs) and some Blood Borne Viruses (BBVs) in some Aboriginal and Torres Strait Islander communities. STIs are endemic in some regions; an unprecedented syphilis epidemic in Queensland began in 2011 and extended to the Northern Territory, Western Australia and South Australia.

Since 2011 there have been six fatalities in Northern Australia from congenital syphilis, and a further three babies are living with serious birth defects in the Northern Territory. In addition, there has been one reported case of congenital syphilis so far in 2017 in South Australia. Despite the existence of a number of Federal and state-level sexual health strategies, the situation remains dire.

Appropriate funding needs to be allocated to the implementation of the Fifth National Aboriginal and Torres Strait Islander Blood-Borne Viruses and Sexually Transmissible Infections Strategy and sexual health services; particularly to ensure sufficient capacity for the delivery of core STI/BBV services within models of care that provide comprehensive primary health care services (particularly Aboriginal and Torres Strait Islander community controlled health services). People should have access to specialist care when needed, through integration with comprehensive primary health care services to ensure sustainable and culturally appropriate service provision.

We welcome the plans to activate a short-term response across the state and territories on the continuing syphilis outbreaks, coordinated by the Federal Department of Health. However, whilst this Action Plan and short-term funding is urgently needed; the short-term activities need to be coordinated with and contribute to longer-term strategies and investments.

The RACP recommends [inter alia] that the Australian government:

• Allocate sufficient funding for the implementation of the Fifth National Aboriginal and Torres Strait Islander Blood-Borne Viruses (BBV) and Sexually Transmissible Infections (STI) Strategy.

• Fund the syphilis outbreak short-term action plan and coordinate this response with long term strategies.

 • Allocate long-term funding for primary health care and community- led sexual health programs to embed STI/BBV services as core primary health care (PHC) activity, and to ensure timely and culturally supported access to specialist care when needed, to achieve low rates of STIs and good sexual health care for all Australians.

• Invest in and support a long-term multi-disciplinary sexual health workforce and integrate with PHC to build longstanding trust with communities.

• Allocate funding for STI and HIV point of care testing (POCT) devices, the development of guidelines for POCT devices and Medicare funding for the use of POCT devices.

These recommendations appear sensible and quite modest, but also contain quite sobering information, which is made more concerning by the reality that the sexually active cohort of the Indigenous population is information poor. Yet with appropriate behaviour modification and/or treatment, most of these issues are or would be avoidable.

If I have a criticism of the RACP submission, it is that it provides no information on what the RACP would consider to be adequate funding for the various actions and initiatives it is proposing. There is a sense in which the RACP has abdicated the issue of funding adequacy to the government, and decided to focus solely on identifying issues which require prioritisation. I understand this as a pragmatic strategy, but remain sceptical that funding adequacy can be a victim of political rhetoric and spin.

Nevertheless, the RACP has done the public a service in identifying the health priorities it has. Their submission includes a range of other Indigenous related issues, as well as a larger number of mainstream health issues (many of which are highly relevant to Indigenous citizens’ health too). I recommend readers have a quick look at the RACP submission.

My suggestion is that it would be useful if post-budget, the RACP released a short assessment of the Government’s budget decisions in the health area along with a checklist of the RACP proposals and the relevant amounts allocated by the Government. I will try to have a closer look at this policy issue in future posts.

Finally I wish to acknowledge the NACCHO website for pointing me to the RACP pre-budget submission (link here).