Indigenous economic and social development in northern Australia in a post-pandemic world

In 2007, Neil Westbury and I wrote a chapter in our book Beyond Humbug arguing that Indigenous economic and social development in the north would be a net contributor to Australia’s defence and national security.

I was therefore interested to read a short and persuasive report from the Australian Strategic Policy Institute (link here) focussed on the deficiencies in Australia’s fuel security and its potentially adverse national security implications[1].

In particular, it struck me that core elements in the report’s argument could be transposed to the Indigenous policy domain as further evidence that the Government has dropped the ball on effective policy in support of Indigenous economic and social development in northern Australia. I have previously posted critically on this issue (link here and here).

Set out below are admittedly selective extracts from the ASPI report that in my view apply with equal or greater force to the Indigenous policy domain:

The government’s Our north, our future: White Paper on developing northern Australia identified the need for greater public–private partnership in the development of Australia’s north. It established two major northern funding programs: the Northern Australia Infrastructure Facility (NAIF; $5 billion) and the Northern Territory Investment Fund ($200 million), but neither has delivered much. It’s clear that nation building in the north needs considerably more thought and commitment than it has received until recently (page 7)….

…Northern development has been a wicked problem for governments since federation. In periods of strategic uncertainty, it has taken on significant value. However, the north’s remoteness from Australia’s population centres has meant that economic investment is a costly endeavour with little benefit at the polling booth. To the casual observer, such analysis might appear glib, but a long-term investment in northern development is a fleeting policy focus. Over the past 50 years, consecutive governments have relied upon market forces and demanded a return on investment to drive nation building in Australia.

Australia’s declining strategic certainty and its Covid-19 lessons on national resilience indicate a need for a change. Or, more accurately, perhaps policymakers will need to do more to ensure that our national interests and strategy aren’t subordinated to commercial profits or economic models that we now see have major gaps and flaws. …

…The Our north, our future: White Paper on developing northern Australia identified the need for greater public–private partnership in the development of Australia’s north. The White Paper established two major northern funding programs: the NAIF and the NT Infrastructure Development Fund. Unfortunately, the NAIF is under parliamentary review for lack of capital allocation and the NT Infrastructure Development Fund has been closed down due to a lack of capital allocation. The debt-based model of both failed to contribute to a sovereign investment model.

… Covid-19 has already shown that market forces don’t always promote adequate national resilience in multiple areas, from broadband bandwidth to the capacity to produce essential medical supplies. … The Covid-19 pandemic has made it increasingly clear that Australia’s current model for nation-building infrastructure investment is far too narrowly focused. The notion that such investments should be funded mainly by those who directly benefit from them rather than also considering who benefits from the increased capacity and resilience more broadly is reducing the country’s resilience. (page 24)…

… The debt-based NAIF and user-pays nation-building efforts are unlikely to result in anything more than passing peaks of economic activity. Unfortunately, those arrangements aren’t supporting the kinds of massive nation-building efforts needed in Australia’s north, where the Australian Government should be considering ambitious investments. Private–public partnerships focused on providing national and regional energy resilience should be given priority (page 25)….

... The government’s policy position that ‘the most appropriate and sustainable structural solution to the maintenance deficit in public infrastructure is a transition to a user-pays model’ isn’t helping to build a safe and secure northern Australia.

Covid-19 has provided the Australian Government with an enormous opportunity to review and reset its nation building policies. Case studies such as the one presented in this report highlight the complexity of the challenge, but they also illustrate how post-covid-19 nation-building and economic stimulus packages could be used to build our national resilience (page 27) [emphasis added].

There is not much to disagree with in these extracts from an Indigenous policy perspective. Perhaps my only caveat would be to suggest that in the Indigenous policy domain, housing provision should be the policy priority. The reasons are intuitively obvious; reduced overcrowding will deliver multiple ongoing benefits: it will improve children’s educational outcomes, reduce domestic violence, reduce the risk of disease transmission, provide opportunities for local employment in construction, repairs and maintenance, and assist the recruitment of locally engaged teachers, nurses and police.

Moreover, going forward, key policy themes for governments in relation to remote communities should be risk and resilience: building community resilience, and reducing the risk of the current and importantly future pandemics. These objectives require increased and sustained new investment. If not now, when?

The key constraints to implementing the policy prescription outlined by the ASPI report authors, but transposed to an Indigenous context, are twofold: a lack of vision by governments – unlike the authors of this report, governments appear unable to recognise that the stimulus will be ongoing (see this article by Adam Triggs – link here) and needs to be channelled into nation and community building, and a lack of an appropriate institutional framework for converting the stimulus that will likely be ongoing for the next five years (see the short article I wrote recently advocating a post-pandemic reconstruction agency for the Indigenous policy domain – link here) to building Indigenous resilience and economic and social opportunity.

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[1] Coyne J., McCormack, T., & Crichton-Standish, H. (2020). Running on empty: a case study of fuel security for civil and military air operations at Darwin airport, Australian Strategic Policy Institute, Canberra. There is much else of interest in the report that I haven’t been able to comment upon.

Indigenous policy and northern Australia

Nothing will come of nothing: speak again

King Lear Act One Scene 1

The Prime Minister, Minister for Resources and Northern Australia, Minister for Indigenous Australians, and First Ministers of WA, NT and Qld issued a media release on 13 December titled ‘Boosting Indigenous participation in Northern Development’ (link here). The media release states, inter alia:

Indigenous Australians will take a stronger role in the economic development of Northern Australia under a new Accord launched at a Northern Australia Ministerial Forum in Katherine…

[The accord] will provide a framework for parties to work together to advance Indigenous economic development in northern Australia.

Prime Minister Scott Morrison said …“This is about creating jobs across northern Australia, which is so important for the region, and our indigenous population….”

Minister for Resources and Northern Australia Matt Canavan said Indigenous participation had always been a key aspect to economic development in the north…“The Northern Australia Indigenous Development Accord (the Accord) will ensure that governments, communities, individuals and industry work together to advance Indigenous economic development across our north.” …

… “The Accord sets out the commitment of governments to strengthen Indigenous economic participation in this nationally significant northern development agenda…” Minister Wyatt said…

…Ministers agreed to extend the term of the Indigenous Reference Group until December 2020. The next steps in developing an Indigenous Commercial Research Plan and locations for Regional Collaboration Areas will be considered at the next Ministerial meeting in 2020.

This all sounds terrific. Please read the whole statement.

While optics are not everything, it is strange that in contrast to Minister Ken Wyatt, the Commonwealth Minister for Northern Australia, Matt Canavan, failed to post this media release on his ministerial website. Moreover, his claim in the media release that Indigenous participation ‘had always been a key aspect to economic development in the north’ is not only historically misleading if not incorrect, but remains problematic today.

Of course, it is the new Accord (link here) where the rubber hits the road. Set out below is my brief and selective assessment of the likely impact of the NAIDA.

The headline conclusion must be that this is a deeply unambitious document.

The Accord has been developed in consultation with the Government appointed Indigenous Reference Group (IRG) (para.1) and is intended to provide a framework…to advance Indigenous economic development in northern Australia.

Point one: this framing of policy opportunities for northern Australia as all about commercial development is in my view deeply problematic. It essentially operates to provide a cover for governments to tread water on other potential policy opportunities, for example, the implications of climate change (link here) or mass incarceration of Indigenous citizens (link here) or welfare policy (link here).

Point two: given the extraordinary levels of deep-disadvantage impacting remote Indigenous citizens, one might have expected that the IRG and governments would have laid out a comprehensive policy agenda to address structural disadvantage and if necessary to allocate greater resources to improving outcomes. Instead, the Accord states (para.3):

The IRG has challenged governments to do more with existing resources; go beyond business as usual to facilitate Indigenous economic development; and improve collaboration across government…(emphasis added).

Point three: the contrast between the co-design approach adopted by COAG in relation to the Closing the Gap refresh where COAG has entered into a partnership agreement with the Coalition of Indigenous Peaks, and this process where Indigenous interests are not parties to the agreement, and the Indigenous representatives are appointed by the Commonwealth is stark.

Point four: the specific roles and responsibilities of the various governments are spelt out in the Implementation Plan at Schedule A of the Accord. They are deeply unambitious while apparently designed to give the appearance of government proaction. When contrasted with the aspirational language in para. 15 of the Accord, the Implementation plan is pathetically inadequate. Para.15 states, inter alia:

The Parties …agree to undertake decisive actions that contribute to…creating jobs…attracting infrastructure investment…facilitating access to capital…..activating the economic value of land….creating institutional arrangements that work to activate , accelerate and optimise Indigenous economic development across northern Australia.

The Implementation Plan proposes [underling added for emphasis]:

·         ‘expanded fee for service opportunities for Indigenous ranger groups’;

·         development of a ‘proposal for developing a Northern Australia Indigenous Enterprise and Employment Hub system’ (presumably four or five enterprise incubators across the North);

·         the ‘Ministerial Forum to understand options for funding feasibility studies’;

·         the provision of ‘proposal/s to consider for progressing land use planning and water reforms”;

·         the identification, trialling and scoping of ‘a process for selecting Regional Collaboration Area sites’ in each jurisdiction; and finally

·         the provision of a ‘proposal for developing a Northern Australian Indigenous Commercial Research Roadmap and Research Plan.

Decisive action indeed! The Government and the IRG have been developing this agenda since 2107, and on the present timeframes outlined in the Implementation plan, decisions to develop what are a set of extremely modest key initiatives will only be green-lighted by the Ministerial Forum later in 2020 and in some cases perhaps 2021. In the words of Sir Humphrey Appleby, implementation will follow in ‘due course’.

So what might a comprehensive plan for Indigenous participation in Northern Australia look like? Set out below is a provisional list of just some of the blindingly obvious candidates for driving improved economic, social, health and environmental outcomes in remote northern communities:

Increased investment in remote human capital development: Greater investment in early childhood programs, teacher quality and tenure, and a stronger focus on bicultural and ‘two way’ curriculums are each a prerequisite for improved outcomes.

Remote housing: A major need and opportunity is to significantly upgrade the quantum and quality of remote housing. This might be through expansion of public housing, but a better option may be to pursue alternative policy ideas including community housing options (link here). Capital might be obtained from a re-energised NAIF, from the Commonwealth’s new social housing bond aggregator (the National Housing Finance and Investment Corporation), and ultimately from the private sector (particularly if underwritten by a short or medium term government guarantee).

Remote property and tenancy management: a plan to ensure locally based Indigenous corporations undertake remote housing maintenance would pay big dividends both socially and economically. 

Land tenure reform: There is a major and complex policy challenge in this area, but it requires sustained policy commitment and a clear vision of the outcomes sought. The failure of Governments to advance the COAG endorsed land tenure reforms (link here) serves to reinforce the political unwillingness of Governments to move forward even on the issues they identify themselves as important. Note that while land tenure is a major transaction cost impediment to efficient services and commercial activities in remote communities, it is not the only transaction cost impediment to commercial development in remote communities.

Governance reform of the native title benefits space: This is primarily a matter for the Commonwealth, Reforms might include requiring PBC’s to appoint independent directors from an approved list; to appoint their auditors from an approved list; and most importantly the provision of adequate core funding for PBCs by the Commonwealth. This is an area where there is probably a case for a short sharp review aimed at identifying a reform agenda.

NAIF Reforms: The Commonwealth could allocate say $1bn for remote Indigenous infrastructure from the $5bn in concessional loans available for infrastructure generally. This would need to be accompanied by a wider definition of infrastructure to include social infrastructure (as suggested by Infrastructure Australia in its most recent reports). Because the NAIF is effectively structured to provide access to concessional loans, there will be a need to develop a delivery strategy to ensure that these funds are able to be both allocated and spent for the benefit of remote Indigenous communities. For example, the Commonwealth might expand the capital base of Indigenous Business Australia with NAIF loans for on-provision to smaller Indigenous owned projects and enterprises in northern regions.

CDP Reforms: the operation of the operation of this program is excessively punitive and creates strong incentives for remote citizens to disengage entirely from both welfare and other government services.

Strengthened financial literacy programs: it was striking that a number of the case studies in the Hayne Royal Commission into the banks were drawn from the experience of Indigenous communities in the remote north.

Finally, it is worth asking the question, is the IRG model fit for purpose? Why is it that after two years work, none of the pressing policy priorities identified in the alternative comprehensive plan set out above have emerged in the IRG’s advice to Government? Is it the case that the Commonwealth Government is limiting the advice that it is prepared to receive? Alternatively, is it the case that the IRG is providing hard-hitting advice, but government is not listening or hearing? Either way, there seems to be a case for an independent review of the IRG’s operations.

The details of the IRG’s advice to the Ministerial Forum do not appear to be public, and I would argue that this lack of transparency is a case where the confidentiality of advice (contra the accepted wisdom reiterated in the recent Thodey Review of the APS link here) actually encourages and facilitates sub-optimal outcomes. There is in my view no justification for the advice of a Government advisory body to be kept confidential. Indeed, how can the appointed members reassure their own communities that they are providing effective advice if their work remains confidential? The question whether the subsequent consideration by policymakers of those recommendations should be kept confidential under FOI is a separate matter. The risk is that the Commonwealth is effectively using the IRG as a convenient cover for government inaction. How else might we explain the deep-seated and sustained lack of substantive action in relation to the Government’s stated policy objectives for northern Australia?

Select Committee on the effectiveness of the Government’s northern Australia development agenda

On 4 July 2019 the Senate agreed to the establishment of the Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda.

The committee is due to report on the last sitting day of 2020.

Information relating to the Select Committee including membership, the terms of reference and copies of submissions are available on the Committee’s web page.

A link to Committee home page can be found here

The Terms of Reference state:

That a select committee, to be known as the Select Committee on the effectiveness of the Australian Government’s Northern Australia agenda, be established to inquire into and report on the effectiveness of the objectives, design, implementation and evaluation of the Australian Government’s Northern Australia agenda, with particular reference to:

facilitation of public and private investment in infrastructure and economic development;

economic and social benefit arising from that investment for Northern Australians, in particular First Nations people;

funding models and policy measures that capture the full value of existing and emerging industries;

measures taken to develop an appropriately skilled workforce;

emerging national and international trends and their impact on the Northern Australia agenda; and

any related matters.

Submissions of particular relevance to Indigenous issues (link here) include:

#13 by Jon Altman and Francis Markham,

#58 by the Cape York Aboriginal Land Council,

#62 by the North Australia Indigenous Land and Sea Management Alliance (NAILSMA), and

#67 by Michael Dillon (the author of this blog).

Submission #80 by the Western Australian Government  is also worth reading, not least for the information it includes relating to the Indigenous Reference Group on Northern Australia (IRG) (see section (b) of the WA submission) where the WA government notes that the Commonwealth and relevant state and territory jurisdictions are developing a ‘Northern Australia Indigenous Development Accord’ aimed at capturing the extensive and collaborative work of the IRG’ and providing ‘a framework for Forum Government’s to align efforts to advance Indigenous economic development in northern Australia’. As far as I am aware, neither Minister Canavan nor Minister Ken Wyatt, nor their departments, have announced or discussed the proposed Accord. Certainly neither Minister’s departmental website provide any information on these proposals.

The key issue from my perspective will be to assess the extent to which the proposed Accord includes substantive policy initiatives, particularly in relation to land reform and native title, funding of PBCs, social and community housing in remote communities, and of course, access to public and private sector development finance for economic activities in remote communities. These are all issues I have argued for in previous blog posts. The WA submission goes on to advocate adjustments to the Investment Mandate of the NAIF to better support Indigenous economic (and hopefully social) investments in northern development. This is an issue that I have argued for over the past year or so in this blog and elsewhere.

To sum up, the Select Committee has the potential to both re-set the agenda in terms of Indigenous social and economic development in northern Australia, and to re-energise the Government’s current policy framework, which to my mind is big on rhetoric, but very short on substantive initiatives.