Regulatory oversight and the delivery of mainstream income support

 

Through tatter'd clothes small vices do appear;

Robes and furr'd gowns hide all. Plate sin with gold,

And the strong lance of justice hurtless breaks;

Arm it in rags, a pigmy's straw does pierce it.

King Lear, Act four, Scene six.

In September the Guardian reported (link here) that some 300,000 Centrelink payment recipients had their payments unlawfully cancelled because of a glitch in the IT system that runs the mutual obligations scheme embedded within the social security system. The Guardian article stated:

The analysis from Economic Justice Australia shows about 310,000 people had their Centrelink payments unlawfully cancelled between 2020 and 2024 because they were not given enough time to reconnect to a job provider after missing a compulsory activity as part of their mutual obligations.

Jobseekers are required to meet mutual obligation requirements – such as attending meetings with an employment provider and applying for jobs – to continue to receive their payments. After jobseekers receive five demerits in the mutual obligation system, they enter what is called the “penalty zone”, where they risk having their payment completely cancelled.

The Guardian article linked to a previous report where the Commonwealth Ombudsman had found 964 persons had their payments illegally cancelled. The Employment and Workplace Relations Department (DEWR) later found additional unlawful cancellations and the mutual obligation system was placed on hold.

A second Report from the Commonwealth Ombudsman has just been issued titled Fairness in the Targeted Compliance Framework: when decisions are made beyond your control (link here) which follows up on the Ombudsman’s previous report. The Mandarin provides a short summary of the report too (link here). Both these reports deal with mainstream income support and do not apply to remote regions where the Community Development Program (CDP) administered by NIAA and DEWR operates (link here and link here). Importantly however, the same IT systems that underpin mainstream program administration are utilised for CDP.

I don’t propose to attempt to unpick the administrative detail that underpins the delivery of income support but instead point to two important elements revealed by the Ombudsman’s valuable analysis.

First, Indigenous citizens are over-represented in the unlawful cancellations. Bear in mind, these are citizens residing in urban and regional Australia, not remote communities. The Reports states (page 11; footnote removed):

Of the 985 unlawful cancellation decisions affecting 964 job seekers between 8 April 2022 and 4 July 2024 (affected job seekers), First Nations People were disproportionately represented:

·         16%:  Average number of First Nations People who accessed Workforce Australia Services between 1 October 2022 – 30 June 2024

·         46%:  First Nations People who were identified to have had their payment unlawfully cancelled between 1 April 2022 – 4 July 2024

Further, 24% of affected job seekers had one or more of the following vulnerability indicators attributed to them: • psychiatric problem or mental illness • illness or injury requiring frequent treatment • significant lack of literacy and language skills • drug or alcohol dependency which impedes compliance • recent traumatic relationship breakdown • homelessness (beyond the control of the job seeker) • cognitive or neurological impairment and • significant caring responsibilities.

I have quoted the related vulnerability indicators as Indigenous citizens are undoubtedly over-represented in many of these categories. They point to the deep systemic issues in play that point to the importance of considering issues beyond Indigenous status in seeking the causes of the underlying drivers of disadvantage.

Bearing in mind the finding by Economic Justice Australia that the total numbers of unlawful cancellations was over 300,000 between 2002 and 2024, the number of Indigenous citizens adversely affected is likely considerable, perhaps in excess of 45,000 over the relevant period.

Second, the Ombudsman’s most recent report makes a finding related to the apparent underinvestment in compliance oversight of the providers by DEWR (see pages 44-47). I have extracted four paragraphs from the report which I suggest are worth considering (emphasis added):

As discussed in Finding 5, DEWR and Services Australia are overturning provider decisions at a high rate. When incorrect decisions are being made by providers at such high percentages, we cannot be assured that DEWR’s prevention and education strategies are sufficient or should not be complemented with a more rigorous approach to deterrence and sanctions. Given the program has been active for more than 3 years, we would have expected more compliance activities against providers.

Our concerns of the lack of transparency for provider performance were heightened when we observed that there appeared to be nominal compliance actions taken against providers. A lack of provider performance transparency combined with nominal compliance actions against providers, in an environment where a high rate of provider decisions are overturned, could point to an oversight design where providers are not being held accountable for poor performance.

In comparison, job seekers are very frequently subject to potentially catastrophic penalties for perceived failures to comply with mutual obligation requirements. In 2023-24, providers issued 1,373,295 income support suspensions to 734,220 job seekers; of these, 6,895 job seekers were subject to financial penalties.

Providers are paid significant amounts by the Australian government to deliver services to job seekers. In 2024-25 DEWR spent approximately $1.256B on Workforce Australia, 74% of DEWR’s spending on employment services.

Conclusion

My own takeout from the release of this report is threefold:

First, the implementation of outsourced program delivery arrangements requires high quality and independent regulatory oversight if the public interest is going to be served. What is almost always absent in our whole of government thinking about the delivery of basic services is the quality of regulatory oversight. I do not doubt that there are downsides to excessive regulation in some policy spaces, but to the extent that the incessant and longstanding campaign against regulation is broad bush and not nuanced, it should be seen for what it often is: ideological special pleading.

Second, there is a case for our core accountability institutions to shift more attention to focussing on the issue of whether governments are under-investing in regulatory oversight across the board (rather than in focussing on whether particular programs or (worse still) program clients are involved in fraud, inefficiency or maladministration. My sense is that at least in areas where the recipients of government services are comparatively voiceless, that this regulatory underinvestment is endemic and indeed a key element in driving or exacerbating systemic (and seemingly intractable) disadvantage as appears to be the case in the income support /social security system.

Third, in terms of Indigenous policy, the mainstream policy realm matters. While the extent of disadvantage and need is arguably more intense in remote regions, the issues facing non-remote indigenous citizens are quantitatively and qualitatively significant and structurally embedded. The National Agreement on Closing the Gap includes as one of four Priority Reforms a reform focussed on the transformation of mainstream institutions (link here). However, the underpinning detail is all about the processes used by agencies to deliver mainstream programs and says nothing about the importance of high-quality mainstream regulation in ensuring Indigenous citizens access mainstream programs equitably. This may appear to be a very fine distinction, but I would argue that it is a crucial distinction that deserves more thought by the Joint Council on Closing the Gap.

10 December 2025

Correction: an astute and conscientious reader has alerted me to the fact that in the third paragraph above, I incorrectly state that the Community Development Program (CDP) administered by NIAA and DEWR operates across remote Australia. Of course, the reason that is incorrect is that the Albanese Government has from the current financial year replaced the CDP with two new programs: the Remote Jobs and Economic Development (RJED) program and the Remote Australia Employment Service (RAES).

The RAES is very similar to the CDP, although much less punitive. There is currently a moratorium in place on the mutual obligations elements of the RAES, however these are scheduled to come back into operation on 6 February 2026. In a recent seminar I attended, I heard someone refer to the RAES as ‘CDP lite’ which may have contributed to my oversight when drafting this post.

The RJED program is I think a valuable initiative although I would have structured it differently, and most problematically, I consider it to be a woefully small response to the problem of structural unemployment in remote Australia. As I have mentioned previously, the Prime Minister claimed CDP was a ‘failed program’ (link here), but given that there were over 40,000 participants in CDP, a reform involving funding 3000 jobs to be implemented incrementally over three years is hardly going to be the transformative reform the Government claims to be implementing, and nor does it meet the commitments made by the Government in 2022 in the lead up to its establishment (link here).

Apologies to readers of this post for my error.

12 December 2025

Pathways toward Indigenous self-determination: hollow constructs and managed illusions

 

Neither a borrower nor a lender be;

 For loan oft loses both itself and friend,

And borrowing dulls the edge of husbandry."

Hamlet, Act one, Scene three.

A recent post on the ANU Development Studies Blog examined the structural basis of regional autonomy in Indonesia (link here). Reading it suggested largely unacknowledged parallels with Indigenous aspirations in Australia for greater self-determination. Hence this post.

First Nations aspirations for greater self-determination are most often articulated in calls for adherence to  international law and informal proclamations (such as the United Nations Declaration on the Rights of Indigenous Peoples); for the implementation of policies and programs that require community-controlled service delivery; and for the negotiation of treaties and other agreements related to land rights, water rights or other property rights. To be clear, these are all legitimate aspirations, although the devil is often to be found in the detail of the substantive terms of the arrangements put in place, and especially in the implementation phase of these arrangements. Of course, there are always opportunities for First Nations to exercise various cultural and other rights vis a vis their own membership that can be conceptualised as the assertion of parallel or shared sovereignty, a concept referenced in the Uluru Statement from the Heart. Neil Westbury and I explored the scope for greater acknowledgment of shared sovereignty in our 2019 CAEPR Policy Insights Paper titled Overcoming Indigenous Exclusion: Very Hard, Plenty Humbug (link here; pp 78-81).  

Close readers of this Blog would be aware however that I am sceptical that these aspirations for greater self-determination on their own offer a viable pathway to greater Indigenous autonomy. There are a range of reasons for my scepticism, which I won’t seek to lay out comprehensively here. But a key element underpinning greater First Nations autonomy continues to be the retention by governments of formal and often informal constraints over independent Indigenous agency. While not the only mechanism, perhaps the most common control mechanism is the retention by governments of authority over the allocation of funding even in contexts where Indigenous interests appear to have independent powers of decision making. 

The Development Policy Blog post was titled How fiscal centralisation undermines Indonesia’s regional autonomy and provides a detailed description of the operation of Indonesia’s fiscal federalism. It concluded as follows:

Indonesia’s decentralisation is thus a story of political empowerment without fiscal substance. The illusion of autonomy persists, but beneath it lies a structure of dependency reinforced by discretionary transfers. If Indonesia is serious about strengthening its regions, it must redesign its fiscal architecture to include predictable, rule-based sharing of national taxes, … granted not as temporary grants but as earned entitlements tied to governance performance. This would create a genuine incentive structure for local governments to innovate, attract investment and compete productively.

Until such reform takes place, Indonesia’s regional autonomy will remain a hollow construct. Local leaders may hold the wheel of governance, but Jakarta still controls the engine, and as long as that remains true, decentralisation will be remembered not as a triumph of empowerment, but as a managed illusion of freedom [emphasis added].

One does not have to look far to find examples of governments retaining fiscal control, and increasingly exercising influence through the use of implicit threats of funding cuts and the selective rewarding of organisations that operate within self-imposed constraints. I don’t propose to provide a list of examples here, although I have discussed several examples in posts in this Blog over recent years. While accepting or acceding to this type of government pressure is a legitimate and often a rational choice for First Nations interests, its adoption will rarely allow or lead to the development of effective advocacy pressure on governments to drive structural or systemic change aimed at enhancing Indigenous inclusion and/or self-determination.

For these reasons, I argue that one of the most worthwhile strategies available to First Nations involves building their organisational and analytic capability for public policy advocacy.  Effective advocacy involves building broad policy alliances and developing the capacity to identify emerging issues (often beyond the narrow remit of Indigenous specific policy issues). It involves engaging transactionally with other mainstream interests. It involves identifying policy priorities and a capacity to both publicly and privately make the case for the adoption of those priorities over extended periods (sometimes years).

While identifying which priorities are most important is for Indigenous interests to determine, I argue that one of them should be a focus on achieving and sustaining fiscal independence wherever possible. Step one is for the core advocacy organisations to find ways to be fiscally independent of government. Step two is for their ongoing advocacy to progressively free key Indigenous organisations of the (often hidden) fiscal constraints and controls retained by governments.

A key rationale used by governments to retain control over financial arrangements and funding is the argument (rarely admitted publicly) that they do not trust Indigenous organisations to operate accountably. The only effective and sustainable response to this argument is for Indigenous interests to ensure that they prioritise financial probity and accountability, and more importantly, that they insist that governments establish effective and independent regulatory oversight where significant funding flows benefit Indigenous interests and/or flow via community-controlled organisations.

Without a sustained commitment to full transparency and effective regulation, both on their own part and in turn from governments, First Nations interests will never surmount the arguments against the retention of government controls over funding. In other words, a focus on transparency and accountability by both governments and by First Nations interests is the sine qua non for greater self determination of key First Nations organisations and institutional frameworks. I canvassed related aspects of this argument in a recent post on Integrity in Public Policy (link here)

Crucially, if Indigenous interests cannot surmount governments’ arguments for retaining financial control over key institutional policy frameworks, they will never break free of the ‘hollow construct’ and ‘managed illusion’ of independence that infects most of the current and developing institutional frameworks across Indigenous Australia that are asserted to constitute or contribute to self-determination.

 

28 November 2025

How effective is the Commonwealth’s Indigenous Procurement Policy?

My mind misgives

Some consequence yet hanging in the stars.

Romeo and Juliet Act one, Scene four.

 

The ANAO has just released a performance audit (link here) with the unwieldy and somewhat opaque title Targets for Minimum Indigenous Employment or Supply Use in Major Australian Government Procurements — Follow-up. This audit deals with the ongoing management of the Indigenous Procurement Policy, which is invariably cited by Commonwealth Governments as a crucial and successful element in its policy approach in relation to Indigenous Australians.

In this post I focus on NIAA’s management of the Indigenous Procurement Policy (IPP), a central plank in the Government strengthening focus on Indigenous economic empowerment (link here).

I previously published posts on the IPP which assessed its performance in positive terms while warning against over-reliance on the single minded focus on commercial businesses as the core of economic development policy (link here and link here).

Here are some key quotes from the ANAO’s report (paragraph numbers are from the Report; footnotes have been removed; emphasis added):

            Background

2. The Indigenous Procurement Policy (IPP) was established in 2015 with the objective ‘to stimulate Indigenous entrepreneurship, business and economic development, providing Indigenous Australians with more opportunities to participate in the economy’. One of three elements of the IPP are the mandatory minimum requirements (MMRs), which are targets for minimum Indigenous employment and/or supply use for Australian Government contracts valued from $7.5 million in certain specified industries.  The National Indigenous Australians Agency (NIAA) is responsible for administering the IPP, including the MMRs….

Conclusion

… 9. Almost five years after the recommendations were agreed to, entities had partly implemented recommendations from Auditor-General Report No. 25 2019–20 Aboriginal and Torres Strait Islander Participation Targets in Major Procurements. Although the NIAA had improved guidance for entities and sought to increase MMR reporting compliance, a recommendation for the NIAA as the policy owner to implement an evaluation strategy was not completed. The NIAA has not demonstrated whether the MMRs are improving Indigenous economic participation. A risk related to the inappropriate use of exemptions was not managed. Recommendations intended to address the risk that reporting on MMR contracts is incomplete and inaccurate were partly implemented by audited entities. Reforms to the Indigenous Procurement Policy were announced in February 2025 without a clear understanding of the policy’s effectiveness….

…. Exemptions from Mandatory Reporting Requirements

16. Between July 2016 and September 2024, 63 per cent (valued at $69.3 billion) of all contracts recorded in the Indigenous Procurement Policy Reporting Solution (IPPRS) were exempted from the MRRs by relevant entities. The proportion of contracts exempted by entities from the MMRs has increased over time. …. The NIAA does not provide complete guidance on the use of exemptions, or assurance over the legitimacy of exemptions. The NIAA has not considered the strategic implications of exemption usage for the achievement of policy objectives….

In a box headed Effectiveness of the Mandatory Minimum Requirements, the ANAO make the following comments:

While the application of the MMRs is trending upwards, between July 2016 and September 2024, 1,475 contracts valued at $69.3 billion were ‘exempted’ by entities from the MMRs, often for reasons that are unclear. There is a lack of performance information and evaluation data that allows for the impact and outcomes of the IPP to be assessed. The NIAA’s public reporting on the IPP does not provide information on the MMRs’ effectiveness. It is unclear if the IPP’s objectives of stimulating Indigenous entrepreneurship, business and economic development, and providing Indigenous Australians with more opportunities to participate in the economy, are achieved. (emphasis added)

There is much more of interest in the report, albeit it is comparatively technical and thus somewhat inaccessible. While the Minister’s February 2025 media release (link here) announcing an expansion of the IPP’s targets aligns with the Government’s pivot to economic empowerment as its signature Indigenous policy focus, the fine detail in this report suggests that NIAA is a long way from being on top of the policy detail. The ANAO documents in considerable detail how the NIAA dropped the ball comprehensively on commitments made in response to previous Parliamentary Committee and ANAO reports and does not appear to have the internal mechanisms in place to ensure that the IPP will be effective in meeting its stated aims.  While increased ambition for the IPP’s formal targets is creditable, Figure 2.1 in the ANAO report (page 51) suggests that the announced increased headline targets for future years are still well below current actual performance at least in terms of the numbers of contracts, thus suggesting that the targets are not intended to stretch actual performance. Meanwhile, the Minister’s commitment to addressing ‘black cladding’ appears almost nonchalant. As she states in the media release mentioned above:

The Government will also work with regulators to tackle ‘black cladding’ – disingenuous conduct designed to gain access to programs like the IPP – and explore options to make it easier to report the practice.

Let’s be clear; black cladding occurs when non-Indigenous firms engage non-contributing Indigenous partners to front a commercial entity with the aim of winning contracts paid by the taxpayer that they would not necessarily win through a merit-based process. A more accurate definition of black cladding might read: ‘dishonest conduct designed to gain access to taxpayer funded contracts’. It has been an issue of concern for a decade (link here). Working with unnamed ‘regulators’ to ‘explore options’ to report the practice [to who?] reeks of rhetorical flimflam. The NIAA expand on this on their website where they state (link here) that

The NIAA will work with relevant regulators and support services to identify opportunities to make it easier for First Nations people to report black cladding that might amount to unlawful conduct and provide targeted education, guidance and support for First Nations business owners.

The problem here is that, by definition, black cladding involves the co-option of Indigenous individuals, often involving the provision of financial incentives. The suggestion that the regulatory approach to minimising black cladding should rely on or be based primarily on voluntary reporting by Indigenous people strikes me as both naïve and destined to fail.

The combination of black cladding (at unknown levels) and exemptions from the mandatory minimum requirements (perhaps we should just call them ‘optional’ minimum requirements….though even this term is a contradiction in terms!) valued at $69 billion and comprising 63 percent of all contracts under the IPP since 2016 (see Table 3.1 on page 56 of the ANAO report) together have the potential to eviscerate the effectiveness of the IPP program. Yet despite having agreed to an evaluation after the ANAO’s previous audit of the employment programs, and after undertaking preparatory work for the evaluation, NIAA cancelled the evaluation. The ANAO in footnote 92 (page 49) note that NIAA advised it could find no evidence of the decision not to proceed. Presumably no officer within NIAA was prepared to take responsibility for the decision. It just happened! One is tempted to ask where were the members of NIAA’s Indigenous Evaluation Committee (link here) while this non-decision was rolling out? Perhaps the NIAA Audit and Risk Committee (link here) should consider how the non-decision to cancel the evaluation was made and what impact it might have on the effectiveness of the IPP. I guess not proceeding with the former commitment to undertake an evaluation does have the advantage of making it easier for the Minister to state with supreme confidence, as she does in her February media statement:

Given its success so far, the Government is also making the IPP more ambitious…

One final issue worth noting relates to ANAO Recommendation Four (see paras 3.10 to 3.13 in the ANAO report) dealing with exemptions to the minimum requirements. In para 3.11, the ANAO recommended (inter alia) that:

To ensure exemptions are accurately recorded in the Indigenous Procurement Policy Reporting Solution, non-compliance with the Indigenous Procurement Policy can be appropriately identified, all applicable contracts are subject to the mandatory minimum requirements reporting and assessment process, and the Indigenous Procurement Policy is achieving its policy objectives, the National Indigenous Australians Agency:

(d) implement a risk-based assurance process to ensure that reported exemptions or exclusions are legitimate.

In its response to this part of recommendation four, the NIAA stated:

Not Agreed to part d – The National Indigenous Australians Agency does not believe it is appropriate for it to be assuring the implementation of elements of the devolved Commonwealth procurement framework by Commonwealth entities. The National Indigenous Australians Agency maintains that it is the responsibility of each Commonwealth entity to ensure it meets its own obligations under Government legislation and guidance, including the Commonwealth procurement framework

Yet the 2019 Order establishing the NIAA as an Executive Agency, signed by the then Governor General (link here), listed the functions of the NIAA as including:

                             i.        to lead and coordinate Commonwealth policy development, program design and implementation and service delivery for Aboriginal and Torres Strait Islander people; and ….

                            ii.        to analyse and monitor the effectiveness of programs and services for Aboriginal and Torres Strait Islander people, including programs and services delivered by bodies other than the Agency…

 

The IPP is the responsibility of the NIAA, and while it is a fair expectation that other agencies will meet their obligations under the program, it is squarely within the NIAA remit for it to set in place processes that ensure all agencies involved in the program are meeting their obligations. The NIAA should view itself as the key regulator oversighting the effectiveness of the IPP’s implementation across government.

 

Conclusion

 

The takeout from this sorry tale is threefold:

·         it confirms that in relation to Indigenous economic policy, the Government is more concerned with appearance over substance;

·         it demonstrates that NIAA does not have the capability to ensure that it keeps its written commitments to the ANAO and the Parliament; and perhaps most importantly,

·         it reveals that no one inside government (including the Minister who is ultimately accountable), let alone outside government, actually knows whether the Indigenous Procurement Policy is effective or not.

 

The IPP opens a new conduit for rent seeking by businesses across the whole spectrum of government activities, and while its objectives are worthwhile, it ultimately stands or falls on the quality of the overarching regulatory oversight by NIAA as the policy owner and all the mainstream agencies in the Commonwealth responsible for letting contracts. Unfortunately, this is not the only public sector activity where regulatory oversight is in short supply (link here).

 

In relation to the IPP, the Commonwealth clearly prefers to operate in a state of blissful ignorance, a prisoner of its own rhetoric and good intentions ― assuming we give them the benefit of the doubt. If the program is in fact ineffective, or even partially ineffective, and the Government’s assessment of its undoubted success is wrong, the losers are Indigenous Australians, and taxpayers more generally.

 

The Commonwealth, and particularly successive ministers for Indigenous Australians and the NIAA, should do better.

 

 

5 June 2025

 

Regulatory inaction: implications for Indigenous interests

 

We must not make a scarecrow of the law,

Setting it up to fear the birds of prey,

And let it keep one shape till custom make it

Their perch and not their terror.

Measure for Measure Act two, Scene one.

 

A pervasive issue across the Indigenous policy domain is the absence of effective ― or in many cases any — regulation of both private and public sector activities impacting Indigenous citizens.

Conceptual scene setting

This is a much wider issue than just the impacts on Indigenous communities, organisations and citizens, but there are some factors that make it a more serious issue for these Indigenous interests.

First, the poor effectiveness of regulation across mainstream domains is the result of sustained lobbying and advocacy (much of it behind closed doors) by interest groups with a vested interest in loose or non-existent regulation.

To cite just a few examples, sub-standard regulation has received extensive media coverage in the past decade in the banking, financial services, aged care, disability services, out of home care, funeral insurance, alcohol retail, food labelling and gambling industries to mention only those areas that immediately come to mind. There are two elements involved in considering this issue: one is the adequacy of the regulatory oversight of existing regulations; the second is the degree to which the existing regulations are adequate or alternatively not required. Both elements play into the issue of regulatory failure.

In many of these cases of regulatory failure, the persistence of poor social or economic outcomes has led to the commissioning of one or more national or state level reviews, coronial inquiries, or royal commissions. It is rare for the results of such reviews and inquiries to be implemented wholeheartedly and quickly; the normal response of governments is to initiate further consultations or reviews which slow the impetus for reform and are then the subject of further lobbying and pressure from the interest groups with most to lose from substantive reform. In my observation, governments rarely do more than resort to minimal reforms, while leaving the industry interests that would be impacted by substantive reform substantially unaffected. The status quo ante is usually maintained and indeed often reinforced.

The reason these mainstream regulatory failures are more serious for Indigenous interests is that Aboriginal and Torres Strait Islander citizens are more likely to be economically and socially disadvantaged and are thus more vulnerable and at greater risk of being adversely impacted by mainstream commercial activities that avoid proactive regulatory oversight.

Second, Indigenous interests are not (yet?) as well organised as the industry-based interest groups to exert countervailing advocacy pressure, particularly on mainstream policy issues which are nevertheless crucial elements in their social and economic lives.

Third, the cultural and ideological narratives that are ubiquitous across the Indigenous community (e.g. the importance of self-determination, or community control in service provision), and which are crucial elements in building and maintaining notions of Indigenous identity and culture have unintended negative side-effects insofar as they shift the focus of Indigenous organisations and even peak advocacy organisations away from mainstream issues and towards Indigenous specific issues.

Fourth, the reality is that the regulation of many mainstream issues falls to the states and territories, and this means that the challenge of monitoring regulatory failures, proposing solutions, pressuring governments to pursue reform and devising policy solutions spans not just one national policy domain, but an additional eight state and territory policy jurisdictions. The result is that effective monitoring requires the creation of multiple state and territory based Indigenous advocacy organisations with the capacity to follow an expansive portfolio of public and private sector activities within their sectoral remit.  

Of course, regulatory failure is not just an issue in the mainstream. It is endemic in the Indigenous specific policy domain, and in many instances, because of the nature of the composition of the Indigenous policy domain, the activities that are in effect under-regulated are operated by Indigenous controlled corporations serving their Indigenous constituencies. There are at least three factors that contribute to sub-optimal regulation across the indigenous policy domain. First, governments who are loathe to regulate robustly in the mainstream do not wish to regulate to a higher standard in the Indigenous policy domain. Second, government regulators do not wish to be perceived as racist, or to be compromising Indigenous self-determination. And third, increasingly, regulators in the Indigenous policy domain report to Indigenous ministers, or are staffed by Indigenous bureaucrats, who may be reluctant to robustly address governance and service failures by Indigenous controlled entities.

Regulatory failure (or even regulatory weakness) whether in the mainstream or the Indigenous domain is not in the public interest. It disadvantages consumers in private sector markets and contexts, and service delivery constituencies in public sector contexts. Once embedded, it creates the preconditions for future sub-optimal performance with concomitant adverse impacts on intended beneficiaries. It is under-reported by the media with most publicity focussed on the deficiencies of organisations or individuals, and not on the absence or systemic weakness of the regulatory oversight that might have prevented the fraud or corruption or service mismanagement that attracted the media attention. A key reason for under-reporting is that regulatory failure is invariably systemic in its impacts, and it extends beyond the time horizon of most journalist and media reporting. Another is that it is not as susceptible to being framed as a simple narrative.

Another reason it is not in the public interest is that regulatory failure is a form of government failure, and in many cases, it is the result (whether intentionally or unintentionally) of implementation failure by governments. It thus contributes to the much more common elements of government dysfunction, at policy, program and even project levels; failures that inevitably contribute to the decreasing levels of trust in government in Australia (link here). While trust in government in Australia is higher that the rest of the world (link here), a trust level of fifty percent is hardly a ringing endorsement.

Regulatory failure is thus simultaneously endemic and invisible; it has multiple causes and is often both complex and systemic in its impact.

Real world examples

To bring this discussion down to tin tacks, I want to briefly point to two separate sets of media reports that recently caught my attention, both of which involve substantial and serious regulatory failure, and both of which have had, and continue to have, a disproportionate adverse impact on Indigenous citizens. The discussion of each of these cases focusses on the high-level regulatory implications, and I do not attempt to summarise or consider every aspect of each case.

On 9 May 2025, the AFR ran an investigative report headlined How a Sydney billionaire became the pokies king of Alice Springs (link here). This was followed up on 23 May 2025 by a report (link here) based on an interview with former NT Chief Minister (and longstanding backroom political operative) Shane Stone. Headlined Former NT chief’s pokies regret: ‘I wish we never had them’. Taken together, these articles point to extraordinary levels of on-site gambling in the NT’s casinos and other premises, extremely high rates of Aboriginal participation in gambling at these venues, low to non-existent levels of regulation of the use of gambling machines, high levels of revenue to the NT Government and extraordinary levels of influence by gambling industry interests over the NT Government (whichever party is in power),  and non-existent levels of accountability and responsiveness of elected governments for the community harm flowing from widespread gambling addiction. According to the AFR, the NT has the highest per capita expenditure on gambling of any jurisdiction in the nation, and the highest per capita government revenue from gambling:

The Northern Territory is the state with the least scrutiny, the loosest probity and the lowest taxes… “I would argue that the regulators, particularly in the Northern Territory, are not active participants in the regulatory process,” gambling expert Charles Livingstone says. “By and large, it’s left up to the venues to regulate themselves, which is entirely like the fox looking after the hen house.”

The AFR report spends considerable time explaining how little oversight is applied by ASIC to the owners of the major gambling venues in the NT and contrasting the numerous community activists calling for gambling reform with the slow and in-camera legal processes applied to any challenges to even the most minimal expansion of access to gambling in Territory towns. Increasingly, community activists are calling for national intervention.

Shane Stone’s statements to the AFR are simultaneously an apparent mea culpa and change of heart (“If I’d had the courage of my convictions, I would have wound back the [poker machine] numbers, but I didn’t do that,”) and a nuanced and politically astute nudge of the political discussion towards subsidiary issues such as limiting access to cash within gambling premises while making a strident argument against national intervention and in favour of state and territory led reform processes. Yet the states and territories are both part of the problem and less visible to the national constituency necessary to drive national reform. At the risk of being accused of extreme cynicism, I am left wondering whether the former Chief Minister is yet to find the courage his convictions require. The AFR sought and obtained comment from current federal ministers with gambling related responsibilities. Compared to the mountain of regulatory reform required in the NT and beyond, their comments amount to a hill of beans. I recommend interested readers take a close look at both articles.

The bottom line is that mainstream and national regulatory disinterest and failure in relation to on-site gambling has had, and continues to have, seriously adverse impacts on vulnerable Aboriginal citizens in the NT. This impact is not felt just by those who gamble, but by their families and intimate partners. Recent ANU research (link here) suggests that between 5 to 8 percent of the national mainstream population is adversely affected by gambling. Those most at risk are low income and economically disadvantaged. These figures are likely to be higher for Aboriginal residents in the NT.

The second case worth mentioning was published on the front page of the Sydney Morning Herald on 24 May 2025 and in The Age (link here $) under the headline ‘Health bosses rack up $400, 000 travel bill’. The report deals with what appears to be endemic and enduring dysfunction within a major community controlled Aboriginal medical service, CTG Aboriginal Health Services, operating across at least three major western NSW towns and providing a wide range of medical services. CTG’s funding last year exceeded $11m and was sourced from the Commonwealth, the NSW Government, and Medicare rebates according to its annual report (link here). The headline focusses on what numerous complaints allege is unwarranted travel by senior executives while financial constraints limit the provision of health services to its constituency. There is no allegation of fraud, but it is clear that there are serious internal management issues not to mention an extraordinary lack of judgment by the organisation’s leadership. The article cites numerous sources alleging that the provision of health services to Indigenous residents across a large part of western NSW have suffered. Notwithstanding its ongoing funding, its annual report provides no information on its incorporation status, no financial report, and no information on its governance processes including how its Board is appointed and the extent to which it represents the wider Indigenous community across its geographic span.

These shortcomings reflect poor governance practices and, in my view, do not meet the requisite levels of downward accountability to the community let alone upward accountability to the funding agencies and taxpayers generally. It is easy to criticise the organisation, and on the facts described in the SMH article, such criticisms appear warranted. Yet in my view, these shortcomings reflect a deeper level of regulatory failure by the relevant areas within the Commonwealth Department of Health, Disability and Ageing and the NSW Government.

The standard of public accountability provided in CTG’s annual report in my view is far below what a funding body should expect in exchange for its continued funding. There is also a suggestion in the SMH report that the ongoing dysfunction has been going on for some years without being resolved. This raises the further question: if the regulation of this organisation is so lacking, then what is the quality of regulation over other similar organisations? How widespread is this regulatory failure which allows internal management dysfunction to endure for extended periods in key health services delivery organisations utilising government funds, and which adversely impacts the most disadvantaged Australians.

Again, the bottom line is that poor upward and downward accountability for key health services in one of our largest states and across an expansive area of regional communities appears to be tolerated and is likely the default modus operandi for regulatory oversight. This poor regulatory performance is a key driver of sub-optimal management performance by outsourced organisations delivering taxpayer funded programs and leaves the most vulnerable and disadvantaged citizens to ultimately pay the cost.

Conclusion

Mainstream regulatory failures in gambling, and the Indigenous specific regulatory failures in health services are contributors to the systemic drivers of deep-seated disadvantage. To the extent that these regulatory failures are widespread, and the default assumption must be that they are, then they work against closing the gap. It is worth emphasising this point: regulatory failure, which is a matter of technical capability for government, is conceptually a prime contributor to any effort address disadvantage. To the extent that the regulatory failure spans multiple sectors, or even spans the entire breadth of government responsibilities, the prospects of removing Indigenous disadvantage would be fatally undermined.

Closing the Gap (however you wish to frame it, and whatever targets you decide to use) is built upon a near ubiquitous implicit assumption that governments know what they are doing, are focussed on the public interest (and not private interests), and partner with or contract with entities that are fit for purpose. In turn, these assumptions (which take on the form of an ideologically based view of how our democratic system works), are based on a precondition of the effective regulation of entities operating within our economic and social realms to ensure that they are acting consistently with the public interest. If they are not acting in the public interest, then our political system is not fit for purpose.

The key to ensuring that private sector entities (operating behind a corporate veil designed to protect individuals against commercial losses and to encourage the risk taking that market economies rely upon) and public funded entities engaged to deliver outsourced government services are acting in the public interest is to focus on the quality of regulation of their activities. To the extent that regulatory oversight is defective, deficient or non-existent, the public interest will suffer, and in the real world, the victims will likely be disproportionately found amongst the disadvantaged whether in mainstream or Indigenous specific contexts.

Where regulatory failure is endemic, there is no easy fix. Governments will not pull themselves off the ground by their shoelaces. Those who are committed to seeing the public interest protected must find ways to exert strategic political influence, and to pursue, piece by piece, step by step, greater transparency by governments of their use of taxpayer resources and greater public dialogue encompassing the systemic issues that operate to undermine the public interest.

For Indigenous interests, and in particular the Indigenous leadership, there will be considerable benefits in pursuing strategies that build their organisational capabilities to monitor and exert persuasive influence on policy. Risks include the likelihood that governments or other interest groups will seek to co-opt Indigenous advocacy, and that internal dissension and external criticism will undermine the persuasiveness of Indigenous advocacy. The development of internal organisational processes and mechanisms that are both upwardly and downwardly accountable and as transparent as possible will serve to minimise such risks.  

 

27 May 2025

Regulatory outcomes and the mining sector: implications for Indigenous interests

 

Whiles I am a beggar, I will rail and say there is no sin but to be rich;

and being rich, my virtue then shall be to say there is no vice but beggary.

Henry IV, Part 2, Act one, Scene two.

 

New research published in the Journal Resources Policy (link here) examines the impact of the various elements of the overarching institutional prerequisites for mine approval via a comprehensive analysis of 409 mining applications subject to regulatory approval in Australia between 2000 and 2020.

The authors, Lisa Nicole Mills, Jennifer Stewart and Graeme Auld are resource policy experts based in Carleton University in Ottawa. The Abstract of their paper states (inter alia):

In this paper, we examine the pressures which affect business risk through the multiple dimensions of the “licence to operate,” in the case of federally regulated mines in Australia. Studying 409 mining applications that were under regulatory review, approved, or withdrawn between 2000 and 2020, we use competing risk hazard models and linear regressions to examine how measures of business risk (longer times in review and more conditions) and choices to withdraw are affected by: the attributes of the mine, competing rights claims and land-uses, levels of oppositional mobilization, changes in political parties in power, and market prices. We found that new projects, and those that triggered an independent assessment of their impact on water, were likely to experience longer reviews. Mines where agriculture was the competing land use also faced longer reviews, and mine proponents were more likely to withdraw their proposal. Contrary to our expectations, the mobilization of opposition to a mine was associated with faster time to approval, but also a higher number of conditions.

In section 2.1 of their article, the authors identify three broad elements of the regulatory process governing mine approvals in Australia: the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) which applies to nine potential matters of national environmental significance; the processes required to obtain secure mining title which are state based; and the provisions of the Native Title Act which apply to lands with either determined native title, or subject to claim. The empirical analysis undertaken was limited to processes under the EPBC Act.

The analysis considers interactions among licences to operate through the lenses of civil society mobilization, electoral and party politics, and competing land-uses as these combine to affect the business risk experienced by mine project proponents through the EPBC Act regulatory approval process and outcomes. I don’t propose to attempt to summarise the details of the statistical analysis and refer interested readers to the article itself. Not will I focus on the outcomes apart from the one of most interest to readers of this blog, namely in relation to Indigenous claims (emphasis added).

A third insight from the analysis concerns the role of competing rights claims and land-uses. The data indicated that Indigenous land rights claims did not have any bearing on the length of time to approval, withdrawals, or conditions; indeed, proposals to mine on land without any claims tended to take longer to be approved than those on land with claims: but this association was not statistically significant.

Further, the authors found that:

Higher levels of civil society mobilization pushed regulators in apparently different directions. When mobilization was high, more conditions were imposed upon the mine's operation, a finding that is consistent with literature that suggests social pressure may increase regulatory requirements… However, mines that faced mobilization were not subjected to longer approval times; and, in the case where mines faced opposition from actors who would be negatively economically affected by the mine's development, approval times were shorter.

The overarching conclusion of the analysis (references removed) is that

Unlike early work on social licence to operate that conceptualized social pressures as working in synergy with regulatory processes, often leading to higher requirements or even beyond compliance behavior, we provided evidence that regulatory licences can serve as a trump card to advance a project. In this respect, our analysis offers caution for those that view economic licensing [ie investor approval] and social licensing [ie community and social approval] as substitutes for, or at least complements to, regulatory licensing.

For my purposes, this research offers at least preliminary or provisional evidence that longstanding tropes embedded within Australian politics in relation to Indigenous land rights are mistaken and wrong. Those tropes, which underpinned the rationale for denying Indigenous interests a veto over mining on their lands, were that land rights would be anathema to mining development and indeed to the nation’s economic security. The experience of the past two decades is that those fears have not eventuated. That experience strongly suggests that the promulgation of those fears was designed to benefit the minerals industry and to maintain the structural exclusion of Indigenous interests within Australian society.

Having said that, hidden behind these issues, and embedded in the current institutional architecture of native title and land rights, are a set of public policy issues related to the equity of the current financial policy frameworks which

(i)            privilege native title holders of land which lies above mineral deposits over those Indigenous groups who do not have access to native title, or those native title holders whose land does not lie above commercially viable minerals; and

(ii)          with only some exceptions, fail to ensure that the funds which flow to native title holders and Indigenous landowners are disbursed within frameworks which privilege accumulation over consumption (or to put it another way, which fail to ensure that future generations will benefit from the compensatory negotiations undertaken by the current generation). If there is any merit in the arguments of many scholars (and Indigenous activists) that colonialism has ongoing impacts, and that intergenerational trauma is a reality, then any argument against intergenerational benefit provision for beneficial payments arising from mining on Indigenous land disappears.

These are public policy issues because it has been governments that have devised the institutional arrangements that underpin the implementation of native title rights and land rights, and while the issues identified above may not have been intended or even recognised, they are now of very real significance. I use the term ‘hidden’ because these issues have been largely submerged in the public debates over Indigenous land rights over the past five decades. With the turn to economic empowerment as an overarching priority in the Indigenous policy domain (link here and link here) it is time that these issues were given greater profile and attention by policymakers and Indigenous advocates.

 

5 May 2025

Why understanding what has happened at the ALC is important

To fear the worst oft cures the worse

Troilus & Cressida Act three, Scene two

 

Along with my co-author Bill Gray, a former senior Commonwealth public servant with extraordinary experience across the Northern Australia and Canberra, I recently penned a short article focussed on the importance of regulatory oversight of the Anindilyakwa Land Council in particular, and by implication, all statutory entities in general.

Published in The Mandarin, with the title  Minister McCarthy and oversight of the Anindilyakwa Land Council  (link here), the article is available for open access once readers create an account.

I wont try to summarise the article here, but instead will make a couple of more general points.

First, robust and proactive regulation is important in establishing and maintaining high quality organisations, whether in the public or private sectors. The ongoing quality of statutory corporations is particularly important because they are invariably established for public purposes and thus are intended to pursue and contribute to the public interest.

Second, over recent decades there has been a general trend towards the overt politicisation of the public service. I do not mean partisan politicisation but instead refer to the co-option of the public service to supporting the Executive arm of government in its ongoing efforts to dominate the legislative arm, that is, the Parliament. Ministers are theoretically responsible to Parliament, but in fact in recent decades it has become apparent that the tables have turned, and in practice it is Parliament that is in most respects subservient to the Executive.

This leads to a situation where Ministers no longer feel obliged to maintain standards of accountability and deference to the law that constitutional theory requires. In these circumstances, regulatory oversight is made subservient to politics, and over time the quality of institutions degrades.

Third, I suspect that in the Indigenous policy domain, there is a reluctance by many public servants to be seen to be critical of Indigenous organisations or officeholders. Such reluctance may be exacerbated when the Minister that public servants are reporting to and supporting happens to be Indigenous. My own view is that it remains important for office holders in statutory corporations to be held to high and rigorous standards of accountability whatever their background. Not only is it paternalistic to adopt lesser standards, but for the reasons outlined above, high quality regulation creates the preconditions for high quality service delivery.

I have focussed on these issues to explain why it is that I have spent so much time and effort in analysing and understanding what has been happening on Groote in this Blog and elsewhere. The issues involved are of much wider significance than the possible shortcomings of a single statutory corporation on a remote Island off the northern Australian coast. The fact that the mainstream institutions designed to hold public sector institutions to account are not working effectively is the real issue.

The reforms required to reverse these developments are structural and systemic. Without close and detailed analysis of public sector developments in locations such as Groote Eylandt, (or in policy realms such as Robodebt), the task of devising the necessary reform agendas, and finding the political coalitions necessary to advance those reform agendas becomes impossible.

This is why the issues on Groote Eylandt are so important. It is also why it is essential that there be a comprehensive and independent forensic audit of the activities of the ALC and its associated CATSI corporations in receipt of royalty equivalent payments. I recommend readers have a look at the Mandarin article with these more general points in mind.

 

12 February 2025

Imbroglio on Groote Eylandt: a high-level roadmap

                                                            I see, as in a map, the end of all.

Richard III, Act two, Scene four

 

Over the past 14 months, there has been a steady torrent of public complaints, reports and media analyses raising concerns related to the governance of the Anindilyakwa Land Council (ALC), and its then Chair and current CEO.

 

Given the complexity of the institutional environment, let alone the myriad problematic activities that have been aired, I thought it might be useful to try to lay out a very high level roadmap of how the oversight of the issues on Groote emerged, what is currently being done, and where it might go into the future. This post is not aiming for comprehensive detail, but rather aims to set out the context. For more detail, readers are referred to the reports listed below, along with the analysis of some eleven previous posts on this blog which can be accessed in the recent post, Eleven posts foretelling calamity and tribulation on Groote Eylandt (link here).

 

Key events

 

In May 2023, the ANAO issued a performance audit report (link here) into the operations of the Anindilyakwa Land Council, a Commonwealth statutory Corporation established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA). The content of the audit was highly critical of governance standards within the ALC, identifying numerous potential conflicts of interest involving the Chair, the CEO and his spouse, amongst numerous other issues of concern. The remit of the audit was limited to the ALC and not to the network of corporations in receipt of royalty equivalent payments, thus limiting the focus of the recommendations to the ALC’s operations. It is worth noting that the ALC and the NIAA would have been provided with a draft report in March or April 2024.

 

On February 2024, a petition signed by 235 residents of Groote Eylandt was tabled in the Federal Parliament raising a range of concerns regarding the operations of the ALC and in particular its CEO. In response, Minister Burney (who is responsible for the operation of the ALRA told a media outlet that she would ask the NIAA Integrity Unit to investigate the concerns raised. Five months later, that investigation (whose terms of reference were limited to the ANAO recommendations) has yet to be released.

 

On 11 May 2024, the SMH published an article (‘CEO’s plan for personal millions form Indigenous mine deal exposed’) by investigative reporter Nick McKenzie (link here) which revealed that in September / October 2023, the ALC CEO had sought approval from the AAAC (the formal owners of 70 percent equity in Winchelsea Mining Pty Ltd) to grant him and his wife (Ms Sophy Liu) a ten percent stake in Winchelsea Mining. Following concerns expressed by an ALC legal officer, and the provision of a second legal opinion, the CEO deferred finalising the transaction

 

On 7 June 2024, during a Senate Estimates hearing, Senator Pocock raised serious concerns with the ALC CEO regarding the negotiation of the terms of the mining agreement between the ALC and Winchelsea Mining. The ALC Chair and CEO had statutory responsibilities to protect the interests of the TOs on Groote Eylandt, yet they were also both the Chair and co-CEO of Winchelsea Mining where they had responsibilities to protect the interests of their shareholders. The terms of the Agreement are not in the public domain, however the ALC CEO claimed that he had briefed the then Minister Nigel Scullion, who had approved the agreement. None of this was made public at the time. At the same Estimates Committee Hearing, the NIAA Integrity Unit indicated that they had received a draft of the investigation and expected the report to be finalised by July.

 

In early July 2024, the Minister’s Office or the NIAA advised the media that the NIAA had referred allegations against either the CEO or the ALC to the National Anti-Corruption Commission (NACC). The Minister would have approved this referral. The referral likely pertains to the proposal to grant the CEO and his spouse a ten percent share in Winchelsea Mining. The NACC had already received a number of referrals related to the actions of the ALC and its CEO from private citizens prior to the NIAA referral; it is unclear if it intends to conduct an investigation, and the extent of its inquiries if such an investigation proceeds.

 

On 20 July 2024, freelance journalists Ben Abbatangelo and Rachel Hoffman published a detailed account in The Saturday Paper (link here) of numerous new allegations of problematic activities on Groote centred around the roles, activities and influence of the ALC CEO and the recently deceased Chair. Key revelations in this article include the following: the role of the ALC royalty development unit in implementing the development the Royalty Shoppa debit card which quarantined significant levels of funds to expenditures in the Royalty Shoppa Warehouse; the apparent inconsistencies in relation to advice to Minister Scullion in relation to cuts to the CEO’s salary to offset his salary from Winchelsea Mining and the actual salary paid by the ALC over subsequent years; allegations that action to mitigate and address conflicts of interest by the former Chair and the current CEO had not been implemented in relation to key ALC decisions; and that concerned TOs had complained to the Minister regarding lack of accountability for a substantial payment by the Anindilyakwa Mining Trust to the Anindilyakwa Royalties Aboriginal Corporation, but had not received a reply.

 

Ways of interpreting the current imbroglio

 

There are at least five legitimate ways to evaluate and assess the ongoing developments on Groote Eylandt, and their interaction with the accelerating momentum of accountability focussed investigation.

 

First, one might assess past, present and future developments through the narrow focus of whether or not there has been fraudulent or illegal behaviour by any of the actors involved in managing the ALC and its associated royalty distributions. Important as this is, I would argue that a focus solely on fraud and accountability is too narrow and will not address wider issues of fundamental importance to the wider community on Groote.

 

Second, one might assess the policy effectiveness of the ALC’s strategic vision and plan for the residents and TOs of the Groote archipelago. The ALC strategy as promulgated on its website is sophisticated and polished. I discussed in in some detail in my earlier post The proposed Winchelsea mine on Groote Eylandt: a strategic opportunity? (link here) where I concluded:

The high level aspirations articulated by the ALC have real merit. I support them if they can be afforded. The strategies being adopted are however deeply flawed, and in my view will likely lead to a disastrous financial meltdown on Groote at some point in the next five years. If this occurs, the socio-economic ramifications will entrench further disadvantage and possibly lead to the unravelling of social cohesion on the island.

I outlined the reasons for that conclusion in the following post (link here). That conclusion has not been refuted by the ALC or the NIAA. Time will tell.

 

If I am right, the current inaction by governments will mean that they share direct responsibility for the outcomes.

 

Third, one might assess the effectiveness of the current regulatory oversight of the activities on Groote since late 2018 when the ALC CEO wrote twice to Minister Scullion advising him of the proposals to establish Winchelsea Mining and purchase the mining tenements on Winchelsea Island. The ALC is a Commonwealth statutory corporation. Unlike private sector corporations, it is not regulated by ASIC and the ACCC, but by the provisions of the ALRA which is administered by the Minister for Indigenous Australians and the Public Governance, Performance and Accountability Act (2013) (PGPA Act) which is administered by the Minister for Finance.

 

See this flipchart for a listing of all PGPA Act entities (link here). Sections 25 to 29 of the PGPA Act impose the following duties on all officials: a duty of care and diligence • a duty to act in honesty, good faith and for a proper purpose • a duty in relation to use of position • a duty in relation to use of information • a duty to disclose interests.

 

Since 1976 when the ALRA was enacted, those two Ministers and their agencies have shared the bulk of the responsibility for regulatory oversight of the actions of the NT Land Councils, with the Indigenous Australians Minister in the lead. Some other accountability agencies have specific roles, for example, the ANAO which undertakes financial audits of NT land councils’ financial affairs and can undertake performance audits (such as the performance audit published in May 2023). The indigenous Australians Minister approves budget estimates for each land council and is required to approve various arrangements set out in the ALRA (eg mining agreements negotiated by a Land Council with a mining corporation).

 

Given this background, the inability of the NIAA at the Estimates Hearing of 7 June 2024 (link here: page 29) to satisfactorily respond to questions from Senator Pocock as to whether the Minister or the NIAA had been advised of Mr Hewitt’s potential conflicts of interest appeared to evoke a level of astonishment. In seeking to deflect the Senator’s apparent incredulity, the NIAA CEO explained that the ANAO Report was directed to the ALC itself. The statement and concomitant inference that the NIAA was not responsible for knowing these matters reflects a deep-seated hands-off approach that is not consistent with the statutory responsibilities of the Minister and her agency. 

 

I am not aware of any detailed analysis of the quality of the Ministerial and NIAA regulatory oversight in relation to Groote, yet the more egregious the situation being uncovered is ultimately found to be, the more we can be confident that it has been facilitated (either consciously or unconsciously) by regulatory failure. The key issue then becomes whether that regulatory failure is a one off, or systemic. Prima facie, the quality of regulatory oversight of the ALC over the past eight years appears to be seriously deficient. In my view, the NACC and the Parliament should make the assessment of this issue a primary focus on their ongoing oversight and investigations.

 

For any sceptics that question my assessment of the existence of regulatory failure, let me provide one personal anecdotal example. I wrote a considered and detailed letter to Minister Burney on 1 March 2024, copied to the Minister for Finance and the ANAO, attaching a detailed analysis of compliance with the legislative requirements for distribution of royalties and the evidence revealed in my own examination of the publicly available financial statements of the key recipient corporations. I framed my analysis as provisional and recommended a detailed forensic audit be commissioned. There are three possible acceptable answers to such a letter: one, I have considered your points and agree and am taking action; two, I have considered your points and disagree for the following reasons and am thus not taking action; three, I am considering the matters raised and will respond when I have reached a conclusion.

 

I received no acknowledgement or reply from the Minister for Finance nor from the ANAO. On 11 June (over three months later) I received a response from the NIAA CEO noting that a review into the implementation of the ANAO recommendations had been commissioned, and explicitly acknowledging that the scope of that review does not address the concerns I had raised. The CEO went on to state that it is worth noting that it is standard practice for the NIAA to refer matters to the appropriate authorities when there are identified concerns regarding the conduct of organisations or individuals that are better managed by those authorities. The letter did not indicate whether any matters had been referred to ‘appropriate authorities’.   Yet the matters I had raised related directly to the regulatory responsibilities of the NIAA and the Minister. I concluded that I had been advised, in the politest terms, to go jump in the lake.

 

Fourth, one might assess the developments on Groote in terms of their implications and consequences for macro-policy issues. These include issues such as the more general effectiveness of the policy and accountability oversight of the land councils in the NT, whether the operation of the ABA which includes funding of Land councils, distribution of royalty and royalty equivalent payments under ALRA;  wider issues related to whether mining related payments more generally are being managed effectively; whether it is time to review the operation of ALRA to assess whether it is still meeting its objectives; and whether the policy capabilities of the NIAA and other agencies (such as The Office of the Registrar of Aboriginal Corporations) have been hollowed out over the past decade leading to loss of corporate memory and policy capability.

 

Again, I am not aware of any considered research or writing, nor any reviews or parliamentary committee focus on these issues in the past decade. My recent post on the draft ANAO work program (link here) discusses some of these issues in more detail. My core point is that the imbroglio unfolding on Groote ought to be seen as an opportunity to proactively finetune and improve the broader institutional frameworks which play an important part in supporting the aspirations and interests of First Nations citizens in northern Australia.

 

Fifth and finally, one might assess the ongoing Groote imbroglio in terms of what it says about the state of our political system. Neither of the major parties appears to have covered themselves in glory so far, and the longer these issues remain unresolved, the greater the likelihood that trust in our political system and democracy will be further diminished. I have commented previously on the disenchantment of remote communities with the current state of politics in the NT (link here: data point three) and I have previously pointed to the deep-seated disinterest of both CLP and ALP Senators in pursuing these issues in the three Estimated Hearings since the ANAO report was tabled. The fact that the NT election is imminent is clearly a salient factor in both sides seeking to keep the lid on these issues.

 

My own take on this is to suggest that the dominance of the Executive over the Parliament is a fundamental issue that requires more critical analysis and attention. Notwithstanding the ubiquitous rhetoric about the importance of democracy, our major parties appear prepared to set aside the public interest (of citizens and voters) in favour of their own political self-interest. The lack of motivation and timely action to date in addressing and disentangling the complex imbroglio on Groote is in my view just one further example of this dynamic. The structural and systemic exclusion of Indigenous interests continues.

 

To sum up, the imbroglio on Groote is cascading out of control. Where it will land, and its wider ramifications, are as yet uncertain. The core argument of this post is that adopting an analytic lens focussed on identifying the existence or not of villains and villainy is crucially important. However, limiting our analytical lenses to this is both overly simplistic and short-sighted. The effectiveness of the ALCs broader strategic policies is also crucial, and so too is the quality of regulatory oversight and the fitness for purpose of broader Commonwealth (and Territory Government) policy objectives and frameworks. Finally, understanding the political drivers in play is also important, as is assessing the longer-term implications of the major political parties continuing to prioritise political self interest over the public interest.

 

 

 22 July 2024