Integrity in public policy

 

Alas, ’tis true I have gone here and there,
And made myself a motley to the view,
Gor’d mine own thoughts, sold cheap what is most dear,
Made old offences of affections new;
Most true it is that I have look’d on truth
Askance and strangely:

Sonnet 110

 

I am in the process of preparing for a month-long break and am unlikely to post much (or anything) until October.

My posts have become slightly more irregular as I have been finding it increasingly challenging to find issues across the Indigenous policy domain which I felt were significant enough to invest the time necessary to write a post. I generally try not to replicate analysis which is available in the media. It is not that there are not issues playing out, or developments occurring, but I find myself unconvinced that they will have serious systemic impact or that I have not already written about them either directly or tangentially.

As an aside, it is worth mentioning that this is the 350^th post on A Walking Shadow since December 2015, and there is much that is worth exploring should readers feel inclined to use the search function or scroll through the Blog Archive on the right hand side of each post.

I came across the quote below from a blog post (link here)  by Scott Sumner (link here), a libertarian or classical liberal economist from the US. It struck me that his analysis applies as much to Australia, and to the Indigenous public policy domain, as to the US, and because it goes to fundamental values which in turn shape the norms that underpin our formal institutions, it is worth amplifying. It particularly applies to the remote Indigenous policy domain where the interface of traditional Indigenous cultural values, regional and highly parochial mainstream political cultures, and a deep-seated reluctance by national political leaders — and the institutions they effectively control — to address policy issues on their merits, have created and sustained what I have previously described as a social and governance catastrophe (link here).

Sumner states, inter alia:

In my view, people focus far too much on individual issues and far too little on the essential role of integrity in the political process.  We should demand that politicians tell the truth.  We should demand that politicians refrain from corrupt practices.  We should demand that politicians adhere strictly to not just the letter of the law, but also its intent.  If we need to pay much higher salaries to attract the best people, then we should do so.  History has shown that a lack of integrity in the public realm leads to very bad outcomes in the long run.  In the end, integrity is the only way to prevent a country from becoming a failed state.

Sumner’s quote struck a chord with me both because it points to a fundamental value necessary for public policy to be effective (beyond meeting the short-term interests of politicians). But it also hints at the existence of other values that we normally consider as relevant to interpersonal relations, but which have under-appreciated potential systemic or structural implications in policy contexts. For example, values such as respect, transparency, inquisitiveness, innovation, persistence, trust, and patience.

Each of these values are important in shaping effective public policy yet are undervalued and under-acknowledged in public discourse around policy issues. They seem to me to be particularly worth emphasising in cross-cultural policy contexts such as obtain in the Indigenous policy domain where the risks of miscommunication and misunderstanding are heightened. To provide just one example of how a commitment to substantive truth telling is important, I was pleased to see the Australian Financial Review publish yesterday an oped article (link here) by an economist, Cathal Leslie, who had previously worked for the Productivity Commission on Closing the Gap issues, and who made the point that the institutional framework for closing the gap fails to focus on or address a crucial determinant of Indigenous wellbeing while focussing of other issues of marginal significance.

Finally, it is perhaps worth mentioning the relationship between the quotes from Shakespeare and this blog again. I provided a brief explanation in a post dated January 2016 (link here) and refer interested readers there for that explanation. That post also laid out a rationale for the Blog which may be of interest to some readers. Whether I met the aspirations laid out there is for you, the reader, to determine.

 

27 August 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

Existential risk to Indigenous languages, transparency and closing the gap

 

If it be now, ’tis not to come; if it be not to come, it will be now;

if it be not now, yet it will come: the readiness is all.

Hamlet Act 5, scene 2.

 

The excellent online journal Inside Story has just published my review of the recently published Gija Dictionary (link here).  I won’t summarise the review here, but will leave it to readers to read for yourselves.

 

The review points to larger policy issues for our nation: do we wish to incrementally slide into a mono-cultural and mono-lingual future, and if not, what will be required to ensure that we don’t. The languages of First Nations are in this respect a special case, as they are in most cases highly vulnerable to falling into disuse.

 

This raises the question: just what is the Commonwealth doing to support Indigenous languages? The answer is not easy to ascertain. The NIAA website contains virtually no reference to the support of languages, not any cross reference to the primary finding agency, the Office of the Arts in the Department of Infrastructure, Transport, Regional Development, Communications and the Arts. The Office of the Arts funds the ILA, the Indigenous Languages and Arts Program with around $25m per annum (link here). A fact sheet dated July 2022 on the Department’s website (link here) outlines the following objectives for the ILA:

The ILA program provides grant funding to support the following objectives: · Capture, revitalise and sustain Indigenous languages · Develop, produce, present, exhibit or perform a diverse range of traditional and contemporary Indigenous art forms · Support new and innovative forms of Indigenous cultural expression through arts · Contribute to the Australian Government’s priorities and outcomes for Aboriginal languages, including those under Target 16 of the National Agreement on Closing the Gap and the International Decade of Indigenous Languages 2022–2032.

 

The Fact Sheet also tells us that the ILA funds ‘around 117 projects that support a wide variety of community-based Indigenous languages and arts activities, including a network of 23 Indigenous Language Centres throughout the country.’ What is not clear is how much of the $27m is directed to language support.

 

In relation to Closing the Gap, the Fact sheet states:

The National Agreement on Closing the Gap now includes a dedicated outcome and a target for Indigenous languages in Australia over the next ten years: · Aboriginal and Torres Strait Islander cultures and languages are strong, supported and flourishing (Outcome 16) · By 2031, there is a sustained increase in number and strength of Aboriginal and Torres Strait Islander languages being spoken (Target 16).

 

Here is not the place for an extended critique of Closing the Gap targets, but I cant resist observing that this target is next to useless, and appears designed as mere rhetorical virtue signalling. Why not measure the comparative rates of fluency in multiple languages amongst First Nations and mainstream citizens? Or the numbers of Indigenous speakers of Indigenous languages? Hopefully the current review of Closing the Gap by the Productivity Commission (link here) will address this issue amongst others.

 

For those interested in what A Walking Shadow believes the Productivity Commission Review of Closing the Gap should focus on in its review, I recommend you consult my detailed submission to the review available on the review website (link here). It is submission number five. It argues for a much more robust approach to Priority Reform Three (see below) and for a focussed process of identifying the actual implementation strategies of the states and territories to implementing the National Agreement on Closing the Gap Agreement.

 

While it would be theoretically feasible to obtain funding allocations for Indigenous language Centres by accessing individual language centre annual reports to the various corporate regulators and/or via the Government’s GrantConnect website, this would be time consuming and frustrating. Whatever the amount (my speculative guess is around $10m per annum), or the price of say eight houses in one of our capital cities, it seems quite inadequate given the implications of cumulative language loss in the past, and it seems, into the future. Deliberate opacity by government was the hallmark of the previous Government, but seems to have been automatically carried over by the current Government.

 

A proactive Government and proactive Ministers concerned to promulgate their social justice credentials would ensure that their agency websites are clear, accessible and that program transparency is maximised. In particular, the NIAA website is in urgent need of a major overhaul aimed at improving accessibility, transparency and in particular, aimed at enhancing linkages to Indigenous funding programs in mainstream agencies (such as ILA) which require sustained attention and monitoring by virtue of the fact that under Priority Reform Three of the National Agreement on Closing the Gap (link here), the Government parties committed to, inter alia:

Increase accountability through transparent funding allocations – Improve transparency of resource allocation to, and distribution by, mainstream institutions in relation to dedicated Aboriginal and Torres Strait Islander service‑delivery. 

 

To sum up, the future of the nation’s unique linguistic heritage is at risk. This issue deserves significant and sustained support from Governments in terms of funding, but also in terms of placing it at the centre of public discourse. The Commonwealth is making a modest contribution (though we can’t determine just how modest), but provides virtually no quality information on what it is doing, how effective its programs are, what are the real risks to individual languages, and what others such as philanthropies and corporates could be doing to strengthen and sustain that living heritage. Closing the Gap is one of the means Governments utilise to assuage community concerns about the quality of Indigenous policy. But this process too has its shortcomings and implementation challenges. And Governments are deeply addicted to the provision of minimal transparency. Three separate, but intricately linked issues.

 

I happen to take the view that it would be a tragedy if bureaucratic obfuscation, or political short-sightedness and game-playing were to contribute to the irrevocable further loss of the first languages spoken in Australia. Policy proactivity is essential. Transparency assists policy effectiveness. Readiness is all.

 

 

 

Indigenous evaluation: selected links

   

His promises were as he then was, mighty,

But his performance, as he is now, nothing.

Henry VIII, Act 4, scene 2.

The Productivity Commission has recently published its draft report on Indigenous Evaluation, and is seeking further submissions by 3 August from the public.

I thought it timely to post links to the PC document, and to a few documents I have authored in relation to the topic of Indigenous evaluation. I wont add further commentary here; the documents speak for themselves.

Link to a previous post, ‘Marshmallow and Fudge: evaluation and the Indigenous policy domain’, here

Link to the Productivity Commission Draft Report on Indigenous evaluation here. The final report is due by the end of the year.

Link to my initial submission to the Productivity Commission here

Link to my recent evaluation policy insights paper on the CAEPR website here. It is titled Evaluation and review as drivers of reform in the Indigenous policy domain.

From the Abstract:

This Policy Insights Paper seeks to assess the influence of evaluation and review in influencing policy in the Indigenous affairs policy domain. The paper examines four high-level case studies of strategically significant policy issues within the Indigenous policy domain to assess the impact of evaluation in driving reform over time. 

Progress at last: NAIF and Indigenous interests

The sun with one eye vieweth all the world

Henry VI, Part One, Act 1, scene 4

Given that I have been critical of the lack of Indigenous engagement with the North Australia Infrastructure Fund (NAIF) – see my previous post here – I was pleased to learn that the NAIF has recently approved a $12.5m loan to and Indigenous mining project. The project is based on an orebody known as Wonmunna (since renamed First Iron) purchased from Fortescue mining in 2018, and will involve the sale of iron ore to Fortescue Mining Group (FMG) and its transport to FMG’s Cloudstreet project under an agreement entered into in 2017 (link here).

On 19 September, Minister Canavan announced NAIF support for an Aboriginal owned mining project in the Pilbara (link here). The Australian Aboriginal Mining Corporation (AAMC) will operate the project, based on two small deposits close to the BHP’s Yandi and West Angelas mines and the Rio Tinto Yandicoogina and Area C mines in the Pilbara. See the map in this National Indigenous Times article on the project (link here).

AAMC is privately owned by 21 shareholders. AAMC has 51% beneficial Aboriginal ownership with Aboriginal owned Carey Mining owning 25% and traditional owners of the areas to be mined apparently making up some or all of the balance of Indigenous owned equity (link here). Carey Mining is the largest shareholder in AAMC. It is owned and managed by Daniel Tucker, who is also the Chair of AAMC. Tucker is also a member of the Prime Minister’s Indigenous Advisory Council.

The AAMC media release (link here) provides the most detailed information on the overall project. The NAIF funding will be complemented by a $14.6m facility from Westpac, and the balance of capital required will be obtained through an equity raising exercise.

On its face, this is all good news and represents a positive step forward for Indigenous interests in the Pilbara and more generally.

It also represents a small window into a much larger political, economic and policy realm where private interests and public sector policies (especially Indigenous related policies) intersect and interact. Much of what is occurring in this domain is cloaked by the limited public information available in relation to private sector and commercial activity and contractual agreements (particularly where the interests involved are not publicly listed corporate entities). Thus, it is clear that Indigenous interests have been major financial beneficiaries in the resource development boom in the Pilbara (and other parts of WA and Qld) over the past two decades. However, policymakers and indeed the public at large, have very little information regarding the quantum of funds flowing to Indigenous interests, the nature of the non-financial provisions in the agreements that are being entered into, and indeed the fairness and probity of the negotiation processes that have taken place and are underway.

Of course, it is arguable that these are not matters for government, and the market ought to be allowed to do its job. The counter argument is that these outcomes are a direct result of the operation of Commonwealth (and to a lesser extent, state) legislation, in particular the Native Title Act, and governments have a responsibility to ensure that the outcomes of legislation are consistent with broader societal expectations. 

Indeed, if we were to conceptualise the role of government as a manager of societal risks, then, one might make an argument for much greater transparency by both commercial and Indigenous interests in relation to the outcomes of their negotiations over land use and resource development. Potential risks include unforeseen adverse environmental consequences, the implications of mines not being effectively remediated after their closure, and the implications of high levels of income and wealth inequality within Indigenous communities, to mention just a few potential examples.  Unfortunately, governments tend not to see themselves as societal risk managers, but rather operate within ideological frames focussed on ‘development’ or ‘jobs’. While economic development, growth and jobs are worthwhile objectives, they ought not to be pursued at all costs, without a clear assessment of the societal risks embedded within.

In the present case of the AAMC First Iron project, a range of questions remain unanswered. While one Indigenous shareholder has been identified, the balance of the Indigenous ownership remains shrouded in mystery. In the absence of this information, it is not possible to be entirely confident that Indigenous interests ‘control’ the policies and decisions of AAMC (notwithstanding its name and the majority beneficial ownership). A second set of unanswered questions relate to AAMC’s relationship with FMG, which itself has a somewhat chequered history of involvement with Indigenous interests (link here and here). It seems likely that at least from FMG’s perspective, the arrangements with AAMC are more than commercial and play into the complex commercial competition between the major miners (BHP, Rio, and FMG) in the Pilbara. Of course, this is not necessarily a negative factor for Indigenous interests, but it makes assessing the merits of the AAMC project that much more opaque.

Finally, while the decision by NAIF to assist an Indigenous commercial project is welcome, it is worth bearing in mind the scale of this decision. NAIF has $5bn available for lending, so the $12.5m loan represents around 0.25 percent of its funds. There remains a long way to go if NAIF can be said to be addressing the infrastructure needs of northern Indigenous communities equitably. This decision is at least a start.

Stepping back to a more panoramic viewpoint, this decision represents just one rather narrow and opaque window into the complex and heterogeneous ways in which mainstream interests and institutions engage and interact with Indigenous Australia. In an environment where governments are increasingly focussed on Indigenous policy narratives built around the economic development opportunities of Indigenous communities and citizens, the sheer opacity of this window is emblematic of a deeper structural problem. Policymakers (and commercial interests) spruik individual events (such as the NAIF loan and the start up of the First Iron mine) as policy successes without themselves having any idea or understanding of the totality of the social, cultural and economic consequences both positive and negative of these events. 

The normal approach of policymakers to managing this policy ignorance is to initiate an inquiry or review when a serious problem emerges. A better, more proactive, and potentially preventative approach would be to focus policy resources on increasing the transparency around commercial activities. This is particularly justified for those interests receiving publicly sourced financial assistance whether in the form of tax expenditures or write-offs, and concessional NAIF loans and the like. To take just one example, it is extraordinary that taxpayers do not have low cost or free access to the publicly available corporate records held by ASIC. In relation to NAIF, there is a range of matters that might usefully be placed on the public record once decisions have been taken (I made a number of specific suggestions in an as yet unpublished submission to this Senate Inquiry: link here).

Where commerce and policy intersects, sunlight is invariably a cheap and effective contributor to managing societal risk!

Transparency and accountability: theory and practice

The ANAO today released a report into Primary Healthcare Grants under the Indigenous Australians’ Health Program (link here).

The report identified a range of shortcomings, more misdemeanors than major issues. I don’t propose to provide a summary or detailed analysis as the report largely speaks for itself. I particularly commend it to readers interested in Indigenous health administration issues.

Notwithstanding its critical content, I confidently predict that the various issues identified, the ANAO report will garner very little media coverage or even Senate scrutiny.

In reading the report, however, one particular issue caught my attention, and it sparked an observation which is perhaps worth noting since it opens a window on to a much larger dynamic which can operate in the APS. This dynamic is where Ministers push the boundaries, public servants don’t see a way to hold the line, and ultimately it is Departments which are exposed as not meeting appropriate accountability norms.

Amongst its various findings, the ANAO uncovered the following issue. Included in comments on the lack of value for money assessments on a billion dollar round of funding, the ANAO also noted at para 16:

The department was also unable to provide evidence it had undertaken a value for money assessment regarding the $114 million grant to the Northern Territory Government. In virtually all cases, risk assessments formed part of the assessment process.

Later in the report, the ANAO provided more information:

2015 Northern Territory government grant

3.13 The Northern Territory government had been funded under pre-IAHP grant programs for the provision of primary healthcare to Indigenous Australians, mostly through clinics in remote areas. As part of seeking Ministerial approval about the funding process under the IAHP, the department advised the Minister that it would only make a formal offer of a grant following receipt of a specific grant proposal and undertaking a value for money assessment against the ‘deliverables’ in the proposal. The Minister approved this approach in mid May 2015.

3.14 No specific departmental assessment plan or selection criteria was developed for the Northern Territory grant. The department contacted the Northern Territory Department of Health on 26 June 2015 to request that it provide a proposal. Departmental records indicate that a formal offer of a $114 million funding agreement to the Northern Territory Government was made on 6 August 2015, before the proposal was received on 15 August 2015. A funding agreement was signed in October 2015. The department was unable to supply the ANAO with evidence that it had undertaken value for money or risk assessments of the proposal.  

The ANAO, whose remit is the operations of Departments and not Ministers, leaves the impression that this was largely an oversight on the part of the Department.

My own experience working within Government tells me that Departments rarely take decisions on these sorts of matters without clear authority from Ministers. There may or may not have been evidence on the file, but it would be a severely career limiting move for a public servant to act without ministerial authority on a grant to a subsidiary jurisdiction such as the NT. Instead, what we have is a ‘mistake’ by the Department, and when caught out by the ANAO, the Department expresses contrition, agrees with the ANAO recommendations, and resolves to do better in the future.

If my supposition is correct, (and I emphasise, it is merely supposition), this would tell us a number of things.

First that the NT Government of the day was apparently so incompetent that they could not develop a timely funding proposal making the case for Commonwealth funding.

Second that there may have been formal or informal signals from ministers to ‘just get on with it’.

Third, that in such circumstances the senior bureaucrats in the Health Department at that time may have felt unable to stand up to the Minister. The provision of frank and fearless advice seems increasingly rare in the highly politicised (with a small p) world of public policy administration in Australia, and this may well have been another instance.

Fourth, that there may have been electoral considerations in play as the timing of the decision to grant the funds to the NT was in the year before an NT election. The then CLP Government, headed by Chief Minister Adam Giles, was closely aligned with the Nationals. The Federal Health Minister at the time was Peter Dutton; the Assistant Health Minister was Nationals Senator Fiona Nash.

Fifth, that if the Senate Estimates Committees are doing their job, we could expect that there would be direct questions at the next hearings directed to determining whether there was ministerial involvement in the Department’s decision to prematurely offer the funds to the NT Government. And if not, what action was taken to counsel the officers involved in making the premature offer without a value for money assessment.

To sum up, what we appear to have with this audit is a good degree of transparency, courtesy of the efforts of the ANAO, but limited or non-existent accountability. There was merit in the traditional Westminster notion that Ministers are responsible for the actions of their Departments. Ever since that notion lost effective traction, accountability standards within Government have gone downhill. And the voting public and taxpayers are the losers. In theory we have accountability, in practice we don’t.