Alcohol and Other Drug Treatment in Indigenous Australia: some policy questions

The Australian Institute of Health and Welfare has just released its report: Alcohol and other drug treatment services in Australia 2015–16 (link here). The report is worth reading as it presents a window into the substantive impact of licit and illicit drugs on society, including Aboriginal society.

In this post, I focus on issues related to Indigenous citizens presented in the report, and then make a number of policy related observations.

Here is a high level extract of its findings from its Executive Summary:

Alcohol and other drug (AOD) treatment services across Australia provide a broad range of treatment services and support to people using drugs, and to their families and friends. This report presents information for 2015–16 about publicly funded AOD treatment service agencies, the people they treat, and the treatment provided.

An estimated 134,000 clients received treatment in 2015–16, an 11% rise since 2013–14 (119,000). This equates to a rate of 650 clients per 100,000 people, or about 1 in 180 people. About two-thirds of clients were male (67%), and half were aged 20–39 (55%).

Despite only comprising 2.6% of the population, 1 in 7 (14%) clients were Aboriginal and Torres Strait Islander. This is a rate of 3,400 clients per 100,000 Indigenous Australians, compared with 540 clients per 100,000 non-Indigenous Australians.

Treatment agencies provided about 207,000 treatment episodes in 2015–16—an average of 1.5 episodes per client—and 4 in 5 (79%) episodes ended within 3 months. Of those clients who received treatment in 2015–16, 11% also received treatment in 2013–14 and 2014–15.

The report makes clear that it is focussed on information for 2015–16 about publicly funded AOD treatment service agencies, the people they treat, and the treatment provided. It does not encompass all AOD treatments provided by agencies and professionals beyond the 796 agencies covered by the data set used. The report notes that most Indigenous primary health care organisations, and the treatments they provide, are not included in the data set analysed in the report (page 4). In other words, around 18,000 Indigenous people receiving on average 1.5 treatments per annum represent a subset of the Indigenous population seeking drug related treatment. Not all people are seeking treatment for themselves; it may relate to a family member.

The report notes that the social costs of inappropriate licit and illicit drug use in Australia are substantial, with financial impacts estimated by some researchers as $56bn. Publicly funded drug treatment increased by 11% in the two years leading up to 2015-16. 

The report notes that despite only comprising 2.6% of the Australian population, 14% of all clients were Aboriginal or Torres Strait Islander people aged 10 and over in 2015–16. This varied by client type—about 1 in 7 (14%) clients receiving treatment for their own drug use, and 11% of clients receiving support for someone else’s drug use were Indigenous. The main drugs that led clients to seek treatment were alcohol, amphetamines, cannabis, and heroin. This was consistent for both Indigenous and non-Indigenous clients (page 9).

In terms of the geographic spread of AOD treatment agencies, over half (54% or 432) of the treatment agencies were located in major cities and nearly one-quarter (24%) in Inner regional areas. Relatively few agencies were located in Remote or Very remote areas (both 4%). This pattern was similar across most states and territories, except for Northern Territory where 35% of agencies were located in Remote or Very remote (22%) areas (page 12). Section 5.2 of the report (pages 48-52) includes some highly informative maps outlining the intensity of treatment provision across the nation. The data suggests that alcohol is a particular problem in remote areas, cannabis also a serious issue in some remote areas, while amphetamines and heroin are more serious issues in urban Australia.

I have not done justice to the wealth of data and information in the report, and recommend readers examine it for themselves. Nevertheless, there is enough here to raise a number of policy questions in relation to Indigenous service provision, and Indigenous policy generally.

First, given the over-representation of Indigenous citizens in the treatment data set (and the knowledge that many other Indigenous citizens are being treated by primary health care organisations outside the data set), are we doing enough both in the proactive prevention space and the treatment space itself to assist Indigenous drug users?

Second, is there an argument for allocating greater weight to remote services within the resource allocation arrangements for AOD services?

Third, the figure of 18,000 clients suggests that at a minimum somewhere around 2% of the Indigenous population seek treatment for drug and alcohol issues each year. Yet the interconnected structure of most Indigenous families suggests that the impact of drug issues will extend to a much larger cohort, including children. What then are the social cost implications of drug misuse within Indigenous Australia? Where do those costs fall, and what do those costs mean for individuals, their families, and the life opportunities of all involved?

Fourth, it seems clear that licit drugs (alcohol, nicotine, and I would include sugar) are more problematic than illicit drugs in terms of the social damage and costs they inflict, particularly for Indigenous citizens. While illicit drugs are by definition banned, licit drugs are subject to strong interest group lobbying over the nature and extent of the regulatory oversight put in place by government. One consequence of the ‘pressure’ exerted within our political systems by commercial interests is that governments explore and too often implement alternative (and potentially less effective) policy mechanisms to regulate individual behaviour (for example income management designed inter alia to address alcohol misuse). There is a case for much more comprehensive and holistic analysis of alternative policy mechanisms aimed at regulating licit drug use, and in particular, explicit assessment of the comparative efficacy of price based mechanisms and other supply restrictions designed to minimise the social and individual harm licit drugs cause.

In recent years, many advocates within the Indigenous policy world have argued against what they term ‘deficit discourse’. They are in my view at most only partially correct. We cannot afford to ignore the over-representation of Indigenous people in social indicators of wellbeing, not least because to do so would remove the already limited focus on the ‘policy deficit’ which governments appear willing to accept and live with, with significant adverse flow on impacts on the life opportunities of thousands of Australian citizens. 

Overcoming and removing Indigenous disadvantage will require systemic changes including a focus on building individual responsibility, but also a stronger preparedness by government to explicitly focussing on closing the ‘policy deficit’ gap; a gap which can only be closed through leadership by governments.

Rule and reign, earth and dust: the machinery of government in Indigenous affairs

Why, what is pomp, rule, reign, but earth and dust? / And, live we how we can, yet die we must.

Henry VI, Part III, Act V, scene 2

Last Friday PMC issued a discussion paper on machinery of government in Aboriginal and Torres Strait Islander Affairs (link here or here), or in plain english, on the organisational structure of the arrangements for administering Indigenous affairs at the Commonwealth level. The Discussion Paper was released on the day of a major seminar involving the APS leadership marking 50 years of Commonwealth involvement in Indigenous affairs (link here).

The paper is apparently the first in an intended series of papers which acknowledge the fifty years since the Commonwealth gained the capacity to legislate in relation to Indigenous matters by virtue of the 1967 constitutional referendum. It does not deal with the various arrangements which exist and have existed at state levels.

The preface notes that

Future papers will concentrate on issues including policy and practice and justice, leadership and ethics. The series is intended to promote discussion and contribute to long term thinking among Aboriginal and Torres Strait Islander and non-Indigenous thinkers engaged in the administration of Australian Indigenous affairs.

The Department is to be congratulated on at least being prepared to canvass these issues. It is unusual to see governments expanding the boundaries of public debate on issues relating to the internal arrangements of government activities. I look forward to future discussion papers in the series. It would also be useful if the Department were to publish the various speeches given at the IPAA seminar marking the Commonwealth’s 50 year involvement in Indigenous affairs. In the meantime, here is a link to the video from the excellent Mandarin website.

Adopting a mix of historical and philosophical approaches, the paper documents the cyclical trends in the structures of government administration over the past 50 years. The author identifies two major tensions in government attempts to find effective structures: first, the extent to which Indigenous citizens have a voice – or are represented in – policy deliberations and decisions, and second, the longstanding and ongoing vacillation between the reliance on Indigenous specific or mainstream agencies, and hence structures and responsibilities. Along the way, the paper notes the propensity of governments to label as a failure the preceding administrative approaches and structures, and notes almost in passing the potential of Indigenous ‘bodies’ (mostly corporations) to fill the gap created by the reticence of governments to seriously incorporate representation of Indigenous interests within the policy process.

Notwithstanding a series of interrogatory headings and sub-headings the paper largely avoids coming down on one side or the other, contenting itself with canvassing the various pros and cons in a slightly disengaged tone. Thus we are asked to consider the following rhetorical questions without obtaining a clear sense of the author’s opinion:

·         What is the imperative to represent minority interests?

·         To what extent is representation necessary to policy success?

·         Do First Nations peoples have a right to self-determination and the continuance of separate systems of culture and knowledge?

·         How best to organise the machinery of Government?

·         Mainstream vs Indigenous specific? and

·         Why worry about frequent changes of government?

The exception is perhaps the last question: the author leaves the reader with the strong sense that the history of frequent changes of government has led to a strong sense of confusion and cynicism amongst Indigenous citizens, and that the constant change, and the concomitant turnover in whole cohorts of public servants has led to a loss of corporate memory and significant constraints in terms of policy continuity. I suspect that she is right in these assessments.

I am not particularly surprised, nor critical, of the lack of definitive conclusions. The paper is after all intended to promote discussion.

The paper is also valuable for its appendices; a list of all federal ministers for Indigenous affairs over the past 50 years, and a series of schematic summaries of the major administrative models adopted by governments over the past 50 years. I also found insightful the references to the approaches adopted by Coombs and Dexter, providing tangible evidence that the issues of ‘representation’ have been central to the effective development of indigenous affairs policy since governments first began to ‘administer’ Indigenous affairs.

The paper’s conclusion is in my view correct:

that frequent changes to policy and machinery of government changes result in transaction costs that are not well articulated or understood. These lead to inefficiencies and are often counterproductive and harmful. To engage with Indigenous Australians, government and the administrative structures of the APS need to articulate clear positions on the structural issue of representation and related decisions around machinery of government and administrative arrangements and need to be able to preserve trust and working relationships across administrative generations.

Of course, this begs the question as to whether governments generally, and the current government specifically, have managed their engagement with Indigenous citizens appropriately.

The general consensus of those who are involved in, or take an interest in, Indigenous policymaking would be a resounding ‘no’. Yet governments and ministers (and their public servants) are all different, they bring different capacities, motivations and capabilities to the task of governing. How is it that meeting the challenge of effective Indigenous engagement has eluded them all?

The answer is beyond the scope of this blog post to attempt to comprehensively answer, but I would suggest that it goes to the fundamental structural underpinnings of our society, and in particular to the substantive marginalisation of Indigenous interests within society and its institutions.

It follows that the quality of government engagement with Indigenous interests will be to a significant extent a function of the capacity of Indigenous interests to exert political influence. In turn, this requires organisation and sustained and targeted pressure. In the absence of effective countervailing pressure, governments will inevitably succumb to the pressure of competing interests and ipso facto marginalised interests (including Indigenous interests) will miss out.

It is worth contemplating the parallel experience of interest groups who do exercise political influence and power. For example, the pastoralists and the miners have well established peak bodies and deep networks into business and politics. There is no equivalent focus on machinery of government in these portfolios. The machinery of Government arrangements in these sectors are longstanding, and relatively stable. These interest groups exercise significant influence over policy processes and outcomes, and have substantial capacities to block policies which they dislike or see as anathema. Most importantly, this influence is not the result of governmental munificence or charity, rather the political power and influence of the interest groups works to engender government munificence and positive outcomes for their members.

On this (structural) reading, for so long as Indigenous interests are not in a position to exert significant, sustained and targeted political influence, they will be the objects of policy and not the drivers of policy. In such a world, the shape of the machinery of government is largely irrelevant. Hence the history of poor engagement, poor policy, and the recurring trope of ‘policy failure’.

Finally, it is worth contemplating the issue of what the next changes to the machinery of government in Indigenous affairs might look like. Notwithstanding the rather pessimistic conclusion above based on a structural analysis, there is always scope for individual and organisational agency. The world is shaped both by structures and human agency; indeed arguably they ‘dissolve into each other’ (see link here).

I note that a recent article by Laura Tingle in the Financial Review mentioned that the Prime Minister would be contemplating a potential reshuffle over the winter parliamentary break. I have previously suggested that the current structural arrangements for Indigenous affairs are likely to change (link here), and I continue to think that a change to shift the Indigenous affairs group into a standalone agency is the most likely outcome. This makes the release now of this Discussion Paper quite intriguing, as its subtext is to argue against further change. However any assumption that the department is coordinating the promulgation of a narrative of stasis in administrative arrangements would require a suspension of disbelief beyond my present capacity.

COAG and Indigenous Affairs policy developments

On 9 June, COAG met in Hobart. The COAG communique (link here) indicates that first ministers discussed the work underway to refresh the Closing the Gap targets and reports on jurisdictions’ initiatives aimed at assisting Indigenous people released from prison find work. Here is the relevant extract from the COAG communique:

Indigenous Affairs COAG leaders welcomed the work to refresh the Closing the Gap agenda, focussing on a strength-based approach that supports Indigenous advancement, working in partnership with Aboriginal and Torres Strait Islander peoples. This work will inform efforts to develop a refreshed agenda and targets over the remainder of 2017, implementation principles, as well as advice to COAG’s second meeting of 2017 on an approach for the next phase of Closing the Gap. 

Leaders noted jurisdictional Prison to Work Action Plans, which outline how each jurisdiction will respond to the 2016 Prison to Work Report to support Aboriginal and Torres Strait Islander people transition from prison to employment. Jurisdictions will update COAG on progress every two years.

The Prime Ministers Indigenous Advisory Council met on 10-11 May and was briefed on the refresh of the Closing the Gap targets. The communique from that meeting (link here) notes, in a section on the topic of Quality Regional Data:

[The Council] supported Government’s commitment towards access to and transparency of regional data. The critical importance of regional data to informing Indigenous leaders and communities to design and deliver effective local solutions was cited and all governments must make accessible quality data at a regional level.  This will enable community leaders to activate locally designed and delivered solutions.  

Transparent access to data at a jurisdictional and regional level is also essential to inform future policy directions when setting clear, measurable, attainable and relevant targets for the refresh of the Closing the Gap initiative over the coming year. It was noted that Prime Minister and Cabinet had provided to EC regions comprehensive data packages. The Council asked the Department to consider further ways to enhance transparency and access to regional data to inform local decision-making.

Given the Governments recent emphasis on improved evaluation of Indigenous programs, including a commitment to allocate $40m to evaluation over the forward estimates (link here), the Government’s response to the Council’s call for greater access and transparency for regional date will be a litmus test of its commitment to improved program effectiveness as well as to the influence of the Advisory Council.

On a positive note, COAG launched a new national performance dashboard (link here) which provides an extremely accessible access point for the current state of play in relation to all COAG national indicators (including the Indigenous Closing the Gap indicators).  A number of the functional sub categories (eg housing, health) display key Indigenous indicators, and can be accessed at jurisdiction by jurisdiction levels as well as nationally. This is a modest, but important initiative and COAG deserves commendation for the work done to make this data accessible.

The news is not great in terms of Indigenous disadvantage. The aim of reducing Indigenous smoking rates is not on track. Indigenous home ownership target is not on track. More positively, Indigenous overcrowding has improved in the decade to 2014, but still sits at extremely high levels. The other mainstream indicators don’t deal with Indigenous outcomes specifically, and thus may hide as many issues as they reveal.

This leads into the issue of the Closing the Gap refresh. Clearly Governments are frustrated at their inability to shift the Closing the Gap outcomes into more positive territory. I have some sympathy given that many of the targets are long term in nature and not susceptible to short term turn arounds. Nevertheless, were the refresh to lead to a new set of ‘good news’ indicators, based on specifications designed to deliver positive narratives, the consequences for the most disadvantaged Indigenous citizens could be disastrous.

Our political system operates in very large measure to fix squeaky wheels. In the political marketplace of interest group advocacy, Indigenous interests remain significantly under-represented both in terms of capacity, access to dollars, and depth of organisational capability. One of the advantages of the Closing the Gap process has been to shine a light into dark corners at the start of each parliamentary year, and thus to partially compensate for the lack of institutional influence exercised by Indigenous interests. The risk of an anodyne refresh will be to neuter even that process.

It will be important therefore that key Indigenous peak bodies such as the National Congress, NACCHO, and the land councils, to the extent possible take a serious interest in the Closing the Gap refresh process. In an ideal world, the Government would release a Discussion Paper which outlines its thinking and seeks public submissions before taking the revised targets to COAG.

The risk is that key Indigenous interests will be distracted by the argy bargy over constitutional change, and pay too little attention to a process which has the potential to allow governments to take the foot of the accelerator in addressing Indigenous disadvantage, and thus negatively impact the wellbeing of Indigenous citizens over the long term.

On a more positive note, the meeting today of Indigenous affairs ministers in Perth (link here), apparently initiated by the South Australian and Western Australian Ministers, and which apparently was not attended by the Federal Minister, seems likely to lead to the reinstatement of regular meeting of Indigenous affairs ministers, which ceased a number of years ago following a review of ministerial councils by COAG. One option would be to add Indigenous affairs to the limited list of COAG Councils (link here). 

While it is important that COAG remains engaged in Indigenous issues (and the Closing the Gap process ensures that it will), there is much to be said for greater and improved collaboration at Commonwealth and state levels and regular ministerial meetings are a good starting point.

Posting Interregnum

We see which way the stream of life doth run
And are enforced from our most quiet sphere
By the rough torrent of occasion.
Henry IV Part Two Act 4, scene 1.


Due to competing commitments, the 'torrent of occasion', I anticipate that I wont be able to post much, if anything, to this Blog over the next two months.

My apologies to regular readers.

Indigenous Advice to Government

 The world is still deceived with ornament…

…Thus ornament is but the guiled shore

To a most dangerous sea.

Merchant of Venice Act III, scene ii

A recent article (link here) in the National Indigenous Times revealed that the Registrar of Indigenous Corporations had issued a compliance notice related to a number of apparent irregularities and made a number of recommendations for immediate action in relation to the administration of the Winun Ngari Aboriginal Corporation (WN), a significant Kimberley Aboriginal corporation which operates in the West Kimberley. Key documents related to WN including the compliance notice and the latest financial statements can be found on the ORIC website (link here).

The compliance notice while carefully drafted provides very little comfort that the corporation’s directors have been effectively managing the affairs of the Corporation over the last few years, and raises issues related to the administration of the corporation by its senior management.

The Corporation is heavily involved in delivering three important and high profile programs in the West Kimberley, the Community Development Program, the Remote School Attendance Strategy Program, and the Kimberley Money Management program. The latest available financial statements suggest Winun Ngari has revenues of around $10m plus per annum, mainly for delivering these programs, and also operates a number of other smaller businesses. Its balance sheet is carrying loans to a range of related and third party entities exceeding $1 million in value. Senior management (which is undefined in the financial statements) is reported as being paid around $300k per annum.

While hardly unprecedented in relation to matters of corporate governance, the issue of poor corporate governance in a publicly funded entity takes on greater significance (as noted by the National Indigenous Times) because the CEO of Winun Ngari since October 2013 has been Ms Susan Murphy, a relatively new member of the Prime Minister’s Indigenous Advisory Council (IAC).

Ms Murphy was also appointed to the ‘independent’ review of the Remote Housing Strategy by Minister Scullion in November last year (link here), a matter not mentioned in the NIT article.

Ms Susan Murphy is described as follows on the PMC website page on the membership of the IAC (link here):

Ms Susan Murphy is the CEO of Winun Ngari Aboriginal Corporation, the largest community development provider for remote Aboriginal communities in the West Kimberley. Ms Murphy has previously held positions in a number of government organisations and has extensive experience working within Aboriginal health, child care and justice.

While not a good look, the appropriateness of her appointments to high profile government roles in the light of the regulator’s findings is largely a matter for the Prime Minister and the Minister who appointed her. In particular, it is the Directors of Winun Ngari Aboriginal Corporation who must take ultimate responsibility for any shortfalls in corporate governance performance of the corporation.

Of wider policy significance in my view is the lack of transparency in the operations of both the Indigenous Advisory Council and the current remote Housing Review, matters which are thrown into sharper relief by the Murphy imbroglio. When issues such as that reported above emerge, the lack of transparency in the activities of these key bodies makes it extremely difficult for an interested observer to assess whether there is in fact a potential conflict of interest or a risk of reputational damage to the wider activities of the government bodies involved.

Governments can hardly make a persuasive case for strong accountability and corporate governance in funded organisations when they fail to operate in a transparent manner themselves. Let’s take each in turn.

The Prime Minister’s Indigenous Advisory Council was established in the early months of the Abbott Prime Ministership. The Council was initially chaired by Warren Mundine, who held a full time appointment.

A review of the Council was undertaken in 2015, see link here  to the heavily redacted document on the PMC FOI Disclosure Log. There appears to have been no public announcement regarding the findings of the review, nor the government’s decisions in relation to it.

Following the accession of Mr Turnbull to the Prime Ministership, the Council has undergone a revamp; Mr Mundine’s term was not renewed, and new members were appointed.

The Terms of Reference for the Prime Minister’s Indigenous Advisory Council were revised in 2016, and are available here.

Along with the new appointments, in a sensible gesture Prime Minister Turnbull allowed the Council members to decide their Chair. The Council has appointed Andrea Mason and Chris Sarra as co-chairs, both of whom have been courageous contributors to Indigenous policy issues over a considerable period. The PMC web site notes that the new members are:

highly regarded, pre-eminent thinkers and practitioners who have been appointed to the Council for the depth of their experience in their respective fields and will bring a strong focus to policy design, implementation and practice.

The communique from the latest meeting (and first with the new membership) is available here. One interesting snippet of information mentioned in the communique, of which I had not previously been aware, is mention of a new Indigenous policy committee within the Government, presumably involving either a range of ministers, or senior public servants.

The Council’s annual letters to the Prime Minister for 2014 and 2015 are here, again from the PMC Disclosure Log. While the letters each canvass a score or more of issues which have been the subject of ‘advice’, there is no inkling of the substantive content of that advice in the letter, nor in the communiques issued after each formal meeting. While the disclosure log indicates that the FOI request included the 2016 year, and was finalised in March 2017, the response does not include the 2016 letter from the then Chair, Mr Mundine, which suggests that it may not exist.

The only other point of interest is that the signature over the Mr Mundine’s signature block has been redacted, citing section 47F of the FOI Act, which protects the ‘unreasonable disclosure of personal information about any person…’ It seems quite strange to apply such an exclusion in relation to a person’s signature, though I suppose one might make an argument for doing so. Nevertheless, it serves to add a degree of uncertainty as to whether Mr Mundine actually signed the letters sent to the Prime Minister in his name.

I think there are two substantive points to be made in relation to the current advisory arrangements in relation to the Indigenous affairs policy domain.

First, it is well past the time when governments should find it acceptable to appoint Indigenous representatives to a formal advisory body with a wide ranging policy remit. There has been a long history in Australia of elected advisory and representative bodies: the National Aboriginal Conference, the National Aboriginal Consultative Committee, and of course ATSIC are cases in point.

There is a case for appointing individuals who bring particular expertise for targeted exercises, but in terms of the provision of overarching advice in relation to Indigenous affairs policy, it strikes me that the current IAC arrangements are fatally flawed insofar as they ignore the existence of a large number of peak bodies and (whether it is actually the case or not) raise the spectre of a government choosing and appointing ‘representatives’ who will provide the sort of advice the government feels comfortable in receiving.

The second point which requires consideration is the total opacity and lack of transparency in relation to the advice which is being provided by the advisory body. There is an argument (which I believe is overrated) that public servants require a degree of confidentiality to ensure that they proffer independent and fearless advice to governments. Hence the existence of an exemption to the FOI laws around ‘deliberative advice’. Even accepting that this constraint of transparency is warranted for public servants, It does not follow that ‘advisory bodies’ without executive responsibilities should be provided with the same privilege. There is no obligation on governments to follow advice from the IAC, and governments will nevertheless have access to the hopefully robust advice of its public servants, and thus public policy will not be held hostage to the risk that an advisory council will not have the courage to speak its mind because it will be made public.

Moreover, there is a public interest in knowing what advice is being proffered on behalf of Indigenous interests generally, and Indigenous citizens in particular deserve to know what the appointed representatives are saying to government effectively in their name. This lack of transparency serves to feed the deep scepticism and cynicism in the Indigenous community (and indeed beyond) regarding the motives of government in its handling of Indigenous affairs.

Indeed, if the public knew, at least in broad terms, the substance of the advice being provided by the IAC, any suggestion that the Government had appointed ‘yes men and women’ would have less force, with a consequential strengthening of the authority of those appointed as indigenous representatives.

To cut to the chase, the risk of the current Advisory Council arrangements is that sooner or later they degrade into a generalised ‘talk shop’ without any real substantive policy content, with the real purpose being to provide a cover or façade to shield what are in effect unilateral government decisions from criticism.

Turning to the ‘independent’ review of Indigenous housing announced by the Minister in November 2016, the PMC website explains as follows:

An expert panel consisting of the following members has been appointed to conduct the Review.

·         Ms Rachelle Towart and Mr Robert Griew (co-Chairs)

·      Mr Fred Pascoe

·     Ms Susan Murphy

The expert panel will work with government officers to ensure Aboriginal and Torres Strait Islander voices are at the centre of the Review. Additionally the expert panel will work together, drawing on their expertise and knowledge of remote Indigenous housing throughout the Review, and will provide leadership on consultation and engagement with Indigenous communities and businesses, housing service providers, peak bodies, land councils and state governments.

A consultative committee has also been established to support the Review comprising of representatives from the Commonwealth, Queensland, Western Australia, South Australia and the Northern Territory governments.

Here is the link to the information on the review on the PMC web site. The members of the expert panel all looked to have relevant backgrounds. Robert Griew, the only non-Indigenous member, is a Principal with the Nous Group (link here) and an extremely experienced former bureaucrat with a deep knowledge of Indigenous affairs. The Minister did not mention the connection to Nous in his announcement.

I previously commented in depth on this review in shortly after it was announced. Here is the link. Please read the post in full, but my key conclusion was encapsulated in the following two sentences:

The initiation of the recently announced Review is potentially a pre-emptive attempt to change the narrative away from sustaining the capital investment required [for housing in remote Australia] towards one of encouraging much greater Indigenous involvement in a much smaller and shorter program. Such an outcome if it occurs would be an abdication of political responsibility for the most disadvantaged citizens in Australia.

While the PMC web site page is replete with references to consultation with Indigenous organisations and state and territory governments, there appears to have been no invitation for public submissions, nor any attempt (at least so far) to publish an interim report suggesting what the review team has in mind.

The Government will eventually release this review, probably only after it has settled on its decisions in relation to the future of the remote housing program. Nevertheless, in contrast to the IAC, we will probably get to see the advice proffered (albeit retrospectively), though whether and to what extent it will be truly ‘independent’ of government or ministerial influence (what else does ‘independent’ suggest?) given the use of the Nous consultancy, the iterative process involving state and territory governments, and the secretariat of public servants assisting the review are matters which in my view should attract a degree of scepticism.

If this is the case, and the review actually lacks independence, then the three Indigenous members of the review panel will (unintentionally) have served as a cover or façade for the Government’s underlying policy agenda. Of course, the capacity of the Government to deal with the remote Indigenous housing program in this way is facilitated by the absence of any Indigenous peak body or advocacy group for social housing, or remote housing.

One would hope that in these circumstances, the IAC would step in and take a strong interest in what is being considered. Unfortunately, we will likely never know whether it does or not, and what its substantive advice to the Prime Minister was.

Of course, one might question the wisdom of a Government appointing individuals to its primary advisory structure who are also undertaking policy reviews on major programs (as is the case with Ms Murphy). The potential for a conflict of interest to arise (which for example could in theory operate to ensure that the IAC does not even substantively consider the remote housing review issues, or if they do, are influenced to consider limited sets of options) seems extremely high.

Perhaps the strongest argument for greater transparency around Indigenous advisory structures would be to eliminate the possibility that sceptics such as myself have cause to doubt the robustness of the policy process itself.

Historic reform or broken policy: the case of recent developments in township leasing policy in the NT

The path is smooth that leadeth on to danger

Venus and Adonis, line 788

Provision for township leases is a policy innovation introduced into the NT Aboriginal Land Rights Act (ALRA) in late 2006 by the Howard Government in the last year of its time in Government.

The township leasing provisions are an important reform, because there is no market for residential or commercial land in most remote NT communities, and this is itself an impediment and constraint on economic development, and in particular on the capacities of external parties, whether government or private, to fund infrastructure and other developments utilising commercial sources of finance.

Under ALRA, there is a capacity under section 19 of the legislation for traditional owners to lease their land to third parties. This allows both public and private interests to obtain secure tenure over portions of Aboriginal owned land, which is owned communally and is inalienable (ie cannot be sold). This thus allows governments to build infrastructure needed to provide government services for community residents, and in theory at least, individuals whether from within or beyond the local community, to build and own housing, other facilities, or merely use the land for individual purposes.

Section 19 leases are quite common in remote NT communities located on Aboriginal land, but mostly for public purposes. Private or commercial leases are more common in the larger tracts of Aboriginal land beyond communities. Traditional owners, represented and assisted by the relevant land councils, are quite used to negotiating arrangements for the use of Aboriginal lands for private commercial purposes, including section 19 leases, mining exploration arrangements, licences for pet meat harvesting of feral livestock such as donkeys and buffalo, and in a small number of cases, agreements for major resource developments.

Each section 19 lease requires the proponent lessee to approach the traditional owners through the land council, detailed consultations, and consequential negotiations (if any) and the various legal and administrative steps required to formalise the lease, including in the case of more significant leases ministerial approval by the Minister for Indigenous Affairs.

So what are the problems with section 19 leases under ALRA?

There are a number, some of greater salience than others. Of most concern are the arrangements for dealing with land within communities. In my view, the provisions of ALRA, including section 19, operate reasonably well for land beyond community boundaries.

The first issue relates to transaction costs. The cost of consulting traditional owners for a suburban block in say Maningrida may well outweigh the notional value of the land. These costs fall on the Land Councils, but also traditional owners (their time is valuable), and also the proposed lessee, since delays will have financial implications, and in some cases, land councils require lease proponents to underwrite the costs of consultation. These costs can be termed ‘transaction costs’.

There are also what might be termed ‘queueing costs’ insofar as land council consultation resources (both financial and human) are limited and delays in finalising consultation are inevitable, particularly for small portions of land, and particularly if demand for consultation were to grow to multiple requests in scores or even hundreds of community locations across the NT.

There are also potential systemic costs (or the cost of foregone benefits) insofar as to the extent that potential lessees are discouraged from even seeking a lease by the transaction and queuing costs in circumstances where the traditional owners would have agreed in return for a lease payment, the overall economic welfare of the traditional owners will suffer, and the potential lessee will divert resources to her second best opportunity, and thus also bear a cost.

These economic costs feed into higher level policy costs. For example, to the extent that policymakers are keen to maximise homeownership opportunities (a policy I consider to be flawed, but that is a discussion for another day), transaction costs, queuing costs and systemic costs constrain opportunities.

Similarly, to the extent that a public or private leaseholder wishes to access borrowings secured by a mortgage over the land involved, there are two challenges. First, the limited terms of most section 19 leases which are designed to avoid the operation of section 5(3) of the NT Planning Act (link here) which defines leases with terms over 12 years to be part of a subdivision, thus invoking a range of other planning requirements and their consequential costs. The second challenge is the inalienability of the underlying title. Both these challenges work against the preparedness of banks and other financial institutions to provide debt finance.

In turn, at a systemic level, the cumulative effect of the various economic costs of doing business and the policy challenges which deter lending for commercial or residential assets is that there is no market for residential and commercial blocks of land in most remote communities in the NT. In economists’ shorthand, there is deep seated market failure.

This in turn disadvantages the significant numbers of Aboriginal citizens who reside in particular communities, but are not traditional owners for that land. In effect, without an effective market in residential leases, those people are perpetual visitors without substantive rights of residency. The land councils are institutions designed to represent and advocate for traditional owners, but there are strong policy grounds for governments to ensure that long term residents are provided with some level of security in relation to their place of residence. Indigenous interests are heterogeneous, not uniform.

From time to time, various interest groups and individuals have argued for the ALRA processes related to communal decision making over land use, and inalienability of the underlying title to be ‘streamlined’ or weakened in various ways. To date, these arguments have failed to obtain traction, at least in relation to ALRA. Native title is perhaps a different story. See for example my recent posts on the processes for approving some Indigenous Land Use Agreements in native title contexts (link here and here) where I argued that the Parliament was incrementally undermining the communal nature of native title rights if it proceeds in accordance the bipartisan approach recommended by the Senate Legal and Constitutional Affairs committee in relation to their inquiry into the Bill drafted to respond to the Federal Court decision in McGlade.

I take the view that there are strong grounds for maintaining the communal and inalienable nature of Aboriginal land. While some commentators argue that these characteristics are inappropriate constraints on Indigenous rights to deal with their property, my pragmatic view is that the risks of permanent loss of substantial tracts of the Indigenous estate, and respect for continuing traditional Indigenous conceptions of their relationship to the land over much of remote Australia, outweigh the philosophical arguments for change at this point in time.

While undoubtedly Indigenous citizens have the largest stake in this issue, it is worth remembering too that there is a national interest in ensuring sustained land justice for the nation’s Indigenous citizens. Non-Indigenous Australians have a responsibility in relation to these issues too. In fifty years’ time, the case for change to the underlying nature of Aboriginal property rights may well be stronger.

Nevertheless, while communal and inalienable title is in my view an extremely important element of ensuring land justice for Indigenous citizens, and particularly Aboriginal land owners in the NT, the shortcomings identified above in relation to the operation of section 19 within remote communities demanded a response. This was the genesis of the township leasing arrangements (sometimes referred to as section 19A leases) implemented by the Howard Government, albeit in the face of opposition from the two largest NT Land Councils, and also at the time from the federal Labor Party.

In summary form, the township lease model created a mechanism whereby a headlease over the whole of a community could be granted by the traditional owners to a Commonwealth Government entity established by legislation (the Executive Director of Township Leasing or EDTL) for a long term of up to 99 years which in turn would issue sub-leases, consistent with the terms of the headlease, over small portions of the headlease area to third parties without the necessity to substantively consult further. The terms of the headlease can provide for payments to traditional owners linked to the extent to which sub leases are granted. Importantly, take up of township leases was voluntary. The township lease provisions also over-ride the NT Planning Act provisions on subdivisions: see section 19D of ALRA.

Since the introduction of the township lease provisions in 2006, progress has been slow and patchy.

So while the relatively small Tiwi and Anandilyakwa Land Councils have negotiated township leases within their jurisdictions (on the Tiwi Islands and Groote Eylandt respectively), the two mainland Land Councils have until recently resisted implementing the model, and presumably advised communities in their respective jurisdictions against adopting it.

The rationale for the land council opposition seems to rest on concerns that while township leases reduce transaction costs, they also reduce the capacity of land councils and traditional owners to negotiate progressively better terms based on an incremental ratchet of terms and conditions over time (as has occurred with section 19 leases over the past decades). They also appear to articulate concerns that the headlease is being held by a government entity and not an Aboriginal corporation.

The Federal Government has recently announced a number of ‘historic’ township leases on the mainland at Gunyangara (link here and here) and Mutitjulu (link here and here). The historic breakthrough appears to relate to the Federal Government decision to no longer insist on the headlease being held by a government entity.

It is not clear to me what mechanism has been utilised in relation to the Gunyangara lease to place it in the hands of a local corporation. It may be that the EDTL first takes the headlease and immediately subleases it to the corporation. Unfortunately, despite a request for access to the lease, the Minister and his Department have so far refused to release it.

The Mutitjulu leases are based on a relatively recent 2015 amendment to the section township leasing and EDTL provisions (link here) which has the effect of allowing the EDTL to receive a sublease (from the Director of National Parks who holds a lease from the traditional owners) and ultimately for the sublease to be transferred and held by a local Aboriginal corporation rather than the Commonwealth statutory entity, the EDTL.

The design problem I foresee arising from the new ‘historic’ policy is that while the lease to an Aboriginal corporation may overcome the transaction cost and queuing cost issues, in order to sign up the land councils and relevant traditional owners, the Federal Government has given away an element of tenure security which may well make the difference between whether a bank or other financier will lend or not.

In particular, the bank’s recourse to its funds over time is dependent on the robustness of the market for the relevant sublease. This in turn is a function of the term of the sublease, the level of demand for the lease from other potential leaseholders, and crucially, to the robustness of the corporate governance of the owner of the headlease.

To the extent that there is a possibility that a corporation will go into administration or insolvency, there is a possibility that the sublessee’s landlord may change and along with that the approach to administering the sublease terms and conditions, both in formal and informal terms. While a bank has formal certainty that the sublease terms will be honoured by any new headlease owner, the practical  realities are that potential lenders will no longer have the security and confidence provided by the knowledge that the headlease is being administered by a government entity.

To take an example from the mainstream, Canberra residential leases are 99 years, with the underlying title being held by an ACT Government entity. Canberra residents assume that future governments will always renew the leases because they are subject to democratic pressures which would make any alternative approach politically suicidal. Were Canberra’s residential leases granted by a private sector corporation, with none of the democratic pressures facing governments, unknown future Board composition, and unknown future shareholders, it seems likely both that Canberra residents would feel much less secure about their leases (and prices would reflect that) and banks would likely adopt a more risk averse approach to lending funds secured by those leases.

Time will tell whether my concerns about the current Government’s ‘historic’ reforms are borne out in the real world. It is however ironic that it was the former Labor Government which stood its ground on this issue against sustained pressure from the two major land councils, whereas the Liberal National Party Government currently in office, and traditionally much more focussed on driving economic reform on Aboriginal land, has taken the course of least resistance.

Of course, compromise is the sine qua non of politics. However, the art of politics, and especially the art of effective policy reform, lies in knowing when to compromise and when to stand firm.

The risk here is that notwithstanding the fact that the township lease provisions continue to address transaction and queuing costs, the failure to provide absolute certainty to potential lenders will deter such lending, with the result that the systemic reform opportunities inherent in township leasing will not be grasped. These risks will be exacerbated if the Tiwi and Anandilyakwa people decide (or are persuaded) that they too wish to remove the EDTL from their existing township leases.

The case by case negotiation of township leases occurs slowly, with only eight completed in the last ten years. It may well be another decade or more before it becomes apparent whether the compromise adopted by the current Government to kick start the take up of these leases has been successful or not. The risk, indeed in my view the likelihood, is that it will constrain access to mortgage finance on remote communities which adopt the compromise model, and consequently will continue to make commercial and residential investment in these places extremely difficult. If I am right, Aboriginal people will be the losers, and the compromise will be seen to be ‘historic’ for all the wrong reasons.

Opacity, obfuscation and self-preservation.

Life is as tedious as a twice-told tale
Vexing the dull ear of a drowsy man;

The Life and Death of King John Act 3 iv

The NT News has in recent times been running a rather tendentious campaign critical of NT Senator and Minister for Indigenous Affairs Nigel Scullion, largely focussed on his alleged silence and lack of action in preventing the projected fall in GST revenues to the NT over the next four years. Here is a link to the GST story. Here are links to the NT News articles on Senator Scullion: link here and here.

The paper followed up with various questions related to the Senators use of travel entitlements. Senator Scullion responded with a media release and related tweets refuting the inferences of travel entitlement misuse: link here.  See also his response in the Senate in the short grab played on the ABC Insiders program last Sunday (2 April 2017). Link here at the 51:20 minute mark.

This background above provides a clear indication of the intense and potentially unfair pressures on Federal ministers and senators when local political developments shift in unanticipated or undesirable directions. It is also part and parcel of the way politics is played, and an insight into how the media plays itself into issues and thereby influences the way the policy process unfolds.

In this specific case, it also helps to explain the underlying rationale and timing of a policy announcement (or in this case, a policy re-announcement).

Thus Minister Scullion issued a media release on 30 March 2017 (link here) with the lead paragraph stating:

The Coalition Government will provide the Northern Territory Government with an additional $70 million to support the delivery of services that will increase community safety in the Territory. [emphasis added].

The release went on to note:

The $70 million will support remote policing infrastructure and contribute to the employment of more than 300 additional police officers in remote communities across the Territory and three dog squads.

This would be great news except that we have seen it before. On 20 May 2016, the Minister issued a media release jointly with then Chief Minister Giles announcing $208m for community safety in the NT: link here. In that media release, which can be found on the Senator’s own web site (www.nigelscullion.com ), but inexplicably not his ministerial media release web site, Minister Scullion noted:

These new reforms will result in at least 300 sworn police officers servicing regional and remote areas outside of Greater Darwin. Two Substance Abuse Intelligence Desks will be maintained and a third dog operation unit will be established to operate across the Northern Territory.

Clearly, the funds announced this week are not additional, but were announced over a year ago as part of a larger package of resources.

The reforms referred to were described in the media release as follows:

Under the reforms, which form part of the new National Partnership Agreement on Northern Territory Remote Aboriginal Investment, the NT Police Force will be given greater flexibility to adapt to the changing needs of remote communities.

The previous Stronger Futures in the NT funding agreement struck by the former Labor Government was overly prescriptive and locked the Territory into an ineffective and rigid policing model.

While the media can often be unfair to politicians, the underlying scepticism of the electorate towards politicians is reinforced when politicians take the electorate for mugs.

Senator Scullion may well have been treated unfairly by the NT News. But as a Minister in an elected Government, he also has a responsibility to be accountable for his decisions, to explain them clearly, and to not obfuscate or mislead.

To date, we have had no information on what the ‘more flexible’ reforms to NT policing which were announced in May 2016 involve. How do they differ from what the previous Government proposed? Nor have we had an update on the location of the new investment in police infrastructure nor on progress in recruiting the extra police officers and their allocation.

Instead we get a rerun of last year’s media announcement, timed to reinforce the Minister’s standing within his own electorate, the NT, and to counter the recent media stories that he is not standing up for the Territory. Even more egregiously, the impression is given that these are ‘additional’ investments when in fact they were previously appropriated and announced.

We expect more from our Governments than this.