The Commonwealth Closing the Gap Implementation Plan: a provisional assessment

 

Hamlet:                      What news?

Rosencrantz:            None my Lord, but that the world’s grown honest

Hamlet:                      Then is doomsday near?

Hamlet, Act 2, scene 2

 

This morning the Prime Minister released the Commonwealth Closing the Gap Implementation Plan (link here). The National Agreement on Closing the Gap agreed by all Australian jurisdictions with the Indigenous Coalition of Peaks a year ago provides for each party to the agreement to develop an implementation plan to lay out how the commitments made in the agreement will be implemented.

 

This post amounts to a provisional assessment of where we are at. The issues involved are simply too complex to be comprehensively analysed in a few hours. Nevertheless, in the interest of getting an alternative perspective into the public domain, I have decided to lay out my initial assessment.

 

At the time the Federal Budget was handed down in May this year, the Commonwealth advised that it would be deferring specific funding on Closing the Gap until the midyear publication of the Commonwealth Implementation Plan

 

In the May Budget, the Commonwealth allocated in excess of $600m in Indigenous specific funding, focussed largely on income support and employment, education, and health including mental health, including $149m for statistical surveys related to mental health and violence.

 

In response to the May Budget, Pat Turner, the CEO of the Coalition of Peaks issued a media release (link here) stating inter alia:

“We are encouraged to see significant funding in areas of aged care, Indigenous skills and jobs, mental health and women’s safety; but this is very much a ‘wait and see’ budget as the majority of funding directed towards Closing the Gap won’t be announced until later in the year,” she said…

… “Given the massive new investments seen in this Budget, Aboriginal and Torres Strait Islander people have a legitimate expectation that there will be a significant boost in funding in all areas of Closing the Gap — including implementation of the Priority Reforms in the National Agreement that we believe will accelerate the closing of gaps,” Ms Turner said.

 

The Prime Minister’s Implementation Plan covers a plethora of initiatives and actions of variable significance, covering both mainstream and Indigenous specific actions and allocations across four Priority Reforms and 17 Closing the Gap targets. Alongside, the Government has announced more than $1bn in ‘new investments’ (link here) as part of the Commonwealth’s implementation plan.

 

There are a number of ways to assess and consider the Government’s announcements: one is to focus on the four priority reforms; a second to assess the actions and associated investment allocated to each of the targets; and a third to focus merely on the dollars invested. While funding is arguably not the best criterion to use in assessing the quality of these announcements, it is the criterion that the Government itself has focussed on.

 

The first paragraph of the Prime Minister’s media release (link here) notes that the Government has committed ‘more than $1 billion in new measures to support to help achieve Closing the Gap outcomes’ [sic].

 

The Coalition of Peaks has issued a media release (link here) welcoming the new funding, albeit noting that more needs to be done:

We have a long way to go to seeing improvements in the lives of our peoples across the country and for the gap in life outcomes to be closed, but today is an important step forward in making this a reality.

 

Of the $1.1bn in ‘new investments’ listed in the Prime Minister’s media release, four broad initiatives account for some $880m. A Territories stolen generations redress scheme (link here) has been allocated $379m and will run for five years; remote health clinics and staff housing is allocated $254m; early childhood education is allocated $123m; and three education initiatives are allocated $126m. These allocations are clearly welcome, but they also serve to highlight areas where the Commonwealth has decided against investing new funds. For example, the Commonwealth invested $5.5bn over ten years in remote housing provision in 2008, and the current Government has not renewed this except in part (it has previously invested $500m over five years) in the NT where it has potential landlord liabilities in relation to long term leases.

 

The Commonwealth’s most significant investment, the stolen generations redress scheme, is limited to former Commonwealth responsibilities in the Territories, and has a target of just 3600 potential recipients (see page 92 of the Implementation Plan). While the investment quantum appears significant (it equates to the price of 380 median priced houses in Canberra), the potential ameliorative impact on deep disadvantage across First Nations citizens is minimal. Moreover, while the ethical case for redressing discriminatory policies is unquestionable, whether this should be classified as closing the gap is much less certain. The real import of this measure is symbolic, a matter that would require separate consideration to fully explore.

 

My major criticism however of the Commonwealth announcement relates to the deliberate opacity and lack of transparency relating to government investments.

 

The action tables at pages 83 to 185 of the Implementation Plan list in the order of 200 to 300 individual actions (I haven’t counted them). Against each action, there is listed any relevant funding, along with a notation indicating whether it is existing or new investment. In many cases, the funding listed is indicated as being mainstream funding relevant to the target, but without any indication or estimate of what proportion of that mainstream funding should be notionally allocated to Indigenous citizens. Moreover, there is no consistent effort to allocate investments over a uniform timeframes. The action items list variable dates, with the majority of funding allocations having no link to the time span of the target.  While some funding is undoubtedly ongoing (eg the income support payments listed in relation to the employment targets) in many cases funding will have been allocated for only a few years.  

 

The result is twofold. First, the Implementation Plan is fundamentally incomplete with existing and new investments not aligned with the target timeframe. To take a random example, Target 10 has a time frame to 2031, but includes a range of funding allocations with timeframes ranging over three, four, five, and seven years. None of the funding extends to 2031. See pages 145 to 148 of the Implementation Plan. This contrasts with the first iteration of Closing Gap where funding was largely (but not entirely) locked in for up to ten years through the use of National Partnership Agreements under COAG, each of which had a specific implementation plan.

 

Second, it is actually impossible to calculate or assess the total level of resources allocated against each target, (and thus to make an assessment of how serious the Government is in relation to meeting those targets). It follows that it is also not possible to calculate the total investment in closing the gap. This problem is likely to be replicated across eight jurisdictions (my examination of the two available state Implementation Plans confirms that they suffer from similar issues).

 

The Commonwealth has made a point of claiming to be accountable (see the Prime Minister’s foreword to the Implementation Plan and pages 8 and 79), yet the deliberate decision not to be fully transparent about the investments being made is a fundamental constraint on that accountability.

 

To emphasise the risks that the public and Indigenous people will be misled either deliberately or through honest mistakes, one need look no further than the Prime Minister’s media release listing $1.1bn in new investments. Yet an examination of the action plan item for the investment of $254m in health clinics and associated housing indicates that $100m of the $254m (see page 98 of the Implementation Plan) is actually existing funding from the Indigenous Australians’ Health Programme. That single case drops the headline figure of $1.1bn in new investments to $1bn (see for example The Age article of 5 August which refers to the $1.1bn figure (link here).

 

For a Prime Minister trumpeting a ‘new partnership based on trust and truth’ (page 1 of the Implementation Plan), a $100m discrepancy may be neither here nor there. Others may disagree.

 

To my mind, the most important issue here is that we face a situation where First Nations citizens disproportionately suffer levels of inequality and deep disadvantage. As a nation, we have known about this for more than two decades, and have had a formal policy framework to address it since 2008. Yet our targets are partial (ie they aim to merely close part of the gaps); the policy reforms promulgated by governments are more fluff than substance, and are continually changing; the investments that governments allocate are inadequate to address the disadvantage we know exists, and have been declining over the past five years. We have established an elaborate bureaucratic and policy ritual designed to persuade ourselves that we are doing all we can to address deep-seated disadvantage and to close the gap. In reality however, we are effectively making a choice to not close the gap.

 

While the Coalition of Peaks deserves credit for seeking to move the government and the nation forward on this issue, and has successfully manoeuvred the Government into a rhetorical proclamation of good faith and serious intent, the reality is that the Commonwealth Government has successfully shifted responsibility for any failure to the states and territories, and bought insurance by locking Indigenous interests into taking at least partial responsibility for the outcomes.

 

So much for a new partnership based on truth and trust.

Rio and BHP’s North American Oak Flat copper project

 

Thus the native hue of resolution

Is sicklied o’er with the pale cast of thought…

Hamlet Act 3, scene 1

 

This week the New Yorker reviews a book (link here) which explores various perspectives on a proposed copper mine being developed on Apache land in Arizona in the US by Resolution Copper, a joint venture between Rio Tinto (55%) and BHP (45%).

The project will be the largest copper mine in North America, and if it proceeds, it has the potential to meet 25% of US demand for copper over the life of the mine. Here and here are timelines that recounts the steps leading to the present state of play.

Native American  and environmental interests are mounting a campaign to prevent the mine from proceeding (link here and here).

There has been some media coverage in Australia (link here and  here).

The Rio web site has limited information on the project, though I did find a description of the project at this web page (link here), a hyper link to the Resolution Copper website (link here) plus a number of media releases including this January 2020 release (link here) and this 2019 media release (link here). The January media release (Resolution Copper project enters next phase of public consultation) notes inter alia:

The Resolution Copper project has entered the next phase of public consultation in the ongoing permitting process, led by the US Forest Service, with the release of its independent Final Environmental Impact Statement (EIS).

Decisions on whether to invest fully in developing the project, a proposed underground mine located in Arizona and one of the world’s most significant undeveloped copper deposits, remain subject to further permitting processes and a feasibility study that will be conducted over several years.

Resolution Copper is committed to continuing its engagement with Native American Tribes and working to seek consent before any decision on the development of the project, consistent with the International Council on Mining and Metals (ICMM) Statement on Indigenous Peoples and Mining…

…Extensive consultation with 11 Native American Tribes and local communities has guided significant changes to the project design and measures including:

The permanent protection of the culturally significant natural feature of Apache Leap

A Tribal Monitor program focused on cultural heritage protection

A partnership to protect and conserve culturally significant Emory Oak groves across Arizona.

Economic and community development agreements that can deliver significant long-term benefits for the Superior community.

The Resolution Copper website is worth visiting not least to view this statement issued in March 2021 (link here) which provides information related to the land swap involved in allowing the project to proceed on public lands. The details of the proposed land exchange can be viewed here, while details related to the block known as Apache Leap can be viewed here.

I decided to put up a post on the project as it appears to have received minimal attention in Australia, and had certainly passed me by. While there is clearly some way to go before the project goes ahead, there appears to be huge momentum behind it, not least derived from the $2bn in capital costs already expended by Resolution Copper, and the strong growth projections for demand for copper (link here).

Native American interests do not appear to have a legal right to veto the project, nor to negotiate financial benefits given that they do not own the land involved [I freely admit that I don’t have an adequate background to make this assertion with 100 percent confidence]. It is of interest however that the Juukun Gorge experience has been prominently reported in the US media coverage of Oak Flat and thus appears to have strengthened Native American leverage vis a vis Resolution Copper.

 

Diluting structural reform: the Productivity Commission’s Information Repository on Closing the Gap

 

Angels and ministers of grace defend us!

Be thou a spirit of health or goblin damn'd,

Bring with thee airs from heaven or blasts from hell,

Be thy intents wicked or charitable,

Thou com'st in such a questionable shape…

Hamlet, Act 1, scene 4.

 

 

The Productivity Commission launched a new Closing the Gap Information Repository on 23 June 2021 (link here).

 

On the same day, Minister Wyatt issued a media release (link here) extolling the Commission’s new web site. He claimed (inter alia) it was:

…another step towards delivering on the Government’s commitment to share data and support more informed decision making by all parties to the National Agreement…

…As well as supporting the comprehensive review of progress every three years, this measure includes developing and maintaining a data dashboard (presenting the most up-to-date information available) and an annual data compilation report (a point-in-time snapshot).

“The launch of the Productivity Commission’s information repository provides the evidence base we need to properly monitor progress that all parties are making towards Closing the Gap,” Minister Wyatt said.

“This initiative brings all the data together into one place so that people can readily see the current situation and trajectories of indicators for each target, providing a level of transparency and access that we haven’t had before…

…Minister Wyatt also said the Productivity Commission will play a key role in keeping all parties to the National Agreement accountable.

 

This initiative, which is required by the National Agreement on Closing the Gap (see clauses 116 & 117) (link here), is clearly a welcome and positive development.

 

Nevertheless, it deserves to be subject to critical assessment, as do the Minister’s claims.

 

The Productivity Commission makes plain that the information repository is still under development, and the web site is listed as being a ‘beta’ version, which normally refers to the release of software that has been through internal ‘alpha’ testing, and is now released for wider public testing. The Minister’s media release glosses over this qualification. The information repository’s beta status does mean that any critique made is potentially moot. Of course, the reality is that the dashboard will be constantly evolving as new data and information becomes available.

 

There are two contextual criticisms worth making upfront. First, contrary to the Minister’s comment that the initiative provides a ‘level of transparency and access that we haven’t had before’, we should remind ourselves that the present Government abolished in 2014 a number of oversight and implementation coordination entities including the COAG Reform Council and the Closing the Gap Clearinghouse. Both these mechanisms had important roles in publishing relevant data regarding the performance of the Closing the Gap framework.

 

Second, contrary to the Minister’s assertion that the repository ‘provides the evidence base we need to properly monitor progress’ and that it ‘brings all the data together into one place’, it seems clear that the intention is to limit the data included to social indicators and to provide no comprehensive account of the investments allocated by governments towards meeting the targets. It will be impossible to keep all parties accountable, and to assess responsibility for shortfalls in meeting targets if we are not in a position to see what levels of investment is being allocated to each target by each of the governments involved, and in particular, are able to monitor variations over time in those investment levels.

 

The third issue worth considering is the way the repository ‘dashboard’ treats the four strategic reforms included in the National Agreement on Closing the Gap and signed up to by all jurisdictions. These are not targets which can be measured quantitatively, but are policy reforms that will need to be sustained over time and inevitably involve policy relevant qualitative judgements to assess their effectiveness. Yet the Productivity Commission has taken the bizarre decision to treat them as if they are mere targets, and thus has devised somewhat artificially quantitative indicators that purport to assess performance.

 

The most egregious example relates to Strategic Reform Three which deals with transforming mainstream government organisations, spelt out in paragraphs 58 to 68 of the National Agreement (link here). The Agreement identifies six elements of a successful transformation in clause 59. The dashboard selects a number of indicators that relate to just one of those six elements (racism), invents a target, namely a ‘Decrease in the proportion of Aboriginal and Torres Strait Islander people who have experiences of racism’ with the implicit suggestion that this is the evidence we need to monitor progress in the implementation of the strategic reform, and will keep government parties accountable (to refer once again to the criteria propounded by the Minister). That implicit suggestion is absolutely wrong on both counts.

 

What is most surprising about the Productivity Commission’s approach here is that in its Indigenous Evaluation Strategy (link here) released in October 2020, and not yet responded to by the Government, the Commission was at pains to emphasise the importance of evaluating the impact on First Nations citizens of mainstream policies and programs. Unless it revises its approach, the very real risk will be that government agencies across eight jurisdictions will limit their purportedly transformational activities to those that relate to the narrow indicators identified in the dashboard. If this occurs, essential structural reform will have been transmuted into mere desirable change.

 

If, as the Minister suggests, the Productivity Commission is to play a ley role in  keeping all parties to the National Agreement accountable, and is to maintain the trust of the Indigenous and wider community in these matters, it will need to ensure that it is meticulous in aligning its dashboard, and the information provided by the repository with the actual terms of the Agreement negotiated by First Nations interests with all Australian governments.

 

Finally, on 25 June 2021, the Minister and Prime Minister issued a joint media statement  (link here) recording their second roundtable with representatives of the Coalition of Peaks. The statement is largely process oriented and provides little information of substance. It does confirm that the Government intends to publish its closing the gap implementation plan in August along with announcements on ‘associated investments’. At that point, the degree of seriousness being brought to the task of closing the gap by the Australian Government will become clearer.

 

 

Proposed changes to the NT Land Rights legislation

 

Where we are

There’s daggers in men’s smiles

Macbeth, Act 2, scene 3.

 

Last Saturday (12 June 2021), Minister Wyatt issued a media release (link here) announcing significant proposed changes to the Aboriginal Land Rights Act in the NT. The Minister’s spiel is that it is generational reform to empower Aboriginal Territorians. I am sceptical.

 

He announced three sets of proposed changes. First, it is proposed to amend the financial provisions underpinning the NT legislation, in particular the Aboriginal Benefits Account (ABA), by establishing an Aboriginal controlled NT economic development entity. Second, he announced changes to the provisions related to mining and exploration on Aboriginal land, including changes potentially affecting the requirements for consultation with traditional owners. Third, he proposes changes to the existing township leasing provisions to allow communities to enter into a head lease with a local Aboriginal corporation.

 

The Minister indicated that legislation to implement the changes would be introduced later this year. Further details are provided in three fact sheets available on the NIAA website (link here). While helpful in elaborating on what is proposed, these fact sheets leave numerous questions unanswered.

 

In November 2020, I published a post examining the emerging rapprochement between the Minister and the NT Land Councils (link here) and asking the question: what is driving this rapprochement?  That post remains relevant to the issues that are now emerging. In particular, it is clear that the Ministers budgetary generosity then (and perhaps ongoing) was designed to lubricate the negotiations on the recently announced proposed changes.

 

The Minister’s announcement makes much of the codesign of the proposed changes with the Land Councils and the ABA Advisory Council (which is predominantly comprised of Land Council Executive committee members). Yet the ABA was explicitly designed to benefit all Indigenous Territorians and they do not appear to have been included or represented in the codesign processes for the proposed changes. Nor has there been any wider public consultation, no issues paper published, and no explicit public discussion paving the way for the announced changes.

 

The Minister’s decision to make his announcement on the Saturday of a long weekend (after three years of codesign negotiations with the four NT Land Councils) seems designed to avoid excessive media coverage. This raises the question: what is the Minister seeking to hide here? Is the Government merely averse to transparent debate on policy issues? Or is there a deeper policy agenda that they fear might become apparent if the proposals are subject to too much sunlight?

 

It is clearly too early to undertake a detailed analysis of the proposals in the absence of draft legislation. Yet even on the information so far provided, some major questions arise and deserve to be tagged for further consideration.

 

In relation to the proposal for an ABA funded Aboriginal controlled NT economic development entity, funded with a $500m endowment and an annual $60m injection, a range of issues arise. If the new entity is effectively controlled by the Land Councils (via control of appointments to the Board), will this lead over time to changes in the Land Councils attitude to regulatory protection of traditional owner interests (for example in cases where the entity joint ventures with an external partner to access and utilise Aboriginal land)? There may well be a case, as the Minister argues, ‘to activate the potential of Indigenous land in the NT’, but it should not occur at the cost of weaker land council regulatory oversight.

 

Second, what does the minister propose for the $700m balance of the ABA’s $1.2bn. And how does he square his confident assertion that the growth in the ABA capital base is ‘forecast to continue’ with the imminent closure of the major source of ABA funds, the Groote Eylandt manganese mine at some point (link here) within the next decade? It would be helpful if the Minister were to release his detailed financial forecasts for the ABA’s revenue over the next three decades. This may be ‘generational reform’, but in matters such as these, serious thought needs to be given to the impact on future generations.

 

In relation to the streamlining of the exploration and mining proposals, the Minister’s Fact Sheet indicates that Land Councils are to be given ‘greater flexibility to determine how traditional owners are consulted, with the agreement of the applicant in each case’. This apparently anodyne statement is in my view fraught and appears designed to strengthen the hand of the land councils vis a vis traditional owners on the ground. This is a retrograde suggestions and requires detailed consideration as to its desirability and if implemented the protections against misuse that would need to be implemented.

 

The proposals in relation to township leasing which allow traditional owners to head lease the land to an Aboriginal corporation rather than the EDTL are in my view problematic. While they appear to provide greater community control over the township tenure, the use of local corporations rather than a government entity to hold the head lease means that potential lenders will be much less willing to lend to sub-lessors because in the event of a loan default, the mortgaged land will only revert to the lender while the local corporation remains solvent. Solving this potential problem ws the reason that the EDTL was established in the first place. The Minister should provide a detailed explanation of how he intends to address this issue as potential lenders will vote with their feet and not lend in circumstances where they cannot be guaranteed access to the mortgaged land.

 

Over the past two years, it has become increasingly apparent that there are major policy gaps in the capacity of the NAIF to deliver benefits to Indigenous citizens of northern Australia, and that the Government’s Indigenous Reference Group on Northern Australia has proposed (unpublished) recommendations that have not been implemented (link here). Yet the Minister’s announcement makes no mention of these policy processes, and instead is proposing a set of changes that strengthens Aboriginal involvement in allocating existing funds (albeit funds that have been allowed to accumulate through non-decisions by the Minster and his predecessor) only in the NT. The risk here is that this sleight of hand will be used as the fig leaf to hide the Government’s policy exposure in relation to the lack of Indigenous inclusion in its northern development policy and divert attention from the absence of any more substantive reform.

 

Finally, I almost choked when I read in the Minister’s Fact Sheet that the proposed economic development entity would:

‘have strong governance structures and transparent reporting to ensure accountability to Aboriginal people in the NT and the Australian Government. In addition to PGPA Act reporting requirements, the ABA entity will have to…provide additional reporting in the first 3 years of establishment’.

And in the Minister’s media release that:

‘by establishing it as a Commonwealth entity, there will be rigorous public reporting to ensure Aboriginal people know where their money is going and how it is being used to support their communities, culture and businesses’.

 

While I strongly support these proposals (and would even go further by legislating the forms of transparency required), it is all a bit rich coming from a government that has pursued a substantial reduction and degradation in the quality of reporting in relation to ABA grants over the past five years, and a Minister who has allowed a major Commonwealth entity within the his own portfolio to lapse into governance dysfunctionality for most of the past year (link here).

 

No doubt there are a range of problematic issues involved in these proposals that I have not focussed on.

 

There is potential to strengthen Aboriginal control and empowerment over the ABA, and for reform adjustments to the legislation more broadly. But there are a range of trade-offs that require wider discussion; a series of major risks, many of which are not visible or obvious; and a number of retrograde proposals that could fundamentally weaken the existing policy architecture of NT land rights.

 

I hope the Parliament convenes an appropriate Committee to examine the legislation when it is introduced to ensure that these proposals receive the detailed consideration they so clearly require.

Regulating Alcohol in the Northern Territory: in whose interest?

 

This might be the pate of a politician….one that would circumvent God

Hamlet Act 5, Scene 1

 

Introduction

The recently released Independent Panel Review (IPR) into the proposed Dan Murphy (DM) development in Darwin is, in public policy terms, a fascinating document (link here). It was commissioned by the Board of Woolworths, one of Australia’s largest and most ubiquitous corporations. The panel appointed was led by Danny Gilbert, one of Australia’s most well connected and socially aware corporate citizens. It is comprehensive, analytically dense, rigorously argued, and deals with a multitude of issues. On its face, it is about the role and responsibilities of Woolworths in particular, and business more generally, in relation to contentious public health and social policy issues arising from corporate operations that have negative impacts of one kind or another on the community.

 

So, the IPR canvasses issues such as corporate social responsibility in a modern economy, corporate Australia’s relationship with Indigenous Australia, governance standards within a large corporation, particularly in relation to subsidiaries, an economic, demographic and social snapshot of the Northern Territory, alcohol consumption in Australia and particularly in the NT, regulation of alcohol sales in the NT, the adequacy of community consultation processes by a large corporation. While all of these issues are discussed in relation to a particular proposal, namely the proposed Dan Murphy’s retail development in Darwin, much of the discussion is relevant to, and has implications for, broader relationships between corporate Australia and the wider community.

 

However, the IPR is also about the broader relations between what I will term mainstream Australia and Australia’s Indigenous citizens. In particular, it is about one of the most fraught issues underlying sustained and ongoing Indigenous disadvantage, namely, excessive alcohol consumption, and its wider ramifications.

 

The challenge for the nation is to find a sustainable balance between the rights of citizens to consume alcohol and managing the severe, but non-universal consequences of excessive consumption. For a range of complex but in many ways obvious reasons, a proportion of Indigenous citizens appear to be particularly vulnerable to these adverse consequences. I don’t propose to explore the issues of responsibility for these outcomes in this post, but would merely note that like many social processes, it seems likely there are multiple causes underlying these adverse outcomes.  

 

In this context, corporations clearly have social responsibilities to minimise harm arising from their operations. The IPR can be read as one of the most robust and rigorous arguments in support of this proposition to emanate from within the business community. However, so too do governments have responsibilities both to regulate potentially harmful activities within the community in the public interest, and to minimise harm from their own policy decisions and actions.

 

The IPR is framed as a report to the Board of Woolworths, and its focus is squarely on what Woolworths should do to align its commercial policies in Darwin and surrounding regions with its wider corporate social responsibilities. The IPR makes nine key findings, all directed to Woolworths and by extension to its (currently) majority owned subsidiary Endeavour which in turn owns the Dan Murphy brand and network of retail outlets (link here).

 

The concluding sentences of the Executive summary are a succinct summary of the IPR’s overarching conclusion:

… the Panel recognises that the negative impacts that arise from the over consumption of alcohol in the Northern Territory, laid out in detail in this report, are off the scale, not just by Australian, but by international standards. The resulting impacts in terms of human suffering and social and economic costs cut right across the Northern Territory community and are not confined to Aboriginal and Torres Strait Islander Territorians. They cannot be ignored. (p.13).

 

I recommend readers take a look at the IPR. The Executive summary, summaries at the beginning of each chapter, and the use of well-designed graphs and figures go a considerable way to making an otherwise complex document accessible.

 

In this post, I seek to go beyond merely summarising the IPR’s arguments and findings (important as they are) and to focus on what the IPR reveals (perhaps unintentionally) about the role of government in fulfilling its role in protecting the public interest in relation to the consumption of alcohol. Given the space limitations of blog post and the detail included in the IPR itself, I would characterise this post as merely an outline of an argument. In effect, I am laying out an alternative way of reading the IPR, and pointing to just some of the facts and events they identify and analyse that support such a reading.

 

In December 2020, Woolworths (to its credit) established an independent review to examine the recently approved proposal to establish a DM retail outlet in Darwin (link here). This decision followed an outbreak of community concern — indeed outrage — about the regulator’s decision to approve and the way it had been approved by the NT regulatory authorities (link here). One of the back stories to the genesis of the IPR is the mounting of an extraordinarily effective campaign against the proposal by Indigenous organisations and their allies based in Darwin and beyond led in large measure by an extraordinary Indigenous leader, Olga Havnen. This post does not attempt to chart the history of those efforts, but there is no doubt that without the campaign, the Woolworths Board would not have commissioned the IPR. 

 

Reading between the lines, it seems likely that the decision to commission the IPR also suggests a level of concern within the Board of Woolworths regarding the actions and decisions of its wholly owned subsidiary Endeavour. Complicating the back story, Woolworths had announced in July 2019 that it proposed to pursue of demerger of the recently established Endeavour Group while retaining a minority shareholding and single Board position within the newly listed entity. That demerger has yet to be finalised.

 

On 29 April 2021, following receipt of the IPR, Woolworths announced that it would not be building a DM retail outlet in the location previously proposed (link here and link here). On 9 June 2021, along with the release of the IPR, Woolworths and Endeavour issued separate responses to the IPR (link here and here), and Woolworths issued a detailed document reflecting on the IPR and responding albeit briefly to what it considered the key findings (link here). While I don’t propose to analyse those responses in detail in this post, it is clear that the Endeavour response is more limited and much more defensive than the Woolworth’s response. This is perhaps explained by the forthcoming demerger, which will leave Woolworths with a minority shareholding in Endeavour of 14 percent, and Endeavour with the task of undertaking the heavy lifting in terms of balancing its commercial alcohol retail operations in Darwin and the wider public interest in harm minimisation.

 

The NT Government’s role and responsibility

 

Chapter 5 of the IPR describes the level and consequences of alcohol consumption in the NT. The summary of the chapter states, inter alia,

The Northern Territory has the highest rate of alcohol consumption in Australia, and a much higher share of the population drinks at risky levels compared to the Australian average…The financial costs to Darwin and the Northern Territory Government from these harms are also acute. Given the demonstrable health and economic costs, it is clear that the level of alcohol-related harm requires urgent and meaningful attention. (p.49)

 

Contextualising the horrendous statistics on disadvantage amongst Indigenous citizens, the IPR states:

There is a view of some in the community that Aboriginal and Torres Strait Islander disadvantage is intractable and that First Nations peoples must bear full responsibility for their status without any compromise to the requirements and wishes of the non-Indigenous population. The Panel rejects that perspective (pp.52-3).

 

The chapter goes on top lay out with surgical precision the devastating statistics on alcohol abuse across the NT:

The Northern Territory has nearly six times the level of alcohol-related emergency department presentations compared to the next closest state or territory (p.53)….

…Dr. Mahiban Thomas, reported that an estimated 350 cases of broken jaws and noses were admitted to the hospital each year, with 88 per cent of those cases caused by alcohol-related assaults. Darwin was suggested to have the highest rate of broken jaws in the world, second only to Greenland (p.54)…

…The Northern Territory has nearly three times the level of alcohol-induced deaths compared to the next highest State or Territory, at a rate of 8.9 per 100,000 population in Darwin, and 28.5 deaths per 100,000 in the rest of the Territory. This figure was more than five times the Australian population-weighted average...

 

On the costs of alcohol consumption, the report quotes research suggesting the financial cost of alcohol consumption to the NT community is $1.4 billion, some 5 percent of the $24.3 billion NT Gross State Product, or 17 percent of the $7.3 billion spent by the government on services to the public.

 

Clearly, the both the economic and social costs of alcohol are such as to warrant proactive harm minimisation policies by the NT Government. What clearly sits behind the IPR’s conclusions are the enormous personal costs and harm of alcohol abuse imposed on individuals, families and children. The IPR mentions these at pp.55 and 126, but it is nevertheless likely that most readers will pass over these points without a second glance. Yet the reality is that alcohol is inexorably destroying the lives of drinkers, families, and children, one day at a time. Most insidiously, alcohol has all the characteristics of an addictive drug, and its misuse has lifelong adverse health and psychological  implications both for users and their close families.

 

Chapters Seven and Eight of the IPR deal the progression of the Woolworths / Endeavour proposal through the extant regulatory processes, and are the key chapters for understanding the actions of the Northern Territory Government in this saga.

 

In April 2017, the NT Labor Government established a review by a former Chief Justice of the NT Supreme Court, Trevor Riley, to review all aspects of the Liquor Act 1978 and surrounding policies. The Riley review was published in October 2019, and made 220 recommendations proposing a whole of government integrated alcohol harm reduction framework. The NTG accepted 187 recommendations and pledged in principle support for a further 32 recommendations. The single recommendation rejected was to ban takeaway sales on Sundays (p.59). As a result of the Riley review the Liquor Act was amended in a series of amendment Acts through 2017 to early 2019, which are clearly summarised on pp. 71-2 of the IRP.

 

Separately, Woolworths, through its subsidiary Endeavour, in mid-2018 sought regulatory approval to establish its Dan Murphy development. See the overview of the legal processes on p.73, and the detailed consideration over the following pages. In September 2019, the Liquor Commission refused Woolworth’s application, based on its detailed assessment of the community impact which would flow from the proposal and its consideration of the public interest. The IPR summarises the Commissions reasons at pp. 76-78. In an extraordinary response, the NT Government released a public statement calling the decision of its own independent regulator  ‘a kick in the guts for responsible drinkers who want more choice in the Darwin market’, and pointed out that it was open to Woolworths to appeal the decision (p.81).

 

The Liquor Commission decision was followed by an application by Woolworths to the NT Civil and Administrative Appeals Tribunal (NTCAT). The appeal was dismissed. Woolworths then appealed to the Supreme Court of the NT in January 2020. In March, a legislative amendment resolved the issue in dispute in such a way as to allow the Liquor Commission to now approve the proposal, thus negating the action in the Supreme Court. A further application appealing the Liquor Commission’s decision not to approve the proposal was filed with NTCAT by Woolworths in April 2020. This was subsequently deferred and then abandoned after further legislative amendments which enabled a new ‘expedited’ decision making process to be undertaken by the Director of Liquor Licencing (‘the Director’). See pp.79-81 for a detailed description of these processes.

 

In Chapter Eight, the IPR assesses the impact of the 2020 legislative changes that, inter alia, removed the decision making responsibility from the Liquor Commission, and provided for the Director to make an expedited decision of four historical applications, including the DM proposal. Extraordinarily, the legislation allowed the Director to make a decision without prior notice to the applicant or any other person, without holding a hearing, and provided that any decision would not be reviewable by the NTCAT. The IPR concluded that these amendments were not good public policy. See the detailed analysis and discussion on pp 83-86.

 

The IPR went on to report that there had been ‘significant engagement between Endeavour and the Northern Territory Government’ in relation to the 2020 legislative amendments to the Liquor Act 2019 (p.86). Endeavour’s proposals were closely aligned with the eventual amendments, but with the significant difference that Endeavour proposed that the matter be advanced by a Ministerial decision rather than the approach ultimately adopted of the Director making the decision. The IPR were critical of Endeavour for its approach, in particular, its suggestion that ‘explicitly excluded any requirements to satisfy the public interest and community impact test’ in the post Riley legislative framework (p.87).

 

Without seeking to exonerate Endeavour, it is clear that the NT Government bears a much greater responsibility for what transpired. It is governments that are expected to act in the public interest, yet all that the NT Government could muster was a craven attempt to facilitate the interests of a major corporation. Moreover, they deliberately established a system where a public servant (the Director) made the decision rather than a Minister as suggested by Endeavour, and rather than the independent Liquor Commission as required by the pre-existing legislative framework. It goes without saying that a public servant is not independent of the executive arm of government. Further, the legislation established a framework that explicitly denied the community natural justice, while making a cynical assumption that the technical complexity involved and (apparent) non-involvement of a minister would diminish any public criticism.

 

Finally the IPR undertook a critical assessment of the Director’s decision to approve the Woolworth’s DM proposal. The assessment identified various legal shortcomings, problematic reasoning, and an approach which adopted a starting point favourable to Woolworths, which set aside expert opinion in favour of the Director’s own previous experience and informal advice from the police, and which set aside the views of local communities most impacted by the proposal (pp. 88-91).

 

Conclusion

 

So to summarise, the NT Government responded to the decision of the independent Liquor Commission that had identified extensive harm and community impact as likely to flow from the establishment of a DM retail outlet by turning 180 degrees from  its explicit 2019 commitments to implement the Riley review recommendations, by criticising its own independent statutory body, by overturning its own legislation to implement the Riley recommendations, and legislating a new process that required a public servant to make a new expedited decision within a legal framework that set aside natural justice, precluded public hearings, prevented appeals, and allowed problematic reasoning to trump expert opinion and community views. In short, the NT Government pro-actively facilitated the pursuit of private interest to the exclusion of substantial evidence that it was not in the public interest.

 

One of the more insidious impacts of this type of behaviour by governments is the way in which trusted institutions within the public domain are politicised and pressured, with deeper and widespread implications for levels of trust in our democracy and core institutions. To take just one example highlighted by the events described by the IPR, the NT police appear to have been influenced (either explicitly or implicitly) to self-censor their perspectives on the social impacts of increased availability of cheaper alcohol in relation to the DM proposal. According to the IPR, in July 2020, the NT police gave evidence in another application for a substituted liquor licence. The IPR reported (p.57):

In Superintendent Antony Deutrom’s evidence to a Liquorland application for a substitution of premises in Palmerston in July 2020, Northern Territory Police stated that the impacts of alcohol on the Northern Territory continue to be “appalling and pervasive…culminating in extra strain”. At the time, demand for police services across the Northern Territory was on the rise, up 39.5 per cent compared to the previous period. Further, 15.4 per cent of those incidents were alcohol-related. Superintendent Deutrom also said, “an increase in alcohol availability could further impact on these figures in a negative manner” [footnotes deleted].

 

See also Superintendent Deutrom’s comments on p.55.  In contrast, the NT Police comments to the Liquor Commission hearing into the DM proposal were much less robust:

In relation to the Darwin Dan Murphy’s development, Commander of Police in the Northern Territory, Travis Wurst, gave evidence to the Liquor Commission in 2019. Commander Wurst referred to the risks attached to the proposed Bagot Road site from a public and road safety viewpoint, the problems of public drinking, and more generally about the role of the Police Auxiliary Liquor Inspectors and the impact of alcohol restricted areas in the Greater Darwin area and surrounding remote  communities. Commander Wurst also noted that the Northern Territory Police were neutral on the application by Woolworths Group and that the application was neither objected to formally, nor endorsed in any way (p.57) [emphasis added].

 

Of course, the unanswered question raised by this clear NT Government strategy to support the DM proposal is ‘why?”’ Why did the NT Government reverse course? Why did it ignore the very significant health, social and economic costs likely to flow from the DM proposal? Why did the Indigenous members of the Government remain silent and accede to this policy? Endeavour has stated that it was in discussion with the NT Government regarding the changed location of the proposed DM outlet (link here). We know that Endeavour proposed legislative change that was substantively taken up by the NT Government. What other conversations were undertaken between Endeavour and the NT Government? The short answer is that we don’t know and the IPR doesn’t tell us.

 

In an appendix, the IPR provides an extensive list of the stakeholders consulted. It is clear that it sought to engage widely within and beyond the NT. It lists engagement with a small number of NT agencies, but there is no mention of any Ministers in the NT Government being consulted. It seems highly unlikely that the Independent Panel did not seek to engage with ministers (it mentions that it consulted with the MLA for the seat surrounding the proposed development, Labor backbencher Mark Monaghan, as well as representatives of the Opposition). The IPR mentions that a number of stakeholders consulted did not wish to be named in the report. Either way, the unpreparedness of Ministers in the NT Government to engage on the record with such a high profile assessment of the proposal speaks volumes for the disdain the Government has shown both to the norms of public debate about issues of significant importance for the NT, and to the NT community itself.

 

While the extraordinary campaign led by Indigenous interests and leaders such as Olga Havnen have won this battle, it is far from clear that they will win the war.

 

The importance of this case study of an important public policy process is that it has largely been driven by business. The Woolworth’s Board clearly decided that they may not be getting the full story from Endeavour (see p.111), and thus commissioned the IPR. The IPR clearly found that Endeavour had been engaging closely with the NT Government.

 

The facts demonstrate that ‘when push comes to shove’, the NT Government is unwilling and/or incapable of pursuing and protecting the public interest. Perhaps the solution is for the corporate sector as a whole to take a wider view of the issues relating to alcohol consumption across the NT, and to develop an active strategy that seeks to protect the public interest as well the private corporate interests they are entitled to advocate for and pursue. After all, if — as the evidence suggests is the case — governments are in the pocket of business, then perhaps it is time for the business sector to step up and pursue the public interest as well as their private interests. It is actually in business’s interest that the nation is inclusive, has a vibrant economy, and a healthy citizenry. The IPR is potentially the first step towards a much more inclusive and visionary stance by corporate Australia.

 

My recommendation to Woolworths would be that its credibility with Indigenous Australia, and the community more generally, would be enhanced were it to actively and transparently use its market heft and influence, as well as its directorship on the Endeavour Board, to ensure that both Endeavour and the NT Government put the public interest above commercial interests in the development of future alcohol policy in the NT.

 

My recommendation to the NT Government is that they should take the opportunity of the publication of this report to undertake a fundamental reconsideration of their policy approach to alcohol regulation. To do otherwise will be to deepen their complicity in an entirely preventable scourge that is taking a terrible toll on many Territorians, including a substantial proportion of Indigneous Territorians. If they cant fix this, their credibility on every other area of public policy will remain in tatters.

 

Finally, I am conscious that I have not mentioned a role for the Australian Government in these issues. Yet it was only fourteen years ago that the Australian Government legislated alcohol prohibition across remote NT communities citing statistics that have barely changed from those we see today. While I am not advocating a return to those punitive policies, there is a role for the Australian Government through the range of policy levers at its disposal to encourage public policy and corporate policy outcomes in the wider public interest. Silence and sitting on the fence is not an adequate response to the ongoing health crisis linked to alcohol abuse across the NT and beyond.

 

 

 

 

 

Deflection and inaction: the Australian Government’s formal response to the Productivity Commission Review on Expenditure on Children in the Northern Territory.

  

Suit the action to the word, the word to the action…

Hamlet Act 3, scene 2.

 

Last week, the Australian Government released its formal response (link here) to the Productivity Commission (PC) report on Expenditure on Children in the Northern Territory. The Australian Government commissioned the PC to conduct this research following on from the recommendations of the Royal Commission into the Protection and Detention of Children in the Northern Territory 2017 (Royal Commission). The PC commenced its study on 1 April 2019 and publicly released its final report on 8 April 2020.

 

I wrote a post analysing the import of the PC report in April 2020 (link here). It is worth re-reading that post in conjunction with the Government’s formal response. The analysis below complements that more detailed response, which in turn relied heavily on the PC report.

 

The recent Australian Government response notes at paragraph 3:

Consistent with the Royal Commission’s findings, the PC’s final report outlines that the Australian and Northern Territory Governments make funding decisions in relative isolation, leading to fragmentation, inefficiencies in service delivery, and significant overlap in expenditure effort.

 

In my April 2020 post, I characterised the PC report in the following terms:

The PC study report is a stunning document. It focusses on one strand of government service delivery (children’s services) in one jurisdiction (the NT), and lays out in forensic and stark detail the extraordinary complexity of the funding and service delivery arrangements, the extent of the overlapping funding, the ongoing existence of gaps in funding, the absence of coordination both between jurisdictions and within jurisdictions (see pages 112- 116), the underutilisation of agencies’ regional networks who of course have most direct contact with citizens, and the lack of internal coherence in funding decisions by both levels of government...

… What is crystal clear — even from a cursory reading of the report — is that the system for funding and delivering children’s services in the NT is not fit for purpose. What is particularly arresting is the PC’s documentation in various places (eg page 306) of the long history of previous reports and inquiries whose analyses and recommendations have not been taken on board by governments.

 

I went on to argue that the implications of the PC report’s forensic examination of just one sliver of the policy domain impacting families (predominantly Indigenous families) in the NT was that similar issues would apply much more broadly.

 

To what extent then does the Australian government response suggest that there has been or is a serious attempt to address the shortcomings identified by the PC?

 

The short answer is that the Governments response is deflection rather than action. It reflects the deep-seated inability of governments to come to terms with the deep structural issues confronting disadvantaged Australians in remote regions. Instead of a new strategy, backed by political will and determination, what has been served up is ‘more of the same’ clothed in layers of bureaucratic sophistry and verbiage.

 

In the words of the Government’s response (paragraph 7):

The Australian Government supports in-principle the PC’s final report, including the areas of reform outlined. However, while holding significant merit, the PC’s suggested reforms also introduce additional operational and strategic complexity. As a result, detailed consideration of each recommendation, including risks, timing, policy alignment, capacity building and resourcing requirements by each agency will be essential for steady, realistic and informed planning and implementation.

 

Sir Humphrey Appleby could not have said it better!

 

The response proceeds to consider in detail each of the PCs four suggested areas of reform, namely: coordinated funding underpinned by regional plans; longer term funding for service providers; better data at the regional and community level, and stronger supporting institutions. While the response points to a range of processes, some more developed and serious than others, there is no overarching commitment to see these reforms comprehensively implemented.

 

I don’t propose to undertake a forensic critique of each element of the response; however I will comment on two issues of current relevance mentioned: the new framework for closing the gap, and the role of evaluation.

 

At paragraph 31, in relation to the PC identification of better data as an area for reform, the Government response states:

The Australian Government recognises that accountability and access to the data being interpreted is another critical consideration to drive transparency. An example of the Australian Government’s commitment to this can be seen through the National Agreement on Closing the Gap. One of the four key priority reforms the National Agreement is centred around is ‘building better data and sharing access to the right data to support Indigenous communities to make informed decisions with us.’

 

This is all good and well, although it reflects the implicit strategy of the Government to deflect calls for greater transparency into processes of greater data provision and sharing at local levels, two quite separate issues. More fundamentally however, the National Partnership provides for a series of processes designed to deliver shared decision making with Indigenous interests on service delivery, and for structural reforms to mainstream government agencies to enhance engagement with Indigenous interests. Yet there is no indication here that DSS has engaged with Indigenous interests in devising the Government’s response to the PC report as a whole. This bodes ill for the quality of the implementation of the national agreement.

 

At paragraph 33, the Government’s response states:

The NIAA’s IAS Evaluation Framework is also a notable example of how the Australian Government is taking a continuous improvement approach to evaluation, and is designed to ensure evaluations are high quality, ethical, inclusive and focused on improving outcomes for Indigenous Australians.

 

Yet the crucial issue is not the quality of myriad evaluations of small scale programs of limited strategic significance, but the use of evaluation to assess the overarching effectiveness of Government programs impacting (in the present case) disadvantaged children in the Northern Territory, most of whom are Indigenous.

 

Another example of (almost) seamless deflection…

 

In this context, it is worth noting that the response makes no mention of the PC report dated October 2020 on an Indigenous Evaluation Strategy, which incidentally recommended an independent evaluation capability across the Australian Government for policies and programs that impact Indigenous citizens. The Government has not formally responded to this report, and makes no mention of this fact in its response.

 

Finally, the most serious problem with the Government response to the PC report is not what is included, but what is omitted.

 

There is just no serious, comprehensive and thought through plan for substantive policy reforms, notwithstanding the fundamental shortcomings identified in the PC report.

 

In my April 2020 post, I outlined two potential approaches to substantive policy reform which would need to extend beyond children’s services to a range of related service delivery and policy domains:

The first approach would be  for Indigenous interests to implement a targeted strategy that picks out five or six of the key reforms identified by the PC (of course there may be others), and to make them core principles and advocate continuously for their implementation and ongoing retention at both national and jurisdictional levels….

…The second (and much more ambitious) approach would involve a fundamental reconceptualisation of the service delivery funding system to take decisions on grants and contracting out of the hands of politicians and place them in the hands of substantively independent service delivery purchasers (SDPs).

Governments would appropriate block amounts of funding over multiple years to say 20 regional SDPs across the nation for key social services, and provide broad (and public) guidance in terms of overall priorities. In turn, the SDPs would make funding decisions on service delivery within their regions, and report on progress to both the public at large and governments.

 

Neither substantive policy reform approach is seriously contemplated in the Government response issued last week. Nor is there anything else that might address the fundamental shortcomings in the architecture of service delivery identified by the PC report.

 

The Government’s response to the PC report is both a lost opportunity, and unfortunately and most seriously, given the lack of commitment to substantive reform, it seems likely that it is a portent of what we are likely to see when the first implementation plans under the National Agreement on Closing the Gap are released in July this year. Bureaucratic deflection and incessant process clothing underlying inaction are habits which are extraordinarily difficult for governments to break.