Reconsidering the architecture for closing the gap

 

                                                 Go, tread the path that thou shalt ne’er return.

                                                 Richard III, Act One, scene one.

 

Following the publication of the Productivity Commission’s draft report for its Closing the Gap review (link here), I published a critique arguing for a more wholistic approach to the review. Having already made a submission, I was initially reluctant to make a further submission, but eventually decided I should make the effort to put my views formally to the review.

 

Last week, I submitted a second submission (link here) focussing primarily on the high level problems with the architecture for Closing the Gap, and argued that the Commission should take the opportunity to look beyond the Priority Reforms to the policy architecture generally and the targets in particular. I also attached an appendix outlining one alternative approach to designing the policy architecture for Closing the Gap. My purpose was not to advocate for that specific design, but merely to demonstrate that alternative design approaches are feasible which would address the flaws and gaps in the current policy architecture (which I pointed to in the body of my submission).

 

As it is reasonably short, I include the appendix below, and encourage readers to read the full submission.

 

Appendix A: Outline of one possible alternative framework for closing the gap

 

[This potential framework is included merely to demonstrate that alternative approaches to devising a framework for Closing the Gap are possible.]

 

The first step would be for the Productivity Commission to be requested to make an independently refereed estimate of the potential cost of closing the gap over (say) a fifty year period. This estimate should be indicative, revised every five or ten years, and designed to inform the Australian community of the scale of the challenge involved. Such an estimate should be contextualised with an analysis of the broad causes of existing disadvantage to undercut any suggestion that these are self-inflicted costs or that First Nations citizens are somehow responsible for their disadvantaged status. Such an estimate might be complemented by a revival of the Productivity Commission’s previous Indigenous expenditure reports, albeit better framed to take into account positive and negative expenditures, to differentiate between citizenship entitlements and discretionary investments, and perhaps even broadened to include tax expenditures as well as appropriated expenditures.

 

Core principles of the framework would be that the targets should be high level and address systemic issues, and implicitly acknowledge that deep disadvantage has multiple causes and symptoms.

 

The primary purpose of the targets would be to provide a generalised indication to governments whether or not disadvantage exists and continues. To this end, a limited number of targets would be set based on the availability of reliable data, and their power to communicate a readily understood narrative to the Australian population. To this end, they would generally involve comparisons between Indigenous and non-Indigenous citizens, and may benefit from being aggregated to amalgamate differing data points within each cohort into a single index (e.g. to amalgamate outcomes for education outcomes at different schooling years into a single index). There should be no expectation that Governments should allocate funding to these particular targets.

 

Examples of potential targets include:

•          Comparative lifespans.

•          Comparative educational outcomes.

•          An indicator of comparative geographic disadvantage across urban, regional and remote regions (incorporating physical infrastructure elements such as housing and essential services; and perhaps other core services such as health and education).

•          An indicator of comparative health disadvantage.

•          An indicator of comparative justice system disadvantage.

 

Beneath the high level targets there would be a limited series of high level ten year sectoral priorities linked to the allocation of additional funding locked in to legislated appropriations.  These core priorities would be supplemented by additional priorities locked in to the forward estimates. The priorities and their associated funding would be underpinned by a published policy or program rationale that includes indicators of current comparative socioeconomic status, a program logic and rationale, and links back to the overarching aim of the Closing the Gap agenda, namely, removing comparative disadvantage and inequity. However, there would also be scope for these priorities to encompass initiatives directed to strengthening culture, including for example language programs, support for the various forms of artistic expression, and support for maintaining links to land and country. Stronger cultures strengthen the capabilities that are a core part of citizenship and contribute indirectly (but importantly) to addressing disadvantage. In other words, such a model builds in a tangible mechanism for governments to acknowledge and fund alternative life choices by First Nations citizens.

 

In relation to the ten year sectoral priorities, there would be benefit in requiring these to be agreed Commonwealth /state funding programs which are designed to be additional to current funding initiatives and programs and can be monitored and assessed as a unified strategy.

 

There should be regular independent evaluations of each the sectoral and additional priority programs, with the evaluation reports tabled publicly in Parliament.

 

Additionally, there should be a series of Priority Reforms (such as currently in place) focussed on driving institutional and systemic reforms designed to support and underpin the Closing the Gap policy architecture. These should be framed in qualitative and not quantitative terms, and should be assessed by regular reviews (such as the current review process).

 

Finally, the Commonwealth should take the lead in this national project as the ‘first among equals’, rather than the current model where is sees itself merely as one of nine jurisdictions with responsibility for closing the gap. This would mean that it should take a direct leadership role in ensuring high level consistency in the closing the gap activities of states and territories, and in engaging with the Coalition of Peaks. The Commonwealth should take responsibility for amalgamating performance monitoring and reporting related to the closing the gap architecture across all jurisdictions. It should also provide robust feedback (perhaps through establishing a statutory office) to the states and territories on the quality of their program reports and implementation plans. This would be consistent with the implicit purpose of the 1967 referendum which gave the Commonwealth powers to legislate in relation to Indigenous citizens.

The semiotics of the 2023 Intergenerational Report

 

But thou didst understand me by my signs,

And dids’t in signs again parley with sin…

King John, Act four, Scene two.

 

The Commonwealth recently published the 2023 Intergenerational Report (link here). The thumbnail description on the Treasury website states:

The 2023 Intergenerational Report projects the outlook of the economy and the Australian Government’s budget to 2062-63. This is the sixth report. Its analysis and projections of the key drivers of economic growth will help inform and improve public policy settings to better position Australia for the next 40 years. The report considers 5 major forces affecting the coming decades:

·         population ageing

·         technological and digital transformation

·         climate change and the net zero transformation

·         rising demand for care and support services

·         geopolitical risk and fragmentation.

 

The Treasurer’s Foreword states (inter alia):

The Albanese Government’s first Intergenerational Report provides a big picture view of the forces that will shape our economy and fiscal position over the next 40 years as we work to create prosperity, expand opportunity, and build a stronger, more sustainable and more inclusive nation. Digitalisation and the adoption of new technologies, shifts in our industrial base, the energy transformation, demographic change, and serious geopolitical uncertainty are already changing the shape of our economy and this will continue over the coming decades. 

 

There has been a plethora of commentary over the past week which I do not propose to replicate. Instead, this post will focus on what the Report says (or does not say) regarding Indigenous people, and what this means for future policy directions.

 

The Report makes a series of passing mentions of Indigenous policy issues: life expectancy at birth for First Nations people are about 8 years lower than the mainstream population (p. 43); First Nations people have a ‘significantly younger’ age profile than the general population (p. 49); and participation rates for First Nations people are low:

The share of Aboriginal and Torres Strait Islander people in employment remains lower than for other Australians. Census data suggest that the gap in employment rates has narrowed slightly from 25 percentage points in 1991 to 22 percentage points in 2021 (Chart 3.11). The employment rate of First Nations people is lower in more rural and remote areas (pp.72-3).

 

It seems likely however that the uptick in participation rates noted above are the result of higher levels of identification rather than any underlying policy response. Even so more than four in ten Indigenous persons between ages 25 to 64 are unemployed, a level of under-participation that has existed for over thirty years.

 

The Report asserts the Commonwealth ‘is making significant investments in closing the gap’ (p. xvii). In this statement, the word ‘significant’ is bearing all the weight, and is open to varying interpretations. An amended version, stating the Commonwealth is making ‘significant but not adequate’ investments would perhaps better reflect the reality.

 

In a discussion of critical minerals, the Report notes that 80 percent of the continental land mass is under-explored for critical minerals and that this might offer ‘opportunities’. There is no mention of the fact that the Indigenous estate comprises around 57% of the continental land mass (not all in direct Indigenous ownership: link here), and thus there is no discussion of the implications either for the supply of critical minerals nor for the economic and other impacts on First Nations communities of this sui generis institutional framework.

 

In relation to pre-school enrolment, the report notes (p. 181) that 99% of First Nations children in the year before school age cohort are enrolled in preschool, a 225 increase since the 2016 census. The report also reports encouraging school retention rates for all Australian students including First Nations of 97 percent (p. 182) but falling mainstream and First Nations attendance rates since 2015, with First Nation student’s attendance being some 12 percent below mainstream rates (p.182). Not mentioned are the geographic differences, with remote attendance rates and levels being much lower than the national figures. For example, the most recent ACARA national report on schooling in Australia (link here) contains data suggesting in very remote regions, Indigenous attendance levels (ie the proportion of students who attend more than 90 percent of available school days) is only 8.7 percent nationally and drops to only 4.4 percent in the NT. The gap between very remote non-Indigenous students and Indigenous students’ attendance levels is 33 percent. Unsurprisingly, Indigenous educational outcomes are sub-optimal. Along with the recently released NAPLAN figures, ACARA (the Australian Curriculum Assessment and Reporting Authority) released a two page short commentary on the results for each of the years 3, 5, 7, and 9 (link here). Each commentary included the same text:

Non-Indigenous students’ average NAPLAN scores are substantially above and significantly different from those of Indigenous students in all 5 testing domains.

 

The most consequential mention of First Nations in the Intergenerational Report comes in the very last paragraph of Chapter Seven on Government Spending. The Chapters major points are summarised at the front of the chapter (p. 143):

Total Government spending is projected to increase by 3.8 percentage points over the next 40 years, rising from 24.8 per cent of GDP today to 28.6 per cent in 2062–63.  Major spending pressures include health and aged care, the National Disability Insurance Scheme (NDIS), defence and interest payments on Government debt. These are projected to rise from 8.8 per cent of GDP today to around 14.4 per cent in 2062–63.  Demographic ageing alone is estimated to account for around 40 per cent of the increase in Government spending over the next 40 years.

In a discussion of non-modelled ‘other payments’, the report notes (p. 187; emphasis added):

Non-modelled payments includes spending on all other areas not elsewhere included in this chapter, including environmental protection and conservation, national parks and world heritage area management, supporting First Nations people and communities, the arts and the film industry, and the Australian Public Service. Payments that are not modelled are assumed to grow in line with GDP so are held as a constant share of GDP over the projection period.

 

Of course, in the scheme of things, these payments are comparatively minor, and arguably any variations will not be statistically significant. Yet there is also an inference here that notwithstanding the significant shortfalls in health, education, infrastructure, housing, and justice outcomes, and the consistent failure to make a dent in closing the gap, that there is no substantive pressure to increase the proportion of GDP that is allocated to these issues.

 

Moreover, notwithstanding the Report’s silence, the salience of mainstream programs in addressing (or not addressing) Indigenous disadvantage is increasingly acknowledged in policy circles, not least in the National Agreement on Closing the Gap, and in particular in its Priority Reforms. Considering the five major forces shaping the future, it is worth considering how those forces might impact Indigenous interests and communities.

 

An ageing mainstream population is not aligned with the current and likely continuing youthfulness of the Indigenous population, and will likely engender a shift in the political pressures shaping governments’ policy priorities towards the concerns of an older mainstream community, and at the expense of younger cohorts. This is a potential risk for Indigenous interests that is rarely mentioned let alone considered in depth. There is a related issue of the surging growth in the national Indigenous population, driven by increasing self-identification. The report makes a glancing reference to ‘changing First Nation identification rates’ in a footnote (p.49), but does not consider whether the recent trends will continue into the medium term, nor what the implications then might be.

 

The coming technological and digital transformation will adversely impact the least educationally qualified segments of the Australian population, and Indigenous interests are over-represented in that cohort.

 

The accelerating impact and risks of climate change and the potential of the net zero transformation will impact remote and regional Indigenous interests significantly. The increasing salience of energy insecurity in remote communities is just one example (link here). The commercial and economic opportunities are significant, but rely on the development of widespread (not isolated pockets) commercial and economic expertise amongst Indigenous communities as well as the structural and systemic changes to the institutional frameworks designed to facilitate the taking up of those opportunities. The existence of the potential will require sustained and complex policy engagement by all governments, but particularly the Commonwealth. Unfortunately I see little evidence that policymakers are prepared (in both senses of the word) to focus on making these opportunities realities. Moreover, the risks of climate change, especially if global temperatures rise to 3 degrees or above (as the Report canvasses and as many scientists are predicting) will have huge and adverse consequences for the viability of many First Nation communities across remote and regional Australia, and perhaps for the medium to long term viability of human habitation in these areas.

 

The rising demand for care and support services will impact Indigenous interests severely given their existing vulnerabilities in the health, mental health, disability and other sectors. There may be a silver lining in terms of increasing employment opportunities for Indigenous people in these sectors, but it is difficult to suggest that the net impact will be unequivocally positive.

 

Finally, the increasing strains of geopolitical risk and fragmentation will impact Indigenous interests in variable ways. The biggest risk of rising international tension will be to distract policymakers from focussing on the needs of the most disadvantaged and to divert funding away from social and ‘soft’ priorities towards military spending aimed at enhancing our strategic priorities. While there may be opportunities for Indigenous interests in some of this activity, the risks are considerable and the shift towards sophisticated and technologically complex military systems (including support systems) does not bode well for the least educationally qualified members of society, a segment where Indigenous interests are over-represented.

 

Conclusion

The Intergenerational Report is designed not as a definitive prediction of the future, but as a mechanism for building support for the policy reforms required to address the challenges the nation faces over the coming forty years. It is also deliberately framed so as to lay out a narrative that makes the Government’s current policy priorities appear rational and necessary. In doing so, it is inevitable that it unintentionally provides signposts to the Government’s underlying priorities, and to the pace at which it wishes to prosecute those policy agendas.

 

In terms of the Indigenous policy domain, the Intergenerational Report appears to signify a deep-seated complacency, and preparedness to merely keep kicking issues down the road. There are a plethora of systemic policy challenges that have been around for decades and continue to remain under-addressed and under-acknowledged. Moreover, the future trends identified by the Report are (on the whole) going to impact far more seriously and more adversely on First Nations than on the mainstream community. In other words, without systemic reform, the trends identified will contribute to greater social and economic inequality between First Nations and the mainstream community.

 

Implicitly, the policy settings of the current Governments appear to signify a commitment to business as usual. Clearly, the efforts to establish an Indigenous Voice is the major exception to that assessment. The proposed Voice is clearly important and would be a major institutional reform if the referendum succeeds. Yet notwithstanding the merits, importance and potential of the Voice, there remains a responsibility on governments to govern and to invest in desperately needed infrastructure and services.

 

The deep-seated comparative shortfalls in First Nations lifespans, education outcomes, in First Nations incarceration levels, in remote housing, in health issues such as FASD and suicide and mental illness, in alcohol and drug abuse, in domestic violence and the extraordinary levels of First Nations children in out of home care are all scandals in their own right. Taken together, they represent a human catastrophe which will endure well beyond the timeframe covered by the Intergenerational Report. In these circumstances, the inaction and lack of substantive policy focus by governments appears incompetent at best and malign at worst.  It is incomprehensible that any government focussed on advancing the public interest could in good faith merely assert these issues must wait while a mechanism is put in place that will itself inevitably call on governments to act on these very issues. Yet this is the underlying signal that the Intergenerational Report sends First Nations, and the wider community.

 

1 September 2023

 

 

Looking beyond the ANAO governance audits of the NT land councils

Defer no time, delays have dangerous ends.

1 Henry IV, Act 3, scene 2

 

On 15 August 2023, the ANAO published its audit Governance of the Northern Land Council, the last of its four performance audits of governance arrangements in the four NT Land Councils (link here). The NT land councils are statutory entities established by the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA), which is federal legislation.

 

The audit results were largely positive, as was the response from NLC management which agreed to implement the eleven largely technical recommendations. I previously commented on the audits of the Tiwi Land Council and the Anindilyakwa Land Council (link here) and on the audit of the Central Land Council (link here).

 

In relation to the NLC, the ANAO headline conclusions stated (inter alia):

8. The Northern Land Council’s governance arrangements under the Aboriginal Land Rights (Northern Territory) Act 1976, Native Title Act 1993 and Public Governance, Performance and Accountability Act 2013 are largely effective...

10. The NLC’s governance arrangements under the ALRA and NTA are largely effective. The establishment and governance of the Council and its committees complies with legislative requirements. Poor record-keeping reduces transparency over the Council member nomination process and the validity of the constitution of the Council. The transparency of other decision-making arrangements could be improved. The NLC has not met a commitment to the Minister for Indigenous Australians and the community to review its method of choice for Council member selection. Governance arrangements for the exercise of the NLC’s key statutory functions (negotiating and assisting with land use, assisting with commercial activities, consulting and obtaining informed consent, and distributing royalties and rents) are largely appropriate.

11. The NLC’s arrangements to promote the proper use and management of resources are largely appropriate …. the 2021–22 Annual Report was fully compliant with PGPA Act and Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) requirements. There could be improvements to performance reporting…

 

Given the inherent challenges of the NLC’s operating environment, this result must be rated as outstanding. There were nevertheless a number of issues identified that should be of concern to the Minister and her agency, particularly if they are left unaddressed. These include adverse ANAO commentary regarding the failure of the NLC to follow through on a number of repeated commitments to Ministers regarding the method of selection of Council members (para 3.12-13), and some mildly critical commentary on the effectiveness of the Audit Committee (paras 4.57 – 71) including the failure of the land council to advise its own Audit Committee of a fraud by a staff member (Appendix 8, para 1.f). I recommend interested readers take a look at the report for the ANAO’s detailed analysis.

 

What emerges from these four performance audit reports is a policy and administrative landscape permeated with competing pressures, including conflicting cross cultural expectations, complex legislative frameworks, continuous flows of funding from a range of sources including mining royalty equivalents (which are used to fund the land councils and to compensate Indigenous landowners for the impacts of mining, negotiated royalty payments derived from mining and other resource use on Aboriginal land, and so called section 19 payments for the use of Aboriginal land by third parties. All of these funding flows are subject to both upward and downward accountability expectations, that is, to the Parliament and to land councils’ constituents.

 

Given these inherent challenges, it is worth looking at the sorts of issues that the ANAO reports do not assess and consider.

 

In 1985, I published an article (link here) arguing for the extension of public sector audits beyond compliance audits and beyond efficiency (or performance) audits to effectiveness audits. To date, the effectiveness realm has not been embraced by the ANAO (nor most other state audit offices).

 

The four land council performance audits provide a useful case study of the limitations of performance or efficiency auditing within a complex and challenging policy domain. The audits are narrowly focussed on the compliance of the land councils with their statutory obligations. Financial compliance with normal accounting obligations, and compliance with the expectations of ministers and the wider public regarding the standards of governance within statutory entities are extremely important. However, by ignoring the issue of effectiveness, that is, whether the land councils are achieving what they are designed to achieve by the parliament and the community, the ANAO has missed a major opportunity.

 

More worryingly, there is a risk that the failure to analyse the need for reforms designed to improve effectiveness will contribute to creating the preconditions for more radical and retrogressive reform in the future. Indeed, it would not be an exaggeration to observe that in relation to an assessment of the operations of the land councils, the ANAO might itself be regarded as ineffective by failing to focus on effectiveness as well as financial compliance and performance and efficiency.

 

One of the implications of this blind spot by the Parliament which should expect effectiveness assessments, and the ANAO which should be pushing to undertake these assessments, is that other mechanisms are utilised to assess effectiveness. Invariably, these are ad hoc, opportunistic and random. They include royal commissions, parliamentary inquiries, evaluations, commissioned and internal reviews, and perhaps media revelations. In this context, it is worth noting that it is almost twenty years since there has been a comprehensive review of the NT Land Rights legislation, and I am not aware of any comprehensive evaluation or high level review of the operation of land councils since their establishment in 1976, almost fifty years ago. There have been a number of reviews and evaluations focussed on specific issues, but these lack the panoptic perspective required to lay the groundwork for sensible policy reform.

 

In the remainder of this post, I seek to identify a number of issues related to the operation of the land rights system in the NT that would benefit from regular overarching effectiveness assessments. To be clear, I am not seeking to provide policy answers or solutions, but merely point out that issues exist that warrant focussed analytic attention. Nor are all effectiveness issues focussed on the land councils. The Minister, the NIAA, and the NT Government all have interests and responsibility that intersect with the land rights legislative framework. In no particular order, here seven important issues that impact the effectiveness of the land rights framework in the NT and consequently deserve regular analysis and assessment:

 

Royalties and other payments: The NTG is currently consulting on potential changes to its royalty regime (link here). In particular, it seems likely that it is under pressure from mining interests to reduce royalty rates. One consequence of such a change would be to reduce the quantum of royalty equivalent payments that are automatically paid by the Commonwealth to the ABA (and indirectly the land councils, the newly established NTAIC (link here), and landowner groups more generally. Yet it is unclear whether the land councils are engaging with either the NT Government or the Commonwealth on this issue.

 

More broadly, the functions of land councils include to ascertain and express the wishes of Aboriginal peoples living in the area of the Land Council regarding the management of Aboriginal land; and to protect the interests of relevant Aboriginal people. Aboriginal land is held communally, yet payments arising from third party use of the land are often paid to entities that do not necessarily reflect all members of the land owning group. Further, in the case of large resource developments, the payments are also substantial, but time limited. There is a persuasive argument that both the Commonwealth and the land councils in administering financial transfers have something approaching a fiduciary duty to ensure benefits are distributed appropriately and beneficiaries are aware of the potential alternative approaches to use of such benefits. Or to put this another way, there is a risk of future litigation that benefits have not been administered and distributed in accordance with those entities fiduciary responsibilities.  Yet neither the Commonwealth nor the land councils appear to have mechanisms that provide any evidence that beneficial payments are in accord with either fiduciary responsibilities or the land council obligations to protect the interests of their constituents.

 

Land Council membership: A longstanding weakness in land council membership, emanating from the customary or traditional basis of member selection, has been a reluctance to select women in some quarters. There has to my knowledge never been a female chair of a land council, and women are invariably a minority on land councils. So a quick scan of the various land council web sites indicates the following data on female membership: TLC 4 /32; ALC 8/26; CLC 22/90; and NLC 17/78 with five additional women yet to be appointed. Overall, 51/226. This in turn raises the question: are land council priorities gendered in ways which exclude or diminish women. I don’t know the answer, but nor does anyone ever seem to formally ask the question. A further issue relates to the longevity of land council membership, and whether there is an optimal level of turnover of council members and in particular executive committee members.

 

Executive Committees: The role of Executive committees and the land council CEOs are crucial offices within land council structures. The ANAO identified a number of instances where executive committees were operating beyond the authority delegated to them and without adequate advice and information flowing to members. A further issue concerns the longstanding under-representation of women on these influential decision-making committees. According to the current websites of the four land councils, the representation of women on these committees at present is as follows: NLC 5/14; CLC 3/11. The TLC has a nine member executive management committee, but its web site does not disclose its membership. The ALC has a Finance Committee, but does not appear to have an executive committee. The potential exists for membership of executive committees and the office of CEO to confer extraordinary influence over the operations of land councils and in particular their financial distributions. In the event that audit committees are not operating independently, the risks of influential individuals appropriating decision making power that the Parliament has provided to the land councils increases. The absence of independent effectiveness audits able to scrutinise the substantive activities and decisions of land council executive committees and CEOs (and not just the processes they adopt) removes a potential ‘check and balance’ that would provide additional protection for land councils’ constituents.

 

Section 19 land agreements: the NLC audit lists (para 3.74) data on the numbers of community consultations on all issues undertaken by the NLC. Over six years there were almost 1750 meetings, consulting around 38,000 participants. It is not clear how many of these resulted in section 19 agreements, nor is it clear how many such agreements are on foot. Similar issues arise with the other land councils, although the workload levels will be much lower. Nor is it clear how long section 19 negotiations take to be finalised (see para 3.57 for the NLC estimate). Similarly, there is little data available on the extent of formal agreements as opposed to informal arrangements with traditional owners.

Delays and reluctance of the land councils two decades ago to prioritise speedy section 19 negotiations were one of the drivers of the township leasing arrangements that have long been resisted by the land councils. It is not clear to me if the township leasing framework is working effectively, but the deeper issue (particularly if we wish to see commercial investment encouraged within townships) is to ensure that individuals and corporations prepared to engage in commercial activities within townships have speedy options for securing leases and tenure that facilitate raising commercial finance.

 

The fundamental issue here is the answer to the question: how well do these agreements for access to Aboriginal land operate. Are the needs of landowner groups being met? Are the third party users satisfied? However, as far as I can tell, there is no data or public information available to answer these questions across all four land councils.

 

Royalty and payment distributions: The ANAO found that the land councils are largely complying with their legislative requirements in relation to royalty distributions under Part IV and section 19 of ALRA. However over time, it is clear that land councils and eligible communities have resorted to utilising corporations to receive payments which then distribute the funds to their members. One result of the use of such corporate mechanisms, in effect as a middleman in the process, is that there is no transparency in relation to the characteristics or identity of the ultimate beneficiaries, arguably avoiding the legislative intent that the land council as a whole should decide on the class of beneficiaries. In addition, there are obvious potential risks with non-transparent payments allocated by the land council (or worse still, by the executive committees) to corporations whose controlling members are not always apparent.

 

Issues of organisational scale: Given the complex policy environment described earlier, and perhaps counter-intuitively, it is clear from the ANAO audits that the two larger land councils (ie the NLC and the CLC) have developed and maintained much stronger governance frameworks that the two smaller land councils. Both the TLC and particularly the ALC appear to be beset with serious and deep-seated governance issues. One of the wider policy implications arising from this result relates to the scale of land council operations. The experience of the two smaller land councils, where small numbers of key individuals exercise substantial authority and control without the checks and balances provided by members from different regions and backgrounds, suggests that devolution can be taken too far. Both the larger land councils have developed regional administrative frameworks to address the longstanding pressure for greater devolution of land council powers and functions. Are those arrangements working well, or not? And given the scale of the dollars flowing through the system, should NIAA be undertaking greater oversight of the smaller land councils?

 

Land tenure responsibilities: The relationship between the land councils and land trusts (who are if effect the entities who own Aboriginal land under ALRA) are complex. A person or corporation seeking to utilise or access a land trust’s country must approach the land council. In turn the land council consults the traditional owners (from whom land trust members are appointed) and then conveys the views of the traditional owners to the land trust as a directive. This innovative and prescient arrangement has in my view worked well over the past almost fifty years, but was not adopted by the Parliament when it enacted the Native Title Act (NTA). Under the NTA, the native title holders who are all members of the Prescribed Body Corporate make their own decisions. In the NT, both legislative regimes operate. Which is most effective? No one seriously discusses this within policy contexts.

 

Further, houses (and other assets) affixed and located on land trust land which are not leased to a government entity are the responsibility of the land trust as landlord. The land councils have a responsibility to meet the financial commitments of land trusts, and in turn the Commonwealth has an implicit responsibility to ensure that the financial liabilities of land councils are funded. There is NT legislation (the Residential Tenancy Act) which requires landlords to, inter alia, ensure the property is maintained and habitable, and ensure the property is safe and secure (link here). These obligations are rarely if ever addressed by land trusts or the land councils, and Aboriginal tenants have, to my knowledge, never taken legal action against a land trust to do so. This may be a function of the dearth of independent advice available to individuals in remote contexts. Yet Aboriginal people continue to live in overcrowded and under-maintained conditions throughout the NT. Where leases exist, the landlord is usually a government or community housing provider. But where they do not (for example, on outstations on Aboriginal land), the landlord is the relevant land trust. It is not clear how many NT Indigenous citizens live in houses without a lease, and the extent of support they receive from land trusts and land councils. My own intuition is that the answer is some thousands of people are housed in such locations, and the support they receive from land trusts (who must act on the direction of a land council) is zero or ‘not much’. A regular effectiveness audit would offer one mechanism for beginning to measure the scale of this issue, and encourage policymakers to set in train policy responses to address it.

 

Conclusion

The ANAO audits of the four NT Aboriginal land councils have been an extraordinarily valuable exercise in setting down a detailed picture of the workings of these important organisations. The overall picture has been positive, although the ANAO findings in relation to the ALC in particular are in my view extraordinary and of serious concern. In relation to the ALC audit, we are yet to see any formal or public response by Minister Burney nor NIAA, though one hopes that action is underway behind the scenes.

 

Yet the ANAO remit is limited, and this means that it under-invests in focussing on effectiveness issues. This post has identified seven broader issues that have the potential to impact the effectiveness of the NT land rights framework for better or for worse, and consequently, deserve explicit policy attention from land councils and from the relevant governments. It is my contention that an explicit program of effectiveness audits by the ANAO across the mainstream, but particularly across the Indigenous policy domain would make a much greater contribution to assisting policymakers to find timely and proactive solutions to many of the issues that require attention in those policy domains.

 

Avoiding asking the hard questions is always convenient at the time, but Indigenous Territorians will not thank policymakers, whether in NIAA, in the ANAO, or in the land councils who deliberately avoid the hard issues. The risk is that at some point, effectiveness deficits will lead to regressive policy changes that undermine the substantial rights presently available to Aboriginal Territorians.

 

17 August 2023

 

Labyrinth: the Productivity Commission Draft Report on Closing the Gap

 

…. that our stars,

Unreconciliable, should divide,

Our equalness to this.

Antony & Cleopatra Act V, scene 1

The Productivity Commission (PC) has released a draft report on its review of progress on closing the gap (link here). The draft report package comprises a nine page plain English executive summary (which I found extremely useful); a 15 page Executive Summary which includes six draft recommendations and a series of requests for information/feedback; a 101 page Draft Report, and a series of seven information papers totalling around 280 pages.

 

The review arises from the terms of the National Agreement on Closing the Gap (link here), in particular, clauses 121 to 124. In particular, clause 121 states:

The Productivity Commission will undertake a comprehensive review of progress every three years … It will provide an analysis of progress on Closing the Gap against the priority reforms, targets, indicators and trajectories, and examine the factors contributing to progress, including by drawing on evaluation and other evidence. 

 

The political and media reaction to the Draft Review has been predictable with a large focus on the report’s implications for the Voice (which to my mind prioritises means over ends). The Australian ran a series of articles on 26 July 2023 (behind its paywall) with headlines such as ‘Closing the Gap failures “show why the vote must succeed”’ (a view espoused by Minister Burney); ‘Indigenous watchdog “with bite” called for regardless of voice vote to deal with Closing The Gap’; ‘Closing the Gap scheme flounders within states of cynical disregard’ (arguing the states have dropped the ball); and an editorial headed ‘Bureaucracy firmly in the sights’. The Chair of the PC, Michael Brennan published an article in the AFR on 30 July (link here $) titled ‘The gap won’t change without fundamental change’. The money quote was his assessment of progress on closing the gap as ‘in large part, a hotted up version of business as usual’. Crikey published an analysis (link here) with the headline ‘Why the Productivity Commission thinks a Voice is needed to Close the Gap’. This is arguably a misinterpretation of what the PC intends. In a perceptive comment on that article, Jon Altman wrote, inter alia, that the PC

continues to produce detailed and expensive report after report carefully documenting the nation’s failure to properly address Indigenous disadvantage. But it does not address the first order issue: is the National Agreement on Closing the Gap framework a sound basis for policy formation? And will valorising equality for Indigenous populations as state-defined statistical subjects generate positive wellbeing outcomes for First Nations people in all their diversity?

 

Like Jon, I wish to focus on the policy issues rather than the quotidian political debate about the Voice (important as that is).

 

The nature of the PC review

There are a number of seriously problematic issues with the draft review (which I will seek to identify below); but these can be traced in large measure to a more fundamental issue: the PC appears to have veered away from the comprehensive review envisaged in the Agreement. The terms of reference for the review provided by former Treasurer Frydenberg in April 2022 state, inter alia:

Scope of the review: In undertaking the review, the Productivity Commission should:

1. analyse progress on Closing the Gap against the four Priority Reform outcome areas in the Agreement;  2. analyse progress against all of the socioeconomic outcome areas in the Agreement; and  3. examine the factors affecting progress. 

 

These tasks can be interpreted in one of two ways. They might be pursued broadly and holistically, in effect asking the strategic question: is the current Closing the Gap process meeting the objective of the agreement laid out in clause 15 of the National Agreement? Or they might be addressed narrowly and less consequentially, in effect asking the question, are the terms of each element of the agreement being met whether or not they are impacting the overall outcome being sought. Unfortunately, on my reading of the report, the PC has adopted the latter approach. I made this argument more expansively in my submission to the review (link here submission #5) based on my reading of an early issues paper.

The result is that despite nearly 400 pages of investigative narration, we don’t really obtain an effective readout on the required new policy roadmap for closing the gap. Instead we get what seems at times an interminable litany of proposals for improved ways to hold governments accountable for particular cogs in the complex machine that comprises closing the gap. I am all for holding governments accountable, but there is an implicit assumption embedded in calls for improved accountability that governments are in fact focussed on implementing actions designed to achieve the overarching objective of the National Agreement. If that assumption is wrong, then all that will be achieved will be more complexity, more engagement/involvement, more process, more bureaucratic kludge, and no change.

 

How might we determine if that assumption if in fact correct? The answer is by examining the tangible plans that exist to achieve the objective. Take this analogy. If I have an objective to build a new home, I develop a plan (let’s call it an implementation plan). I buy some land. I consider what I need to make the home useful to me. I engage an architect, and develop detailed designs and have the design specifications costed. I allocate financial resources both for the capital costs (construction) and for the ongoing maintenance. If there is a mismatch between design and available financial resources, I either adjust the design or allocate more financial resources. This is not rocket science. If I don’t have a plan; if I don’t develop designs that provide tangible links between my aspiration/vision and the ultimate outcome; if my designs are not able to be constructed at present because the materials required are not available; or if I don’t allocate resources and have some idea about how much it will cost; then an objective observer would conclude that I am not serious…

 

In relation to closing the gap, the National Agreement sets out the aspirational plan and steps to achieve the ultimate objective (clause 15 says it is reduced inequality between indigenous and other citizens). But Governments have failed to take it further. The implementation plans produced so far (required under the agreement) are not in fact implementation plans, but lists of what governments are already doing with some marginal new monies added. The PC identified that jurisdictional implementation plans were not fulfilling their intended purpose. See Box 4 on pages 27-8. I don’t agree with the detail of the PC analysis; for example, the Joint Council has agreed that the implementation plans be produced annually, a matter which strikes me as ridiculous, yet not commented upon by the PC.

 

To return to the house construction analogy, you don’t develop an implementation plan iteratively for each month or quarter of construction, but for the complete project. Instead the PC argues for codesign of these plans which is superficially attractive to Indigenous interests, but will inevitably produce delay and a bureaucratic morass (already a problem with this whole process). The time for Indigenous codesign is in developing the targets. Governments then must deliver against them, consulting and codesigning with relevant Indigenous interests as they go. The fact that jurisdictions do not have adequate and effective implementation plans is a fundamental flaw that requires rectification.

 

In relation to identifying the cost of closing the gap, including perhaps its constitutive elements, Governments have made no commitments. Instead, they merely publicise the financial commitments they make, often with little transparency of what the expenditures are achieving. Worse still, in contrast to the original Closing the Gap architecture under COAG (known as the National Indigenous Reform Agreement or NIRA), governments do not in general utilise decade long financial allocations. The problem with this general approach is that there is no way of knowing whether the financial commitments of governments are adequate or not. It is a truism that money is not everything, but in this case, it is an essential component of strategies to reduce inequitable access to services and basic infrastructure (like housing). Adequate funding may not be sufficient, but it certainly essential.

 

In my submission to the review, I argued that the PC should seek to estimate the likely total cost of closing the gap. To return to our analogy, we don’t start building a house without knowing what it will cost. Unfortunately, the PC has ignored this element of my submission. It is bad enough that governments do not estimate these costs, but it is an egregious dereliction of responsibility for the ‘independent’ reviewer to ignore this issue. No other area of public policy is seriously analysed without a focus on cost. In areas of high ideological salience like defence, the debate over cost is assessed not just in terms of real growth rates, but the proportion of GDP allocated to the task (link here). In Indigenous affairs, all we get is an incessant flurry of media releases announcing this grant and that, often directed at squeaky wheels.

 

One of the consequences of this seemingly deliberate blindness by the PC is to promulgate and maintain the myth that closing the gap is solely of concern to Indigenous interests. If adequate resources are to be allocated to addressing Indigenous disadvantage, then mainstream attitudes need to change. This requires understanding which is best obtained by encouraging wider community involvement in the processes associated with closing the gap. [As an aside, the forthcoming vote on the Voice is another example of the importance of building wider community understanding in relation to the issues of core concern to Indigenous citizens.]

 

A further issue identified by the PC relates to the status of the targets in the Agreement. This is addressed at length in Information Paper 6, but it is too convoluted to dissect here. Instead I suggest interested readers look at the plain English Executive Summary (link here). Alternatively, see the discussion on page 5 of the draft review. Here are some choice extracts from the Summary (pp. 6-7) regarding targets and data (emphasis added):

For clear progress on the socio-economic outcomes and Priority Reforms, the Agreement says there must be: • performance tracking • public reporting. But doing this has been a big challenge.  The Priority Reforms are the basis of the Agreement. Even so, governments report no data on: • the agreed targets  • indicators that support the Priority Reforms.  These are critical gaps in data. 

Also, progress on socio-economic outcomes is measured against national targets. It is not clear how to hold governments accountable for what happens at the regional level.  There are no data developed for: • any of the targets under the Priority Reforms • 4 of the 19 socio-economic targets • roughly 140 supporting indicators  • more than 120 data development items. 

We probably will not see these data developed within 10 years from the start of the Agreement (that is, by 2030).  More effort is needed to: • improve governance  • prioritise data development.

 

In other words, we have the policy architecture, but not the means to implement it. The PC recommendation is for a dedicated government agency to drive data development. I beg to disagree. To return to the house construction analogy, we have constructed the frame, but the walls and roof are missing as the relevant materials are not yet available or developed. Do we appoint another builder to supervise the current builder, or go back to the drawing board?

 

I suggest the Commonwealth should step in and initiate an immediate process of radical simplification to take this process back to its core purpose. There is a need to consider once again what the targets are actually for: instead of providing a policy roadmap indicating that we are heading in the right direction, they have been transformed into an attempt (that is bound to fail) which seeks to guide us each and every step along the way. Nineteen targets times eight jurisdictions plus hundreds of supporting indicators and data development items again across eight jurisdictions, all under constant change and refinement, and we have a data labyrinth which is guaranteed to ensure that any one foolish enough to enter is swiftly lost in the bowels of the machine.

 

There are a range of other issues embedded in this draft review that require detailed consideration by those interested in seeing Indigenous inequality and exclusion removed from Australian society. I will address a few below in no particular order.

 

Conceptual issues

 The philosophical and ethical issues that are embedded within the notion of closing the gap receive too little attention by policymakers. The tension between the state’s rhetorical focus on removing inequality and the right of citizens, particularly Indigenous citizens, to choose fundamentally alternative ways of living (implicit in the rhetoric of self-determination), which Jon Altman alluded to in his comment to Crikey quoted above, is of enduring relevance in the policy quest to close the gap. It is an issue that is generally avoided as ‘too hard’ by policymakers, yet lies at the heart of much Indigenous distrust of governments and their bureaucratic processes. Altman explores this issue at length in this submission to the PC inquiry into an Indigenous evaluation strategy (link here sub.#23). The PC has entirely ignored these issues in its draft report; a reflection in my view of its lack of analytic interest in exploring what it is that the Closing the Gap process is seeking to achieve.

 

Deficit discourse and remote disadvantage

One of the key polemical drivers of the Closing the Gap refresh process initiated by the former LNP Government which led eventually to the National Agreement was an ostensible reaction to the notion of deficit discourse which advocates argue is designed to blame Indigenous citizens for their own disadvantage. This is clearly an important policy insight, one that has recently been highlighted in relation to mainstream disadvantage by the Robodebt Royal commission (link here page iii). Yet when this concept is taken to extremes, it undercuts the whole point of closing the gap.

 

Unfortunately throughout the draft report, the PC appears to have adopted and endorsed such an extreme interpretation uncritically, thus setting up a polemical dichotomy where governments can do no right and must be held accountable for every shortfall and (paradoxically) where Indigenous interests are ongoing victims without agency. So for example, in Information Paper 6 (Link here pp. 14-5), the PC writes:

Review participants indicated a role for performance monitoring in supporting a paradigm shift in policy narratives about Aboriginal and Torres Strait Islander people. This shift moves policy discourse away from framing Aboriginal and Torres Strait Islander people as a disadvantaged minority towards rights-bearing peoples with strong connections to diverse cultures, Countries, and communities that have withstood current and historical institutional racism …  In its submission, the Lowitja Institute explained: Data is a powerful tool. Data can be used to hold governments and the community-controlled sector to account on actions under the National Agreement, however there is a risk that this can be decontextualised and misused if data sovereignty and data governance mechanisms are not in place. The oversupply of deficit-based data has created a discourse that sees Aboriginal and Torres Strait Islander peoples presented as a problem, or as wholly responsible for inequities…. (sub. 15, p. 7). (emphasis added)

 

One consequence of this aversion to anything that even hints at deficit discourse is that important issues at the core of ongoing Indigenous exclusion and disadvantage are being deliberately written out of the policy relevant narrative and thus the policy agenda. It may not be a coincidence that given the current demography of Indigenous Australia (link here), it would be theoretically possible to conjure a positive narrative on progress in closing the gap while ignoring the needs of remote Australia. The losers from this process are the most disadvantaged Indigenous citizens, particularly those in remote regions. So for example, in the 101 pages of the draft report on the status of closing the gap, there are only seven mentions of the word ‘remote’, most just passing references, and there are no specific statement by the PC referencing the fact that Indigenous disadvantage is deepest and most severe in remote regions. The closest is a reference in a case study on the Torres Strait on p.62 where the Torres Strait Council refers to its very remote location as an issue.

 

Yet the PC itself, in its July 2023 Annual Data Compilation Report identifies (albeit in cautious bureaucratese) the dire state of disadvantage in remote regions (link here page 30):

People living in a more remote area may experience additional barriers to better outcomes; for example, not having access to key government services or infrastructure at the same level as people living in other areas. Aboriginal and Torres Strait Islander people typically experienced poorer target outcomes as remoteness increased, which was mostly not the case for non-Indigenous people … Aboriginal and Torres Strait Islander people living in more remote areas also saw less progress toward target outcomes. Target outcomes typically only improved for Aboriginal and Torres Strait Islander people in major cities and regional areas where there may be fewer barriers, including better access to key infrastructure. There was little or no improvement in remote and very remote areas. The exception was for target 9A ‘appropriately sized housing’ where outcomes improved the most in very remote areas, though they remain well below the outcomes in less remote areas…

 

Or more starkly, in the same report the PC states (emphasis added):

One jurisdiction where the worsening outcomes are particularly concerning is the Northern Territory. The Northern Territory’s outcomes worsened across eight target indicators and in most of these they were already performing relatively poorly at baseline compared to other jurisdictions. For example, the adult imprisonment rate in the Northern Territory increased at the highest rate despite already being above the national average at baseline.

 

It is worth noting that the NT has the most geographically concentrated remote population, and has the weakest financial base in the federation.

 

Priority Reforms

The PC’s approach to assessing progress on the Priority Reforms, particularly Priority Reform 3, is in my view deeply flawed. I dealt with this in my submission to the review, so won’t duplicate it at length here. The key point is that increasingly, mainstream policies and programs are gaining greater salience across the indigenous policy domain. Ensuing mainstream agencies are focussed on addressing Indigenous disadvantage in their core activities is crucial to ensuring that there is a whole of government focus on these issues. Yet treating the priority reforms as akin to mechanically constructed targets, and measuring important but incidental issues such as levels of racism within agencies as the metric of success is a recipe for failure and non-performance. Unfortunately, the PC does not see this as they ignore this issue in its entirety.

 

Concluding comments

The problem with this draft review is that it is fundamentally misconceived, and fails to step back and look at the nation’s approach to closing the gap holistically. This was a crucial opportunity only three years into the revised process, and unfortunately, the PC has failed to grasp it. There is a lack of real policy analysis throughout this report, and the attached information papers.

 

As a consequence, the review fails to ask the hard questions and ignores many aspects that should have been front and centre. For example, there is no substantive assessment of the operations of the Joint Council. There is no assessment of the capability requirements on the Coalition of Peaks and whether the current levels of support are adequate. There are mentions of states failing to deliver on their commitments, but no real solutions offered in response. There is no recognition of the primacy of the Commonwealth in the federation, and the implications of the deliberate strategy embedded within the architecture of the agreement for the Commonwealth to outsource its overarching responsibilities to the Joint Council and the states. There is no analysis of the nature of the refreshed targets which are increasingly not focussed on comparative economic and social status, but are framed in terms of absolutes (ie improvements on current levels).

 

There is no recognition that the current design architecture for the agreement, while incomplete and thus subject to ongoing remedial work, is simultaneously over designed and in need of radical simplification. As presently configured, it guarantees that the Coalition of Peaks (representing Indigenous interests) will be wading through bureaucratic sludge for the next ten years, and thus effectively distracted from the main policy game. It also ensures that the probability of the national agreement imploding under the weight of its accumulated complexity is high and bound to grow. Proactive reform is preferable to stasis followed by abolition.

 

The bottom line however is that the six recommendations of the draft review (see pages 10-15), if implemented, would in my view not make any substantive difference to the nation’s progress on closing the gap within five or even ten years. They are an amalgam of doubling down on the current hyper-complexity of the policy architecture along with a hefty dose of blind faith in the bureaucratic leadership of the nation. Did the robodebt royal commission not make any impression at all on the PC? Notwithstanding the PC Chair’s view in his recent AFR article that governments are engaged in ‘a hotted up version of business as usual’, the draft recommendations in this report might be characterised in similar terms.

 

I have a recommendation for the Commonwealth Government. Issue the PC with revised terms of reference, and perhaps an extension of time. Request them to (a) develop an estimate of the cost of addressing the entrenched inequality facing Indigenous Australians; (b) map out a realistic timeframe and strategy for achieving that objective; (c) make a more fundamental analysis of the current status of the Closing the Gap architecture; and (d) provide options for radically simplifying the structure and design of the current architecture while retaining the four priority reforms. And for good measure, keep it to fifty pages. Such a report would then allow the Commonwealth Government to meaningfully and honestly engage with Indigenous interests and the states and territories.

 

3 August 2023

Note this post was amended on 4 August to correct a number of typographical and grammatical errors