Putting dollars on disadvantage: Australia’s Indigenous spending

Australia needs to take a more considered approach to Indigenous spending. Rusty Stewart

AFTER THE INTERVENTION - Today, The Conversation launches a series looking at the recent history of Indigenous policy in Australia, and some ways forward. Are any of the current approaches working? What could be done better, and how? Today’s piece looks at a recent review of funding for Indigenous programs.


A government-commissioned report has found progress on Indigenous disadvantage has been “mixed at best”.

The Finance Department’s Strategic Review of Indigenous Expenditure was put together in February 2010, and obtained by Channel Seven under Freedom of Information laws.

The report describes returns on government-funded Indigenous programs as “dismally poor”.

$3.5 billion was spent on Indigenous-specific programs between 2009 and 2010.

Is this money well-spent or evidence of chronic waste? What does it mean for the Gillard government’s Closing the Gap policy?

The report can be interpreted in a number of different ways, but one thing is clear. Australia can do better.


What do you think of the report’s findings?

Associate Professor Russell Ross: I’m not at all surprised. There are a lot of government programs that can be described as wasteful. It’s always easy to criticise, and to second guess where money could be saved. But the single most important issue here is that one would expect these programs to be expensive because of the nature of the Indigenous population.

They are very disadvantaged, they are more likely to be living in remote areas. There is a lot of money that needs to go into education to get Indigenous children to be able to complete high school. Where a lot of Indigenous people live, that means leaving home, which adds to the expense.

But the really important issue to me is the “what if?” question. What would have happened if these programs hadn’t been developed? We actually would have seen the measure of disadvantage going backwards for the Indigenous population if that were the case. Indigenous people would be a lot worse off today than they would have been 20 or 30 years ago when these programs were starting to be talked about.

Professer Jon Altman: I can understand why the Federal Government was reluctant to release this report. It is a very poor quality report.

From my point of view it’s an indictment of Australian public service culture, because it doesn’t engage with critical views of the overarching policy approach of government, it is happy to accept the status quo. It’s an indictment of Australian Government rhetoric about evidence-based policy-making because there’s no evidence base provided in the report, either about historical performance or about contemporary needs.

It talks about $3.5 billion being the current (2009–2010) spend, but it makes no assessment about whether that spend is adequate. In fact it says that it’s just going to take the spend as something that’s fixed and all it’s looking to do is reallocate funds within that spend without asking the fundamental question, whether on a needs-based historically-based assessment, this amount is enough.

Every assessment we’ve had that’s quantitative and rigorous in the areas of shortfalls in housing and infrastructure, health hardware and educational facilities, suggests that $3.5 billion dollars is an underspend because what is allocated will need to meet the legacy.

Australia’s indigenous population is dissatisfied with the way money is being spent. publik16

Dr Chris Sarra: Aboriginal people will share perhaps an even greater sense of outrage about the inefficiency and the sense of misspent funding on Indigenous affairs. It’s very easy to think that we’re sitting back; happy that we’ve received all these dollars when clearly that’s not been the case. It’s important for all Australians to understand that as Aboriginal people we have an even greater sense of outrage at public money not being spent effectively to make a difference in our communities.

For decades, Aboriginal people have signalled a dramatic sense of frustration about politicians who think that it’s enough to throw money at a solution when we’d all prefer for them to sit down and do things with us, not to us, in the interest of making a difference.

Has the media reporting of this issue been overblown?

Associate Professor Russell Ross: In a word, yes. This spending is an investment in future generations. No one could expect these programs to be quick fixes. It’s really an intergenerational improvement. Just getting people through to complete high school rather than leaving at the earliest possible age takes a generation to achieve.

It’s too soon to say whether all the money’s being wasted or not. There’s no doubt some of the money is being wasted, and could be better targeted, but that’s true of virtually every dollar any government in the world spends.

Professor Jon Altman: I think the coverage has been highly irresponsible. To the average punter, not putting this notion of a $3.5 billion dollar spend into context in terms of need, in terms of whether those dollars are hitting the needy target, is quite irresponsible. It’s got the potential to fuel a backlash against Indigenous-specific expenditures that is unjustified.

The media has picked up very quickly on the notion of the viability of remote Indigenous communities, and I think that issue is an absolute furphy because we don’t ask the same questions about non-Indigenous Australian communities.

There’s no acknowledgement in the media of the national interest served by the indigenous people living in remotes areas. There’s no coverage of the national security, biosecurity, resource management benefits, and the role they play in developing cultural industries like the visual arts in remote areas that have spin-off benefits for tourism.

Resourcing remote areas is difficult. Megan Clement

Dr Chris Sarra: It seems like an explosive issue, but I suspect that the problem all along is that there hasn’t been enough interest from the media. There haven’t been enough challenges to government and the agencies that receive this expenditure. Too many of us have been silent, and that does not include Aboriginal communities. We’ve jumped up and down quite consistently but have not had a prominent voice in the media to shine a light on this concern.

What does the review say about the government’s Closing the Gap policy?

Associate Professor Russell Ross: Closing the gap is a very slow process. I would argue that on all the data that I look at, if Closing the Gap weren’t in place, then the gap would have been getting bigger. Low-income-earning Australians’ wages are going up much more slowly than those at the upper end, so the gap is getting bigger, whether you’re looking at Indigenous people or not. The fact is that most Indigenous people are located at the bottom end of that scale.

Professer Jon Altman: My view is that the government needs to go back to the drawing board. The whole framework needs to be reassessed. I say that because this is an extraordinarily abstract framework that’s been developed in Canberra by the Rudd administration without any consultation with Indigenous Australians, and without any assessment of the continent-wide diversity of Indigenous circumstance that might question whether gaps can be closed in some situations.

The Closing the Gap framework is a technical and highly abstract fictional goal of the Australian Government to meet targets sometime in the future, but the only evidence we have to date from the Australian Bureau of Statistics in the area of employment shows that gaps have not closed between 2008 and 2010, and they could in fact be widening.

The Gillard government needs to go back to the drawing board. AAP

Dr Chris Sarra: It clearly says that things need to be different, and it also says we have to understand which gap needs closing. We need to close the gap in education, health and other disparities between Indigenous and non-Indigenous Australians, but before we do that we have to close the gap that exists in terms of government and bureaucracy’s ability to understand and be responsive to the needs of Aboriginal communities.

There are challenges for Aboriginal communities and I’m not suggesting for a moment that we should wait for government and bureaucracy to come and fix everything. We want to get government to connect with communities in a way that’s respectful in a way that honours the humanity of Aboriginal people and engenders profound change.

What does it say about the previous government’s Intervention strategy?

Associate Professor Russell Ross: I have always felt uneasy about the intervention, because it’s not a productive way of spending money – to parachute in and say, “This is the way it’s going to be done.” You have to get commitment from the people you’re trying to help.

Professor Jon Altman: All the report says is that the Northern Territory is one of the jurisdictions in Australia that has the least capacity to deliver services for Indigenous Australians, especially in the areas of housing and infrastructure and employment. Then it says that arrangements for transition after 2012 need to be looked at, suggesting that rather than waiting till June next year to decide what to do, governments should at least put in place a framework for the post-2012 continuation of the Intervention.

But the report makes no mention of the fact that, according to the Howard government, by 2012 prescribed communities should be normalised, and there should be no need for an ongoing Intervention if policy had achieved its aims.

Dr Chris Sarra: The problem with the Intervention was that it was born out of a filthy, toxic genesis. Howard saw this as an electoral rabbit to pull out of the hat at a time when he was really struggling.

He will always be dogged by this question: if he was truly committed to making a difference in the lives of Aboriginal children, why did he leave it to the last moment? At the commencement of government he became famous for slashing dollars for Indigenous programs in a way that was callous, reckless and counterproductive.

Indigenous people are individuals, not numbers. Rusty Stewart

How could Australia do better in funding Indigenous programs?

Associate Professor Russell Ross: That’s the really hard question. I’ve been researching in this area for 20 years and it’s the sort of question my students always come up with. It’s better to be spending money than not at all, but the one area that could be improved is public scrutiny of government spending.

A lot of programs are implemented in a private sense. There’s no option for researchers or people outside the government to look at ways of improving delivery or engaging more with the local communities. I think we need more transparency and more openness to constructive criticism. I think the release of this review is a good thing. It’s important that people understand the magnitude of the expenditure.

It’s also important to keep things in perspective. $3.5 billion is not as much as the government spends other areas. It’s a fairly small percentage that addresses one of the biggest social issues in Australian history.

Professor Jon Altman: I think we can do a lot better. We need a policy framework that is much clearer about the diversity of Indigenous circumstances and what’s realistic in those circumstances.

We need to reinvigorate partnership with Indigenous Australia. The first step to do that is to abolish the Closing the Gap framework and get rid of the Northern Territory Intervention. We need to go back to Aboriginal communities with a blank piece of paper and say, “We’ve got a policy framework, but what is it that will meet your aspirations?”

This is a terribly difficult thing to do because the government has abolished the only national elected Indigenous organisation, ATSIC, and the challenge of going to the indigenous sector and dispersed population is huge. There are 1200 discrete indigenous communities in remote Australia alone. To consult with such a large number of communities is not impossible, but it will take a lot of time. Contrast that with the six weeks the Gillard government is allocating to consultation over the continuation of the Northern Territory Emergency Response.

This report turns people into numbers, and I think that what Australia needs to do it start turning those numbers back into people. People with connection to place, with tradition, with identity and with a history of very fraught relations with the Australian state.

We need to value the humanity of our Indigenous population. Rusty Stewart

Dr Chris Sarra: This report signals the requirement for political leaders to have the courage to ask some serious questions about value for money in Indigenous affairs. As an Aboriginal man I’m asking them for this. What’s been missing is the political courage to be fully committed, and ask whether or not we are truly making a difference.

Governments think they can throw out a few media releases to say how much they’re spending, and the best we get in terms of a response is a few anecdotes here and there with very little substantial evidence to say whether or not things are truly making a difference. We need to have the courage to make decisions about whether a particular approach is working or not.

We need to learn from the mistakes we’ve made in the past, and understand that we’ve never seriously had an Indigenous policy approach that honours the humanity of Aboriginal people. We need a policy approach that says Aboriginal people are worthy of investment and nurturing, and also that they are capable of lifting themselves beyond the challenges that confront them.

We should sit down respectfully and design polices and process that do things with Aboriginal people, not to them.