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A gap-stalling budget
Issue 177 - 14 May 2009
By Chris Graham
ANALYSIS
NATIONAL, May 13, 2009: Spending in Indigenous affairs has reached record levels in the 2009-2010 budget, announced last night.
It comes at a time of unparalleled financial challenge for the nation, with the government predicting a $53.1 billion deficit, in a budget that seeks to stimulate an ailing economy in part through the provision of nation building projects.
In Indigenous affairs, the budget night increase was a modest $100 million on last year ($1.3 billion up from $1.2 billion in new spending initiatives).
But this budget can't be looked at in isolation. It must be considered in the context of the $3.6 billion in additional federal Indigenous affairs funding offered up as part of the Rudd government's commitment to Council of Australian Governments (COAG) 'Close the Gap' campaign.
In total, $4.8 billion has been promised for Indigenous affairs in 2009-2010.
It is the largest amount of funding allocated for a single year in the history of federal budgets, and represents an increase in real dollar terms on the Howard government's last budget of around $1.3 billion.
It is also the second highest budget in terms of Indigenous spending as a percentage of available government revenue.
In 1992-93, Paul Keating's first year as Prime Minister delivered 1.43 percent of the total government budget to Indigenous affairs. Today's federal treasurer Wayne Swan has come within 0.01 percent of that figure, and it may well rise by the end of the next financial year.
The budget is not, however, without its flaws. The biggest single item listed is $106 million, earmarked for the Canberra bureaucracy to manage the incomes of an estimated 15,000 Northern Territory Aboriginal men and women, the welfare recipients caught up in the NT intervention.
That's more than $7,000 per person, per year, to manage an income that's not even double that.
It is a staggering sum of money to blow on a policy that has already cost the Australian taxpayer well over $100 million, and delivered no evidence of improvement in the lives of its victims.
In any other portfolio, this sort of wastage would spark a royal commission. But it is Indigenous affairs. $100 million, or even $200 million down the drain is not that exceptional.
Indeed, quarantining of Aboriginal welfare payments is politically popular. As a compulsory policy, it's mindless and illegal (it breaches the Racial Discrimination Act). And if white Australians knew what an ineffective policy really cost them, they'd be stunned. But, like I said, it's Indigenous affairs.
The sum is particularly galling when you consider that the Rudd government has again delivered a cut in funding - for the second year in a row - to Aboriginal Legal Aid.
When the Howard government left office, ALA funding nationally stood at $58 million. Wayne Swan's first budget delivered a cut to $52 million, revised up this year to $55 million.
At the same time, in the Northern Territory alone the Rudd government is planning to spend an additional $150 million to improve policing.
It's hard to fathom why any government would expose itself on this front. Apart from the fact it promised in Opposition to bolster ALA funding, it would require an increase of just a few tens of millions of dollars - $30 million would probably do it - to begin fixing the problem.
Instead, the government delivers a cut. And so it will be defending itself from attacks about its appalling record on Aboriginal Legal Aid funding for the rest of the year.
It's pretty stupid politics... but it's Indigenous affairs.
Overall, however, the cuts and the wastage is not enough in itself to justify a condemnation of the Rudd government budget.
That old chestnut criticism of 'gross underfunding'- a staple of columnists, particularly in this newspaper - is drying up.
Funding is heading in the right direction, albeit too slowly. But it's progress in a portfolio where almost nothing is expected. So when a 'little' is delivered... well, it's exciting times.
Indigenous housing, particularly in remote regions continues to receive strong boosts.
Including COAG, more than $1.9 billion is being allocated over 10 years to remote housing. It's still way short of what is needed - ATSIC in 1999 estimated that unmet need in Aboriginal housing in the Northern Territory alone was $2.3 billion. God only knows what it is 10 years down the track, and on a national scale.
But the truth is, the Rudd government did not create the staggering backlog. And it could allocate $10 billion tomorrow, but there's no possible way it could spend it.
Government neglect in this area has been so bad that it will take generations to resolve. The money allocated by the Rudd government is a reasonable down payment.
All up, with funding heading in the right direction, the battleground in Indigenous affairs will shift primarily to how it's spent.
On a positive note, there's $29 million for the fourth stage of a major infrastructure program in the Torres Straits.
The 'big ticket item' is a $50 million boost to Native Title Representative Bodies, funding that is long overdue. The sting in the tail is that only $7 million will f lter through this year, with the rest to follow in 2011 and 2012. But again, it's progress.
Indigenous health is also a strong priority.
The budget delivers just $200 million over four years - a miserly $50 million a year, in an area with an annual under-fund to the tune of hundreds of millions of dollars.
But again, COAG must be factored in - there's an $800 million commitment from November last year over four years.
Across the whole portfolio, after two years the Rudd government continues the 'scattergun approach'. Bureaucrats in Canberra fill a big cannon full of money, aim it in a northerly direction (sorry, Victoria, and Tassie) and then press fire.
Some of it must hit the ground in areas of need, right?
Some of it does. Much of it doesn't.
Again, in fairness to the Rudd government, the capacity to effectively offload adequate funding in Indigenous communities, particularly in regional and remote communities, was seriously damaged by the dismantling of ATSIC's regional structure (the best part of a flawed national body).
That was a Howard government policy, although it was supported unanimously by Labor in 2004 in the lead-up to the Latham election.
Rebuilding that structure will take many years, although there's not a lot of evidence that the Rudd government has even really begun the process.
And on that front, there's no money listed in the budget for a National Representative Body.
Whatever happens, it will be 'no ATSIC'. It will not deliver services. It will not require anything like the $1 billion budget ATSIC enjoyed.
A final report to government will be delivered in July on possible models. Watch this space for details, and funding, although don't be too surprised if it's dragged out for another year.
There are many things the Rudd government would like to fight the next election on.
An Indigenous governance model that The Australian newspaper will invariably describe as 'another ATSIC' is not one of them.
Overall, Macklin still stands condemned on her recent housing policy that links 40-year leases of Aboriginal land to access to public housing. It is a breach of basic human rights, and irrefutably flies in the face of the UN Declaration on the Rights of Indigenous Peoples.
But the Rudd government as a whole has delivered a budget that, while not spectacular, while not well-targeted, and while still short of what is needed, is by some margin the best ever delivered in the history of Australian Parliament.
It's not enough to restore hope, but it might just buy the Rudd government a little more time.
 
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