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The real story behind the abolition of ATSIC Wednesday, 10 November 2004 NATIONAL: Five days after ATSIC formally lodged a High Court challenge to the federal government’s removal of its powers to make funding decisions, Prime Minister John Howard was warned the abolition of ATSIC had now become “a matter of urgency”. The revelations are contained in a leaked cabinet-in-confidence document, dated April 7, 2004, which was written to brief the government on the proposed abolition of ATSIC, a copy of which has been obtained by NIT. The federal government has always maintained the creation of ATSIS on July 1, 2003, which removed the power of the ATSIC Board to decide who receives its money, was legal and that ATSIC’s legal challenge was a “frivolous waste of taxpayers’ money”. But the leaked document reveals a less confident federal government which was caught out by a series of strategic errors made by the Prime Minister and the former Minister for Indigenous Affairs, Philip Ruddock. It reads: “Action in relation to ATSIS is urgent in light of ATSIC’s decision to challenge the establishment of ATSIS. “It is therefore proposed that the government’s decisions be announced immediately and that legislation be drafted as a matter of urgency with a view to passage before July 1, 2004. If the legislation is not passed by July 1, action could be taken to abolish ATSIS administratively and to move staff functions and programmes to relevant agencies...” But a second, far more explosive cabinet-in-confidence document obtained by NIT reveals the government’s fears were well-founded. In April 2003, the Prime Minister was strongly warned against the creation of ATSIS by his most senior bureaucrat, cabinet secretary Peter Shergold (see full story page 8). Mr Shergold was responding to a letter Mr Ruddock wrote to the Prime Minister on April 10, 2003 in which he urged the government to remove ATSIC’s powers to control its own funds - the first time the plan to gut ATSIC had been floated (the letter, ironically, was written three days after Mr Ruddock informed the Prime Minister that every government minister “almost without exception” had failed to properly undertake a major review of government programs to see if they could be better tailored to Indigenous needs - see previous edition of NIT). Mr Shergold’s advice was also based on a legal opinion provided by the Australian Government Solicitor’s office (AGS), a copy of which has also been obtained by NIT. Robert Orr QC, the government’s most senior legal adviser, agreed there was a “reasonable argument” that agencies other than ATSIC could spend ATSIC’s money, but he warned ATSIS was not the best way to achieve it. Stripping ATSIC’s powers through the creation of ATSIS “would be unusual, and involve some risk” he wrote, adding that the move could be subject to a High Court challenge and if that were to occur, the government’s entire $1 billion Indigenous Affairs budget could be frozen while the court ruled on the matter. In layman’s terms, that means no Aboriginal communities or organisations previously funded by ATSIC would receive any money until the issue was resolved. The leaked April 7, 2004 cabinet document also reveals: • The federal cabinet was mislead about the nature of support for the National Indigenous Council. It claimed that influential Cape York leader, Noel Pearson was in favour of ATSIC being replaced with a government appointed body. Mr Pearson has publicly advocated for an elected chairman (see full story page 9). • The National Indigenous Council was intended as a replacement to ATSIC, despite recent claims by Indigenous Affairs Minister Amanda Vanstone to the contrary (see full story at www.nit.com.au). Other leaked federal government documents reveal: • ATSIC commissioners were threatened with legal sanctions and financial ruin if they did not take immediate steps to abandon the legal challenge (see timeline, page 7). • The government was provided with information from within ATSIC which was designed to damage ATSIC’s legal challenge (see timeline, page 7). At the time of press, the Prime Minister’s office had not responded to NIT’s requests for comment. Printer Friendly Version  Email Story to a Friend Submit Letter to Editor * A NOTE TO OUR ONLINE READERS: The multi-award winning National Indigenous Times is an independent newspaper and receives no government funding whatsoever. Our print edition is published every fortnight, but because of the public interest nature of our reporting, we ensure all of our stories are available online at no cost. Thus, we rely entirely on advertising and subscriptions to survive, and hope you'll consider subscribing to NIT's print edition to help us continue our work, or even just browse our Online Shop.

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