Bennelong Society Conference 2005:
Remote Aboriginal Communities: Where are the Jobs?

Communal assets and individual benefits:
bridging the Aboriginal job opportunity gap with incentives

John Avery

Gary Johns asked me to speak at this conference because of my contribution to the Reeves review of the Aboriginal Land Rights (NT) Act 1976. It is seven years since John Reeves delivered his report.[1] Changes following Reeves' recommendations have been slow to develop. However, the Reeves' report can take substantial credit for highlighting the failures of the land rights policy in delivering economic benefits to Aboriginal people in the Northern Territory. That report made it very plain that the Aboriginal people living in remote parts of the Northern Territory on Aboriginal land did not live in placid contentment but were stifled by a lack of opportunity to use their lands to best economic effect. In 2002, the Hon Mr John Ah Kit, a Minister in the Martin NT Labor Government who had been Director of the Northern Land Council, said it was almost impossible to find a functional Aboriginal community in the NT. He also said:

Aboriginal people in the Territory must escape from the cargo cult mentality of government doing everything for them; of relying on the empty rhetoric of playing the victim. Aboriginal organisations must bite the bullet and develop new, innovative strategies to overcome the cancerous ideology of despair.

This cargo cult mentality is fostered by the current scheme for applying monies arising Aboriginal land under the Aboriginal Land Rights (NT) Act 1976. It should not be forgotten that Aboriginal people enjoy their lands in many ways, however these lands are economic assets that generate income flows. These monies from communally held lands must be translated into benefits for individuals. The problem is how this should happen.

As a generalisation, this should occur in ways that are both economically effective and fair. Finding practical solutions will always be a complex and contentious matter in the detail of particular cases. However, under the present scheme, income streams from Aboriginal lands are paid in ways that are not economically effective and not evidently fair. Aboriginal futures are heavily discounted in favour of immediate transfers. These have not resulted in general improvements, but they have reinforced a culture of rent-seeking which stifles incentives to employment.

I will also address the diminished opportunities for employment at the local level due to high costs to start and carry out business on Aboriginal land. If monies are properly applied and opportunities for local employment are increased, there may be prospects for improved employment. However, I will firstly make some observations about the circumstances that led to the shedding of Aboriginal employment after the equal wages cases in 1966 and suggest some approaches. The high threshold to work facing remote Aboriginal populations has to be addressed with reforms to the economics of Aboriginal land.

Thresholds to employment

Aboriginal employment in remote areas collapsed after the award of equal wages to Aboriginal stock workers in 1966. Aboriginal people who worked prior to then were proud of the work they did, especially of their long travels and the contacts with people they met, whether in droving cattle, working on luggers on the north coast, travelling with bore sinkers, building roads, travelling with the boxing tents and so on. A great many skills were learned in these roles. Many Aboriginal women of these generations were proud of their jobs as cooks, nurses or health workers, or even as 'stock boys' and doing other cattle station work, though there were fewer opportunities for them. Personal names taken on by older generations reflect occupations, such as Drover, Engineer, Tracker, Ringer or Driver. Many Aboriginal surnames derive from associations with particular cattle stations or particular past employers, mainly white men.

These sorts of jobs are largely gone. Many of those jobs built on Aboriginal bush skills, and rough working conditions seemed to have been absorbed within the tough somewhat stoical outlook of the older generations. There was not such a wide educational, legal and cultural threshold to employment then as there is now. If equal pay was the catalyst for the wholesale shedding of Aboriginal labour after 1966, what hope do remote dwelling Aborigines have now, after three or four decades of general unemployment?

The clear lesson from 1966 is that the employment of Aboriginal people then was highly sensitive to the cost of labour. Some argue that the equal wages decision only hastened a process of post WWII modernisation of the pastoral industry that required a more skilled, mechanised and mobile workforce. However, the impact on Aboriginal labour could be attributed to past failures to educate Aboriginal people and to make them more productive employees. Obviously there is great need to address education and capacity for employment, but necessary as these steps are, they will not deliver results in employment quickly. Reducing the costs to employ Aboriginal workers (and other low-skilled populations) could provide a more immediate pathway into employment and afford younger Aboriginal people the opportunity to develop orientations and habits for work that previous generations developed through employment. This could be achieved by a combination of welfare, taxation and industrial reforms.

Opportunity costs: home ownership and private use

The demand for and economic significance of home ownership in remote Aboriginal settlements has received recent attention. It is generally recognised that current incomes are too low to allow make this generally affordable. From a financial point of view, individuals earning sufficiently high income would be better advised to invest the money elsewhere. Yet, some individuals who have the money do want to own a house on Aboriginal land and their doing so could have wider benefits for remote Aborigines.

Poor housing has very serious long-term consequences for educational outcomes and general health in remote areas. A cost of $1 billion is frequently cited to address the needs. Improvements in housing therefore are crucial. It is possible that housing associations could manage the housing stock on remote settlements better if they owned the houses.

The provisions in the ALRA (s.19) that would allow private interests in Aboriginal land to be granted for any purpose, including housing, are cumbersome. However, the biggest obstacle is that land could not be granted without prohibitively expensive consultations with traditional owners conducted by a land council.

This last point reflects the high start-up cost for any economic activities on Aboriginal land. Under the present system there is no simple and inexpensive way to access Aboriginal land, even if this does not involve the granting of an interest. These costs create substantial disincentives to all but large-scale economic projects on Aboriginal land.

Local entrepreneurs---Aboriginal and not Aboriginal---are frustrated when pursuing opportunities to work with and employ local Aboriginal people on Aboriginal land. For example, they may wish to take tourists to a particular spot to experience Aboriginal life styles, or they might want to mine sand for building. Generally, these entrepreneurs do not hold MBAs or law degrees but they are on the spot. Others would come if there were real opportunities. But they do not have $10 000 to pay the land council to fund the first meeting with traditional owners, or to fund the following ones. In my observation, these entrepreneurs, particularly if they have personal ties to Aboriginal people, often are held in contempt by land councils.

These costs filter out a myriad of medium, small or seasonal or even ephemeral projects and enterprises. The costs to get approval are not such a problem for big projects, such as mines, pipelines, railways and so on. These get approved through complex multi-meeting negotiations yielding upfront moneys to key Aboriginal stakeholders and so-called royalties, not because of job opportunities actually delivered.

High rents for small and medium projects would place another disincentive in the way. The best payoff for these activities would be not be a cash flow but increased employment opportunities, though the numbers of jobs will not meet the local demand for employment. Most might be seasonal jobs, part-time jobs and temporary jobs. These are just the sorts of jobs that could create a pathway for Aboriginal people into employment of any sort. Having no hope of getting a job, other than on the CDEP, is demoralising and boring.

Land councils are unlikely to afford lower opportunity costs at start-up for small projects because their own costs would be high. Therefore these decisions should be devolved to the local level. It would be sensible to accommodate these within local or regional development frameworks developed with Aboriginal stakeholders, government and other expertise.

Monies from Aboriginal land

The structure of welfare payments has become notorious for reinforcing dependence and for sapping incentives to work. In the Northern Territory, income streams from mining royalty equivalents and from other rents or agreements about Aboriginal land likewise short circuit the incentives to work with incentives to obtain income by traditional entitlement.

The recent NT Coroner's inquiry into petrol sniffing deaths in Central Australia has highlighted the numbers of young Aboriginal people who choose this bizarre, self-obliterating behaviour. I don't know the latest statistics on Aboriginal suicide, although my own experience in the Northern Territory reflected the epidemic of attempted Aboriginal suicide in remote Australia in the 1990s. I do not think that it is coincidental that communities with a high focus on income streams from Aboriginal land, and a high level of competition for them, also stand out for high levels of substance abuse, violence and dysfunction.

However, these expectations are high everywhere. For example, land councils distributed payments for each kilometres of Aboriginal land crossed by the Alice Springs to Darwin railway line, for each group of traditional Aboriginal owners along the route.

The Aboriginal Land Rights Act (NT) 1976 provides a statutory scheme of mining royalty equivalents through the Aboriginal Benefit Account. This began in 1952 when the Aboriginal Benefit Trust Fund was established to provide development funds if mines were approved on the NT Aboriginal reserves. Monies were paid into the fund from Consolidated Revenues equivalent to royalties paid to the Crown from mines on Aboriginal reserves. While that could pass as a simple transfer of royalty money, since 1978, mining royalties have been paid to the Northern Territory as the Crown while the Commonwealth has continued to pay equivalents into the fund.

A minimum of 40% of the fund is allocated to the Land Councils. 30% is strictly allocated to areas affected by the mines proportional to their royalty contributions. The remainder is for the benefit of other NT Aborigines. It has been less than 30% because Land Council administration has generally absorbed about 50% of the funds.

Woodward, during his Commission on Aboriginal Land Rights, considered that traditional clans might be thought the proper recipients of moneys from mining on clan lands. It may have occurred to him that payments based on traditional ownership of land would have introduced a new dimension to traditional ownership of unprecedented potency. This is certainly the case, for there is no evidence that clan membership carried secular entitlements to land in Aboriginal tradition. Woodward recommended instead that because members of several clans traditionally shared the resource of an area, irrespective of clan affiliation, such moneys should be applied to benefit the wider group. These monies are therefore called areas affected moneys, though among Aboriginal people they are royalties.

Aboriginal Land Rights Act (NT) 1976 provides land council substantial discretion to determine how these moneys are paid out. The Northern Land Councils say these reflect "a special right to compensation for traditional owners of land directly affected by mining operations". They usually end up paid to a so-called royalty or clan association that is supposed to apply them to community or charitable purposes. Poor reporting of these associations means that we do not know where much of this money actually ends up. There is little evidence that these monies have made any contribution to Aboriginal standards of living.

Under the ALRA traditional owners generally have statutory power to veto other agreements for mining exploration and for other uses of Aboriginal land. Unsurprisingly, these agreements generally benefit senior traditional owners and payments can be made under agreements that are specifically for traditional owners.

Consequently, there has been an epidemic of disputes and often-violent competition for status as traditional owner of land. These have undermined Aboriginal relationships in many regions of the Northern Territory and eroded confidence in traditional values. These are oral traditions that were not designed to withstand intense disputing over relationships to land. There is no overall system of enforcement or dispute resolution for traditional claims. Under ALRA, influence with the land council can be vital to securing traditional-owner status and through it, access to communal land money.

Considering that these are taxpayers' funds or income earned from common Aboriginal assets, the dissipation of these moneys has come at the cost of opportunities to apply them to more enduring purposes. The scheme provides large project developers with incentives to offer Aboriginal leaders to conclude negotiations over Aboriginal land, with agreement money on top of royalty equivalents. Land councils depend on mining money. The incentives to develop Aboriginal skills or enhance Aboriginal employment are low and the results have been disappointing. The focus has been on the money here and now, and on doing the deal. It gets things done---at whose cost?

The annual income of about $30-40 million from rents and royalty equivalents is a modest amount. There will be scope for growth but, realistically, Aboriginal people need to earn incomes by their own efforts. They need to improve their capacity to earn their own livings and their income flows should be targeted to produce this result. Demographic and life-cycle factors give clues to addressing these capacity issues to best effect.

Targeting monies effectively: demography and life-cycle

From the early 1970s, improved delivery of primary health care succeeded in reducing child mortality in remote Aboriginal populations, which had been a disgrace. This led to high fertility, which, with a short life expectancy, has led to a young and rapidly growing population.

A young growing population makes heavy demands on adults to provide for the physical, social and educational development of the young. The debilitating use of alcohol in the same period has diminished adult capacity to deliver effective socialisation. Poor housing, noise and general disorder represent additional pressures. Child abuse is notoriously high.

Life cycle and developmental factors are important. Success at earlier stages of development is critical for later stages.

• Problems in Aboriginal populations during pregnancy appear as higher rates of low birth weight babies and increased long-term health problems.
• Poor childhood environments, including abuse, disrupt physical, cognitive, psychological, social and educational development, with long term adverse consequences.
• The adolescent brain undergoes physical changes for faster processing and increased capacity for learning. Effective social learning is required to develop adult orientations of independence, social identity and a sense of purpose. The rates of suicide attempt and serious substance abuse in young remote Aboriginal populations send a powerful signal that things are going badly wrong at this stage.

The developmental successes and the many capable young Aboriginal men and women in remote areas should be recognised. However, too many young Aboriginal people leave school early and immediately take up a pattern sitting around waiting for the next carton of beer or the next bag of dope. These teenagers do not form the patterns required for almost any kind of employment. I suspect many of them would pose occupational and health risks in many workplaces.

Petrol sniffers represent extreme dysfunction. Frontal lobe damage leaves some of them incapable of self-control. I know one young man in this situation. He is in gaol. His life went seriously wrong from about 14 when his mother died, he attempted suicide a couple of times and got involved in drinking and petrol. He was a walking disaster by 20. As a child he was pleasant, biddable and active but in retrospect I guess that he had been sexually abused from an early age. As much as I liked him then, and as much as I sympathise with him now, he has become such a danger to the community that he should remain in detention, probably for his life. I will let you contemplate the costs involved. This should never happen.

Scarce resources need to be targeted for best effect. Developmental considerations suggest funding policies to:

• improve maternal health (female education has a good track record)
• support childhood development
• prevent developmental failures at all ages
• promote good developmental outcomes
• link young people to employment opportunities

Fairness

Note that the targets I have suggested are young women, children and young men. These do not have a high status in Aboriginal tradition, which favours older people, particularly men. While communal moneys are linked to traditional status, the benefits will be diverted away from where they might have the most lasting benefits.

I suggested above that communal monies should be transferred to benefits where their effect can be greatest and in a way that is fair. I think, that fairness in these circumstances can be tied to effect if communal monies are transformed into incentives for functional behaviour. For example, these monies could be used to reward school attendance or performance, provide scholarships and so on. The idea is that the monies would be distributed to no particular person but available as a potential incentive to any who were prepared to make an effort.

Aboriginal leaders and many non-Aboriginal supporters, including many professional people and academics, will resist any attempt to alter the existing arrangements. Some argue that Aboriginal moneys should not be applied to health, education and housing because these are human rights entitlements to be provided by government. Using Aboriginal moneys for these purposes will only encourage government to cut its contribution, they say.

It sounds a bit like a case for holding yourself to ransom. Other Australians spend most of their money on housing, education, health and on a range of investments in personal habits and attributes to maintain employability.

Aboriginal ways of life: mobility as an ideal

In the 1970s, Aboriginal settlements in remote parts of Australia, particularly on Aboriginal land, were consolidated and given new form as ideally self-governing Aboriginal communities. H.C. Coombs' vision was that of self-managing communities on Aboriginal communal land running things 'Aboriginal way'. That there were no existing Aboriginal ways to run Aboriginal settlements as communities was not considered to be an obstacle. The residents would sort this out according to Aboriginal values, particularly those of generosity, sharing and consensus.

However, Aboriginal tradition is not based on a model of self-governing communities or groups. It is not about one village, one church communities or isolated groups in steep-sided valleys. The only continent of hunter gathers in modern times, Aboriginal Australia was a network of regional and local networks mapped onto Australia's hydrology. Contrary to what often is assumed there were no corporate groups, including corporate or politically organised clans or tribes. Instead Aboriginal tradition elaborated bases of social connection, mainly in the idioms of kinship such as in terms of blood, bone, flesh and spirit. However, for every point of solidarity there is an offsetting contrast and opposition. Alternating conflict and reconciliation is very much part of the tradition.

In 1958 the anthropologist W E H Stanner wrote:

I have seen a man, revisiting his homeland after an absence, fall on the ground, dig his fingers into the soil, and say: `oh my country'. But he had been away voluntarily; and he was soon to go away again voluntarily. Country is a high interest with a high value; rich sentiments cluster around it; but there are other interests; all are relative, and any can be displaced. (Whiteman Got no Dreaming: Essays 1938-1973 p 49)

Aboriginal tradition is not about sitting down in one place inside a community. It is about making roads far and wide and physical mobility over long distances; and there is a tension between home and the road. Young Aboriginal people need to be encouraged and assisted to travel far and wide to find work. Noel Pearson is fostering this with young Cape York people going to Victoria for seasonal fruit picking. Obviously, this is temporary and casual work, but mobility provides opportunities that are attainable.

My own experience is that Aboriginal workers are more likely to remain working long term if they work outside their immediate region. They will return home from time to time, at the end of the season or for a particular event, but then return to the job. Locals often feel pulled in all directions by their immediate families and extended kin, and have a hard time staying on the job.

In fact, the drift away from remote settlements appears to be under way. It is restrained by the low capacity of remote Aboriginal people to make the change. Darwin, Katherine, Tennant Creek and Alice Springs can expect to receive increasing numbers of Aboriginal people from remote settlements. There will need to be planning to accommodate these populations within urban areas. Generally, Aboriginal people making this transition are those with better skills and capacities. If so, the remote populations will remain with a large opportunity gap unless their capacity can be raised by well-targeted policies.

Planning for better outcomes

The key points so far are:

• The cost to employ low-skilled people, including Aboriginal people in remote or urban areas, needs to be reduced by reforms to welfare, taxation and employment policies.
• Moneys arising from communally held land should not be paid as income but should be converted into incentives to encourage better outcomes.
• Opportunity costs for small and medium activities on Aboriginal land need to be lowered, particularly in the vicinity of major settlements, by devolving decisions on these to regional bodies.

The last two points should be brought together under regional development plans negotiated to produce better outcomes on Aboriginal lands at the regional and local levels using income streams from Aboriginal lands as incentive payments.

Traditional owners along with other residents, including women and young people, are natural stakeholders to be involved in developing and owning these plans. The processes should be transparent and the plans should be public documents. There need to be regional bodies to implement development plans and to make decisions in accordance with them.

There is a body of opinion---some land councils, some academics, lawyers and some Aboriginal leaders---supporting the existing scheme which allocates scarce monies by traditional entitlements. However, mining royalty equivalents are taxpayers' money paid under a statutory scheme, and government has a responsibility to apply these effectively. Companies and government agencies negotiating land use agreements for long-term or substantial projects should consider that they have a responsibility not to discount Aboriginal futures by offers of up-front monies to clinch the deal.

One thing is certain, with a young growing Aboriginal population in remote Australia, there are major problems ahead, particularly for the Northern Territory. Aboriginal cultural outlooks and expectations are rapidly changing and the solutions of 30 years ago are not working. Aborigines face awkward choices between traditional values and other desirable things, but previous generations have done this. It is not appropriate that a statutory scheme weight the choices with monies skewed to traditional ownership. The basic assumptions of community and group reflect one dimension of Aboriginal tradition, the other dimension of mobility and making connections away from home will fit better with more mobile Aboriginal populations of the future.

Note

1. I am now employed at the Department of the Environment and Heritage in matters unrelated to employment policy, land rights and the living conditions of remote Aboriginal populations. What I have to say on these topics does not represent the opinions or policies of the Department or the Australian Government.