A well-researched Aboriginal complaint about how they, and Australian taxpayers, are ripped off by the Northern Territory government deserves particular attention in the months ahead, if only because changes to the way the GST dollar is carved up among the states stands to even further accentuate the disadvantage.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Ripping off Aborigines and the Commonwealth is a bipartisan sport in the NT; politicians and bureaucrats on both sides of the political divide tend to think they get more bang for their political buck by having very well-resourced schools in the comfy Darwin suburbs, rather than out in dirty, dusty, and very remote and ungrateful Aboriginal settlements. Likewise with money allocated to address Indigenous disadvantage in healthcare, housing, police services, roads, municipal services and jails.
It's hardly a great secret. I remember writing about the abstraction of resources notionally allocated to Aboriginal health, and putting some figures to it, in 1977. No one queried the estimates, or reproved me for accusing federal public servants of being parties to the "reallocation".
I, and others, have made a bit of a theme about the particular roguery of NT administrators, before and after self-government. But I have never seen anyone deny it, describe it with proof to the contrary as a slur, or pretend something will be done about it. Nor, despite the pleas of many interested parties and individuals engaged in the accountability system, have any federal officials, or their ministers, Labor or Coalition, shown any desire to do anything about it.
Put to any sort of defence of what happens, administrators sometimes explain that the significant shortfall in services in remote Aboriginal communities is partly accounted for by Indigenous access to (and heavy consumption of) centralised health services in Darwin and Alice Springs hospitals, or their pro-rata share of the cost of maintaining a vast (and overwhelmingly white) bureaucracy in air-conditioned offices in the same places.
A major political and economic issue coming up in the next few months is the Productivity Commission's release of its conclusions about how horizontal fiscal equalisation should continue in relation to the Commonwealth Grants Commission's determinations of the relative disadvantage faced by state and territory governments in trying to provide the same quality and standard of state and municipal services everywhere.
The system is under review because of the way the mining boom raised state-sourced revenues in Western Australia to great heights nearly a decade ago. This made WA the fiscally strongest state. In the GST divvy-up, states and territories whose fiscal capacity was low had their position adjusted so that each was made to be at least the average of all of the states and territories. Once that was done, more money was added to everyone's (except WA's) pot, until all were at the level of the fiscally strongest state. At that point, any money left over was divvied up on a population basis.
When the divvy-up scheme was first agreed among the states, less than 20 per cent of total GST revenue was used to top up the resources of states and territories such as the NT, South Australia and Tasmania. Last year, however, 70 per cent of the money was gone before the pro-rata divvy up. WA was screaming that it was getting only about 30 per cent of what others were getting. Originally, about $3 billion went in to putting everyone in about the same position, bearing in mind their advantages and disadvantages; now, it's $8 billion.
If WA only gets about 30 cents a head for $1 going to NSW or Victoria for each of their citizens, folk in the NT were getting about more than $5 a head. This was after complex assessments by the Grants Commission of problems of remoteness and difficulties of delivering services, the size of the Indigenous population, and the cost of providing services to them.
The NT has always scored heavily both for remoteness and for disadvantage in Aboriginal communities. Yet the standard of living and the quality of services for non-Indigenous folk in its fleshpots is amazingly similar to that found in Canberra.
Whether there's a Liberal or a Labor government in Perth, one can expect that it, and WA's federal representatives in Canberra, will be bitching most about how hardly done by they are. When prime ministers visit, one can expect that these moans will receive a sympathetic hearing, and sincere-sounding agreement that something must be done. The need to do something is the greater because of the number and seniority of Turnbull government cabinet ministers from WA, and fears that the Coalition could be in for a drubbing in WA on this and other grounds at the next federal election.
The problem is that none of the other states, or either of the territories, has the slightest enthusiasm for change. Every extra dollar WA gets will be at its expense. The Commonwealth won't be pay more, or less, even if politicians will face local pressure if state budgets are cut.
Relatively disadvantaged states will lose out considerably, with a sharp drop in the quality of services, if the divvy-up takes less account of their special disadvantages. But even states that already put in (in GST exactions) more than they take cannot see why they should help WA with a crisis of its own making. (In some quarters, this feeling is the stronger because WA has been, for most of federation, a state whose citizens have received much more money from the Commonwealth than ever they have contributed.)
The Productivity Commission is not keen on a big shift from the fundamental principles, given that the Grants Commission system is a world beacon for providing at least the possibility of equal access to government goods and services to all citizens. No one seriously disputes the commission's methodology; any tinkering with the system with weasel words about "a reasonable" – rather than "an equal" – access to services is a step backwards.
Still, the Productivity Commission knows the politicians have a problem and is trying to be practical, arguing in its draft report that "the pure may be the enemy of the good: the current [horizontal fiscal equalisation] system struggles with extreme circumstances, and this is corroding confidence in the system".
It has suggested that rather than using the top fiscal producer for the initial top-up to disadvantaged states, the position of the second-best state be used. This is a lot less unfair than, say, a simple divvy-up. But, come what may, it means money gets taken from other states to go to Perth. Teachers, health workers and welfare workers in those other states and territories know this will result sound in reduced services, most likely for the poor.
Last month, we saw yet another report from the federal Auditor-General pointing out that the Commonwealth had only hazy ideas about whether the states (and territories) were actually living up to their Gonski promises about providing education funds according to particular schools' needs.
Federal monitoring arrangements "do not provide a sufficient level of assurance that funding has been used in accordance with the legislative framework, in particular the requirement for funding to be distributed according to need", the audit found. "Further the [Education Department] has not used available data to effectively monitor the impact of school funding and to provide greater transparency and accountability. As such, the department is not well placed to determine whether the current policy settings are effective in supporting the achievement of educational outcomes".
If history is any guide, there may might be little point in reverting to a grant systems with stricter reporting requirements, given that the Commonwealth has long had a lamentable record in actually checking on state and territory administrations. They rely on and accept what are little more than receipts from the administrations (including Catholic and independent schools) concerned.
The Auditor-General's writ goes insufficiently into what is done once the money is received by the state; well-advised state auditors themselves are usually a bit vague when the money has been a Commonwealth grant. It really is about time COAG established a national auditor-general with a right to follow the dollars. Or, given that they are Australian taxpayers' dollars, a Commonwealth auditor.
One can, of course, answer that it was always intended that states and territories would be the best judges of what was best for their particular jurisdictions, and that they should have considerable leeway in setting their own goals and priorities. After all, they are politically accountable to their electorates for what they do.
Yes, but anyone with experience of the "blame game" knows full well that any project in which both governments have a finger is hardly accountable at all. And there is, or ought to be, a difference, between deciding locally the location and priorities for roads, or whether some of the money available should go to preschools, and living up to clear and public commitments about what will be done with the money. That's a concept, it seems, which is foreign to politicians on both sides. Perhaps they are covering for their mates, if they are in power, or do not want to reduce the discretion and lack of accountability if and when their mates do achieve power.
But there's something particularly immoral and smelly about redirecting money intended to deal with the particular problems of Aboriginal Australians.
The NT Labor government won power relatively recently on the back of rural resentment, particularly from Aboriginal communities, about the quantity and quality of services provided. It has solid Indigenous representation in cabinet and on the backbench, and no doubt seriously intends to do better than its predecessors.
But those familiar with past NT Labor governments can be forgiven for having low expectations about what will be achieved. Money "liberated" for remote communities needs to come by cutting services in Darwin and Alice Springs. These have constituencies (including Labor constituencies) well able to scream, make a big noise and get their own way. And, after all, it's in just those places that the public servants who administer the territory have forged a standard of living most Australians would envy.
It's not that there is anything wrong with the Grants Commission's calculation of the disadvantage suffered by remote Indigenous Australians. It is, simply, that the money given to the territory to address the problems – so that territory Aborigines have the same access to services as Australians everywhere – is instead diverted to other pet aims and programs of government, mostly in the big towns.
The Yothu Yindi Foundation has used Grants Commission figures to show that the NT government is receiving $1.175 billion to address issues of Aboriginal disadvantage, over and above money that should be spent for services in communities of a sort and quality shared by other territorians.
Of that, it spends $654 million on such programs. About $522 million, close to $10,000 per Aboriginal resident of the territory (or about $2500 for every non-Indigenous resident) is diverted to other purposes.
The NT gets $250 million for roads into remote areas, but only $122 million is spent. It's given $133 million for prisons, but has spent only $68 million, even as it sets international records for the proportion of its Indigenous population incarcerated. It should be spending $166 million on remote policing services; only $136 million is spent. Money is ripped out of housing, family and child services, municipal and transport services, and spent other than on services to communities.
The (mostly white) NT public service has increased in size by 42 per cent in the past 15 years, though the population has increased by only 21 per cent. There are about 26,000 NT public servants (10 per cent of the total population); the ACT has about 21,000 for a population 60 per cent greater.
"The increase in [NT] public service jobs over and above population increase is almost 3000 positions, or about $400 million per annum. Presumably the cost of the additional staff in departments responsible for services to indigenous people will be treated as 'indigenous expenditure' despite the apparent inefficiency inherent in the numbers ...
"Fiscal policy in the NT has embedded a system marked by systemic failures to appropriately or effectively spend funds or deliver key programs intended to deal with the issue of rampant indigenous disadvantage and improved indigenous futures.
"The problem is structural and the misapplication, or ineffective application, of funds will not change until there is a change to the way money is controlled, managed, spent and reviewed in a transparent manner."
In a good many of the remote locations involved, Aborigines are on BasicCards, because they can't be trusted to manage their money. On the record, and the evidence, a BasicCard should be tested on NT politicians and public servants first. It would do no harm if the program extended to those in charge of the Commonwealth's efforts as well, from the minister, Darwin local Nigel Scullion, down.
Jack Waterford is a former editor of The Canberra Times. jwaterfordcanberra@gmail.com
