Mowbray, Martin --- "Taking away Indigenous Financial Independence: Possible Changes to the Aboriginal Land Rights (NT) Act" [1998] IndigLawB 36; (1998) 4(11) Indigenous Law Bulletin 12

Taking away Indigenous Financial Independence: Possible Changes to the Aboriginal Land Rights (NT) Act

By Martin Mowbray

The Aboriginal Land Rights (NT) Act 1976 was due for review within the framework of National Competition Policy. Rather than focussing on efficiency, however, the current Review has targeted a range of other issues that may well result in derogation from the principles embodied in the Act. Amongst these is the provision for financing the Northern Terriiitory Land Councils and other Aboriginal boodies. At present, Land Council core income is determined as a percentage of mining royalty equivalent payments from the Commonwealth. This indexed source of finance may be replaced by payments made via the annual budgetary process, and thus be directly subject to the political agendas of the government annd public service. Moreover, mining royalty equivalents, which represent compensation moneys for Aboriginal people in the Northern Territory, may be diverted to substitute for government support of public infrastructure on Aboriginal land, or to commercial enterprise.

Origins of the review of the Land Rights Act

In 1993 the Keating government received the Independent Committee of Inquiry (Hilmer) Report on National Competition Policy. Amongst other measures, adoption of most of the Hilmer recommendations by the Commonwealth, state and territory governments, led to a determination to review all legislation and government regulations against the criterion of whether competition was restricted. In the wake of this, in 1996 the Federal Treasurer released a schedule of 98 legislation reviews to commence over the succeeding four years (Press Release No.40, 28/6/96). The review of the Aboriginal Land Rights (Northern Territory) Act 1976 (the ‘Land Rights Act’) was listed as due to commence in 1996–97. The Treasurer stated that:

The review process will provide an opportunity to establish the case for retaining, modifying or reforming current regulatory arrangements. Each review is required to identify the costs and benefits of the legislation and the likely consequences of reform measures proposed. The guiding principle of the legislation review is that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction outweigh the costs and that the objectives of the legislation can only be achieved by restricting competition. (Treasurer, Press Release No.40, 28/6/96)

Since the Treasurer’s statement, the basis for a review of the Land Rights Act in National Competition Policy appears to have become something else. There is evidence that the opportunity for a review of the Land Rights Act is being used to pursue a more ideologically foundedpolitical agenda.

Early signs of this shift were evident in David Nason’s article in The Australian on 28 October 1996. This was headed ‘Herron ponders scrapping veto for Aborigines’. Nason reported that the Minister’s office saw the forthcoming review as considering the appropriateness of the so–called ‘veto’. Here he was referring to the right of Traditional Owners in the Northern Territory to refuse consent to mining on their land. As other items for attention Nason listed the ABTA, ‘environmental guidelines for mining and other development on Aboriginal land, and the transfer of the Aboriginal Land Rights Act to Northern Territory control’.

Together these matters are central to the preservation of Aboriginal Land Rights in the Northern Territory. Directly or indirectly they encompass all the concerns which the Northern Territory government and other conservative bodies have about the Land Rights Act. Tellingly, they all appeared in the draft Terms of Reference for the review which were circulated by the Minister for Aboriginal and Torres Strait Islander Affairs on 7 July 1997. They remain embedded in the Terms of Reference that were finally announced on 16 July.

The current review of the Land Rights Act by John Reeves QC is due for completion in May 1998. Recommendations may be made that, if adopted, will substantially weaken Aboriginal land rights in the Northern Territory. Some of these could well concern the Act’s provisions for the financial support of land rights.

In his 1974 Aboriginal Land Rights Commission Report, Justice Woodward proposed the legal means for strengthening Aboriginal interests in land in the Northern Territory. Woodward recognised the importance of an arm’s length funding arrangement with the Commonwealth government. He saw ‘great merit in the Land Councils having a substantial source of income not dependent on government approval’ (Woodward, 1974, par.608). Effectively, this meant separating financial support for land rights from the politics of annual budgetary allocations.

To accomplish this, Woodward recommended continuation of existing financial provision in the form of the Aborigines (Benefits from Mining) Trust Fund (ABTF) which had been established in 1952 under the Northern Territory (Administration) Act 1910. The ABTF embodied the principle of providing Commonwealth funds indexed to royalties paid to government in respect of mining on land reserved for Aborigines. It was set up to facilitate compensation to Aborigines in respect of mining on their reserves.

Principles and functions

The ABTF entailed several other principles that were incorporated in the Land Rights Act. These included payment of a set proportion of fund revenue to communities adjacent to resource development projects, and administration by the Commonwealth body principally responsible for Aboriginal affairs—then the Welfare Branch of the Northern Territory Administration.

Part VI of the Land Rights Act replaced the ABTF with the Aboriginals Benefit Trust Account (ABTA), which began operations in July 1978. With the advent of the Financial Management and Accountability Act 1997 and consequential amendment of the Land Rights Act, the ABTA was renamed the Aboriginals Benefit Reserve (ABR) from January 1998.

The ABR’s major statutory functions are: to receive monies deemed as the equivalent of mining royalties derived from mining operations on Aboriginal land in the Northern Territory; to make payments to Land Councils to meet their administrative expenses; and to make payments to the Land Councils for distribution to incorporated Aboriginal associations, communities or groups (such payments are to benefit Aboriginal people who are directly affected by mining operations); to make payments to other Aboriginal associations, communities or groups in the Northern Territory; and to make other payments as directed by the Minister (or delegate) in accordance with s64 of the Land Rights Act.

ABR funds reflect: a right to compensation for Traditional Owners of land directly affected by mining operations; a wider entitlement to compensation for loss of land or connected rights and associated disadvantage to Aboriginal people throughout the Northern Territory; and the need to provide Land Councils and other Aboriginal bodies providing representation, advice and additional services or assistance with financial support that is insulated from political party machinations and the immediate control of governments.

When the Land Rights Act was last subject to a wide–ranging review, the then (Labor) Minister for Aboriginal Affairs appointed Mr Justice Toohey to recommend amendments to the Land Rights Act, having regard to five ‘principles which the government sees as fundamental in relation to land rights’. One of these was ‘Access to mining royalty equivalents’ (Toohey, 1984:141). No such principles apply to the current review of the Land Rights Act. Indeed, the Reviewer has declared his preparedness to make recommendations contrary to those principles (Reeves, 1997, pars 29–31).

Directions of the current review

An unfortunate dimension of the current review is its provision for submissions of which the number, authorship and contents have been declared secret. In the publicly accessible submissions surprisingly little attention was paid to the Land Rights Act’s financial provisions, other than by the Central and Northern Land Councils and the Aboriginal and Torres Strait Islander Commission (‘ATSIC’). These bodies all adopted a similar position, in favour of retention of the fundamentals of the existing policy on financing land rights in the Northern Territory.

The dearth of direct attention to financial dimensions of the Land Rights Act in the submissions reflects the Reviewer’s own cursory treatment of the issue in his Issues Paper (pars 68 and 69). However, the small section (19) of the Northern Territory Government’s submission (January 1998) that deals with the ABR is significant. The government reveals its longstanding concern about the flow of ABR funds to the Land Councils, particularly the two larger, mainland, land councils. It goes on to propose that the ABR should be used as a source of capital for commercial activity. The Chief Minister had recently suggested that the ABR might ‘be established as a statutory authority with a commercial orientation’ (NT Parliamentary Record, 1/12/97:11). A previous Chief Minister has cynically suggested that past expenditure of ABR funds ($390 million) could have been used to have achieved economic independence for Aboriginal people in the Northern Territory (NT Parliamentary Record, 1/12/97:44). Quite aside from what might have become of contested land claims, the sum involved, $390 million at face value, could not go anywhere near meeting such an objective.

The notion that the ABR might be transformed into some sort of fund to support commercial development or community or public infrastructure has been repeatedly floated by the Reviewer. This is particularly evident in the oral hearings, where he has taken the opportunity to canvass the possibility. At the Tennant Creek hearing for example, the Reviewer suggested that community facilities, such as health centres, could be funded by ABTA (that is ABR) funds (transcript, 10/3/98, p.45).

Here the Reviewer effectively proposed that private money, in the way of compensation for Traditional Owners of land directly affected by mining operations or negotiated compensation and fees, as well as to the wider Aboriginal population, could be diverted to pay for facilities. These could be amenities that for other Australians are paid for out of general revenue, council rates, taxation expenditures, or fees for service. Once transferred, the compensation monies are private (an issue discussed by Altman, 1983 and elsewhere).

In doing so, the Reviewer also appeared to overlook the contentious issue of substitution. That is, the disputed practice by the NT Government of substituting public support for infrastructure and services when compensation monies become available (see eg Supervising Scientist, 1997).

At the Milikapiti hearing the Reviewer raised the question as to whether the ABR should be used for a ‘commercial fund, which would be available to Aboriginal communities to carry out economic development’. He reported an unsourced ‘strong argument that that (ABR) money should be used for economic development’ (transcript, 19/2/98, pp 5,6,8).

At Milikapiti the Reviewer also reported ‘some people’ as ‘saying that the Land Council should be funded separately by the Commonwealth Government out of taxes like most other statutory bodies are funded’. While the ABR is already funded this way the Reviewer appeared to mean that the Land Councils might be funded through the yearly budgetary process, rather than through monies indexed to mining royalties.

On 18 March, the Commonwealth Minister for Aboriginal and Torres Strait Islander Affairs distributed a Discussion Paper and called (in a media release) for submissions about a proposed indigenous economic development agency with merchant bank style functions. This would be called Indigenous Business Australia (after the existing counterpart, Aboriginal Business Canada). Amongst other things, the proposed IBA would undertake investment management for the ABR.

Continued use of the pre 1998 name, ABTA, in the Discussion Paper suggests that the Discussion Paper was under preparation for some considerable time. In any event, the Minister now has set up an inquiry which runs in parallel with part of the present review. It increased the momentum of the proposition that ABR monies be diverted from Land Councils to pay for public infrastructure, support commercial development, or both.

Problems and risks

A recurrent problem when the idea of channelling mining royalty equivalent payments away from direct distribution to Aboriginal bodies is touted, is the omission of reference to the fact that, amongst other things, the ABR is currently a clearing house for compensation payments. The role of the ABR is to provide recompense for Aboriginal bodies in the Northern Territory. It is not in the first instance to subsidise basic public services or generate commercial revenue. Risk taking with monies that represent compensation to almost exclusively low–income beneficiaries has generally been considered inappropriate by the ABTA secretariat and the Land Councils (see eg their respective submissions to the review in December 1997 and January 1998).

Conversion of Land Council income to dependence on the Commonwealth budgetary cycle is also inconsistent with the intentions behind the Land Rights Act. As noted previously, Woodward recognised the need for Land Council income not to be directly subject to government vicissitudes (Woodward, 1974, par. 608). Referring to this in the 1983 review of the Land Rights Act, Justice Toohey reiterated that, while the Central and Northern Land Councils acknowledged problems in a system of funding based on mining royalties, ‘they see greater dangers in being dependent on grants from consolidated revenue. On saying this, Toohey found no reason for fundamental change in Land Council funding (Toohey, 1984:110).

It is also worth noting that Woodward made no proposal for investment. He expressly indicated that provisions for land rights had to be accompanied by funds for the development of Aboriginal land (1974:138). Such funds were to come from a source additional to that for compensation, and support of the Northern Territory Land Councils.

The current review, and public consultation over Indigenous Business Australia, may lead to the demise of an original provision of the Land Rights Act. Loss of the Act’s provision for support of land rights through mining royalty equivalent payments will disempower the Land Councils. Fragmentation of the structure and roles of the Land Councils, especially the two larger organisations, may well accompany this eventuality. It would also be likely to be accompanied by removal of the authority of the ‘right of veto’ from Traditional Owners.

Martin Mowbray is Professor of Social Work and Head, Department of Social Science and Social Work, RMIT.

References

Altman, JC (1983) Aborigines and Mining Royalties in the Northern Territory, Canberra, Australian Institute of Aboriginal Studies.

Independent Committee of Inquiry (Chair: H.G. Hilmer) (1993), National Competition Policy, Canberra, AGPS.

Reeves, John (1997) Issues Paper, Review of the Aboriginal Land Rights (NT) Act 1976, Darwin.

Supervising Scientist (1997) Kakadu Region Social Impact Study: Community Action Plan, Report of the Study Advisory Group, Canberra, Supervising Scientist.

Toohey, John (1984) Seven Years On, Report by Mr. Justice Toohey to the Minister for Aboriginal Affairs on the Aboriginal Land Rights (Northern Territory) Act 1976 and Related Matters, Canberra, AGPS.

Woodward, AE (1973) Aboriginal Land Rights Commission, First Report, Canberra, AGPS.

Woodward, A.E. (1974) Aboriginal Land Rights Commission, Second Report, Canberra, Government Printer.

This paper draws on material prepared as part of a consultancy to the Central Land Council.