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Reynolds, James --- "Abbott's Welfarism'" [2002] IndigLawB 57; (2002) 5(20) Indigenous Law Bulletin 5

‘Abbott’s Welfarism’

by James Reynolds

On 25 September 2002, the Federal Minister for Employment Services and Workplace Relations, Tony Abbott, gave a speech entitled ‘Grassroots Capitalism’ to the Indigenous Employment Conference in Canberra.[1] The speech provided further evidence of government policy short on analysis, but big on rhetoric. It showed the government’s preparedness to make policy on the run, without clear analysis of the problem it purports to address or justification for its proposed policy direction. In this article, I review the more interesting points from Abbott’s speech, namely the role of land rights in creating economic opportunities and the effectiveness of the Community Development Employment Program (‘CDEP’).

Setting the Scene

In his speech, Abbott posited a solution for the ills faced by remote Indigenous communities. He argued that Aboriginal people do not have ‘real’ economic opportunities, which is partly a by-product of history, but also the lack of ‘real’ employment opportunities for Aboriginal people located in remote areas. He suggested that CDEP has worked well at containing the level of unemployment, but that it did not possess the same characteristics as ‘real work’ that is, the giving of purpose and human cooperation. He argued that capitalism, built upon ‘real’ work, would represent a quantum step forward for Aboriginal people in resolving the social ills that they face.

Abbott locates Aboriginal problems within the populist construct that our social and economic problems are a direct result of 'welfarism' and would be solved or improved by us working. If he had pointed out how our remote communities could create these sustainable employment markets, particularly since the erosion of our rights by the government’s 1998 amendments to the Native Title Act 1993 (Cth), then his identification of the causes of these problems may have been credible. I will argue that Abbott’s reasoning is internally inconsistent.

Land Rights

Firstly, to what extent do Abbott and Howard think that their amendments to the Native Title Act 1993 (Cth) facilitated the greater integration of Aboriginal people into Australia's economy? Abbott and most of the Liberal government seem unable to make the connection between land rights and greater economic empowerment. There is no governmental recognition that substantive native title or land rights would provide titleholders with the economic power that comes from the ability to enter a market with a property right that can be traded.

That is not to say that Abbott did not discuss land rights or native title. In fact, he quite rightly pointed out that land subject to native title cannot be sold or subdivided, and therefore it cannot provide security for debt. He argued that the way forward is to allow better economic use of native title. He advances this position in complete ignorance of the economic power that native titleholders and claimants had to ‘negotiate’ over mining and other developments that occur on their land, which was diminished[2] by Howard’s ten-point plan.

For instance, if Aboriginal people had a ‘right to veto’ development, then developers, miners or other businesses would pay Aboriginal people not to exercise this right, thereby allowing development to proceed. This would facilitate greater participation and acceptance by Aboriginal communities of economic development opportunities. The allocation of such property rights occurs within other market situations, such as tradable water entitlements.[3]

Many, including Abbott, would argue that a right of veto would slow down development and potentially lead to investment going offshore. Perhaps, but lets consider three separate factors.

New mines can operate for up to 50 years, depending on the size of the mineral deposit. It would be expected that the net earnings associated with such a development would more than adequately cover any payment to Aboriginal people. If this is not the case, then the mine was never economically justified in the first place, and to blame Aboriginal people is a moral cop out. Alternatively, if companies struggle to pay Aboriginal people, perhaps governments could forego their mining royalty revenue by transferring the right to receive royalties to Aboriginal people. After all, mining royalties are a special tax, and such taxes, like the Ansett tax on the aviation industry, are generally used for special purposes.

As Aboriginal people have had limited economic rights since colonisation, it will take time for communities to set up effective and efficient institutions to form the legal framework for the management of such economic rights. These new institutions will take time to learn how to balance the interests of all parties. However, over time, as people gain confidence and respect for the institutions, extended delays to development should be the exception rather than the norm.

Moreover, despite Abbott’s and other politicians’ claims about institution building and finding ‘long-term’ solutions to problems, they are simply interested in immediate political measures that can be readily recognised by voters at the next election. That is why Howard delivered the ten-point plan diminishing the first legally recognised Aboriginal economic right.

Community Development Employment Program

While Abbott correctly identifies that without CDEP Aboriginal unemployment would be around 90 percent in remote communities, he fails to extend his analysis in a manner that informs his policy direction. The fact that CDEP is needed to keep people ‘busy’ reflects the fact that there is no sustainable employment in remote communities. To pretend otherwise is a public policy deception of the highest order and one that has been perpetuated on Aboriginal people since CDEP started. However, this is not a uniquely Aboriginal problem, as non-Indigenous communities in remote and regional parts of Australia will attest. All Australians would be better off by governments undertaking greater analysis of the problems in regional and remote communities as a means of informing policy intervention.

If CDEP is designed to keep people busy in the absence of sustainable employment, so that they feel fulfilled and not antagonistic towards each other, why is it that Aboriginal communities still face significant social and family problems? I would argue that the problems of Aboriginal communities have more to do with Abbott's welfarism, which is a by-product of government involvement in Aboriginal lives. The government's involvement is a parlous history littered with examples of property right destruction, family break up and community isolation,[4] over such a long period of time that it has socially conditioned Aboriginal opposition as a normal reaction to governments.

It is accepted that continuous Aboriginal opposition to government and even community initiatives cannot be a good thing, particularly given our social circumstances. However, it is a factor that must be considered within the context of the history of Aboriginal and Anglo-Saxon interaction in this country, and should be taken into account in policy development. Two hundred years of poor government policy and intervention cannot be resolved by Aboriginal people overnight.

The Future

It is important that Abbott's speech is not ignored, as it provides valuable insight into the government's thinking on Aboriginal issues, and more generally on how the government’s policy to deal with rural decline is being shaped. It also illustrates the need for public policy to be developed on the foundation of clear analysis of the problem the government is purporting to address, and a thorough examination of policy alternatives.

The government should be aware that ill conceived policies can sometimes have unintended consequences that can extend to matters beyond the issue that the policy was initially focused on. For instance, and I am sure that Abbott would agree that the governments that designed the ‘protectionist’ and ‘assimilation’ policies were unaware that they were destroying individual initiative, and creating future communities that were so isolated from markets it would lead to wholesale unemployment, which, in turn, would create a concentration of social ills and human misery on a scale that should be unimaginable in a country as wealthy as Australia.

James Reynolds is of Gangalidda heritage from the Gulf of Carpentaria and resides in Brisbane. He has a Bachelor of Economics degree and a Masters of Business Administration degree, both from the University of Queensland. James is also a director of the Black Peppers Gallery in Brisbane.

[1] A copy of the speech can be found at www.workplace.gov.au/WP/Content/Files/ES/abbottcliepspeech.pdf.

[2] Some would argue that the right to negotiate has been destroyed. However, the critical point is that the government criticises native title for its lack of economic value to Aboriginal people, at the same time that it reduces any economic value it initially had. Such an obvious weakness in a land right should be strengthened rather than watered down.

[3] For more information on tradable water entitlements see http://www.waterexchange.com.au/.

[4] It is important to recognise that the location of these remote communities is a by-product of a policy that believed that Aboriginal people needed protection from white settlers and would eventually die out as a race. With those visionary and illuminating ideas in mind, it is no surprise that there are limited economic opportunities.


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