Indigenous Expenditure Report 2012

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Indigenous Expenditure Report 2012

Posted 5/09/2012 by John Gardiner-Garden

The just released 2012 Indigenous Expenditure Report estimates expenditure by all levels of Government on services to Indigenous Australians. It is the second in a series (the first being released in 2010) which examines inputs into Indigenous service delivery and which is intended to complement the longer running Overcoming Indigenous Disadvantage reports which examine outcomes in this same area. Both reports are currently produced by the Steering Committee for the Review of Government Service Provision.

Released at the same time as the full expenditure report has been a series of all-state and state-by-state factsheets, a series of web expenditure tables and the 2012 Indigenous Expenditure Report Overview . In both the report and overview, some ‘key points’ are summaries as follows:

  • Total direct Indigenous expenditure in 2010-11 was estimated to be $25.4 billion, accounting for 5.6 per cent of total direct general government expenditure. Indigenous Australians make up 2.6 per cent of the population.
    • The Australian Government accounted for $11.5 billion (45 per cent) of direct Indigenous expenditure, with the remaining $13.9 billion (55 per cent) provided by State and Territory governments.
    • Mainstream services accounted for $19.9 billion (78 per cent) of direct Indigenous expenditure, with the remaining $5.5 billion (22 per cent) provided through Indigenous specific (targeted) services. 
  • Estimated expenditure per head of population was $44 128 for Indigenous Australians, compared with $19 589 for other Australians (a ratio of 2.25 to 1).
The report notes that the $24 538 per person difference reflected the combined effects of:
  • greater intensity of service use ($16 109 or 66 per cent) — Indigenous Australians use more services per capita because of greater need, and because of population characteristics such as the younger age profile of the Indigenous population. 
  • additional cost of providing services ($8429 or 34 per cent) — it can cost more to provide services to Indigenous Australians if mainstream services are more expensive to provide (for example, because of location), or if Indigenous Australians receive targeted services (for example, Indigenous liaison officers in hospitals) in addition to mainstream services.
The Report also includes a number of focus areas of expenditure and in the following areas the ratio of Indigenous to non-Indigenous expenditure per head of population was, to quote:
  • school education — 2.99:1 ($5359 per Indigenous Australian compared with $1792 per non-Indigenous Australian), mainly reflecting higher per capita use of school services, driven by the younger age profile of the Indigenous population. 
  • public and community health services — 4.89:1 ($3152 per Indigenous Australian compared with $644 per non-Indigenous Australian), mainly reflecting higher per capita use of health services, driven by the poorer health status of Indigenous Australians. 
  • housing — 4.85:1 ($1708 per Indigenous Australian compared with $352 per non-Indigenous Australian), mainly reflecting higher per capita use of social housing by indigenous Australians, driven by socio-economic disadvantage.
The report’s release was announced by some newspapers under headlines highlighting the apparent expenditure discrepancies (see for example The Australian’s ‘Aboriginal split: 5.6pc of funds, 2.6pc of population’ ) and with some writers noting that expenditure has risen well in excess of inflation since the 2010 Overview (see for example David Crowe in The Australian’s ‘Indigenous spending topping $25bn The question is: has the two-year surge benefited the 575,000 people?’). The Indigenous Affairs Minister Jenny Macklin and Assistant Treasurer David Bradbury have in their media release, emphasised the reasons for the level of expenditure (‘ The estimated government expenditure on Indigenous Australians reflects a greater use of government services because of higher level of need and disadvantage, as well as the additional cost of providing services in remote areas with significant Indigenous populations’), and observed that ‘since 2008 governments have committed unprecedented investments to help close the gap in Indigenous Affairs’.

It is not, however, the size of the challenge or the size of the commitment that is being publicly questioned in the wake of this report, but the efficacy of Government expenditure and/or policy—especially given that Department of Finance and Regulation’s Strategic Review of Indigenous Expenditure (released under freedom of information last year) found poor results from the public investment, and that the COAG Reform Council’s Indigenous reform 2010-11: Comparing performance across Australia (released June 2012), found that some key health goals were unlikely to be met and that progress on education goals seems to be faring even worse. Even the generally optimistic Close the Gap Campaign Steering Committee’s Shadow Report 2012 complained of ‘long-standing data issues that still plague the effective monitoring of programs and that work to dilute accountability’.

Reports on indigenous expenditure have always generated a wide range of public reactions. For example, following the release of the 2010 Indigenous Expenditure Report Helen Hughes and Mark Hughes published ‘Rivers of Money Flow into the Sand’ (Quadrant, June 2011), damning the welfare approach to Indigenous Affairs and calling for greater private property rights for indigenous people on communal land, while following the release of the Strategic Review of Indigenous Expenditure Jon Altman, in The Conversation, 8 August 2011, ‘Putting dollars on disadvantage: Australia’s Indigenous spending’ was critical of the media coverage which had ‘the potential to fuel a backlash against Indigenous-specific expenditure that is justified.’ This latest expenditure report is likely to draw a similar range of reactions.

Later this month the Parliamentary Library will be releasing an updated background note entitled Commonwealth Indigenous-specific expenditure 1968-2012 which will provide a comprehensive picture over 44 years of identifiable indigenous-specific Commonwealth expenditure.

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