Indigenous Socioeconomics Indicators, Benefits and Expenditure

Social Policy Group

Indigenous Affairs Expenditure

Dr John Gardiner-Garden

Last updated 11 March 2003

This is a companion paper to two other briefs prepared by the Parliamentary Library's Information and Research Services, Indigenous Individual Benefits and Indigenous Socioeconomic Indicators.

Historical Overview

Identifiable Commonwealth expenditure in the area of Aboriginal and Torres Strait Islander (ATSI) Affairs began with the establishment of the Office of Aboriginal Affairs soon after the landmark referendum in 1967. It was relatively low in the first few years (indeed, the figure for the financial year 196768 of $13 000 is too small to include in the table) but increased significantly with the creation of the Department of Aboriginal Affairs (DAA) soon after the Whitlam Government came to office in December 1972. It increased again in 1985 when the relevant expenditure by other Commonwealth departments started to be identified separately. In 1990 the DAA was replaced by the Aboriginal and Torres Strait Islander Commission (ATSIC) and at about that same time several other specialist Indigenous agencies started to have their expenditure separately identified. By 199293 total identifiable Commonwealth expenditure in the area exceeded $1.4 billion.

In 199394 ATSIC expenditure continued to increase but overall Government expenditure in the area fell slightly as a result of lower identifiable expenditure by other Departments. Since then, however, total identifiable Commonwealth expenditure has risen much more than has ATSIC expenditurethe reasons are two fold. Firstly, since 1994 ATSIC has lost responsibility for several areas which have been attracting increased Commonwealth support. Responsibility for health shifted from ATSIC to the mainstream department in 199596. Responsibility for land acquisition and management shifted to the Indigenous Land Corporation (ILS) between 199596 and 199697. Responsibility for the Torres Strait shifted to the Torres Strait Regional Authority in 199495. Secondly, in the 1996 Budget ATSIC's budget was cut.

During the late 1990s the relevant Minister and the Chair of ATSIC, by using different figures, have presented different perspectives on the funding situation.

In 1996 Senator Herron offered figures showing that the Government was planning to spend $400 million more on ATSIC in its first four years than the previous Government had spent over its last four years, while ATSIC was able to offer figures showing that the Government was planning to spend $470 million less on ATSIC in its first four years than the previous Government had planned, in its advanced estimates, to spend in those same years.

In 1998 Senator Herron was able to say anticipated Commonwealth expenditure in Indigenous affairs was higher in 199899 than in the previous year and higher in real terms (i.e. adjusted for CPI) than when the Government came to office ('Indigenous Spending Highest on Record', Media Release, 12 May 1998). ATSIC Chair Gatjil Djerrkura could point out that in real terms the 199899 figure was down on the 199798 figure, and that of the four priorities being emphasised by the Governmenthealth, housing, education and employment, only health received a significant increase in funding. Senator Herron referred to 'a record $2.2 billion spent on Indigenous specific programmes during 19992000' ('A Better Future for Indigenous Australians', Media Release, 11 May 1999). Gatjil Djerrkura, though giving the budget only 'two and a half out of four' and finding some specific allocations disappointing, conceded it was 'an advance on last year' and the budgetary increases 'are small but nonetheless welcome'.

The 19992000 figures continue the trend whereby expenditure on ATSIC represents a progressively smaller proportion of total Indigenous specific programme spending (in 199899 it represented 59 per cent of total expenditure, in 19992000 56 per cent).

The following tables and graph are based on data presented in various DAA and ATSIC Annual Reports, and Ministerial Statements (most recently the Hon. Philip Ruddock's Statements, Our Path Together, 22 May 2001 and Indigenous Affairs 200203, 14 May 2002). It is important to note the following:

• the main agency figures include loans and grants to organisations, payments to State and Territory governments, and running/administration costs
• as the names of departments, agencies and programs have varied over the years only general descriptors of these areas and portfolios are used
• some Indigenous specific agencies which appear on the graph for the first time in the 1990s had predecessors in the 1980s (expenditure included under 'Other main agency expenditure')
• the move from cash to accrual budgeting in 1998 makes comparisons between pre and post 1998 figures problematic.

Table 1: Identifiable Commonwealth Expenditure on Aboriginal and Torres Strait Affairs, 1967-68 to 1978-79 ($ millions - cash basis)

.

1967-68

1968-69

1969-70

1970-71

1971-72

1972-73

1973-74

1974-75

1975-76

1976-77

1977-78

1978-79

Main ATSI agency (a)

Employment

.

.

1.4

0.4

0.6

4.1

4.8

14.6

5.7

5.3

6.8

6.9

Health

.

0.5

0.8

1.2

2.0

3.0

9.4

11.9

15.9

14.4

16.3

17.5

Law and justice

.

.

.

.

.

0.7

1.2

2.7

3.7

3.7

3.9

4.2

Housing

.

2.3

2.8

6.1

6.5

14.3

25.0

43.0

43.2

39.9

34.3

39.4

Community infrastructure

.

.

0.3

7.5

8.2

10.5

15.7

16.4

27.5

25.2

26.1

22.5

Education

.

0.8

0.9

2.9

3.0

3.1

4.8

6.0

9.0

8.5

9.2

9.1

Other

0.0

6.4

2.7

2.0

3.6

8.6

17.3

30.1

33.9

23.9

27.7

33.0

GRAND TOTAL

0.0

10.1

8.9

20.0

24.0

44.3

78.3

124.8

138.9

121.0

124.3

132.6

(a) Office of Aboriginal Affairs - 1967 to 1971; Department of Aboriginal Affairs - 1972 to March 19990.

Source: Annual Report of the main ATSI agency, various years.

Table 2: Identifiable Commonwealth Expenditure on Aboriginal and Torres Strait Islander Affairs, 1979-80 to 1989-90 ($ millions - cash basis)

(a) Department of Aboriginal Affairs - 1972 to March 1990; Aboriginal and Torres Strait Islander Commission - March to June 1990
(b) Function absorbed by other agencies from 198889.

Source: Annual Report of the main ATSI agency, various years.

Table 3: Identifiable Commonwealth Expenditure on Aboriginal and Torres Strait Islander Affairs, 1990-91 to 1999-2000 ($ millions - cash then accrual basis)

(a) Estimates.
(b) Functions absorbed by other agency(ies) from this year.
(c) Includes Human Rights.
(d) Excludes Community Housing.
(e) Includes Community Housing.
(f) Does not include ABTA/Aboriginal Benefit Reserve expenditure.
(g) The cash basis figures are the Commonwealth capital injections, but the accrual basis figures are annual agency expenditures. The agency regards itself as self-funding.
(h) Aboriginal Benefit Trust Account until 1996-97. Includes $0.2 million provided annually under the Ranger Agreement.
(i) Torres Strait Regional Authority.
(j) Indigenous Land Corporation.
(k) Includes $91.0 million for each year for the Aboriginal Rental Housing Programme previously funded under the Housing portfolio.

Source: ATSIC, Annual Report, various years; Addressing priorities in Indigenous Affairs, Statement by the Minister for Aboriginal and Torres Strait Islander Affairs, 12 May 1998.

Table 4: Identifiable Commonwealth Expenditure on Aboriginal and Torres Strait Islander Affairs, 2000-01 to 2001-02 ($ millions)

(a) Final actual outcome. Figures not similarly noted are estimated actual outcomes.
(b) Including Community Housing and Infrastructure programme.
(c) Including some Community Development Employment Projects.
(d) Previously Aboriginal Benefit Reserve.
(e) Previously ATSICDC (Aboriginal and Torres Strait Islander Commercial Development Corporation).
(f) Includes $91.0 million. For Aboriginal Rental Housing Programme.

Source: ATSIC, Annual Report 2000-01 and 2001-02; Our Path Together, Statement by Hon. P. Ruddock, 22 May 2001; Indigenous Affairs, 2002-03, Statement by Hon. P. Ruddock, 14 May 2002.

Current Expenditure Portfolio-by-Portfolio

In the 20002001 Budget, total identifiable Commonwealth expenditure on Aboriginal and Torres Strait Islander Affairs increased to $2.3 billion, only a very slight increase in real terms over the 19992000 figure and in the 20012002 Budget total identifiable Commonwealth expenditure on Aboriginal and Torres Strait Islander Affairs remained at $2.3 billion. In the 20022003 Budget the commitment rose to $2.5 billion. The Hon Philip Ruddock's Statement, Indigenous Affairs 200203, offers an area-by-area summary of Government objectives and commitments and a program-by-program break down of the estimated actual expenditure for 20012002 and Budget estimates for 20022003. For a closer look at programs offering benefits for individuals and how these benefits compare with benefits available through mainstream programmes see the companion publication Indigenous Individual Benefits. For an analysis of possible trends in outcomes flowing from expenditure in various portfolios see the companion publication Indigenous Socioeconomic Indicators.

Current Expenditure State-by-State

The Commonwealth Grants Commission, as part of its reference to compare the distribution of Indigenous needs with existing pattern of resource allocation, has been attempting to estimate Commonwealth expenditure on Indigenous specific programs on a State by State basis. The thirteen tables in which they offer preliminary estimates of such expenditure in particular areas are available in the Commonwealth Grants Commission Indigenous Funding Inquiry Final Report.

Comparative Per-Capita Expenditure

Identifiable Commonwealth expenditure on Indigenous specific programs is not simply 'on top of' that which Indigenous Australians might benefit from by being Australians. Close to one third substitutes for expenditure on mainstream assistance programs (e.g. Abstudy for Youth Allowance, Community Employment for Newstart, Community Housing for housing under the Commonwealth-State Housing agreement, Aboriginal Legal Aid for general legal aid, Aboriginal Medical Services for Medicare supported services). A further percentage is for services which are arguably the responsibility of other levels of government. At the same time, Indigenous Australians often utilise mainstream services and benefits (e.g. Pharmaceutical Benefits and Aged Care) at a lower rate than other Australians, and a lot of Commonwealth assistance flows to other groups within Australian society, such as veterans and farmers, with a disproportionately low number of Indigenous members. When considerations such as the above are taken into account, Indigenous Australians are often found not to be receiving, on a per-capita basis, the benefit of that much more expenditure than non-Indigenous Australians. Below is an analysis of comparative per-capita expenditure in four key areasdrawing primarily on Max Neutze, Will Sanders and Giff Jones, Public Expenditure on Services for Indigenous People, Education, Employment, Health and Housing, Discussion paper, no. 24, The Australia Institute, September 1999. A summary is available here.

For a comparison between individual benefits for which Indigenous and non-Indigenous people are eligible see the companion publication Indigenous Individual Benefits and for more on the trends in socio-economic indicators which place comparative per-capita expenditure in context see the companion publication Indigenous Socioeconomic Indicators.

Education

Per capita public expenditure on education for Indigenous persons in most relevant age groups (324 years old) in 1995 was 18 per cent higher than for non-Indigenous. This disparity may not, however, be out of proportion to need. Many educational services for Indigenous people are in rural and remote locations where the per capita cost of delivering education is great. Many Indigenous students are from families with lower than average incomes, may speak a language other than English at home, may have parents who themselves have had little formal education and may not have the books and facilities at home to facilitate homework. Indeed, if those programs which Indigenous students are particularly likely to avail themselves of because of their low income, remote location or special needs (ABSTUDY, Youth Allowance, Assistance for Isolated Children and specific Indigenous programs such as Tutorial Assistance Scheme, Vocational and Educational Guidance and Student Support and Parental Awareness Programs, the Strategic Initiatives Program) are left out of the sums, the per-capita estimated public expenditure per Indigenous person is only 89 per cent of that for non-Indigenous and only 52 per cent at the tertiary level.

Employment

Per-capita public expenditure on programs for the unemployed has been 48 per cent more for unemployed Indigenous Australians than for non-Indigenous Australians. Contributing to this disparity would seem to be the higher average cost of the general employment programs in which Indigenous people participate, specifically those for the long term unemployed and Community Development Employment Projects (CDEP), the latter also having broader community development objectives. When that part of CDEP which is over and above the Newstart allowance is left out of the equation, per capita general employment programs expenditure is 35 per cent less for an Indigenous unemployed than for a non-Indigenous.

Health

Per capita expenditures on publicly funded health services in the survey years of 199596 and 199899 was more than 50 per cent higher for Aboriginal and Torres Strait Islander people than for non-Indigenous. Per capita privately funded expenditure in both these years was much higher for non-Indigenous people making total per capita health expenditure (all levels, all sectors private and public), only slightly higher for Indigenous people (about 8 per cent in 1995-96, 22 per cent in 199899). The gap in per capita public expenditure closes dramatically when comparing Indigenous and non-Indigenous people with comparable incomes and in comparable regions.

See:

• Australian Institute of Health and Welfare, Expenditures on Health Services for Aboriginal and Torres Strait Islander People 199899, Australian Institute of Health and Welfare, Canberra, 2001.
• J. Deeble et al., Expenditures on Health Services for Aboriginal and Torres Strait Islander People, Commonwealth Department of Health and Family Services, Canberra, 1998.
• Max Neutze, Will Sanders and Giff Jones, Public Expenditure on Services for Indigenous People, Education, Employment, Health and Housing, Discussion paper, no. 24, The Australia Institute, September 1999, p. xi. Summary available here.

Housing

The average Indigenous household receives between 8.5 and 25 per cent more than the non-Indigenous in benefits from public expenditure on housing (e.g. through funding for public and community housing, through Rent Assistance paid to eligible tenants and through the favourable tax treatment of owner occupied housing). Contributing to this discrepancy is, however, the fact that a much higher proportion of Indigenous households than non-Indigenous, live in public housing. The benefits (which take the form of rent rebates) are on average the same for Indigenous and non-Indigenous tenants. It might also be observed, that as Indigenous households are larger on average than non-Indigenous, when the benefit from public expenditure is expressed as a per capita benefit, the margin shifts to favour the non-Indigenous by between 9 and 21 per cent.

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