Commonwealth Indigenous-specific expenditure 1968-2008


Research Paper Index

Research Paper no. 10 2008–09

Commonwealth Indigenous-specific expenditure 1968–2008

Dr John Gardiner-Garden, Social Policy Section
Malcolm Park, Statistics and Mapping Section
26 September 2008

Contents

Introduction
Historical overview
Recent developments
The trend in expenditure
Per capita expenditure
Detailed expenditure tables
Sources
  Compilations of Commonwealth Indigenous-specific expenditure data
  Indigenous population data
  GDP and Implicit Price Deflator data
  Total Commonwealth expenditure data

Executive Summary

This paper attempts to identify Commonwealth expenditure in the area of Indigenous affairs over the 40 years from 1968 to 2008 and to plot that expenditure by agency.

The paper analyses trends in both the nominal and real expenditure, in the expenditure as a percentage of total Commonwealth outlays and Gross Domestic Product, and in the per-capita expenditure. In nominal and real terms Commonwealth Indigenous-specific expenditure has trended up, but as a percentage of total outlays or Gross Domestic Product it has plateaued in more recent years. The per capita trend is found to be too problematic to characterise simply.

Introduction

This paper presents graphs, tables and commentary on the subject of identifiable Commonwealth expenditure in the area of Indigenous Affairs. This means expenditure in any portfolio through programs or program components specifically intended to address Indigenous issues or needs that is, indigenous-specific expenditure. For the sake of brevity this is sometimes referred to in this paper as identifiable Indigenous expenditure.

In the pdf version of this paper, the tables referred to are appended at the end of the document.

In the html version of this paper, links to tables will open the relevant table in an Excel spreadsheet. All of the tables and charts referred to are in this one spreadsheet and they can be accessed via the tabs along the bottom of the screen in Excel. There is no need, therefore, to return to this page to access another table.

Historical overview

Identifiable Commonwealth expenditure in the area of Indigenous affairs began with the establishment of the Office of Aboriginal Affairs soon after the landmark referendum in 1967.[1] The expenditure was relatively low in the first few years but increased significantly with the creation of the Department of Aboriginal Affairs soon after the Whitlam Government came to office in December 1972, and continued to grow through the 1980s.

In 1990 the Department of Aboriginal Affairs was replaced by the Aboriginal and Torres Strait Islander Commission (ATSIC) and, except for a slight dip in 1993 94, identifiable Indigenous expenditure continued to rise throughout the 1990s. ATSIC expenditure as a proportion of total Indigenous expenditure started, however, to fall in the mid 1990s. This was a result of areas such as health and land acquisition being shifted out of ATSIC and some areas that remained within ATSIC receiving a funding cut following the 1996 Budget.

Although overall expenditure continued to rise from the late 1990s onward, it is difficult to compare earlier figures with those from later years because in 1998 there was a move from cash to accrual accounting and from 2000 01 the annual Ministerial statements on Identifiable Commonwealth Expenditure on Indigenous Affairs used different categories for representing expenditure. Tracking expenditure becomes even more complicated from 2002, as the successive administrative rearrangements associated with the gradual demise of ATSIC led to the staged transfer of its funding and responsibilities through, and to, a range of other agencies.  

In 2005 06 the Commonwealth introduced the reporting in the Portfolio Budget Statements of Australian Government Indigenous Expenditure figures and it is these that are used in this paper to plot expenditure over the years that followed.

Recent developments

At the end of 2007 the new Rudd Labor government introduced the words partnerships , closing the gap and sorry into the official language of Indigenous policy. The new Government promoted its 2008 Budget as making Indigenous expenditure commitments far in excess of the previous government, giving its new and redirected funding following the 2007 election as $580 million and Indigenous relevant 2008 09 Budget Measures as costing $425.3 million giving a total of $1.2 billion. The period covered by individual commitments varying from one to five years. A full break down with forward estimates can be found in the Whole of Government section of Budget Paper No.2, pp. 299 320 and a summary can be found on the Department of Family, Housing, Community Services and Indigenous Affairs web-page Indigenous Budget at a Glance.[2] With respect to the Northern Territory these new and redirected funds totalled $666.1 million, with respect to Australia as a whole, $554 million.

Although the rhetorical context was very different from that surrounding the Howard Government budgets, the programs and level of funding supported by the new Rudd Government are not very different from those of the previous government. This is borne out by comparing three figures expenditure commitments just prior to the Northern Territory Intervention, after that intervention but before the Rudd Government s May 2008 budget, and after the Rudd Government s May 2008 Budget.

The total of the 2007 08 Budget Portfolio Budget Statement (PBS) Australian Government Indigenous Expenditure (AGIE) figures for 2007 08 (that is, pre the Northern Territory Intervention) was $3.2 billion.

The total of the 2008 09 Budget PBS AGIE actual figures for 2007 08 (that is, post the Howard Government s Northern Territory Intervention commitments but pre-Rudd May budget commitments) was $3.85 billion.

The total of the 2008 09 Budget PBS AGIE estimated figures for 2008 09 was $3.86 billion.

The main factor in the rise in committed expenditure between 2007 and the 2008 by both the Howard and Rudd Governments was the advent of the Northern Territory Intervention. The 2008 Budget by and large simply continued the previous government s focus on improving the situation in the Northern Territory with a scale of expenditure envisaged by the previous government.

Table 1: Identifiable Commonwealth Expenditure on Indigenous Affairs,
1968 69 to 2007 08, Nominal and real dollars; percentages; per capita

 

The trend in expenditure

Converting nominal expenditure to real terms[3] shows a rising trend over the period, which means that increases in expenditure have been more than increases in inflation (see Table 1 and Chart 1). In real terms, identifiable Commonwealth expenditure in the area of Indigenous affairs saw a dramatic rise and fall in the early to mid 1970s falling from $947 million in 1975 76 to $596 million in 1978 79 and it did not then pass the 1975 76 level until 1983 84 ($960 million). The mid 1980s onwards has seen an almost uninterrupted rise in real expenditure, apart from small and quickly recovered declines in the mid 1990s and 2005 06. The trend can look a little different, however, when this expenditure is plotted against total government expenditure and Gross Domestic Product (GDP) and considered against total government revenue.

Chart 1 - Nominal and real (2007-8 dollars) identifiable Commonwealth Indigenous specific expenditure 1968-1969 to 2007-08

When expressed as a percentage of total Commonwealth expenditure, identifiable Indigenous expenditure shows the same sharp increase and fall in the mid 1970s, followed by almost continuous growth to 1992 93 (see Table 1 and Chart 2). The mid 1990s saw fluctuations with the percentage rising and falling year to year but still trending upwards. Since 1997 98, however, it has remained relatively stable around 1.35 per cent, fluctuating between a high of 1.43 per cent in 1999 2000 and a low of 1.24 per cent in 2001 02. In 1968 69 identifiable Indigenous expenditure accounted for only 0.18 per cent of total Commonwealth expenditure while in 2007 08 it accounts for an estimated 1.37 per cent.

When plotted as a percentage of GDP, Commonwealth Indigenous-specific expenditure shows a pattern broadly similar to when it is plotted as a percentage of total Commonwealth expenditure. Growth is fairly constant up until the early 1990s with a very clear stabilisation at around one third of one percentage point since then. Therefore, when measured against the economy as a whole, as measured by GDP, there has been no real growth in Indigenous-specific expenditure since the early 1990s (see Table 1 and Chart 2).

Chart 2 – Identifiable Commonwealth Indigenous specific expenditure as a percentage of total Commonwealth expenditure, and GDP, 1968-69 to 2007-08

Some commentators have also considered identifiable Indigenous expenditure in the light of the total government revenue. They have drawn attention to the fact that the plateauing of Indigenous expenditure relative to total expenditure and GDP from the late 1990s onwards, has happened in a period when the federal government has been generally presenting surplus budgets, so could theoretically (leaving all fiscal considerations and competing needs aside) have increased Indigenous expenditure.[4]

Per capita expenditure

There are two possible sets of Indigenous population data that per capita expenditure figures can be derived from, and both are problematic.

Five yearly census data covers the whole of the period of Aboriginal affairs expenditure. Census counts, however, are not considered a reliable indicator of the true size of the Indigenous population over this period. The data show periods of low and high population growth which cannot be accounted for by births and deaths only and which may be due in part to variations in the propensity to identify as Indigenous. As such, the per capita expenditure figures which are derived from these data and presented in Table 1 should be used with caution. In particular it is strongly advised that these figures not be used for an analysis of trends over the period.

The Australian Bureau of Statistics (ABS) has used data from the 2001 Census to produce estimates and projections of the Indigenous population which are considered more reliable than the Census figures, but which only cover the period 1991 2009. Furthermore, because of the difficulty in predicting the Indigenous population, both high and low projections were produced from 2002. Regardless of whether high or low projections are used, these data show a rising trend over the period in per capita identifiable Indigenous expenditure, though yearly fluctuations are quite volatile (see Table 2 and Chart 3).

Chart 3 – Real identifiable Commonwealth Indigenous specific expenditure per capita, 1991-92 to 2007-08 (Based on ABS estimated and projected Indigenous population)

Table 2: Experimental estimated and projected Indigenous population and real identifiable
Commonwealth expenditure on Indigenous Affairs per capita, 1991 92 to 2007 08

Further complicating the task of estimating per capita expenditure is the fact that a lot of Indigenous-specific expenditure has not been simply on top of that which Indigenous Australians might benefit from by being Australians. A large proportion of it has substituted for expenditure that would normally be provided via mainstream assistance programs (for example, Community Development Employment Projects 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 amount has been for services which are generally the responsibility of other levels of government (for example, state or local). At the same time, Indigenous Australians have often utilised mainstream services and benefits at a lower rate than other Australians (for example, Pharmaceutical Benefits and Aged Care).[5]

To produce meaningful per capita expenditure figures, detailed consideration-filled studies of single-portfolio areas need to be conducted. An example of such a study is that cited in footnote 5.

Detailed expenditure tables

The following tables provide the most detailed expenditure data available. The data are drawn from various sources, but most notably those discussed in the sources listed below.

Table 3: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1968 69 to 1989 90 ($ millions cash basis)

Table 4: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1990 91 to 1999 2000 ($ millions cash then accrual basis)

Table 5: Identifiable Commonwealth Expenditure on Indigenous Affairs, 2000 01 to 2004 05 ($)

Table 6: Australian Government Indigenous Expenditure - portfolio level, 2005 06 to 2007 08 ($ 000)

Table 7: Australian Government Indigenous Expenditure (AGIE portfolio level, 2007 08 to 2008 09 ($ 000)

Sources

Compilations of Commonwealth Indigenous-specific expenditure data

Expenditure data for the late 1960s to the late 1980s can be found in Appendix 15 of the Aboriginal Affairs Department, 1988 89 Annual Report, and in J.C.Altman and W.Sanders, From exclusion to dependence: Aborigines and the welfare state in Australia, Discussion Paper No. 1/1991, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra.

In 1991 and 1992 expenditure tables were included in the Budget Related Paper No.7, Social Justice For Indigenous Australians, circulated by the then Minister for Aboriginal Affairs, Robert Tickner.

From 1993 and 1995 expenditure tables were included in an annual, but no longer officially Budget Related, Social Justice For Indigenous Australians, circulated by the then Minister Robert Tickner.

There was no equivalent compilation released in 1996 or 1997, but in 1998, the then Minister for Aboriginal and Torres Strait Islander Affairs Senator Herron released Commonwealth Programs For Aboriginal and Torres Strait Islander Peoples 1995 1996, and Addressing Priorities in Indigenous Affairs an expenditure compilation that also included actual expenditures for 1995 96 and 96 97 and estimates for 97 98 and 98 99.

From 1999 to 2002 the Government released at budget time expenditure compilations in the form of a series of Ministerial statements:

A Better Future for Indigenous Australians, Statement by Senator the Honourable John Herron Minister for Aboriginal and Torres Strait Islander Affairs, 11 May 1999.

The Future Together, Indigenous-Specific Measures in the 2000 01 Budget, Statement by Senator the Honourable John Herron Minister for Aboriginal and Torres Strait Islander Affairs, 9 May 2000.

Our Path Together, Statement by the Honourable Philip Ruddock, MP Minister for Immigration and Multicultural and Indigenous Affairs, 22 May 2001. http://www.budget.gov.au/2001-02/minst/html/atsic-13.htm#P297_65117, accessed on 23 September 2008.

Indigenous Affairs 2002 03, Statement by the Honourable Philip Ruddock, MP Minister for Immigration and Multicultural and Indigenous Affairs, Minister Assisting the Prime Minister for Reconciliation, 14 May 2002.

In 2003 the then Minister for Indigenous Affairs, Amanda Vanstone, simply included Indigenous-specific expenditure in a Budget time press release kit. Her 2003 release only included overall expenditure, but the 2004 and 2005 expenditure included more of the detail of the kind that had been in earlier Ministerial statements.

From 2006 there has been no single cross-portfolio compilation of Indigenous-specific Commonwealth expenditures. Instead portfolio specific summaries of Australian Government Indigenous Expenditure (AGIE) have been included in nearly all the annual Portfolio Budget Statements.

Indigenous population data

Australian Bureau of Statistics (ABS), Australian Historical Population Statistics 2006 (3105.0.65.001), Table 9,

http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3105.0.65.0012006?OpenDocument, accessed on 23 September 2008.

ABS, Census 2006: QuickStats Australia, http://www.censusdata.abs.gov.au/ABSNavigation/prenav/ViewData?subaction=
1&producttype=QuickStats&areacode=0&action=401&collection=Census&textversion
=false&breadcrumb=PL&period=2006&javascript=true&navmapdisplayed=true&
, accessed 23 on September 2008.

ABS, Experimental Estimates and Projections, Indigenous Australians, 1991 to 2009 (3238.0),
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3238.01991
%20to%202009?OpenDocument
, accessed on 23 September 2008.

GDP and Implicit Price Deflator data

ABS, National Income, Expenditure and Product, March 2008 (5206.0)
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5206.0Mar%202008?OpenDocument
, accessed on 23 September 2008.

Australian Government, Budget Strategy and Outlook 2008 09: Budget Paper No. 1, 13 May 2008,

http://www.budget.gov.au/2008-09/content/bp1/html/index.htm, accessed on 23 September 2008.

Total Commonwealth expenditure data

Australian Government, Budget Strategy and Outlook: Budget Paper No. 1, 1999 2000 and 2008 09 editions - Historical Australian Government Data, 

http://www.budget.gov.au/, accessed on 23 September 2008.



[1]. See J. Gardiner-Garden, The 1967 Referendum history and myths, Parliamentary Library Research Brief, Canberra, 2 May 2007. http://www.aph.gov.au/library/pubs/rb/2006-07/07rb11.pdf, accessed on 23 September 2008.

[2]. Australian Government, Budget Paper No. 2: Budget Measures 2008 09, Commonwealth of Australia, Canberra, 2008,

http://www.budget.gov.au/2008-09/content/bp2/html/expense-25.htm and Australian Government, Department of Families, Housing, Community Services and Indigenous Affairs, 2008 09 Indigenous Budget at a Glance,

http://www.facs.gov.au/internet/facsinternet.nsf/aboutfacs/budget/budget
2008-08_indigenous_at_a_glance.htm
, accessed on 19 May 2008.

[3]. The nominal expenditure (what is spent each year) adjusted to remove the effect of inflation and expressed in 2007 08 dollars using the Implicit Price Deflator (IPD) for Non-Farm GDP. Essentially these figures are the expenditure of previous years expressed in current dollars, enabling a more useful comparison over time.

[4]. For example, Chris Graham in the National Indigenous Times, 29 May, 2008, pp.15 16 calculated that Indigenous expenditure as a percentage of total revenue had been generally lower in Howard Government budgets than it had been in Keating Government ones, and argued that it s one thing to measure the amount of money allocated to Indigenous affairs. It s another thing altogether to measure the amount of money available to be allocated to Indigenous affairs.

[5]. See J. Deeble J. Shelton Agar and J. Goss, Expenditures on health for Aboriginal and Torres Strait Islander peoples 2004 05 Australian Institute of Health and Welfare, Canberra, February 2008. http://www.aihw.gov.au/publications/hwe/eohfatsip04-05/eohfatsip04-05.pdf, accessed on 23 September 2008.

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