Chapter Three - The effects of the ATSIC Amendment Bill
In her second reading speech, the Minister indicated
The Bill does one thing. It
abolishes ATSIC. The bulk of the Australian Government's reforms to Indigenous
affairs are proceeding independently of this Bill.
The Committee is concerned that this seriously
over-simplifies the Bill's proposed effects. While
most of the reforms have been independently implemented, there are changes in
the Bill that affect more than just the Board of
ATSIC, and this chapter analyses those changes.
Transfer of ATSIC assets and intellectual property
The Government's approach to ATSIC's assets was
explained by the then CEO of ATSIS, Mr Gibbons:
The principle that has been followed in the drafting of the Bill
is that real assets that were in the hands of Indigenous organisations remain
in Indigenous custody through ILC or IBA. Assets that were acquired for the
purposes of administering programs would return to the Commonwealth for that
purpose where they have not already been returned to or taken over by the
Under Schedule 1, Item 192 of the Bill
(item 191 in the Bill that was before the
previous Parliament), ATSIC's assets and liabilities are transferred to the
Commonwealth, to Indigenous Business Australia, or to the Indigenous Land
Corporation. Broadly speaking, the assets are divided up as shown in the table
Table 3.1 – Transfer
of ATSIC assets
Movement of asset
Type of asset involved
Transferred to IBA – 'Class A exempted assets'
Regional Land Fund money
Transferred to ILC – 'Class B exempted assets'
Housing Fund money
ATSIC housing loans and business loans (if declared by the minister to
be a class B exempted asset)
to the Commonwealth
ATSIC assets not declared by the minister to be either class A or B.
Any other ATSIC asset may be declared by the Minister to
be either a class A or class B exempted asset. In these cases, which body acquires
ATSIC's liabilities (IBA, ILC or the Commonwealth) is entirely at the discretion
of the Minister. Assets of the Regional Councils are vested in the Commonwealth
once they are abolished.
Item 192(4) of the Bill specifies that, if an asset was
held by ATSIC on trust, then the body to which the asset is transferred will
hold it on trust 'subject to the terms of the trust' under which it was held by
ATSIC does hold assets other than the various Fund
moneys and pastoral stations. It holds shares in Yipirinya (Yeperenye) and
Imparja Television. ATSIC also
holds other assets, including artworks and artefacts valued at $1.76 million. AIATSIS
pointed out that:
With the abolition of ATSIC, there is an immediate risk of
disbursement of material of long term historical significance to Indigenous
peoples and the Australian community in general. AIATSIS is well placed to
fulfil the responsibilities of a central repository of cultural and other
material of relevance to Indigenous peoples held by ATSIC/ATSIS, including the
library, art, media and ephemera.
The Government indicated it planned for these assets to
be transferred to the Commonwealth rather than IBA or the ILC. This would effectively mean they would
pass out of the hands of Indigenous-controlled organisations. More recent
evidence was given suggesting there would be discussions between AIATSIS, OIPC
and the National Gallery of Australia
about how the collection would be preserved.
The Committee supports the maintenance of the collection as a coherent entity,
and also that Indigenous people should formally have custody of Indigenous
artworks and artefacts.
The principles that should underlie any decision about
the future ownership and location of the artworks and artefacts currently in
the possession of ATSIC include:
- That the collection be maintained as a single,
- That Indigenous people and organisations be
closely involved in, and approve, the location of the collection; and
- That the collection remains in public hands.
Because the ATSIC art collection emphasises desert and
Northern Australian art, a location in the Northern
Territory or possibly another part of Northern
Australia might be favoured.
The Committee recommends that all assets controlled by
ATSIC continue to be applied to the benefit of Indigenous Australians, and that
Indigenous people retain custody of Indigenous artworks and artefacts.
Changes to the Office of Evaluation and Audit
Under the original Act, the Office of Evaluation and
Audit (OEA) was established within ATSIC. OEA has never had the same degree of
independence as the Auditor-General. Its director was appointed by the Minister
after consultation with the Commission. It could conduct audits within its
terms of reference at its own initiative, or, in particular situations, when
requested by the Minister, the Commission, the TSRA, Aboriginal Hostels
Limited, the ILC or IBA.
Under the new arrangements, OEA will be established
within DIMIA, and its agenda will be set to a large degree by the Minister.
The Bill proposes to
change the role of OEA. Currently OEA examines the activities of Indigenous
organisations such as the Commission. Under the proposed Bill,
OEA will be able to evaluate any 'relevant program' administered by an
Australian Government body, and to audit organisations and individuals who receive
funding under relevant programs. A relevant program is:
A program, or a program component, under which money is
provided, including on loan, or a guarantee is given, or an interest in land or
other property is transferred, for the purpose of furthering the social,
economic or cultural development of Aboriginal persons or Torres Strait
Even prior to the administrative changes implemented by
the Government in the first half of 2004, ATSIC was not responsible for all
federal Indigenous programs, so this change in definition of what OEA can audit
broadens the scope of OEA's scrutiny. The Committee notes that this change is
consistent with the recommendation of the ATSIC Review, that:
The role of the Office of Evaluation and Audit be expanded to
enable it to evaluate and performance audit the programs and services of all
service providers including all agencies of government where the Australian
Government has provided resources for the provision of services for Aboriginal
and Torres Strait Islander people.
In its submission, the National Aboriginal Community
Controlled Health Organisation (NACCHO), expressed concern that this would not
go far enough:
Currently, there is no explicit mechanism whereby Departments
can be held accountable for mainstream health program expenditure and whether
these programs reach target populations such as Aboriginal peoples and Torres
Strait Islanders as is required under the Australian Governments Charter of
Public Services in a Culturally Diverse Society (1996). If enhanced
Departmental accountability only pertains to a restricted set of health
programs, NACCHO cannot see that this process will contribute to address the
current lack of accountability.
NACCHO's doubts are partly based on its experience in
the area of health, where mainstream health services were inadequate. The Commonwealth Grants Commission
report also identifies this issue, indicating that Indigenous people may not be
accessing mainstream programs to the same extent as non-Indigenous people. Even under the proposed new,
expanded mandate, OEA will not be able to examine this type of problem.
Concern was expressed that the change could bring more
bureaucracy rather than more transparency:
...there is such an increasing array of auditing processes and
possibilities that there needs to be a clean look at who should be auditing
Aboriginal organisations and for what purpose, to make it more streamlined and
appropriate. Certainly, it looks to us after our initial trawl through the bill
that this is only going to make it a yet more complex and difficult process
rather than an easier one to work through, particularly for organisations like
the land council, where the transparency and scrutiny is already extremely high
in terms of annual reports and the ANAO.
There is also the question of whether the audit
function is being broadened without resources to match. There are already areas
that OEA has the power to examine, but which it has not explored. It is not clear whether there is a
plan to increase OEA's budget to allow its operations to significantly expand. Whether this broadening of OEA's
remit is going to enhance the scrutiny and performance of Indigenous programs
will depend on OEA having adequate resources.
The mainstreaming of ATSIC functions and Indigenous
programs generally creates a more onerous task for the Parliament in overseeing
and monitoring the Government’s overall performance. In the case of each
program, there is a good chance that, under the new arrangements, failures or
shortcomings in its performance might well less apparent, ane even overlooked.
There is a sound argument, therefore, for a new structure or process to be
established, so that adequate public scrutiny can be ensured.
Changes affecting the Indigenous Land Corporation and Indigenous Business
The ILC is required to prepare an Indigenous land use
strategy to guide it in the performance of its functions. Under the current Act, the ILC 'must
have regard to the desirability of consulting the Commission' when preparing the
strategy. The Bill
in its current form does not propose to require any other consultations with
Indigenous organisations to replace the reference to ATSIC, leaving the clause
In performing functions under this section, the Indigenous Land
Corporation Board may consult such other persons and bodies as the Board
The Committee notes that retaining the word 'other' no
longer makes sense, as its use was a consequence of the provision also
containing the provision requiring particular regard to be had to the views of
The Bill will for the
first time empower the ILC to give money to IBA for projects. It is likely that the ILC will
acquire properties that were previously owned by ATSIC. In evidence, the ILC's general manager,
indicated it did not think the acquisition of 19 properties from ATSIC would be
I do not think that will bring too much of a burden upon us. We
have already purchased 172 properties and we have 108 under a remediation
strategy which looks at properties, their condition, the people who are there
and the aspirations for those properties and provides funds and property
management plans. We will just incorporate them into our normal regime.
The Committee is nevertheless concerned about the
capacity for the ILC to manage the expanded portfolio of properties. As Mr
Galvin noted, the ILC is already starting to
expend considerable resources on management of properties already in its
Land management expenditure has been escalating because now we
are looking at Indigenous held land that needs what we call our remediation
strategy. Back in 2000-01 we looked into 156 properties that we had purchased,
and found that probably 85 per cent of them were not generating the benefits
that people thought they were going to. Primarily, the reason for that was that
they were purchased without a great deal of scrutiny or effort. It was more
that land equalled benefit.
We have developed a remediation program where we go back to
those properties and the landholders. We have got about 108 of those 152
properties in our remediation program, where we are developing property
management plans. We are fixing up infrastructure.
The ILC is thus already having to spread its resources
across acquisition, property maintenance and remediation, and is now going to
acquire a diverse range of properties from ATSIC. These new acquisitions will
be imposed on the ILC effectively regardless of whether they would have been
consistent with the ILC's acquisition policies and strategies.
While the Committee notes the ILC's assurances of its
capacity to manage this expanded portfolio of properties, the Committee
nevertheless considers that the issue should be monitored by the Parliamentary
Joint Committee on Native Title as part of its statutory scrutiny role of the
The Committee recommends that ILC's capacity to
manage its portfolio of properties be monitored by the Parliamentary Joint
Committee on Native Title as part of its statutory scrutiny role of the ILC. In
the event that ATSIC and its regional councils are abolished, the ordinary
members of the ILC Board include an Indigenous representative nominated by a
relevant Indigenous organisation
The Committee also notes assurances by Mr Galvin, CEO
of the ILC, that the changes will not have any effect on the number of
Indigenous people on the seven member ILC Board, notwithstanding that once the Bill
is passed and ATSIC is no longer in existence the two ATSIC representatives
cease to be members of the board.
As Mr Galvin
[T]here will still have to be five Indigenous members of the
board and two other members who have certain skills and who can be Indigenous
It would be up to the minister to appoint two other Indigenous
members, so there is no reduction in the number of Indigenous members.
The Committee notes that if the Parliament were to
abolish ATSIC but retain the Regional Councils, there would be an opportunity
to require that one of the ordinary members of the ILC Board be a Regional
Council member, just as the Act currently requires one of them to be a
The changes affecting IBA are different. Currently, the
Act sets out principles under which IBA should operate. The ATSIC Act also currently
Except as expressly provided in this Act or the Commonwealth
Authorities and Companies Act 1997, the Minister is not empowered to direct
Indigenous Business Australia in relation to any of its activities.
These 'expressly provided' powers given to the Minister
are currently quite limited: the Minister can ask IBA to change its Corporate
Plan (but not demand that it do so),
and can request information. In
addition, the Treasurer can limit the total loans for which IBA can provide
guarantees. As the IBA submission
points out, 'IBA is therefore not a conventional government agency and operates
at arms-length from the Commonwealth'.
The Bill proposes to
alter this arrangement, saying instead that:
Indigenous Business Australia must perform its functions and
exercise its powers in accordance with any general written directions given to
it by the Minister.
Asked about the justification for this revision of the Minister's
capacity to direct IBA, Mr Vaughan
at the moment the Minister has such powers in respect of the
housing fund and the business loan programs administered by ATSIC; given that
it is planned that those two functions be transferred to IBA, it is appropriate
that the minister’s powers to give general directions about them should also be
imported into the IBA provisions of the act.
Section 12 of the current ATSIC Act sets out the powers
of general direction in regard to ATSIC:
The Commission shall perform its functions and exercise its
powers in accordance with such general directions as are given to it by the
Minister in writing.
In addition, the ATSIC Act currently states that 'Money
in the Housing Fund shall not be spent otherwise than in accordance with budget
estimates approved by the Minister'.
The amendment proposed in the Bill
to provisions governing IBA will apply to all
of IBA's functions. This represents a significant change to the capacity of IBA
to control its own operations. In its submission, IBA indicated that it
supports changes to the Act.
However, it also indicated that it supported legislation 'framed in a way which
limits Commonwealth control and therefore any perception that the Commonwealth
has any flow-on responsibilities for IBA's actions'. Given that the changes appear to
extend ministerial control of IBA's activities, the Committee was not able to
clarify how these two positions are reconciled.
The Committee also sees potential conflict between the
reforms to IBA and the recommendations of the Government's recent review of the
governance of statutory authorities. That review recommended that 'governance
boards should be utilised in statutory authorities only where they can be given
the full power to act'. This
change to IBA's functions appears to be moving in the opposite direction.
The Committee emphasises that IBA has a good track
record in the financing of Indigenous business enterprises. The new
arrangements will radically shift the focus of the agency, in particular by
requiring it to move into the housing loan market, which operates on different
principles and has different goals. The generalised financial constraints now
to be placed on IBA have the potential to undermine the integrity and success
of this organisation, and they certainly reduce its autonomy in financial decision-making.
The Committee expresses strong reservations about the changes to IBA’s
functions and autonomy and urges the Government to agree to a review into their
effects on the organisation, to take place within three years of the new
arrangements’ taking effect.
The new requirement being imposed on IBA regarding
ministerial directions is not being applied to the ILC. The ILC's clause
restricting ministerial involvement (Section 191L) is substantively unchanged
(except temporarily in regard to the ILC's administration of Regional Land Fund
the current ATSIC Amendment Bill 2004 repeals the existing paragraphs
196(1)(a)-(c) which provide for appeals to the Administrative Appeals Tribunal
where IBA refuses a business loan. While the Bill provides for such appeals when housing loans
are refused by IBA, it neglects the issue of business loan refusals: this
avenue of appeal is to be cut off. The Committee regards this omission as
unfortunate and believes that such a provision should be restored.
Committee recommends that the Bill be
amended to provide appeals to the Administrative Appeals Tribunal in cases
where IBA refuses a business loan. The Committee also recommends that the Government examine
all new requirements that the Bill and related administrative changes impose on the IBA to
ensure that these do not have a negative impact on its operation.
Implications for Native Title Representative Bodies
The Bill has
implications for Native Title Representative Bodies. In response to a question
on notice, OIPC summarised the changes:
Representative bodies will no longer apply for grants from
ATSIC, but for the provision of funds from the Secretary of the Department
which has administrative responsibility for Part 11 of the Act. This is
presently the Department of Immigration and Multicultural and Indigenous
The Secretary of the relevant Department, rather than ATSIC,
will have a role in overseeing the performance of representative bodies.
Section 203F will be amended to require the Secretary (rather than ATSIC) to
inform the Minister of matters relating to the performance of representative
bodies. Section 203FB will be amended to provide that review of assistance
decisions made by a representative body will be undertaken by the Secretary of
the relevant Department, rather than ATSIC.
The operations of representative bodies will no longer be
evaluated under s76 of the ATSIC Act but under the new s193X.
A new s203FI is being added to allow delegation of certain of
the Secretary's powers to an officer of the Australian Public Service who is a
member of the Senior Executive Service or has equivalent rank.
In addition, the language of the Bill
has been changed, so that Representative Bodies apply for 'provision of
funding' instead of a 'grant of money'. The Government has stated that this is
'to ensure greater accountability for outcomes for funds provided to bodies
which provide services to Indigenous people'.
The change in language will allow the Government to provide funds through
contracts for services.
The Committee is concerned about these changes. Native
Title Representative Bodies provide assistance to native title holders or
persons who may hold native title to prepare, lodge and progress claims. This
process necessarily has the potential for litigation against the Commonwealth.
Until now, the allocation of funds through ATSIC kept them at arms length from Commonwealth
agencies. Now that adversary is saying it wants 'to ensure greater
accountability' for funds. In practice, this could create the temptation on the
part of the Commonwealth to exploit the Representative Bodies' dependency on
the Government for funds. There is a clear potential for a conflict of interest
to develop, whereby the Commonwealth might direct funding away from
organisations it perceives as likely to take it to court in a native title
The Committee recommends that the Parliamentary Joint
Committee on Native Title carefully examine the issue of conflict of interest
in the funding of Native Title Representative Bodies as part of its current
inquiry into Native Title Representative Bodies.
Consulting with Indigenous Australians
The existence of ATSIC gave opportunities for
Indigenous Australians to have a national, representative voice. One important
way in which this voice was heard was through government bodies being required
to consult with ATSIC, or to have ATSIC members as representatives on their
boards. As Professor Scott stated:
I have prepared in the documents an analysis of what the Bill
actually does. It goes through 11 or 12 bits of other legislation and removes
the voice of Indigenous people from any of those forums. Nothing has been contemplated
to take its place.
Because ATSIC is to be abolished under this Bill,
Indigenous Australians potentially lose control of these opportunities for
consultation and participation. These changes include:
- The loss of consultation with ATSIC by the Minister
when considering new Directors for either Indigenous Business Australia or the
Indigenous Land Corporation, without anything taking the place of that
- The loss of input, through the Torres Strait
Islander Advisory Board, into the selection of a Torres Strait Islander to the
Council of the Australian Institute for Aboriginal and Torres Strait Islander
Removal of a requirement that the Minister for
the Environment consult with ATSIC in some circumstances;
- Removal of a requirement that the Aboriginal and
Torres Strait Islander Social Justice Commission must consult with any Indigenous organisation; and
- Loss of ATSIC control over the nomination of a
member of the National Health and Medical Research Council (NHMRC).
Under the Bill,
Indigenous people also lose some influence over other bodies designed to
advance Indigenous welfare. For example, the abolition of ATSIC means that
there is no longer an organisation, chosen and controlled by Indigenous people,
which can delegate functions to IBA.
Now IBA and its Minister solely determine what IBA will do.
The Committee believes that, in the absence of ATSIC,
Indigenous people should be able to have confidence that their representatives
and organisations will be listened to, including by organisations like ILC and
IBA. One element of ensuring this could be consultation processes that require
engagement with Indigenous organisations.
The Committee notes that the reforms to OEA will create
a definition of programs that OEA will be able to evaluate. They are defined as
'relevant programs' (for the Office of Evaluation and Audit – see the Bill,
Schedule 2, Item 1).
The Committee encourages the Government to consider
whether consultation clauses in Acts affecting Indigenous people could make
reference to a requirement that 'relevant organisations' being consulted. These
could be defined in a manner analogous to the clause above governing the programs
that OEA can evaluate. Alternatively, there could be provision made for
determinations from time to time as to what are relevant organisations to be
consulted for the purposes of particular Acts, or particular proposals. This
could take account of the future emergence of national Indigenous
The Committee recommends that consultation clauses in
the Acts modified by the ATSIC Amendment
Bill be amended to insert a requirement to consult relevant Indigenous organisations.
As well as the direct effects of the Bill,
the abolition of ATSIC may have other, indirect effects on Indigenous
representation. NACCHO gave an example in the health area:
The abolition of ATSIC removes an Aboriginal representative voice
from the Aboriginal Health Framework Agreements forums at the state level of operations...
These meetings previously brought together NACCHO Affiliates, ATSIC, with state
government representatives from the State Department of Health and Commonwealth
representatives from the Office of Aboriginal and Torres Strait Islander Health.
As a consequence, the introduction of the Bill, places
Aboriginal representative bodies in a minority position at the Framework Agreement
table with potentially significant consequences.
There are some suggestions about ad hoc ways in which other Indigenous organisations could fill the
gaps created by the proposals in the Bill. NACCHO
suggested that it could take over from ATSIC the role of nominating an
Indigenous person to the NHMRC.
The Committee outlined above possible modifications to the legislation to
require consultation with Indigenous organisations in some circumstances.
However, the fundamental problem not addressed by the Bill
is how Indigenous people will be assured of an effective voice at the regional,
national or international level. It is to this problem that the report now
Implications for Regional Councils
The Committee received a substantial amount of evidence
on the effects of the Bill on the regional
structures currently existing under the aegis of ATSIC. There is widespread
concern that these by and large successful bodies will not be adequately
replaced, let alone funded. This matter is discussed at length in chapter 4.
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