Commonwealth Indigenous-specific expenditure 1968–2010

16 September 2010

Dr John Gardiner-Garden, Social Policy Section
Joanne Simon-Davies, Statistics and Mapping Section

Contents

Executive summary
Introduction
Historical overview
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 42 years from 1968 to 2010 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 (GDP), and in the per-capita expenditure. In nominal and real terms, identifiable Commonwealth Indigenous-specific expenditure has trended up, but dipped in the last 2 years. As a percentage of total outlays or Gross Domestic Product it started to plateau about 10 years ago. The per capita trend is found to be too problematic to characterise simply.

Introduction

This paper updates one authored by John Gardiner-Garden and Malcolm Park and published as an online Parliamentary Library Research Paper in September 2008.

It 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 Budget-time 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.

In 2007, the last year of the Howard Government, commitments made under the Northern Territory Emergency Response (the NTER or ‘the Intervention’) increased Commonwealth Indigenous expenditure, especially that directed to the Northern Territory. Though many of the NTER measures were controversial, the Howard Government’s overall legislative package and budget commitment received bi-partisan support.

The Rudd government changed the policy rhetoric to ‘closing the gap’, ‘Indigenous Reform agenda’ and ‘National Partnerships’, set their benchmarks, goals and funding commitments inside a Council of Australian Governments (COAG) framework, and amended some procedures and legislation so that Commonwealth actions could withstand the reinstatement of all the provisions of the Racial Discrimination Act 1975. Though the rhetorical, administrative and legal context was very different from that surrounding the Howard Government budgets, the Rudd Government’s budgets of 2008, 2009 and 2010 generally supported the Intervention-initiated budget emphasis on funding programs intended to address perceived needs of remote communities. There has, however, been some public debate over the financial efficacy of the Government’s Strategic Indigenous Housing and Infrastructure Program, the income management arrangements (its extension receiving bi-partisan support) and the Community Development Employment Projects (CDEP) reform.

It needs to be noted that in recent years definitions of various Portfolio Budget Statement (PBS) outcomes can change without it being noted in the PBS and thus without it being noted in the detail expenditure tables that follow (see appendix), so care needs to be taken if wanting to compare across years individual intra-agency outcomes.

The trend in expenditure

Converting nominal expenditure to real terms[2] 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 to 2008 onwards saw an almost uninterrupted rise in real expenditure, apart from small and quickly recovered declines in the mid 1990s and 2005–06. From 2008 to 2010 both real and nominal expenditure have fallen.

Chart 1: Nominal & real (2008-09 dollars) identifiable Commonwealth Indigenous specific expenditure 1968-69 to 2009-10

The trend can look a little different when this expenditure is plotted against total government expenditure and Gross Domestic Product (GDP), as shown in Chart 2.

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 to late 1990s saw fluctuations with the percentage rising and falling year to year but still trending upwards. From 2000–2001 onwards, however, the percentage of total Commonwealth expenditure allocated to Indigenous affairs has trended down. This appears more pronounced in the years 2008–09 and 2009–10 as stimulus expenditure associated with the Government’s response to the global financial crisis (GFC), increased overall expenditure without adding to Indigenous-specific expenditure.

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 over the next decade, and then a slight fall in the last two years. Therefore, relative to growth in the economy as a whole, as measured by GDP, there has been no increase in Indigenous-specific expenditure since the early 1990s and in fact there has been decline in the last two years (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 2009-10

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 up to the GFC of 2008, happened in a period when the federal government had been generally presenting surplus budgets, so could theoretically (leaving all fiscal considerations and competing needs aside) have increased Indigenous expenditure.[3] In the years 2008–09 and 2009–10, however, Commonwealth revenues declined as a result of the GFC and deficit budgets were recorded.

Per capita expenditure

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 and Chart 3 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.

Chart 3 – Real identifiable Commonwealth Indigenous specific expenditure per capita, 1971-72 to 2006-07

Further complicating the task of estimating per capita expenditure is the fact that much 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). [4]

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 4.

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 1: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1968–69 to 2009–10

Table 2: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1968–69 to 1989–90

Table 3: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1990–91 to 1999–2000

Table 4: Identifiable Commonwealth Expenditure on Indigenous Affairs, 2000–01 to 2004–05

Table 5: Australian Government Indigenous Expenditure (AGIE) – Portfolio level, 2005–06 to 2007–08

Table 6: Australian Government Indigenous Expenditure (AGIE) – Portfolio level 2007–08 to 2010–11

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 JC 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, 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, viewed 23 September 2008, http://www.budget.gov.au/2001-02/minst/html/atsic-13.htm#P297_65117, 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, Senator 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

ABS, Australian Historical Population Statistics, 2006 (Cat no. 3105.0.65.001) (Census of Population and Housing), viewed 9 August 2010 
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3105.0.65.0012006?OpenDocument

GDP and Implicit Price Deflator data

ABS, National Income, Expenditure and Product, March 2010, Table 5 (Cat. no. 5206.0), viewed 15 September 2010
http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures
/9AB1CBD6025F9CBBCA257790001DB80C?opendocument

Australian Government, Budget Paper No. 1, 1999–2000 and 2009–10 editions – Historical Australian Government Data viewed 9 August 2010
http://www.budget.gov.au/2010-11/past_budgets.htm.

Total Commonwealth expenditure data

Australian Government, Budget Paper No. 1, 1999–2000 and 2009–10 editions, at
http://www.budget.gov.au/2010-11/past_budgets.htm
and 2010–11 edition at
http://www.budget.gov.au/2010-11/content/bp1/html/index.htm, and the 2010–11 edition’s Appendix I: Historical budget and net financial worth data at
http://www.budget.gov.au/2010-11/content/bp1/html/bp1_bst10.htm, all viewed 11 August 2010.

Table 1: Identifiable Commonwealth Expenditure on Indigenous Affairs, 1968–69 to 2009–10

Table 2: Identifiable Commonwealth Expenditure on Indigenous Affairs 1968–69 to 1989–90

Table 3: Identifiable Commonwealth Expenditure on Indigenous Affairs 1990–91 to 1999–2000

Table 4: Identifiable Commonwealth Expenditure on Indigenous Affairs 2000–01 to 2004–05

Table 5: Australian Government Indigenous Expenditure (AGIE - portfolio level 2005–06 to 2007–08

Table 6: Australian Government Indigenous Expenditure (AGIE) - portfolio level 2007–08 to 2010–11

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[1].      See J Gardiner-Garden, The 1967 Referendum—history and myths, Research brief , no.11, 2006-07 Parliamentary Library, Canberra, 2007.

[2].     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.

[3].      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 the Keating Government, 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.’ 

[4].      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, viewed 15 September 2010,
http://www.aihw.gov.au/publications/hwe/eohfatsip04-05/eohfatsip04-05.pdf

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