Budget Review 2020–21 Index

James Haughton

This brief provides information on the economic position of Aboriginal and Torres Strait Islander people, summarises Indigenous-specific components of this Budget and provides some assessment of the Indigenous impact of general budget measures. Unless otherwise stated, all page references are to Budget Measures: Budget Paper No. 2: 2020–21.

Overall economic position and Closing the Gap

Before the onset of COVID-19, analysis of census data up to 2016 (Markham and Biddle, 2016) showed increasing divergence of economic outcomes between Aboriginal and Torres Strait Islander people in urban and regional areas (81% of the Indigenous population) and those in remote and very remote areas (ABS Map of Remoteness Areas). Indigenous income levels were rising and poverty levels decreasing in urban and inner regional areas, while in remote and very remote areas incomes stagnated or fell and poverty rates increased. In 2016, less than a quarter (24.4%) of Aboriginal and Torres Strait Islander people in urban areas, but more than half (53.4%) of those in very remote areas were living in poverty (defined as income below 50% of the median average) (p. 16). Even in urban areas, in 2016 average Indigenous household incomes were only three-quarters (77.0%) of average non-Indigenous household incomes (p. 21).  

The 2018–19 National Aboriginal and Torres Strait Islander Health Survey (NATSIHS) found that, in 2018–19, 42.9% of very remote Indigenous households experienced hunger (at some point ran out of food and could not afford to buy more), (p. 5) and over one half (51.7%) ran out of money for basic living necessities (Parliamentary Library analysis of NATSIHS data: see Figures 1 and 2 below). Even in major cities there are significant levels of income stress and hunger.

Figure 1. Household went without $ for basics for a day or more in 2018-19, by Remoteness

Figure 2. Household went without food for a day or more in 2018-19, by Remoteness

Source: Parliamentary Library analysis of 2018–19 NATSIHS data.

Conversely, according to the 2018–19 NATSIHS, 9.7% of the Aboriginal and Torres Strait Islander population, (15.8% of the population in major cities) are in the top three income deciles that it has been claimed will gain the greatest benefit from the Budget’s tax cuts (Parliamentary Library analysis of NATSIHS data).

The increasing poverty in remote areas (Markham and Biddle, 2016) is frequently attributed to such factors as

• the abolition of the former Community Development Employment Projects (CDEP) programme (p. 14)
• the inadequate rate of social security payments (Senate Standing Committee on Community Affairs, pp. 126–136)
• the high level of disengagement from government support systems leading to a large proportion of the population having no income (Senate Standing Committee on Community Affairs, pp. 133–6) (in 2018–19 NATSIHS data, more than half of working age Aboriginal and Torres Strait Islander people in very remote areas were neither working, studying, nor receiving Jobseeker payments), and
• the very high levels of payment suspensions and penalties (Fowkes, 2016, p. 1) applied to Aboriginal and Torres Strait Islander people in the Community Development Program (CDP) through which Jobseeker is delivered in remote areas.

Reforms in CDP administration since 2019 have since seen a slow increase in engagement levels and a decrease in penalties—between September 2018 and December 2019, the number of CDP participants increased from 23,929 to 28,299 and the number of financial penalties levied decreased from 43,860 per quarter to 27,181 per quarter (Parliamentary Library analysis of CDP data).

The Government’s response to COVID-19 saw the JobSeeker payment increased by $550 a fortnight and all activity participation requirements, suspensions and penalties for CDP participants were removed. (For more information on the Indigenous-specific components of the COVID-19 response, see COVID-19 and Indigenous Australians: A Chronology). As over a third (38.0%) of Indigenous working-aged people in very remote areas were eligible for the Coronavirus supplement (Markham et al, 2020, p. 6), this may have resulted in a significant short-term reduction in poverty. However, reduction (as of 25 September) and projected end of the supplement (as of 31 December) may mean that poverty in remote areas again increases. Furthermore, because Indigenous people are disproportionately employed in casual roles (Markham et al, 2020, pp. 2–4) as unskilled or semi-skilled labourers and as service workers, they are likely to have been disproportionately affected by the COVID-19 recession.

In this context of significant economic crisis and expanded government spending, and coming after the Commonwealth, states/territories and Aboriginal and Torres Strait Islander peak bodies signed a new National Agreement on Closing the Gap (NACG) in July, many Aboriginal and Torres Strait Islander commentators and peak bodies have condemned the Budget for missing the opportunity to invest in a substantial Closing the Gap package, or to address Aboriginal and Torres Strait Islander incarceration and deaths in custody. The Budget allocates $10.1 million over four years to the Productivity Commission (PC) to produce an improved Closing the Gap progress dashboard and report, and states that $46.5 million will be granted from the existing National Indigenous Australians Agency (NIAA) budget to building the capacity of peak and community-controlled Aboriginal and Torres Strait Islander organisations (Priority 2 of the NACG, pp. 8–10).

The NACG calls for governments and member organisations to spend up to 12 months devising implementation plans for the NACG’s targets, which may explain the lack of immediate funding in the Budget. Also, the PC is expected to release two significant reports in the near future: the Overcoming Indigenous Disadvantage report (3 December 2020) and the Indigenous Evaluation Strategy report (October 2020) which may influence Government spending plans. However, the Government has not flagged that any further investment will follow from these implementation plans or PC reports.

Budget measures by Building Block

For consistency with other reporting frameworks, such as the Overcoming Indigenous Disadvantage report and the Indigenous Expenditure Report, this brief categorises budget measures according to the former Council of Australian Governments (COAG) ‘building blocks’.

Many budget measures state that they will be met from the existing resources of the National Indigenous Australians Agency (NIAA). This may mean that correspondingly less money will be available for the regular NIAA programs and grants.

Education, school attendance and early childhood

As part of the Students Support Package (p. 81), $39.8 million over four years is being provided to the Clontarf Foundation to expand their sports-oriented school attendance and engagement program for Aboriginal and Torres Strait Islander boys and young men. Evaluations of the Clontarf Academy and similar programs have been consistently positive (although many have mentioned a lack of equivalent female programs), but the Clontarf Academy has been criticised for cultural inappropriateness and not sufficiently targeting at-risk students.

Also as part of this package, $5.8 million over four years is being provided to Good to Great Schools Australia to develop a pilot program for Direct Instruction (DI)-oriented delivery of numeracy and science in up to 10 remote and very remote schools in Australia. Evaluations of the Flexible Literacy in Remote Primary Schools Program, which delivers DI in remote, predominantly Indigenous-student schools, range from cautiously positive to strongly negative.

Funding for both these programs was criticised in the bipartisan House of Representatives Standing Committee on Indigenous Affairs report The Power of Education: From Surviving to Thriving (2017). The Committee recommended that no funding beyond 30 June 2018 be provided for DI oriented programs due to lack of evidence for their effectiveness and reported negative cultural and attendance outcomes (recommendation 12), and funding for boys’ sports programs should not continue without equivalent support for programs for Aboriginal and Torres Strait Islander girls and young women (recommendation 9) or non-sport oriented programs (recommendation 10). In its response, delivered in August 2020, the Government ‘noted’ the relevant recommendations.

Easier access to the independent rate of ABSTUDY is addressed in the Social Security and Welfare brief.

As part of its higher education reforms (see Budget Review 2020–21 ‘Higher education research and teaching’), the Government previously committed to all Indigenous students from regional and remote areas meeting admission standards receiving a Commonwealth-funded university place (Budget Paper No. 2, p. 232). In the past Indigenous students have been more likely to study in the areas of Society and Culture and the Creative Arts, and less likely to study the Sciences, Information Technology or Engineering, than non-Indigenous domestic students; therefore, the government’s changes in university fees may have different effects on the Indigenous student cohort (see Table 1 below).

Table 1: Indigenous and all domestic students by field of higher education, 2019

Field of Higher Education	All Indigenous students, 2019 (n=21,097)	All domestic students, 2019 (n=1,609,798)
Natural and Physical Sciences	5.7%	8.3%
Information Technology	2.0%	7.2%
Engineering and Related Technologies	2.6%	7.6%
Architecture and Building	1.3%	2.6%
Agriculture, Environmental and Related Studies	1.5%	1.2%
Health	21.6%	16.5%
Education	12.4%	7.9%
Management and Commerce	10.5%	24.8%
Society and Culture	33.2%	20.6%
Creative Arts	7.3%	6.1%
Food, Hospitality and Personal Services	0.5%	0.2%
Mixed Field Programs	4.9%	0.8%
Non-award courses	0.4%	1.2%
Total	100.0%	100.0%

Source: Department of Education, Skills and Employment, Selected Higher Education Statistics – 2019 student data, released 14 July 2020.

The Jobmaker Plan Research Package includes ‘$8.9 million over three years from 2020–21 to increase the capabilities of the Humanities, Arts, Social Sciences and Indigenous e‑research platforms’ (p. 79).

Employment and Economic Participation

Aboriginal and Torres Strait Islander people are on average younger than non-Indigenous Australians, with over two thirds (67.8%) of the population being under 35 in the 2018–19 NATSIHS (Parliamentary Library analysis of NATSIHS data). This large Indigenous youth cohort may benefit from the JobMaker Hiring Credit measure (see Budget Review 2020–21 ‘Employment services measures’). However, there are already wage subsidy programs for Indigenous Australians and the requirement that a Hiring Credit beneficiary previously have received a JobSeeker, Parenting or Youth Allowance payment may inadvertently exclude many of the more than 40% of Aboriginal and Torres Strait Islander people of working age who were ‘not in the labour force’ (Parliamentary Library analysis of NATSIHS data). Researchers from CAEPR have criticised the budget’s lack of Indigenous-specific employment measures.

The JobMaker Plan (investment in new energy technologies measure) includes $67.1 million over six years from 2020–21 to expand the Regional and Remote Communities Reliability Fund to support pilot studies for electricity microgrids in regional and remote areas (p. 118). According to Budget Paper 3: Federal Financial Relations, this includes extending an existing Western Australia-based program for remote Indigenous communities (p. 66).

Minister Wyatt’s Budget press release states that, as part of the Digital Business Plan measure (p. 64), the Office of the Registrar of Indigenous Corporations (ORIC) will receive $5.4 million over four years to implement a Director Identification Number system, enabling greater transparency. It is not clear whether this is new money or comes from the NIAA budget.

$3.9 million is provided in 2021–22 to extend the Time to Work Employment Service program by one year to provide in‑prison pre-release employment services for Aboriginal and Torres Strait Islander people (p. 75). This program was part of the Commonwealth response to the COAG Prison to Work report.

Community Safety

The Budget proposes that the Cashless Debit Card will transition from a ‘trial’ to a permanent measure (p. 150). This measure requires legislation, which was introduced in the House of Representatives on 8 October 2020 (see Budget Review 2020–21 ‘Social security and welfare’). The measure has been criticised by peak Aboriginal organisations in the Northern Territory. The Budget also provides $44.4 million over three years for the Extension of Financial Wellbeing and Capability Measures (pp. 153–4) including financial counselling and budgeting skills to people in Income Management and Cashless Debit Card locations.

$40.1 million is being provided over three years for the Extension of Child and Parenting Support Services (p. 153), which provides specialised early intervention and prevention support to at-risk children and families with complex needs, including Indigenous families. What percentage of this funding will be available for Indigenous services is unknown.

The Change the Record Coalition and Aboriginal Legal Services have criticised the Budget for not providing adequate funding for Indigenous legal aid or addressing high incarceration rates.

Governance, Leadership and Culture [including Land and environmental measures]

$46.5 million is provided for capacity building of Aboriginal community controlled organisations, discussed above. This measure is being funded from the NIAA budget (p. 146).

$10.1 million over four years is provided to the Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) to facilitate the return of cultural heritage from overseas collections (p. 149). This is being funded from the NIAA budget.

$2.2 million over four years from 2020–21 is provided to speed up application processing under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (p. 51). Commonwealth heritage protection law has been widely criticised since the destruction of the Juukan Gorge heritage site, so this measure may foreshadow reform in this area.

$2.0 million as part of the Perth City Deal is provided for design work on the Noongar Indigenous Cultural Centre (p. 142).

$4.2 million over two years from 2020–21 is provided for Indigenous River Rangers in the Murray-Darling Basin Plan (p. 52) (see Budget Review 2020–21 ‘Murray-Darling Basin’).

The Supporting Healthy Oceans measure (p. 54) includes $28.3 million over four years from 2020–21 for Australia’s marine park network, including increased science and monitoring activities, expanded Indigenous park management and pro-active enforcement of marine park rules (which is performed by specialised Indigenous Rangers with enforcement powers), and $14.8 million over four years to remove ghost nets, which the Economic Recovery Plan Overview (p. 35) states will be done by Indigenous rangers.

The Government will provide $233.4 million over three years from 2020–21 to improve infrastructure in Commonwealth national parks (p. 289), specifically the Uluru, Kakadu, Christmas Island and the Booderee National Parks. Uluru, Kakadu and Booderee are all owned and co-managed by Aboriginal Traditional Owners under leaseback arrangements to the Director of National Parks, who may benefit from both the work opportunities on country and the potentially increased tourism and visitor numbers. This funding also includes $51.4 million to renew and replace essential services infrastructure, including water, electricity and sewage in the Mutitjulu Community in the Uluru-Kata Tjuta National Park. There is also $12.0 million over two years to maintain service levels and meet commitments to Traditional Owners in jointly-managed parks, owing to the decision to waive entry and permit fees for these parks to promote local tourism (p. 215), and $3.5 million over two years from 2020–21 to continue land management at the former Rum Jungle uranium mine site in the NT (p. 123); see the 2016–17 Indigenous affairs Budget Review brief for a short overview of Rum Jungle.

The Aboriginal and Torres Strait Islander Land and Sea Future Fund (which was created by the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018, and is under the management of the Future Fund Board with instructions to achieve a long term real return of 2–3 per cent per annum) has performed poorly in the current economic conditions, with a return of -1.3 per cent since 1 October 2019 (Budget Paper No. 1, p. 10-44). The Future Fund also had a negative return of -0.9 per cent (p. 10-43).

Health

Budget Paper No. 1 (p. 6-19) predicts increased Aboriginal and Torres Strait Islander health expenditure of $973 million to $975 million from 2019–20 to 2020–21, then a decrease of $8 million in Aboriginal health expenditure to $967 million, from 2020–21 to 2021–22. This decrease is because the Budget forward estimates do not currently make any provision for renewing or extending the National Partnership Agreements on trachoma control and rheumatic fever beyond 30 June 2021 (see below).

Under the COVID-19 response measure (p. 96), there is $4.0 million to continue the Remote Point-of-Care Testing Program in regional and remote Indigenous communities. A number of other measures in response to COVID-19 were announced in the July Economic and Fiscal Update (reprinted in Appendix A of Budget Paper No. 2), which are not further discussed here.

The Preventive Health measure (p. 101) includes $21.2 million over four years from 2020–21 to support delivery of a number of initiatives under the Roadmap for Hearing Health. This includes improving access to hearing services for Aboriginal and Torres Strait Islander children. The Power of Education report recognised hearing loss as a major barrier to Aboriginal and Torres Strait Islander children’s education (Recommendation 3, pp. 27–31).

Two National Partnership Agreements on Aboriginal and Torres Strait Islander health, on trachoma control and rheumatic fever are currently scheduled to expire on 30 June 2021 (Budget Paper No. 3, pp. 25–26). In the most recent report, Trachoma eradication appeared to be stalling (2018 report, p. 14) and eradication of rheumatic fever will require significant investment (Wyber et al, pp. 292–3, 313–315 estimates full eradication costs are $2.9 billion for new housing and $890 million over ten years in other capital and ongoing costs).

The National Aboriginal Community Controlled Health Organisation (NACCHO) has welcomed increased funding for health in a number of areas but expressed disappointment that there was no significant investment in clinical infrastructure.

Housing

Indigenous Business Australia (IBA) will benefit from a $150 million equity injection over 3 years to enable it to provide more home loans to Aboriginal and Torres Strait Islander people in regional Australia. This appears in Budget Paper No. 2 as a receipt measure (p. 12) as equity transfers are off-budget, and the loans will generate a repayment stream. Minister Wyatt states this will enable 360 home loans and over 1,000 related jobs. The measure has been welcomed by the IBA.

The government will provide $100 million to assist with the provision of remote Indigenous housing in Queensland (p. 147). This funding has already been provided for. Budget Paper No. 2 states that this is part of an agreement with the Queensland Government to assume full responsibility for housing in remote communities in Queensland. Similar agreements were made with other state and territory governments in the 2019­–20 Budget.

The Remote Housing Review (2017) by the Department of the Prime Minister and Cabinet estimated that 1,100 new houses would be needed in Indigenous communities in Queensland by 2028 to address overcrowding and estimated future demand (p. 24). Under the former National Partnership on Remote Housing, houses in Queensland cost an estimated $486,484 to construct (p. 30). On this basis the $100 million provided by the Commonwealth in this Budget could build approximately 205 houses, less than one-fifth of the estimated need.

 

This brief was updated on 9 November 2020 to include additional information

All online articles accessed October 2020

For copyright reasons some linked items are only available to members of Parliament.

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