- An economic pathway forward
- For over 65,000 years Aboriginal and Torres Strait Islander peoples ‘sustained their own vibrant economies, including systems of trade and exchange that stretched across the continent and to adjacent islands’. First Peoples were explorers, inventors, entrepreneurs, and exporters, and maintained an economic system that fuelled their population for generations.
- With colonisation and the new settler population, a new economy was introduced to support it. An economy that Indigenous peoples have been excluded from through the forceful dispossession of their lands and rich natural resources, systemic discriminatory practices, paternal and forced assimilation policies, and stolen wages. From then until now, this legacy has stemmed higher unemployment rates, lower than average incomes, poor health and educational outcomes, and educational attainment disparity, resulting in ‘a significant wealth divide between Indigenous and non-Indigenous people’.
- Addressing this historical disadvantage and economic disempowerment are critical to improving Aboriginal and Torres Strait Islander peoples’ socio-economic outcomes and to closing the economic divide.
- Furthermore, the right of all peoples to self-determination, including the free pursuit of economic development, is enshrined in international law through the International Covenant on Economic, Social and Cultural Rights and International Covenant on Civil and Political Rights. Articles 3–5 of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) affirm this right of all peoples to self-determination, economically, socially and culturally.
National Agreement on Closing the Gap
2.5In recent decades the Australian Government, states and territories have taken steps to stem the legacy of disadvantage. In 2019, the Commonwealth, state and territory governments and the Australian Local Government Association signed a formal partnership agreement with the Coalition of Aboriginal and Torres Strait Islander Peak Organisations (the Coalition of Peaks) to share decision-making processes and develop a new National Agreement on Closing the Gap. The National Agreement on Closing the Gap was finalised in July 2020. The National Agreement on Closing the Gap continues to be successive Australian governments’ flagship policy, and many of its policies refer to the Agreement.
2.6The National Agreement on Closing the Gap sets out four key priority reforms:
- One: Formal partnerships and shared decision-making
- Two: Building the community-controlled sector
- Three: Transforming government organisations
- Four: Shared access to data and information at a regional level.
- There are also 19 socio-economic targets under the National Agreement on Closingthe Gap. These include targets for increasing the proportion of Aboriginal and TorresStrait Islander peoples who are employed, as well as various targets that are indirectly related to better economic outcomes, including targets in relation to education, housing and land rights.
- The most recent progress report has shown that, of the Agreement’s 15 socio-economic targets for which data was available, only five were on track, five showed improvements but were not on track, one showed no change, and four showed progress that was worsening. As reported in the recent Productivity Commission review, it observed small tweaks or additional initiatives, or even layers of initiatives as attempts to give effect to the Agreement. However, it advised that real change does not mean multiplying or renaming business as usual actions.
- This inquiry has highlighted that while progress has been made against Closing the Gap targets, it has been piecemeal and slow.
The Australian Government is building the foundation for First Nations economic empowerment
2.10The Australian Government’s commitment to building the foundation for First Nations economic empowerment for Aboriginal and Torres Strait Islander peoples was reinforced in Prime Minister Anthony Albanese’s speech at the recent Garma Festival:
Changing this, building true and lasting self-determination, requires economic security. Security that exists outside of government decisions—and endures beyond them. And, right now, changes in the global economy are opening up these possibilities. Growing demand for renewable energy, critical minerals andrare earths represents an unprecedented opportunity for our nation. Bypartnering with locals from the beginning, we can avoid the exploitation andinjustices of the past. And we can tackle the poverty and lack of opportunity that has seen disadvantage entrenched in these parts of our country over generations. The principle that Aboriginal and Torres Strait Islander peoples deserve a real say in the economic development of the land you call home. Andyou deserve your fair share of the benefits that flow from it. You are more than curators or custodians, you are the Traditional Owners, who have cared for land and waters for 60,000 years and more. And we want you to have ownership of your future—built on a foundation of economic empowerment.
2.11The Australian Government is supporting the economic prosperity of Aboriginal and Torres Strait Islander peoples by making historical investments in jobs, education, and economic development opportunities. It has created more than one million jobs since it was elected in 2022—more than any government in a single parliamentary term. It has invested $777.4 million over five years for the creation of 3,000 jobs in remote Australia. It has furthered employment opportunities by investing in free-free TAFE courses with over 30,000 First Nations students furthering their education. It is investing in a Future Made in Australia and is working to put Aboriginal and Torres Strait Islander peoples at the decision-making table and position them to have equity and ownership rights in future industries.
2.12The Australian Government’s commitment to a new First Nations Economic Partnership was announced by the Prime Minister in August 2024, who described the partnership as a ‘new direction—with greater independence, real empowerment and lasting economic security for communities’.
2.13Since then, the Treasury and the Coalition of Peaks have been working together to shape the partnership and its priorities. Between May and June 2024, the Coalition of Peaks held stakeholder consultations to ‘inform the partnership design, including key priorities and governance’.
2.14At a public hearing, Ms Patricia Turner, Lead Convenor of the Coalition of Peaks, explained that the First Nations Economic Partnership will be a policy partnership under the National Agreement on Closing the Gap., She described the policy partnership as ‘a vehicle for allowing Aboriginal and Torres Strait Islander representatives to share decision-making around Closing the Gap policies, instead of[governments] making policies on their own without much success’. MsTurner advised that four key priorities had emerged through consultations on the partnership, aligning with the four priority reforms of the National Agreement on Closing the Gap:
- strengthening Aboriginal and Torres Strait Islander representation in economic development and participation partnerships with governments and other stakeholders to improve outcomes
- developing and strengthening employment opportunities in the community-controlled sector through the creation of additional secure jobs, wage parity, new professional job streams and associated professional development opportunities
- reforming mainstream employment services and looking at what actions are needed to create culturally safe workplaces that value and invest in growing opportunities for Aboriginal and Torres Strait Islander peoples to get into a range of roles and positions
- building a comprehensive data picture of the current state of Aboriginal and Torres Strait Islander peoples with respect to economic development and participation opportunities.
- Ms Turner said she anticipated that the partnership would be established in the coming months and proposed that this Committee’s report be ‘considered by the partnership as a vehicle for determining a government response’.
- In parallel with the First Nations Economic Partnership, the Australian Government issupporting the First Nations Economic Empowerment Alliance. The Alliance was established following an international symposium in 2022, and the Murru waaruu seminar series in 2023, hosted by the Australian National University (ANU)’s FirstNations Portfolio. In addition to the ANU, the Alliance’s members include theIndigenous Sea and Land Corporation, the National Native Title Council and FirstAustralians Capital. It aims to ‘advance the case for major economic reform in Australia’ and ‘establish comprehensive economic empowerment for First Nations peoples in Australia’.
- The ANU First Nations Portfolio described the Murru waaruu Outcomes Report, published in May 2024, as ‘the culmination of almost two years of deliberative dialogue and policy design involving subject matter experts, community representatives and key stakeholders from Australia and overseas’. The report includes a range of policy proposals that are intended to ‘inform a genuine engagement between First Nations leaders and the Australian Government to co-design a First Nations economic self-determination policy framework’.
- The ANU First Nations Portfolio submitted to the Committee that ‘Australian governments have never before sought to establish a comprehensive policy response to First Nations economic marginalisation that engages economic and fiscal policy levers to provide economic opportunities for First Nations communities’. It considered that adopting such an approach ‘could enable First Nations communities to leverage their acquired assets and other rights and interests to engage as meaningful partners in the economic prosperity of modern Australia’:
The focus now must be on using economic and fiscal policy levers to shift the narrative and public policy approach away from managing First Nations poverty, to supporting the capacity of First Nations people to grow and sustain wealth. That shift is important for the health and development of the Australian economy and must be based on partnership and equity, and on the strengths of what FirstNations people bring to the table, not on a focus on deficit and disadvantage.
2.19Australians for Native Title and Reconciliation, Kimberley Land Council, Cooperative Research Centre for Developing Northern Australia and Indigenous Land and Sea Corporation were supportive of the institutional reform considerations set out in the Murru waaruu Outcomes Report.
2.20The joint submission from the National Indigenous Australians Agency and the Treasury highlighted that the Murru waaruu Outcomes Report and other international research ‘demonstrates the important role of economic empowerment in achieving improved socio-economic outcomes for First Nations peoples’ and ‘establishes the need for a shift in First Nations economic policy, away from a legacy of social policies directed at First Nations welfare and simple mainstream industry participation, to a strategic commitment to First Nations wealth creation.
Aboriginal and Torres Strait Islander peoples are punching above their weight
2.21Despite Aboriginal and Torres Strait Islander peoples exclusion from the Australian economy, research from the University of Melbourne shows that the First Nations economy is growing at pace with an 11 per cent increase from 2012–2022, and that businesses generate over $16.1 billion in revenue each year, employ more than 116,000 people, pay $4.2 billion in wages, and are 40 to 100 times more likely than non-Indigenous businesses to employ Aboriginal and Torres Strait Islander staff. For every dollar of revenue spent, Indigenous businesses create $4.41 of economic and social value.
2.22Given the limitations on capturing Indigenous data, the economic and business contribution of First Nations peoples is likely to be underestimated (this will be discussed later in the report—see Chapter 3).
2.23Indigenous-led and owned businesses and social enterprises are receiving well deserved accolades for their work. Indigenous businesses and entrepreneurs are punching above their weight in the tourism, hospitality, construction, information technology, fashion and arts, bush foods and botanicals, and clean energy sectors.
2.24The inquiry has also shown that Aboriginal and Torres Strait Islander peoples face significant barriers to participating in the mainstream economy. They reported facing barriers to starting a business, scaling up a business, leveraging land for economic purposes, accessing capital and finance, lack of institutional trust, negative risk stereotypes, and lower business and commercial acumen.
An economic approach for intergenerational transformation
2.25The inquiry has also put a renewed spotlight on the structural barriers and systemic disadvantages Aboriginal and Torres Strait Islander peoples face. As a result of the colonial experience, Aboriginal and Torres Strait Islander peoples are unable to leverage assets and accrue intergenerational wealth to the same extent as other Australians.
2.26The evidence is clear that historical and successive policy approaches are inadequate in transforming the social and economic outcomes for Aboriginal and Torres Strait Islander peoples.
2.27In addition to bipartisan commitment to Closing the Gap, this report calls for a fundamental reframing of the First Nations economic narrative and the embracing of broader economic and legislative settings. The recommendations of this inquiry will support the transformation of First Nations peoples to generators of long-term wealth and equity.
2.28Many participants in the inquiry identified that a strengthened and new approach is needed to address disadvantage, with a greater focus on economic empowerment as the vehicle for achieving broader social outcomes. There was also strong support for greater participation of Aboriginal and Torres Strait Islander peoples in the design and delivery of policies that affect them, and broad support for taking a ‘strength based’ approach to policy, in contrast to the, often applied, deficit approach.
2.29Participants also highlighted the importance of this inquiry and the Australian Government in elevating their entrepreneurial strengths and perspectives in examining a new pathway forward.
2.30During the inquiry the Committee heard that:
- accessing finance and capital is the greatest barrier to First Nations economic development
- strengthening existing, and developing, new fiscal instruments can significantly increase economic participation
- capturing longitudinal economic and business data can support policy design and improve the institutional trust of First Nations businesses
- strengthening First Nations cultural and intellectual property will deliver significant commercial opportunities
- capacity and capability building within First Nations communities will enable the growth of emerging industries and Australia’s economy
- ensuring resourcing for Prescribed Bodies Corporates is sufficient will enable economic development for Traditional Owner groups and other interested parties
- reviewing the full Native Title Act 1993 (Cth) may deliver improvements for leveraging economic opportunities in the Indigenous estate
- co-governance of fiscal institutions and creative investment frameworks have been fundamental to the economic development of international First Nations communities.
Committee comment
2.31The Committee recognises the resilience and ongoing strength of Aboriginal and Torres Strait Islander peoples and communities in the face of the colonial legacies of forced dispossession, and the systemic discriminatory and exclusionary practices and policies which have resulted in unacceptable levels of economic and social disadvantage. Previous efforts at closing the gaps in social and economic advantage have generally not delivered the success that is needed.
2.32The Committee also recognises the need for a fundamental reframing of the FirstNations economic narrative and embracing of broader economic and legislative settings, focused on improving economic opportunities and self-determination. Economic self-determination is not only a worthy goal in its own right, but is the key to enabling broader self-determination and the means by which social disadvantage in communities can be addressed in the long-term. The Committee recognises that growing a First Nations economy will benefit all Australians.
2.33While a comprehensive economic policy to address Aboriginal and Torres Strait Islander disadvantage has been lacking in the past, this inquiry has shown that the Australian Government is heading in the right direction and that many of the ideas and the structures required to deliver them already exist. Throughout this inquiry, the Committee heard about many examples of Aboriginal and Torres Strait Islander peoples showing the tenacity, creativity and resourcefulness needed to carve out areas of economic opportunity for themselves and their communities. However, sustained efforts from the Australian Government in building capacity, scaling up of investments, and removal of unnecessary legislative impediments will be needed for these successes to be replicated at the scale needed to achieve the aspirations of First Nations businesses and communities, and the outcomes set by the National Agreement on Closing the Gap.
2.34The Committee acknowledges the ongoing bipartisan commitment to the National Agreement on Closing the Gap priority reforms. In particular, the Committee supports the Agreement’s emphasis on partnerships and shared decision-making, and enabling Aboriginal and Torres Strait Islander peoples to take more control of their social and economic futures. First Nations-led solutions are of crucial importance to delivering the outcomes and targets set out in the Agreement.
2.35The Committee specifically notes the relevance of the First Nations Economic Partnership as a vehicle for implementing a comprehensive policy framework to address the economic challenges facing Aboriginal and Torres Strait Islander peoples. The Committee encourages the Australian Government to accelerate the implementation of this partnership as a priority.
2.36An evaluation of the economic benefits of government policy to First Nations peoples must take a holistic approach and include the measurement of social benefits, including improved housing, health outcomes, and reduced incarceration rates.
2.37It will be important to measure the degree to which any economic benefits are distributed throughout communities.
2.38The Committee recommends that the Australian Government and the Department of Treasury develop a supplementary measurement framework that incorporates the principles of Australia’s Measuring What Matters Framework. This must include profiling and tracking to illustrate gaps and the mapping of variations of socio-economic wellbeing of First Nations communities. This will create a systematic way to track the socio-economic wellbeing of communities over time.