The tabling of this report to the House of Representatives takes place against the background of the government declared national emergency and the dramatic military-supported federal intervention in the Northern Territory following the "Little Children are Sacred" report¹. Amongst the recommendations of that report, most of which have so far been ignored in the government's response, were several which highlighted the crucial role of employment in promoting indigenous wellbeing and, conversely, the destructive impact of unemployment on "self esteem, disposable income, personal relationships" and in creating "a social environment of boredom and hopelessness." The authors of the report, Anderson and Wild, emphasised that the government needed to work closely with Indigenous communities in policy development and implementation rather than taking unilateral action which implicitly denies Indigenous agency and reinforces the sense of powerlessness which many already feel.

Anderson and Wild are by no means the first to underline how important regular employment is in redressing indigenous disadvantage more generally. In fact, they are the most recent in a long line of commentators who've urged governments to take more effective action in assisting indigenous Australians to gain a more secure economic footing, and to do so in a way that respects and engages Indigenous values and culture. While the specific recommendations for action may vary, all start with the recognition that unemployment is corrosive of the quality of both individual and community life, producing poorer health outcomes, reduced life expectancy, domestic violence, homelessness and substance abuse. Poverty is the characteristic which best explains the prevalence of poor health in any community and, according to the World Health Organisation, the standard of health of Indigenous Australians lags almost 100 years behind that of other Australians, with Australia ranking last among rich countries who have indigenous populations.

International research has documented the connections between poverty and unemployment and poor health, addictions, involvement in illegal drugs, violence, sexual exploitation, prostitution at an early age and despair. It is also well understood that health and destructive behaviour patterns improve with improvement in a community's economy.

As we shouldn't need to be reminded, "European settlement and subsequent capitalist economic development in Australia resulted in widespread destruction of the traditional economic and cultural activities of indigenous Australians". As Dockery and Milsom, the authors of the previous quote, argue in their NCVER² sponsored review of Indigenous employment programs, to the extent that Indigenous Australians aspire to integration with the mainstream economy, they face the considerable disadvantages inherent in being in the early phase of "a profound cultural and economic transition" as well as the barriers presented by the ignorance and prejudice which still exist in the wider community. They have also suffered from a lack of sustained political action to address these complex problems, including short term funding cycles, constantly changing bureaucratic arrangements and inexperienced staff. For example, the South Hedland based Western Desert Puntukumuparna Aboriginal Corporation (WDPAC) based in Port Hedland, Western Australia which administers 18 CDEP's across in remote locations, reported that:

Unfortunately it is very hard to attract good people to these positions and consequently, some shortcuts have been made in the recruitment process in an endeavour to fill a position. Often a program coordinator is selected on availability and not merit. Sometimes the right person is found but more often than not, they aren't. This is due in part to the poor working conditions found in communities, such as poor housing (if available at all), poor water supplies (often undrinkable but still all that is available to the community members) and poor pay rates within a resource rich, high paying mining environment. Coupled with these are the wider communities' misconceptions of Aboriginal communities being populated by violent substance abusers.³

One of the submissions to our committee⁴ put it bluntly,

"Despite a mountain of research and clear evidence of the degree of disadvantage faced by Indigenous Australians in the labour market and with respect to almost all other socio-economic indicators, the effort put into improving Indigenous labour market outcomes in this country has been woefully inadequate. This may not be as evident in terms of 'input' measures such as budgetary commitment as it is in the lack of political will to resolve critical questions on the broader objectives of Indigenous policy and thus the ability for policy makers to remain unaccountable for the lack of progress in addressing Indigenous disadvantage".⁵

In what may be a precedent in Committee reporting, Labor members of the ATSIA Committee were not prepared to endorse the majority report of this inquiry into indigenous employment, not because of any fundamental disagreement with the few recommendations it proposed (although we do not agree with all of them), but because of the report's failure to come to grips with the gravity of the problem or to suggest policy settings and programs which had any real prospect of increasing employment.

We argued that the Chairman's draft report, as initially presented to us (and still largely unmodified in the final draft), needed major revision. In fact, much of the report is little more than a catalogue of case studies which could have formed the starting point for sound deductions about future directions for effective policy development but instead are simply presented without coherent analysis.

The majority report appears to accept untested assertions about various programs and public relations assertions from the privates sector if they are as persuasive as carefully constructed evaluations. Government department and agency claims about the effectiveness of various policy settings are often accepted without question rather than being subjected to reasonable critical scrutiny. The purpose of the report, after all, was to try to find out what really worked. Our constructive suggestions along these lines and our request for a major revision of the report so that we could achieve unanimity were initially accepted but later refused on what we believe to be spuriously imposed deadlines that prevented such revision.

After almost three years of hearings, including many witnesses, 137 submissions and travel to every corner of the continent, the conclusions are disappointingly shallow. We argue that the findings and recommendations presented to us in the draft report and accepted by government members fall so far short of what is needed as to constitute an insult to the many people who spoke to us. Sadly, given the resources at our disposal and the now truncated reporting timeline, the Labor members are not in a position to write a comprehensive report which fully addresses these problems, but we can point to areas where a future government should act. We can also briefly review what is known about the effectiveness of the programs which constitute the government's Indigenous Employment Policy.

Evaluation: What works?

In setting the terms of reference, the Committee deliberately set out to try to avoid simply restating the often reported deficit in employment opportunities for Indigenous Australians but rather to ascertain what programs and strategies actually succeeded in increasing employment and what, if anything, could be learned from these successes - what factors were predictive of success, what program elements or interventions were most useful and where resources could most effectively be allocated.

While we did not intend to ignore program failures and obstacles to improvement, we did try to shift the focus to discerning the possible reasons for the lower participation and higher unemployment - the impediments - which successful programs should seek to overcome. Labor members were disappointed that these intentions are not clearly reflected in the majority report. We recognise that this was always going to be a difficult task not least because of the relative lack of rigorous evaluation, the lack of continuity in government programs and the lack of clarity about the objectives of economic development and labour market programs targeting Indigenous people. Pointing out such deficiencies would have assisted future policy makers - if they were inclined to take any notice of committee reports.

As well as the broad question of what works to increase Indigenous employment, the Labor members suggested that the committee should seek to ascertain whether what works varies from place to place and community to community. It seemed vital to us that in reporting our findings we should test the validity of claims made about various programs and approaches, including by the government and its agencies, and to accord greater weight to hard data rather than assertion or pious hopes.

We also suggested that in reporting the results of our inquiry we should try to distil from the evidence we had been given an understanding of what economic development settings seem to be successful in generating new opportunities for indigenous people, what maintains employment for those already in the workforce, what improves labour market readiness and what helps overcome the obvious obstacles that indigenous people face. In particular, we suggested that these questions should be examined as a structural or systemic level as well as for individually targeted interventions. In the first case, it seemed sensible to ascertain the effectiveness of:

• ensuring that Indigenous people are involved in the planning and implementation of economic development and employment programs which affect them;
• setting employment targets for Indigenous people in the public and private sectors;
• providing financial incentives to employers;
• including Indigenous employment obligations in government contracts and agreements with the private sector;
• Indigenous specific employment strategies (national, state and local government) versus "mainstreaming";
• policies incorporating recognition of the "customary"⁶ sector - including art, wildlife harvesting and heritage and natural resource management in economic development in remote communities;
• programs to train and employ Indigenous people to replace non-Indigenous workers in providing core services to Indigenous communities;
• supplementing CDEP programs to provide services in education, health, construction, maintenance, community order, conservation and cultural activities;
• increasing access to land and capital, including through Native Title land use agreements, the Indigenous Land Council and Indigenous Small Business Fund;
• anti-discrimination and promotion programs to potential employers on the benefits of employing Indigenous workers; and
• modifying working conditions to accommodate cultural differences and distance constraints.

Similar assessment should also have been made of interventions aimed at changing individual behaviour and capacity such as education, training and work readiness programs, mentoring, small business development assistance, leadership programs and, as the terms of reference required, some evaluation of the contribution, if any, of the changes introduced under the rubric of "practical reconciliation" to improving Indigenous employment. Given the government's major shifts in policy direction including the abolition of ATSIC, the transfer of CDEP to DEWR, the introduction of mutual obligation and shared responsibility agreements and the "mainstreaming" of services to Indigenous people, it is reasonable to ask whether they have yet produced any measurable benefits.

Indigenous Employment Policy

While we are not in a position to fully assess the questions outlined above, the evidence presented to the committee and available on the public record allows us to indicate some possible mechanisms for expanding indigenous employment, especially in remote and regional communities which have been the focus of recent government attention.

Any such attempt should begin with the published research. Due to data limitations, our knowledge of what does and does not work in overcoming Indigenous disadvantage in the labour market is very limited since there are few rigorous analyses of those data. In 2004-5, labour force participation of Indigenous people was about three quarters of that of non-Indigenous people, while the unemployment rate was about three times the rate of the rest of the community. Many are long-term unemployed. Overall, the employment rate for the Indigenous working age population is barely more than 50% including the approximately 36,000 CDEP participants.

The major government program in this area is the Indigenous Employment Policy announced 1999. This is a composite of several programs, encompassing a range of Indigenous-specific programs such as CDEP as well as Indigenous access to mainstream employment programs. It now has three main elements: the Job Network, the Indigenous Small Business Fund and the Indigenous Employment Program (IEP) whose key sub-programs are listed in Attachment 1.⁷ We briefly review the success of these interventions which are the primary vehicles for the Commonwealth Government's "practical reconciliation" agenda.

Since the point of the inquiry was to inform policy development, it seemed important to us that we begin with the state of play. The government has used both system wide data and post-program employment rates to argue that there has been an improvement for Indigenous Australians since the introduction of this policy framework devised as part of the government's shift to so-called "practical reconciliation". While the majority report repeats the view of DEWR that there have been improvements in Indigenous employment, there is no attempt to assess whether at a time of such low national levels of unemployment and labour shortages, the relative position of indigenous people has significantly improved.

Census data show that the unemployment rate for Indigenous Australians did fall between 1996 and 2001 from 22.7% to 20% (it has since fallen further, although the 2006 Census data which would allow like with like comparisons are not yet available). Without additional information it is difficult to determine how much of this improvement would have occurred in any event and whether the changes can be attributed to the policy itself. While it does appear that the Indigenous labour force participation rose between 1996 and 2005, the increase was small - from 52.7% to 54% compared to the non-Indigenous population increase from 61.9% to 73.3%.⁸ The majority report does not untangle whether the increases were due to increases in CDEP participation or in open employment and why Indigenous people appear not to have increased their engagement in the Labour market at the same rate as non-Indigenous Australians.

The most recent major review of Indigenous employment programs suggests that "the unemployment rate for Indigenous Australians would appear to be more to related to the general improvement in labour market conditions."⁹ The Australian Bureau of Statistics (ABS) Labour Force Survey shows that over the same period (1996- 2001) the total unemployment rate for Australia fell from 8.2% to 6.1%, a greater fall in relative terms, than that experienced by Indigenous Australians.

In general, it seems that a number of indigenous specific programs have been effective in boosting employment. Dockery and Milsom concluded that,

"patchy as it is, the evidence suggests that a mix of on-the-job work experience, achieved through wage subsidies or brokered placements, combined with other appropriate support such as mentoring and training, offers the most successful approach to achieving market employment outcomes for Indigenous job seekers"

They further concluded that wage subsidies were one of the most effective means of assistance. Research on vocational training programs has also shown superior outcomes for Indigenous students in Indigenous specific courses conducted by Indigenous teachers, and when study is undertaken with Indigenous registered training organisations.¹⁰

These conclusions are consistent with much of the material presented to the Committee in submissions and hearings. For instance, the Umoona Aged Care Aboriginal Corporation which is run for and by Aboriginal people pointed to individually tailored training courses, effective mentoring and the use of CDEP for work experience as key elements in achieving successful employment outcomes.¹¹

Community Development Employment Projects (CDEP)

Despite the fact that CDEP participation forms a significant proportion (36,000 people or 25%)¹² of those counted as employed, the majority report largely avoids the questions of whether CDEP has a continuing role in providing employment and of the likely effects of the substantial changes to the CDEP program that commenced on July as part of the government's 2005 revision of the Indigenous Economic Development strategy. Nor does it systematically explore the impact of earlier changes despite the fact that CDEP is the nation's longest lasting program to assist Indigenous people to gain work skills and employment and "widely regarded as one of the most successful."

This is a serious omission since in very remote Australia only 15% of Indigenous adults are in mainstream employment, with 42% in CDEP employment. While the figures are lower in urban and regional Australia, CDEP has been the vehicle for many community programs and related employment. One of the "key messages" from Misko's assessment for NCVER of the role of CDEP in rural and remote communities was that while "the scheme cannot be expected to solve the problems of employment and under-employment of Indigenous Australians in the bush or elsewhere", it "can assist by providing funds to support employers to provide training and employment for participants" and it "enables rural and remote communities access to substantial blocks of funds and resources to customise activities and enterprises and thus improve the physical and social environments of local communities".¹³

The recently introduced changes mean that around 5000 CDEP participants, principally in urban and regional Australia, will be moved to STEP and Newstart and the CDEP programs of which they were a part closed down. In addition, under the current intervention in the Northern Territory, all CDEP funding has been moved from twelve month to three month basis and placed under direct government, rather than community, control. No rationale has been given for these changes.

Already, many people in urban and regional Australia previously employed under CDEP programs to provide community services such as street patrols, support for the victims of domestic violence and sobering up shelters are now treated as unemployed, with all that implies. The services they formally provided are now either closed or much reduced. State governments are being forced to fill some of these service gaps, at short notice and without consultation or funding transfers from the Commonwealth government. It seems to be a classic case of cost shifting. For example in Broome, the closure of CDEP programs would have resulted in the demise of the Goolari Media Enterprises, which as the employer of 37 people is the largest Indigenous employer in Broome and a significant force in the Indigenous community. But for the $2.13 million funding package provided by the State government over the next three years, Goolari, which has been operating for 15 years and as a registered training organisation which has won numerous State and Commonwealth government awards for its employment based training in areas such as radio, screen, broadcastings and events management, would have closed. Other programs which have lost funds are the PCYC which provides various programs for troubled Indigenous youth and the town based women's shelter which helps train workers to assist women in crisis, principally as a result of abuse. Similar programs in other States and Territories have also been cut.

Aboriginal and Torres Strait Islander Social Justice Commissioner, Tom Calma, in his 2006 Social Justice Report, attempted to assess the likely impact of these changes. While allowing, as most commentators do, that there are problems with CDEP, the Commissioner recognises that the "CDEP scheme plays a central role in the economic and community life of many discrete Indigenous communities and rural towns with a significant Indigenous population."¹⁴ Although the scheme is in some respects a prototype of later "work for the dole" programs, since it was originally devised to redress the perceived negative effects flowing from simply providing social security benefits especially in areas where no formal labour market existed, it is now seen by some as being part of the problem of passive welfare.

In its original form, the program provided for unemployment benefits payable to members of a community to be taken collectively by the community's council and distributed in return for work undertaken on projects devised by the community. Over time, additional funds were provided for project management and associated capital. The primary emphasis was on community development which generated employment, not just on individual employment readiness.

As indicated in the majority report, several witnesses to the committee indicated that they believed that CDEP funded activities sometimes drew Indigenous people away from "real jobs" and were essentially a "dead end" rather than a pathway to long term full employment. Others have pointed to the fact that CDEP is used to provide services that should be provided by governments or to subsidise operations that would otherwise have to pay award wages. The Waringarri Media Aboriginal Corporation pointed out, for example, that there is an Indigenous Media Award that should be paid to all the Indigenous employees in the media instead of CDEP payments which do not provide any incentive to work because they are no different from unemployment benefits which are also available in the same community.

Despite these criticisms, it is clear that CDEP has enabled many communities to develop valuable community services such at night patrols, childcare centres and garbage collection which, disgracefully, would not otherwise be provided and to start up local businesses which would not otherwise receive capital. As Tom Calma points out, it has also contributed to the development of Indigenous businesses, entrepreneurship and leadership in some communities. The Bawinanga Aboriginal Corporation based in Maningrida, for example, has hosted a CDEP since 1989 and provides for support, maintenance and development of 32 surrounding communities with almost 600 participants. Their emphasis has steadily shifted toward becoming a regional development organisation with the goal of achieving economic independence for the client groups. They make it clear that CDEP plays a critical role in this process because it has had "the flexibility necessary for the difficult tasks of growing the regional economy" in an area where there is no mining, manufacturing or agricultural activity and where the challenge of "accommodating a willing workforce in relevant and productive employment requires creative and clever solutions." The corporation, frustrated in finding other sources of funding, have used profits from their successful trading enterprises set up under CDEP to provide seed capital for business development and to top up wages. This may well represent a legitimate future direction for CDEP in communities with limited opportunities for conventional employment. In their submission they suggest several ways in which CDEP could be improved including removing access to unemployment benefits (UB) in such communities (since the simultaneous operation of CDEP and UB destabilises CDEP), providing business funding linked by formula to CDEP and providing funding for training and associated capital.

Professor Jon Altman, director of CAEPR, has made similar suggestions, including the need to enhance links between CDEP organisations and training providers and to provide realistic capital and in-cost support. Research undertake by NATSISS and analysed by CAEPR shows that CDEP organisation can assist participants with their incomes, enhance working hours, participate in non-market activities (with direct benefits to individuals and families) and participate in cultural and ceremonial actives. Critically, CDEP could be further enhanced to generate employment in the arts sector, sustainable use of wildlife, natural and cultural resource management, land and sea management, wildfire management, carbon abatement, biodiversity conservation, security and coastal surveillance.

At the moment, the lower CDEP pay rates effectively allow governments to provide services on the cheap, to the detriment of continuing, fully waged jobs. Governments, and some communities, sometimes provide "top ups" to CDEP funded positions in school, clinics and community services which in other places would be fully funded positions. As a number of communities have suggested, one method of securing better levels of Indigenous employment would be to supplement funds currently directed toward CDEP programs in Indigenous communities so that full time, appropriately paid jobs could be offered within those communities. In fact, the government has introduced a very modest program which does just this. In 2006-7 an annual allocation of $5 million was set aside to create 130 full-time equivalent positions for health worker duties. In its 2007-8 budget under the heading "Building an Indigenous Workforce in Government Service Delivery, 97.2 million over four years (35.9 diverted from CDEP programs) is set aside to fund 825 jobs across Australia in environmental and heritage protection, education, child care, night patrol in indigenous communities and community care. Labor members believe that a more generously funded program encompassing a wider range of services, including state and local government services such as water supply, housing, waste management and so on, and funded in part by additional commitments from the states and territories would obviously benefit Indigenous employment and deliver a standard of services (and the additional wages income) taken for granted by the rest of the community.

While there are weaknesses in the CDEP, the changes introduced by the government do not appear to have built in any systematic way on the documented strengths of the scheme. Nor do they appear to have taken account of the benefits for Indigenous people's cultural needs and self-determination aspirations of being in control of such programs.

Job Network

Much of the recent government policy emphasis has been on shifting Indigenous people into mainstream job market programs. Indeed, from July 1 this year, the urban and regional CDEPs have been closed and participants are being moved either to STEP or Newstart, to be assisted through the Job Network. However, the early results from the first round of Job Network contracts suggested poor servicing of Indigenous job seekers. While the government sought to address this problem in the second round of contracts by requiring a greater focus on specialist services for Indigenous jobseekers, the available evidence shows that "participation rates for Indigenous people in Job Network services have remained below target, in contrast to program commencement rates for Indigenous people under the Commonwealth Employment Service."¹⁵

What's more, despite DEWR's claims to the Committee about the effectiveness of the job network (p 32 of the majority report), their own data also show that while Intensive Assistance providers have improved their effectiveness in getting Indigenous people into work, the placements are not being sustained. In 2005-6, only 21% of Indigenous job seekers placed were still in work at 13 weeks, falling to 16% at 26 weeks. The following year's figures were no better. This compares with figures for 2005 from the population at large which show that 59, 46, 39, and 47 percent of job seekers who commenced Job Search Training, Customised Assistance, Work for the Dole and Mutual Obligation respectively, were still in employment 12 months later.¹⁶ The figures for 2006 indicate similar deficits, with total positive outcomes (employment plus education) for intensive support programs reaching 59% for the total population and only 39% for Indigenous job seekers.

It should come as no surprise, that within the suite of Job Network programs, the most successful are those which are linked with Indigenous people's interests and which are flexible enough to encompass cultural and family responsibilities. Research suggests that better results are often achieved when Indigenous people are involved in service delivery, perhaps because they are better able to deliver culturally appropriate assistance. "The accumulated evidence from major programs suggests that Indigenous-specific programs and wage subsidy programs in particular are among the more effective forms of assistance in promoting mainstream employment outcomes."¹⁷ Is not clear whether, in general, Indigenous people are faring better under the Job Network than they did under previous labour market programs.

Practical Reconciliation

One of the tasks the committee set itself was to assess what contribution, if any, "practical reconciliation" had made to any positive outcomes we identified. This is one area in which the majority report is clearly deficient; enough time has passed since the government's shift of policy was announced to allow an evaluation of the effectiveness of its new approach in tackling unemployment and several attempts had been made to do so.

Preliminary results are not encouraging. In their evaluation of the effectiveness of the "practical reconciliation" agenda, the Centre for Aboriginal Economic Policy Research at the Australian National University analysed Australian Bureau of Statistics data over a 10-year period from 1991 and concluded that there was no statistical basis to the claim that "practical reconciliation" is delivering better outcomes in employment, housing, education, health or the income status of Indigenous Australians than previous policies. For example, in four of the five indices of participation in the labour force, the status of indigenous people relative to the rest of the population appeared to have declined. Their median income had also fallen, as had the ratio of Indigenous to non-Indigenous participation in tertiary education. Census data to be released later this year will allow further evaluation of any trends. Since the abolition of ATSIC and the transfer of some its responsibilities (including CDEP) to DEWR, the government has been in complete control of its agenda. The results to date are not encouraging.

In looking at the reasons why "practical reconciliation" does not appear to have improved the wellbeing of Indigenous Australians, the authors of the above review, Altman and Hunter, argue pointedly that:

"One of the major problems with the practical reconciliation agenda is that it fails to recognise that many of the practical outcomes highlighted are driven, directly and indirectly, by social, cultural and spiritual needs".

In a by now familiar response to criticism, the government invested public funds in contracting a firm with close links to the conservative think tank, CIS, to undertake a critique of the CAEPR work. This attempt to discredit the authors continued despite the fact that the Altman and Hunter paper was refereed by peers and published in a reputable economics journal. Although it has enjoyed significant public sector support for over 15 years and despite the conclusion by independent reviewers that CAEPR is "the only major grouping of researchers having expertise and producing sustained quality research in the broad field of Indigenous economic and social policy in Australia at a present", Government core funding was cut at the end of 2005 and the government continues to ignore their research findings.

Conclusion

There is little disagreement that improving the wellbeing of Indigenous people depends, at least in part, on reducing material poverty. A key to such improvement lies in programs and initiatives which increase sustainable employment. It is disappointing that the evidence to date does not allow any firm conclusions about the necessary components of effective interventions and how they might need to be adapted for different communities. Equally disappointing is the failure by government policy makers to confront the complex - and contentious - questions. For instance, it appears to be taken as read that all Indigenous people naturally desire the lifestyle and values that come with economic integration and that if they don't a carrot and stick approach will be effective in achieving such integration. As Tom Calma argued in his recent report to government:

"The compliance mentality that currently permeates Indigenous policy making processes does not address [the] full sweep of issues. It is an increasingly punitive framework that cherry picks issues and neglects important essential characteristics for good policy."¹⁸

The Hon Dr Carmen Lawrence MP

Ms Annette Ellis MP

Mr Peter Garrett MP

The Hon Warren Snowdon MP

Attachment 1