Chapter 3 The role of government, industry and community programs
3.1
There are a wide range of programs from many sectors offering specific
enterprise support services to Indigenous people. They range from Australian
Government programs such as Indigenous Business Australia to state programs
such as the Koori Business Network run by the Victorian Government and programs
run by industry and individuals, which are designed to assist Indigenous people
to start and run their own business.
3.2
The nature of the support provided ranges from financial support, skill
and capacity building, overcoming isolation, and asset development including
land and coordination of services.[1] The programs generally form
part of a wider strategy designed to improve outcomes for Indigenous people.
3.3
In 2005, the then Australian Government Department of Employment and
Workplace Relations undertook a scoping project to investigate the services
available to Indigenous people. The project found that there was an extensive
range of government, industry and community organisations offering specific
enterprise support programs and services to Indigenous people. It also became
obvious that the sheer number and complexity of programs and services was often
confusing and daunting to emerging Indigenous entrepreneurs.[2]
3.4
Indigenous communities also have a range of specific issues which may impact
upon participants’ opportunities to take part in the mainstream economy. At
the Indigenous Governance Conference in Canberra in 2002, Ms Diane Smith from CAEPR
highlighted some of the difficulties faced by Indigenous communities. This
included that most Indigenous communities:
n are overwhelmingly
reliant on government transfers, and especially on social security benefits;
n lack access to
necessary capital funds, financial services and credit; and
n lack streamlined
financial management and financial training systems.
3.5
It was also shown that in the absence of any enabling national policy or
agreement, current funding arrangements impose major restrictions on communities
and their organisations. Funds are:
n administered by
multiple departments which retain financial authority;
n delivered in a
stop–start process;
n via a multitude of
small separate grants;
n subject to changing
program priorities and packaging;
n bound by inflexible
conditions and timeframes; and are
n overloaded with heavy
administrative and ‘upward’ accountability burdens.[3]
Australian Government programs
3.6
The Australian Government, through several agencies, runs programs which
provide services for Indigenous people wanting to start their own businesses.
This direct enterprise support can include grants, lower cost loans and support
services such as mentoring, business development assistance and connection to
other businesses and markets.
3.7
Outside of the mainstream programs offering direct enterprise support to
Indigenous people are other Government agencies and authorities who provide
support other than funding or may undertake research into the area of
Indigenous enterprises that is likely to prove invaluable in directing future
initiatives and funding for Indigenous entrepreneurs. Australian Institute of
Aboriginal and Torres Strait Islander Studies (AIATSIS), CSIRO, Indigenous Land
Corporation (ILC) and ORIC are examples of groups who provide support or
research in this area.
3.8
The Department of Environment, Water, Heritage and the Arts (DEWHA) coordinates
Indigenous environment programs and initiatives such as ‘Caring for Country’
and natural resource management. The Committee is aware that many of these
programs focus on employment rather than the specific development of
enterprises.
3.9
In addition the Committee received a submission from the Small Business
Ministerial Council (SBMC). The SBMC, which meets annually, comprises
Australian Government, state, territory and New Zealand Government Ministers
responsible for small business policy. Among other things, the SBMC works to promote a national, consistent and coordinated approach to small business policy
and its development, aimed at avoiding overlap and duplication in small business
programs between levels of government.
Indigenous Business Australia
3.10
Indigenous Business Australia (IBA) is a statutory authority within the
Australian Government’s Families, Housing, Community Services and Indigenous
Affairs (FaHCSIA) portfolio.
3.11
IBA’s programs and activities aim to facilitate and enable the
engagement of Indigenous people in the wider economy. There are three core
service delivery programs:
n Business Development
and Assistance Program (BDP);
n Equity and
Investments Program (E&I); and
n Home Ownership
Program (HOP).
3.12
The BDP fosters the development of Indigenous enterprises by providing
access to professional support and finance for Indigenous business
entrepreneurs that cannot access these services in the private sector.
3.13
Its primary products are low interest business loans for Indigenous
Australians with a viable business proposal but who do not satisfy mainstream
bank lending criteria. Loans are provided at subsidised rates (currently 2.5
per cent below the Commonwealth Bank of Australia business rate). IBA also provides business support, such as business planning, business related skills
development and mentoring, through a national network of over 200 professional
business advisers, including business planners, accountants and marketers.
3.14
Further assistance encompasses economic development initiatives,
including workshops that provide business related training and introduce
clients to business concepts and realities, research that provides useful
insights into regional economic opportunities, and outreach and mentoring
activities for aspiring business people in regional and remote areas.[4]
3.15
Other initiatives include projects aimed at multiple beneficiaries where
the benefit may be long term business or skills development outcomes. The aim
of these initiatives is to build capacity and aspiration for business, and
create pathways into business particularly in regional and remote Australia.
3.16
IBA consider that the overall effectiveness and value add of their
programs stem from a core role as an essential ‘market gap’ provider. In their
submission, IBA state that they fill the gap left by the mainstream economy not
providing financial services or commercial opportunities which are accessible
to Indigenous people.[5]
3.17
IBA works with Preferred Service Providers (PSP) to provide their
services across Australia and the Committee heard from several of these
providers in the course of the inquiry.
3.18
The Committee was very impressed with the work being done around the
Introduction to Business Workshops and the range of services available through
the PSP network. They did also note that there are PSPs that are not
Indigenous focussed.[6]
Issues
3.19
One of the issues raised in the inquiry about the BDP was the level of
risk that IBA were willing to accommodate. In their submission, Professor
Foley and Dr Hunter indicated that the recent IBA statistics[7]
may demonstrate that the lending policies of IBA are more at the prudent end,
servicing only a small percentage of Indigenous economic development or an
elite sector of Indigenous finance.[8]
3.20
Mr Bruce Harvey from Rio Tinto made the point that IBA would only lend to large established businesses that can demonstrate a positive cash flow and
that they are a real profitable business over time.[9]
3.21
Several participants in the inquiry raised what they considered to be the
somewhat onerous requirements for IBA applicants. The Minerals Council of
Australia stated that IBA’s BDP and E&I requirements are onerous and
require emerging businesses to meet equivalent hurdles to those required by
mainstream investment options such as banks. They stated that IBA tend to favour investment in businesses that may be sustainable and economically viable even
without investment by IBA.[10]
3.22
Mr Edgar Price of Price Louvel raised concerns regarding IBA's business support program, namely that there is a requirement for a certain level of business
sophistication on the client’s behalf before they meet criteria for assistance.
He felt that this would rule out many Indigenous people.[11]
3.23
Koorie Women Mean Business considers that there needs to be less red
tape in the IBA application and a shorter timeframe on the application process.[12]
The Yorta Yorta Nation Aboriginal Corporation agreed with this.[13]
3.24
Rio Tinto’s submission raised issues about the scope and delivery
of IBA’s services which often do not reach some parts of
the country where business advice and support is in high demand. There is a
lack of IBA services in the Pilbara in Western Australia, but in the east Kimberley
region there is very successful one on one case management support for businesses
through IBA.[14]
IBA Response
3.25
IBA informed the Committee that they consider that over the last few
decades the process of Indigenous economic development through programs such as
theirs has been either over processed or under processed:
You have either done it to such an extent that Indigenous
people find it hard to get in, or there is a lack of process and the loans
start to fail.[15]
3.26
IBA also indicated that there were unrealistic client expectations stemming
from the previous Aboriginal and Torres Strait Islander Commission (ATSIC)
program and limited appreciation of the need for commercial rigor in loan
assessment.
3.27
During the time of the transition between ATSIC and IBA, certain requirements such as higher security of close to 100 per cent were put in place but
this has now settled to an average of 70 per cent.[16]
IBA requires less security but still spends time ensuring the capacity of the
applicant to repay the loan.
3.28
IBA consider that their program is a gap product that it sits alongside
the mainstream financial systems but does not operate in the same manner as
banks do. IBA takes less security, provides loans to Indigenous people who may
not have a good credit history and loans to Indigenous people who are first time
borrowers.[17]
3.29
IBA has also made changes to substantially reduce the time taken to
progress applications through to loan settlement, such as no longer using the services
of the Australian Government Solicitor. Previous process delays centred around
certain steps in the IBA business loans process that extend timeframes,
particularly the incorporation of comprehensive business planning and
confirmation of Indigenous descent.
3.30
IBA is careful to distinguish their role from that of a business incubator
and hub. IBA considers that hubs are a good idea for people who have an
aspiration for business but considers that they operate in a different space. IBA provides assistance and access to resources which enable the client to stand up for themselves,
rather than IBA providing intense support.[18]
3.31
IBA acknowledges that prompt responses are vital in a commercial
environment and action has been taken to reduce both the assessment process and
the legal processes of loan establishment. However, risk management practices
implemented since the program transitioned to IBA have been retained as these
underpin the improved outcomes for clients, including the success rate of
businesses. With the new changes in place, IBA business loan processing times
will be comparable to those of the mainstream banks.[19]
Committee Comment
3.32
There was a large amount of evidence presented to the Committee during
that hearing that was critical of IBA and their processes. The Committee
recognises that in many cases this evidence was a fair and accurate
representation of what was happening at the time. IBA has undergone a
significant transition since ATSIC and the Committee appreciates that they have
undertaken steps to address many of these issues.
3.33
However, the comments are of concern to the Committee as they represent client
dissatisfaction and a lack of confidence in IBA from some areas of the
Indigenous community. Balancing this, the Committee commends IBA for utilising more mainstream experts such as the team of bankers who are auditing the
assessment process for loan applications.[20]
3.34
The Committee recognises that IBA has emerged from a culture of grant
facilitation with a low assessment of risks, and is endeavouring to improve its
credentials in terms of professionalism and assisting businesses to success.
This transition may require more coordination with the expertise that is
currently available in the non Indigenous finance and business sectors.
3.35
Accordingly, the Committee encourages IBA to continue to look for and
use other experts who can assist them to achieve a high level of
professionalism in their own operations and to provide the highest possible
levels of service to Indigenous businesses.
Department of Education, Employment and Workplace Relations
3.36
The Department of Education, Employment and Workplace Relations (DEEWR)
currently administers several programs that contribute to Indigenous
entrepreneurship that are focused on a range of activities from business
planning through to creation and operation of a business.
3.37
The three key programs run by DEEWR are as follows:
n The Emerging
Indigenous Entrepreneurs Initiative (EIEI) supports economic development,
business skills and financial literacy for Indigenous people with a goal ultimately
leading to enhanced employment and business development opportunities;
n The Indigenous Small
Business Fund (ISBF) provides funding for the development and expansion of
Indigenous businesses and enterprises; and
n The Indigenous
Capital Assistance Scheme (ICAS) is intended to stimulate Indigenous business
development. DEEWR has a contract with Westpac to provide tailored products and
services which will support Indigenous business development.
3.38
Central to these funding programs are the other aspects that DEEWR
either directly funds or supports. These include:
n Funding Indigenous
economic development officers, either directly or in partnership with state and
territory governments. There are 35 of these officers around Australia and they
work in a diverse range of areas, such as specialising in driving initiatives
with mining companies or the arts industry;[21] and
n Funding business hubs
operating in the Northern Territory.
3.39
DEEWR funds individuals, families or partnerships and community organisations
through these programs. In the last financial year, the EIEI program provided
$4.8 million for initiatives, the ISBF $6.8 million and ICAS $405 000. These
programs were reviewed in 2007 by the Office of Evaluation and Audit and were
found to be successful in providing funding assistance to eligible Indigenous
businesses. Additionally, it was found that half of the community organisations
receiving funding through the ISBF were creating employment opportunities with
a quarter employing more than 4 people.[22]
3.40
The New Enterprise Incentive Scheme (NEIS) was shown, in some cases, to
be the means that assisted new businesses starting up[23]
but there tended to be a low take up rate by Indigenous people.[24]
NEIS is a self employment program funded by DEEWR which helps eligible people
become self supporting and independent of Centrelink by establishing and
running their own business.
3.41
Participants reported that NEIS assumes a higher level of literacy and
numeracy than many Indigenous people have.[25]
Committee Comment
3.42
The Committee considers that the programs provided by DEEWR are having a
positive impact on Indigenous enterprises. They also consider that partnerships
with groups such as state and territory governments and industry are vital in
ensuring that applicants are able to find the appropriate service in a timely
manner.
3.43
The Committee considers that there is merit in the ICAS scheme, where a
business develops financial literacy through a connection with the commercial
sector, in this case Westpac, rather than an interim arrangement or a
government backed arrangement.
Department of Families, Housing, Community Services and Indigenous Affairs
3.44
FaHCSIA is the Australian Government's lead coordination agency in
Indigenous affairs and also has a range of programs to assist Indigenous
people. FaHCSIA supports the national implementation of the Australian
Government’s whole of government arrangements in Indigenous affairs and manages
the network of multi agency Indigenous Coordination Centres (ICCs) across
Australia.
3.45
The Department is the lead agency on a number of major Australian Government
initiatives, including:
n the Northern
Territory Emergency Response;
n the National Apology;
and
n consultation on a
National Indigenous Representative Body.
3.46
FaHCSIA administers a number of Indigenous specific programs,
particularly in the areas of housing, community development, leadership and
land. Within its mainstream programs it keeps a focus on Indigenous services
and projects that support communities and families.
3.47
One program is the Indigenous Women’s Program. Activities funded under
this program aim to reduce Indigenous disadvantage through enhancing Indigenous
women’s leadership, representation, safety, wellbeing and economic status. It
includes an Indigenous Women’s Leadership program, a national program that is
focussing on leadership to economic development. This program was praised by
inquiry participants.[26]
Committee Comment
3.48
The Committee is concerned that the complexity of the administrative
arrangements which are under the responsibility of FaHCSIA could make their
programs inaccessible to Indigenous Australians who may seek business
development information from FaHCSIA. This was demonstrated in the evidence
provided by the Burrthi Corporation, who had difficulty in navigating the
information provided.[27]
Department of Innovation, Industry, Science and Research
3.49
The Department of Innovation, Industry, Science and Research (DIISR) does
not have programs which specifically target Indigenous businesses. Rather the
Department manages a number of programs that provide information, support and
advice to all small business owners and aspiring small business owners.[28]
3.50
These programs include a national network of small business advisory
centres also known as Business Enterprise Centres (BECs) which provide small
business advice and assistance. BECs have been praised by participants in the
inquiry as they provide services to all small business owners and provide
appropriate support in a very timely manner.[29]
3.51
The Desert Knowledge CRC is funded through DIISR and receives $20.7
million over seven years to 30 June 20l0. The focus of the Desert Knowledge CRC is developing knowledge economies which sustain Australia’s inland environments for desert
people, Indigenous and non Indigenous.
Box 3.1: The Remote Enterprise Centre in Alice Springs
The Remote Enterprise Centre (REC) is funded by the Department of Innovation, Industry, Science and Research and will be based in Alice Springs and provide outreach support to communities in the Northern Territory and also in remote regions of Queensland, South Australia and Western Australia, forming part of the national Enterprise Connect network. The REC is expected to commence operations in late 2008.
The REC will support new and existing services and businesses including outback tourism, Indigenous arts and crafts, carbon trading and land management, horticulture and aquaculture, livestock, mining and associated industries such as grading and rehabilitation.
The REC will provide a source of information to business, regardless of the length of establishment or size, through a referral service connecting businesses with sources of technical, process, management and financial expertise. It will partner, or will provide referrals to pre-existing service providers such as Indigenous Business Australia, the Indigenous Business Hubs, Business Enterprise Centres, State Governments and Local Governments who provide services aimed at new businesses. The REC will also provide services to beyond start-up businesses either directly or by referral to relevant service providers, recognising that there are gaps in service provision to such remote firms.
Source: Correspondence from DIISR, received by the Committee, 28 August 2008
Committee Comment
3.52
Although the Committee did not receive formal evidence from DIISR, it
considers that the programs under its responsibilities have the potential to
provide assistance to current and future Indigenous business owners
particularly those Indigenous people who live in cities and urban areas.
3.53
The
Committee considers that programs such as the BECs which also operate in the
mainstream, would be a source of support for the urbanised population of
Indigenous people in states such as South Australia and Victoria where 48 per
cent of Indigenous people live in urban areas.[30]
Committee Comment – Australian Government Programs
3.54
The Committee considers that there is merit in more cooperation between
the departments and agencies which provide assistance to Indigenous
enterprises.
3.55
The Committee considers that this cooperation would assist with overall
coordination of funding and programs for Indigenous enterprises. It would also
have the potential to streamline interaction for potential Indigenous entrepreneurs
as they could be directed to the appropriate program in a timely manner.
Recommendation 5 |
3.56 |
The Committee recommends that the Australian Government establish
an Interdepartmental Committee (IDC) to ensure a streamlined and coordinated
approach to the delivery of all forms of business assistance to Indigenous
enterprises. The IDC should comprise all departments and agencies delivering
services to Indigenous businesses and enterprises including but not limited
to Indigenous Business Australia, the Department of Education, Employment and
Workplace Relations, the Department of Innovation, Industry, Science and
Research, the Department of Families, Housing, Community Service and
Indigenous Affairs. |
Commonwealth Science and Industrial Research Organisation
3.57
The CSIRO through its various research and social outreach initiatives,
is aiming to deliver sustainable economic, social and environmental solutions
to further address some of the major challenges facing Indigenous communities
in Australia. CSIRO has initiated an Indigenous Engagement Strategy to achieve
greater Indigenous participation in its research and development agenda.[31]
3.58
CSIRO provides assistance to Indigenous communities at the science front
where there is the interface of research and activity that has the potential
for economic and social development. Some of these research areas are discussed
in Chapter 2.
3.59
From this experience, CSIRO suggests that existing business support
programs provided by governments may not always adequately address or cater for
scientific research and development in emerging industries and that business
support funding timeframes are too short to allow for appropriate
investigations.[32]
Committee Comment
3.60
The Committee notes the potential for Indigenous engagement in natural
resource management across areas such as bush food harvesting, weed and feral
animal (such as camels) reduction, fire management and carbon abatement.
However, these opportunities will remain unrealised without the research to
investigate commercialisation potential and the addition of possible financial
incentives to value natural resource management in remote areas of Australia.
As a first step in pursuing these potential businesses, the Committee
recommends an expansion of the current work being undertaken by CSIRO in this
field.
3.61
In particular the Committee notes that CSIRO is a partner researcher in
a number of projects, such as the Desert Knowledge CRC, and works
collaboratively and respectfully with Indigenous communities. The Committee
considers CSIRO is best placed to network the research and development in this
area, leading to potential commercialisation opportunities for Indigenous
communities.
Recommendation 6 |
3.62
|
The Committee recommends that the Australian Government
provide additional funding for the Commonwealth Science and Industrial
Research Organisation to expand its research and partnering work in the areas
of natural resource management and carbon emissions reduction leading to
potential commercialisation opportunities for Indigenous communities.
|
Office of the Registrar of Indigenous Corporations
3.63
ORIC delivers a framework of integrated programs which offer specific
services and support to Indigenous corporations registered under the Corporations
(Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act). ORIC
provides a range of services for Indigenous corporations including tailored
training services which cover topics such as financial management and budgets
and secure funding and develop enterprise opportunities.
3.64
The CATSI Act is tailored to meet the diverse requirements of
contemporary Indigenous corporations. It is designed to support Indigenous
people forming corporations for native title and commercial purposes, as
opposed to corporations which are non profit and receive government funding for
the sole purpose of delivering community services.[33]
3.65
ORIC advises that the number of registrations under the Act is
increasing. There are 2 622 Prescribed Bodies Corporate (PBC) currently
registered, with 58 per cent of these in remote Australia. PBCs are established
to hold and manage native title and any benefits flowing from agreements.[34]
ORIC anticipates a growth in registrations of 15 per cent this financial year.[35]
3.66
A focus on governance in Indigenous communities has been advanced under
this new Indigenous corporations framework. ORIC provides a specialised
service within the corporations framework to ensure that Indigenous
organisations can direct economic development through self determination. An
overriding objective of this process is to provide certainty to government and
corporate partners, and so to make investment more attractive.[36]
3.67
To achieve this ORIC conducts reviews of 60 to 80 Indigenous corporations
on an annual rolling basis, with some 25 per cent nominated by complaint or
intelligence. Mr Nathan Boyle told the Committee:
One benefit has been proving that there is no more or less
corruption in Indigenous or non Indigenous corporations. Some of our work is
testing that. We also give certainty to funding bodies and governments by
saying, ‘These corporations are healthy, they are performing well and they are
not corrupt.’ That gives certainty to the Australian government or other states
in order to say that you can fund them and they are doing well.[37]
Committee Comment
3.68
The Committee commends the Registrar and his Office for its achievement
so far. ORIC conceded that requirements for reporting under CATSI Act are more
onerous than under the revised Australian Securities and Investments
Commission Act 2001(ASIC Act), but advised that this would be addressed
shortly. The Committee anticipates the resolution of this issue.
3.69
The Committee also commends the role that ORIC has recently taken in
dispute resolution and mediation between members of a corporation and between
different corporations. ORIC indicated that conflict between family and
interest groups is a characteristic of some Indigenous corporations. This has contributed
to a perception in the broader business sector that Indigenous corporations are
unstable and therefore should not be engaged with on a commercial basis.[38]
Indigenous Land Corporation
3.70
The Indigenous Land Corporation (ILC) is a statutory authority of the
Australian Government, established to assist Indigenous people to acquire and
manage land to achieve economic, environmental, social and cultural benefits.
The ILC considers that it plays a significant role in assisting and supporting
Indigenous landholders to develop viable enterprises.[39]
3.71
As set out in the National Indigenous Land Strategy 2007, the ILC has
priorities of supporting projects that:
n target education,
training delivery and creation of sustainable employment; and
n are conducted in
collaboration with other project partners.
3.72
The ILC targets these priorities and assists with the development of
Indigenous enterprises through four primary mechanisms:
n Indigenous
organisations apply to the ILC's Land Acquisition and Land Management programs
for assistance with development of a land based business;
n regional projects are
supported that give advice, mentoring and training to Indigenous businesses;
n ILC businesses are
operated that employ and train Indigenous people in the pastoral and tourism
industries; and
n businesses are
initiated in collaboration with Indigenous groups to target mainstream
enterprise development opportunities that will be handed over to the group once
governance, capacity and appropriately skilled staff are in place.[40]
3.73
The ILC believes that economic, environmental, social and cultural
benefits will flow to Indigenous people through their engagement in education,
training and employment.
3.74
In 2005-06 ten commercial businesses throughout Australia were being
managed by the ILC. These businesses are mainly large scale beef cattle
enterprises, but also include tourism businesses and two orchards.
3.75
The ILC also works in partnership with other agencies to fund regional
projects that support the development of businesses on under utilised
Indigenous held land. One such project is the Indigenous Pastoral Program
(IPP). The IPP aims to increase the level of pastoral production on Indigenous held
land and increase Indigenous involvement in the industry through training and
employment. The program is currently assisting Indigenous land owners of
11 properties with financial and governance training, natural resource,
fire management, drought response and business planning.
3.76
The IPP has built successful partnerships between industry and
Indigenous land owners in the region, and contributed to direct environmental
benefits and improved land management.[41]
Australian Institute of Aboriginal and Torres Strait Islander Studies
3.77
Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS)
contends that recognition of native title has been a strong influence on the
increased engagement of Indigenous peoples in the Australian economy and in the
development of new enterprises.[42]
3.78
AIATSIS has undertaken a role in working with native title holding
groups and their corporations to establish and realise their aspirations in the
area of Indigenous enterprises as it was found that the capacity of these
groups to access programs and resources to identify and support business
enterprise was lacking. This role has included the development of resources
specifically for native title groups to identify government programs and
resources.
3.79
AIATSIS consider that there is a significant gap between the growing
government expectation of native title agreements to deliver social and
economic change, and a corresponding level of support or funding for agreement
making processes and the continued implementation and monitoring of agreements.[43]
State Government programs
3.80
State governments have recognised the value of supporting the
development of Indigenous enterprises, through the provision of programs often
with a rural or remote focus to meet the needs of the Indigenous communities in
their jurisdiction.
3.81
The New South Wales Government currently implements a number of programs
that teach business skills, support Indigenous people in their economic
development, and forge relationships between Indigenous people and the private
sector. There is an emphasis placed on providing resources to aid the creation
of new Indigenous businesses, whether they are subcontractors, or small to
medium sized enterprises.[44]
3.82
The Koori Business Network (KBN) is the Victorian Government’s primary
agency for promoting the growth of sustainable Indigenous businesses and
economic development. It works with both individual and community based
entrepreneurs, hosts Indigenous economic development conferences and provides
access to business mentors and aids in the development of business strategies.[45]
3.83
South Australia has recently created an Inter-Ministerial Committee on
Aboriginal Workforce Development which is looking at place based approaches to
increasing employment through training and case management.[46]
In addition, it has commissioned a study of the bush food industry in response
to previous government support of Indigenous landholders to develop bush food enterprises
across the production, manufacturing and distribution spectrum, with mixed
levels of success.
3.84
The Queensland Government has several departments which share
responsibility for Indigenous enterprise development. The Department of Tourism,
Regional Development and Industry has responsibility for Indigenous Business
Development. This program has a grant scheme of $2.5 million per annum consisting
of two components. One is a business establishment and business expansion
program, and the other program is for capacity building. A partnership also exists
with DEEWR to fund Indigenous economic development officers, who work from
regional offices around Queensland.[47]
3.85
The Northern Territory Government released an Indigenous Economic
Development Strategy in 2005. The strategy highlights many of the opportunities
that can be facilitated through appropriate support and the forging of
cooperative partnerships and includes details on strategies in various industry
sectors such as the arts and natural resource management.[48]
3.86
The Aboriginal Economic Development division within the Department of Industry
and Resources in Western Australia provides a range of business support
services, including financial assistance, to Indigenous people and
organisations.
3.87
The Aboriginal Economic Development division works with a combination of
local, state and Australian Government, industry and philanthropic financial
assistance providers. Funding is provided flexibly; applications can be made at
any time in the budget cycle, if funds are available within the division’s
budget.[49]
Box 3.2 Blak Business Smart Business
The Blak Business Smart Business Hub was an initiative undertaken by the Brisbane City Council with funding from the then Department of State Development, Trade and Innovation in response to issues raised by the Brisbane Indigenous communities through an extensive community consultation process conducted throughout 2003 and 2004. The Hub operated across South Queensland. Additional funding was also secured from the then Department of Employment and Workplace Relations. The program’s funding ceased in August 2008.
The Hub brought together a range of business information, support and resources in one place in a simplified way that was readily available to assist Indigenous business development, business owners and community organisations.
The aims of the Hub were:
- To increase the number of Indigenous people establishing and managing their own businesses and generating Indigenous employment opportunities; and
- To increase the capacity of Indigenous community organisations to identify and operate sustainable business models and to act as role models for business development in Brisbane and South East Queensland.
The Hub worked by:
- Proactively seeking, networking with and supporting Indigenous clients at any stage from business start up to expansion.
The Blak Business Smart Business Hub provided support, ran workshops, brokered solutions for Indigenous clients, undertook research and focussed on sector development and marketing and promotion.
Source: Mr JM John Armstrong, Submission No. 3, pp. 10-11.
Committee comment
3.88
The Committee considers that the availability of funding at any time in
Western Australia and Queensland[50] is a strength as it
enables potential Indigenous business to move with an appropriate level of
momentum, rather than waiting for a funding round to start. The Committee has
further comments on grants versus loans later in the chapter.
3.89
The Committee was impressed with the model of the KBN which for a small
team and budget seems to undertake a wide range of activities and promote a
sense of social inclusion and empowerment amongst Indigenous Victorians. Some
of the services of the KBN that particularly impressed the Committee were:
n that the KBN operates
with an economic development perspective to Indigenous policy making, through
positive engagement, forging business relationships and delivering government
support services in a culturally appropriate way;[51]
n that the KBN has maintained
the cultural importance of having Victorian Indigenous people lead the agency;
n the Victorian
Indigenous Business Directory 2008-2009 which demonstrates the wealth and
variety of goods and services on offer as well as showcasing outstanding
Indigenous people in business;
n the Young Indigenous
Entrepreneurs program, which focuses on young people but also involves their
parents, with opportunities to talk and listen to role models; and
n the Indigenous
economic development conferences run biennually.
3.90
The Committee considers that one of the strengths of the KBN is that it
considers that Indigenous people are a key factor in helping to develop Indigenous
enterprises.
3.91
The Committee also considers that the KBN performs some of the roles
similar to those of an Indigenous Chamber of Commerce such as the promotion of
businesses through the Indigenous business directory.
3.92
The Committee considers that the KBN model has significant merit and
should be implemented across all states and territories, taking into account
the specific jurisdictional requirements.
Recommendation 7 |
3.93
|
The Committee recommends that the Australian Government work
co-operatively with state and territory governments to expand an Indigenous
business networking model that appropriately takes account of the uniqueness
and diversity of Indigenous business in each state and territory.
|
Industry programs
3.94
Industry programs which offer specific enterprise support programs and
services to Indigenous enterprises tend to be concentrated in the mining
sector. More information on these enterprises can be found in Chapter 5.
Community programs
3.95
There are a wide range of community programs which provide specific
enterprise support to Indigenous enterprises. Funding for these programs can
come from governments, including federal, state and local. Aboriginal
Corporations may provide enterprise support to their members.
3.96
Koorie Women Mean Business Incorporated is a specialised group based in
Victoria which provides services for Indigenous women to develop sustainable
livelihoods and well being. It specialises in developing partnership projects,
identifying business opportunities and offering professional development
services and projects which focus on issues which sustain women and their
business.[52]
Small Business Incubators
3.97
The Darebin Enterprise Centre is an example of a small business
incubator which was established over 10 years ago. It is based in the City of
Darebin in metropolitan Melbourne, which has a high Indigenous population and
provides business support services to individual Indigenous business owners,
Indigenous communities around Victoria and small business owners.
3.98
The Darebin Enterprise Centre indicated that although the business
support services that it offers to Indigenous business are the same as to
mainstream businesses, they tend to provide a more intensive service for
Indigenous businesses. Generally this meant providing more services over a
longer period of time.[53]
3.99
Research has shown that the model of the business incubator provides an
important and necessary level of support for entrepreneurs in areas where they
may not have a high level of experience such as marketing, legal and finance.
The incubator assists with all these areas until people can manage for
themselves and can ‘graduate’ from the incubator.[54]
3.100
The Indigenous Business Hubs in the Northern Territory which are run by
Darebin Enterprise Centre are funded under the DEEWR, EIEI program. The hubs
provide services for Indigenous entrepreneurs across Darwin and beyond.
3.101
Indigenous people who are interested in setting up a small business
contact the hub and then the coordinator works directly with those people on
various business development issues, whether it is the mechanics of setting up
the business, registering the business in the first place, marketing the
business, providing financial management support for the business or
bookkeeping service for the business.
3.102
The coordinators in Darwin and Tennant Creek highlighted the importance
of the hub in developing relationships with possible clients. They emphasised
that a lot of time initially would be taken in conversation, building up trust
and being honest with the client about the scope of the services that the hub
can provide, rather than just filling out forms.[55]
3.103
The coordinators emphasised that the ways of doing business with
possible Indigenous entrepreneurs can vary.
But there is a lot of what we classify as ‘tyre kicking’ as
well: ‘Let’s just hang around the car and talk about it. It sounds good, yeah.’
That actually takes up a lot of time. That is where they are testing your
confidence and your support—whether they actually want to come on board with you.
A lot of Indigenous business is done that way: just talk around the bush for a
little while. By then, sometimes, it is too late.[56]
Committee comment
3.104
The Committee would like to praise the work being done by the Darebin
Enterprise Centre, including the Indigenous Business Incubator in the Northern
Territory. From evidence received, it would seem that the model used by
Darebin is appropriate to developing Indigenous enterprises in both urban and
remote regions. The Committee recognises the passion and commitment of staff
who are making a difference to their Indigenous clients.
Indigenous Corporations
3.105
The Committee heard from several Indigenous corporations in the course
of the inquiry.
3.106
The Registrar of Indigenous Corporations reported that the majority of
the organisations that are registered with ORIC are not for profit; a large
proportion of them are about delivering services to their communities and also
delivering government services. For instance, they may be delivering municipal
services, CDEP programs, arts centres, health services, and a whole range of
legal aid services or family violence prevention legal services. Many
government services are provided through these organisations.[57]
3.107
The Larrakia Development Corporation Pty Ltd is a company which has been
set up to serve the needs of the Larrakia people of Darwin in the Northern
Territory. The Larrakia Development Corporation runs five companies and
organises employment for Larrakia and other Indigenous people as well as Darwin
based people.
3.108
The Wunan Foundation is a not for profit and non government Indigenous
organisation with a focus across the East Kimberley region of Western
Australia. Wunan considers that the level and quality of participation in the
regional economy by Indigenous people needs to be increased, not just through business
development but economic participation through employment, as unemployment in
the East Kimberley region is in the range of 75-80% for Indigenous people.[58]
Mr Ralph Addis, Chief Executive of the Wunan Foundation presented the view that
it is extremely challenging for anyone to go from being unemployed and not
having a strong set of experiences and skills to running a real business.[59]
3.109
The Gelganyem Trust was set up as an outcome of the Indigenous Land Use
Agreement between Argyle Diamond mines and the traditional owners of the land.
The majority of the Gelganyem funds are tied up for life after the mine but
there are some funds available for the Gelganyem Trust to partner with
government and non government organisations to instigate initiatives for the
good of Indigenous people.
3.110
The Gelganyem Trust is trying to facilitate connections for people who
are part of the traditional owners group, or dawang, who may have business
ideas. This can include referring them to service providers and government
organisations such as IBA or consultants.
3.111
The second emerging area is the Gelganyem Business Enterprises which is
a planned commercial arm that will have a focus on developing and maintaining
profitable businesses for Indigenous people who are part of the dawang. Many
of these businesses will be in partnership with Argyle diamond mine.
Committee comment
3.112
The Committee consider that there are many opportunities that are
presented to Indigenous corporations and is pleased to see them taking
advantage of these opportunities to try and improve the lives of Indigenous
people.
3.113
The Committee particularly wants to commend the specialised work and
programs being done that are appropriate to local Indigenous communities and environments.
These corporations now have to work in a more sophisticated environment and
there is an expectation that they will take on new roles and do more. The
corporations do have specialised knowledge of their area and people and in
taking steps such as working with mining companies for the benefit of their
people, they are proactively working to create change.
3.114
The Committee also commends Mr Keith Djiniyini and the Burrthi Aboriginal
Corporation. Despite having his own health issues, Mr Djiniyini wants to set a
new course for his people and the Committee recognises the leadership role that
he has taken.
Issues
3.115
A message that was conveyed to the Committee from all locations and
different groups is that when it comes to developing Indigenous enterprises, one
size does not fit all. ‘Indigenous Australia’ is a concept made up of about 400
000 individuals in very many different social groupings.[60]
Although there is a wide range of programs available to support the development
of enterprises, these programs may not provide the appropriate level of support
for the remote Indigenous entrepreneur or the Indigenous woman who is looking
to start a micro-enterprise.
3.116
There was a range of criticism around general aspects of program
administration for government programs. Staff turnover,[61]
changes in guidelines for funding[62] and length of funding
program[63] were three of the main
issues that both Indigenous business owners and support providers indicated
were likely to impact on the number and success of the development of
Indigenous enterprises.
3.117
The impact of the availability of grants versus loans was raised with
the Committee. Evidence suggested that some potential Indigenous entrepreneurs,
who were ready for business and were capable of sustaining the repayments would
rather wait for a grant, sometimes for up to two years, than apply for a loan.[64]
In this manner, a prevalence of available grants rather than loans may delay or
impede the start up of businesses.
3.118
When Indigenous businesses receive government financial support they are
often required to have corporate structures and can be subject to
accountability requirements that are very costly and at times can be in excess
of those required of a comparable non Indigenous business.[65]
3.119
The Australian Indigenous Chamber of Commerce considers that there is a
desperate need for Australian Government funding to create a web based Indigenous
business portal. They advocate that government procurement in remote areas should
encourage tenderers to joint venture or partner with Indigenous communities, or
else offer businesses and training opportunities for Indigenous businesses as a
part of each tender.[66]
3.120
Koorie Women Mean Business described the importance of Indigenous people
being taught by their own people and teaching being modelled on their own
people’s experience.
… they find it extremely frustrating that there are no
Indigenous registered training providers to help them go through the small
business barriers that they consider to be particularly important to them in
their area in developing that business.[67]
3.121
There were various suggestions to the Committee about providing a one
stop shop for advice and support on developing Indigenous enterprises.[68]
The Minerals Council of Australia saw an opportunity for a centre which would
help new businesses as well as create opportunities for existing businesses.[69]
The Desert Knowledge CRC felt that there needed to be a collective approach
with a genuine client focus which would reduce duplication and reduce lack of
coordination.[70] Balkanu Cape York
Development Corporation believes that the alliance between the units of the
Cape York Business Development arm enables them to deliver a one stop shop and
value for money service.[71]
3.122
The Committee was told that greater use needed to be made of the
internet in providing services for developing Indigenous enterprises.[72]
3.123
The Committee heard from some inquiry participants that the strength of
a particular program was due to it not being part of government. Mr JM John
Armstrong indicated that:
A dedicated and independent (from government) support service
such as Blak Business Smart Business is vital for Indigenous Community
acceptance and up take, the cutting through red tape and the personalised,
culturally based engagement with clients cannot be achieved within a government
department program.[73]
3.124
Ms Barbara Livesey from Reconciliation Australia told the Committee that
they were often approached for assistance because Reconciliation Australia was
independent from government and there was a perception that they could play the
role of an honest broker.[74]
Committee comment
3.125
The Committee fully supports the idea of loans over grants. Although
there has been a history of grants available for Indigenous enterprises the
Committee considers that these have not been advantageous for new businesses and
businesses should start from a fully business based footing. The Committee
considers that a suite of loans should be available for new Indigenous
enterprises, ranging from interest free micro-funding through to loans which
operate on a more commercial basis.
3.126
The Committee observed that there was a wide range of programs that
provided funding for Indigenous enterprises, and that the difference between
programs funded by differently departments was not always apparent.
3.127
The idea of having a program which is outside of government has merit, however,
the Committee considers that as most funding is still through government
departments, a one stop shop needs to be part of or connected to the
government. The model of a community development approach proposed by
Reconciliation Australia in its submission to the Northern Territory Emergency
Response Review Board has some very valuable suggestions that the Committee
feels would assist a one stop shop model.[75]
3.128
The Committee considers the employment of Indigenous staff is a critical
aspect of any one stop shop model. Additionally there should be Indigenous
enterprise development officers who are trained in working with Indigenous
people and appreciate the cultural aspects of Indigenous enterprises. Evidence
presented to the Committee indicated that this could make a significant
difference.[76]
3.129
The Committee heard about the model used by the Australian Trade
Commission (Austrade), where companies wishing to get into the export market
were assigned a ‘go to’ person, or single case manager, who would take businesses
through all stages required. This person was the one contact that the business
had, and was able to answer and deal with all questions and problems or advise
where the business owner needed to go to access other specialised advice. Austrade
is focussed on leading businesses through three sequential processes, starting
with to learn, then to grow and finally to compete.[77]
Recommendation 8 |
3.130
|
The Committee recommends that the Australian Government
establish a ‘one stop shop’ for Indigenous entrepreneurs and businesses. This
facility should provide assigned case manager contacts, similar to Austrade,
who navigate a business through different stages of establishment and growth.
The ‘one stop shop’ facility should include services to support Indigenous
businesses such as:
n advice
on the range of government, industry and community grant and funding programs
available;
n mentoring
and business ready skills recognising the particular cultural challenges
facing Indigenous enterprises; and
n advice
on establishing appropriate governance structures.
|