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The ATSIC experiment has failed. [Address to the] Liberal Speakers Group, Melbourne.

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The ATSIC experiment has failed

Liberal Speakers Group Melbourne

10 March 2003

Christopher Pyne MP


Tomorrow, the Commonwealth Government should move to:

• remove service delivery from ATSIC’s control, • restructure the organisation so it becomes an advocacy and policy body, and • return responsibility and funding for the delivery of basic services to the

appropriate state or Commonwealth government department as has already occurred with the provision of health services.

Why should Aborigines, already disadvantaged, suffer further discrimination by having their housing and education catered for by second rate service providers?

The abstract ideal of self-determination has no place in the practical question of delivering these basic services. Indeed, we are putting the cart before the horse.

I wish to explain how an early supporter of the ideal of ATSIC has come to this radical position.

Most Australians do not know a great deal about ATSIC.

They probably know that it is the peak body with responsibility for the welfare of indigenous Australians. I suspect that there is also some level of public awareness that ATSIC is inefficient, and a sense that it is not held to account in the same way as non-indigenous government bodies.

But talkback radio stories about dodgy accounting and other practices are the principal source of the general public's interest in the organisation.

This unfortunate state of affairs is hardly surprising, as debate over ATSIC has traditionally been limited to the more shrill, conservative shock-jocks.

Amongst those who have a genuine interest in the welfare of indigenous Australians, criticism of ATSIC and related bodies has long been considered


inappropriate, perhaps because it could be seen as associating the critics with the shock-jocks.

This attitude has been damaging in a number of ways. Firstly, lack of accountability has turned ATSIC into a bureaucratic, inefficient organisation which squanders taxpayer funds.

Secondly, in spite of generous funding over many years, ATSIC remains an ineffective organisation. It has failed to deliver for indigenous Australians, who remain one of the most disadvantaged groups in our society.

Finally, stories of waste, corruption and nepotism have evoked anger and resentment towards ATSIC amongst non-indigenous Australians. This has led to despair about, or even hostility to, ATSIC's mission. By failing to confront ATSIC's problems, advocates of indigenous interests have reinforced the talkback radio caricature of aborigines as rorters of the system.

It is clear that if Aboriginal interests are to be advanced, ATSIC cannot continue to escape scrutiny. Increasingly, that realisation has dawned on Aboriginal leaders themselves and many have begun to criticise ATSIC in ways that would have amounted to heresy in the Keating years.

I would like to contribute to this vital and overdue examination of how ATSIC has failed, why it has failed, and how best to restructure it so that the many real problems confronting the Aboriginal community can be resolved.

Aboriginal disadvantage

In some Aboriginal communities alcoholism and petrol sniffing are prosthetics for hope.

Aboriginal families have been overrun by the symptoms and by-products of poverty - social decay, substance abuse, poor literacy and numeracy skills, chronic unemployment and deaths in custody.

Life expectancies in most Aboriginal communities are 25 years less than in the general population. The age distribution of Aboriginal people is more similar to a third world African country than a western nation such as Australia. Aboriginal men die youngest with a life expectancy of 56 years - seven years lower than Aboriginal women at 63.

The average mortality rate is two and a half times the rate of the total national population. But despite this, the number of Aboriginal people in Australia is still increasing at almost twice the average rate of population growth.

Aborigines suffer similar disadvantages in the realm of economic prosperity. While 70% of Australians live in a home that is owned by one of the occupants, only 30% of Aboriginal people do. The remaining 70% live in rented homes, making it almost impossible for them to build an asset base.


The unemployment rate for Aboriginal people is 36%, almost six times the overall rate. Those that do work will earn an average income that is only two-thirds of the national average.

Social problems are also rife in Aboriginal communities. The rate of imprisonment for Aboriginal people is 18 times the rate of non-Aboriginal people. Despite comprising only 1.5% of the total population, they tragically constitute 20% of the total prison population.

Addressing these issues must logically begin by addressing their immediate cause. Aboriginal communities need clean water schemes, programmes to tackle the escalating problem of domestic violence, an improvement in literacy and numeracy skills and genuine employment programmes.

Regrettably, during Labor's last term of government, policies to improve conditions for Aborigines were hijacked by people unable to discern the difference between feeling good and actually doing good.

The Coalition Government, under the banner of practical reconciliation, has started to shift the focus back onto grassroots issues. Aboriginal art museums in inner-city Melbourne and Sydney are no longer seen as a panacea to disease and illiteracy in remote Aboriginal communities.

Instead of using Aboriginal affairs as a political cause, the Government has decided that the priority should be on solving real problems faced by the Aboriginal population.

Unfortunately, that change in emphasis has not been greeted with unanimous approval. Many ATSIC leaders were beneficiaries of the symbolic approach of the Keating era, which relied upon taxpayers funding a small class of educated and media-savvy Aboriginal leaders to sell Labor's misguided policies.

As a result, ATSIC is proving more of an impediment than an aid to the practical reconciliation agenda.

The case against ATSIC

ATSIC is a laudable ideal, but it is an experiment that has failed.

The core problems of ATSIC are congenital. Indeed, Lois O’Donoghue has condemned ATSIC’s structure for creating the built-in conflicts of interest that have rendered it impotent as a force for positive change. More specifically, there is not always a clear separation between those making funding decisions and the recipients of funding under the ATSIC Act.

While government ministers are entitled to undivided loyalty from their departments, ATSIC officers serve two masters - the Minister for Aboriginal


Affairs and the elected board. This situation creates an unworkable tension between ATSIC and state and Commonwealth governments.

No publicly funded organisation should consider itself immune from what are accepted community standards of accountability. But ATSIC has side-stepped these standards of accountability by hiding behind the veil of false accusations of racism.

ATSIC employs 1,217 people and administers a $1.1 billion budget, two -thirds of which is quarantined for expenditure on housing and the Community Development Employment Programme.

In terms of discretionary spending, ATSIC’s priorities are questionable.

In the 2002-03 budget ATSIC has allocated $10 million to ambiguously described “cultural promotion” and only $4.8 million directly to the hot button issue of domestic violence.

Around $27 million was spent by ATSIC last financial year on consultancies including a staggering $4.1 million on ATSIC’s fleet of leased cars.

There is also strong evidence of a culture of mismanagement and flawed priorities within the ATSIC network.

The Aboriginal and Torres Strait Islanders Legal Service in Brisbane was the subject of one typical scandal. An audit report circulated last year identified fraud and misappropriation of around $200,000. Chartered accountants PKF also found that the legal service had failed to lodge financial statements with ATSIC, neglected to prepare and lodge statutory information with respect to GST, PAYG and payroll tax. The audit also revealed that the service had ignored requirements to pay amounts collected for GST and PAYG from employees, child support agency payments and superannuation levy.

The National Indigenous Development Alliance was established in 1999 with the aim of providing a “united indigenous economic direction”. In three years it has received nearly $6.2 million in funding from ATSIC, including a $3 million operational loan.

The company embarked on its first business venture in May 2002 with the start up of NIDA Insurance Intermediary Services Pty Ltd which also included communications and consultancy work.

Last August, Deloitte Touche Tohmatsu were appointed receivers.

There are of course, other accounts of ATSIC waste and mismanagement that are a staple of talkback radio - like the revelation that preliminary legal costs of serial pest Peter Hore were initially met by an ATSIC funded legal service.


But the recurring theme in all these anecdotes is that ATSIC’s annual $1.1 billion budget is not hitting the ground.

ATSIC funds must be spent on improving Aboriginal living standards and opportunities for sustainable economic development - not diverted down cultural and economic cul-de-sacs.

The failure of ATSIC to deliver any lasting improvement for Aboriginal people has prompted Cape York leader Noel Pearson to describe ATSIC as “very dysfunctional” and in need of “very radical reform”.

Even outspoken firebrand Murrandoo Yanner has described ATSIC as a “hopeless, powerless and useless organisation”.

The current ATSIC administration

The inherent structural problems of ATSIC have been amplified by the current crop of unorthodox Aboriginal leaders.

Chairman Geoff Clark and his deputy Sugar Ray Robinson - who are old foes in the labyrinthine world of indigenous politics - have run ATSIC for just over three years.

As Chair, Geoff Clark is paid $235,000 a year - a little less than the Australian Prime Minister, a little more than the Treasurer of the Commonwealth.

So one could be excused for thinking that for $235,000 a year the Aboriginal community and Australian taxpayers might have hoped for an ATSIC Chair who is both a leader and a statesman.

In Geoff Clark they have neither.

Geoff Clark has robbed ATSIC of any public goodwill that Lois O’Donoghue had established.

If there has been one constant in Clark’s political career it is the fact that there is no line he won’t cross.

In a transparent attempt to exploit community fear over terrorism in a post-Bali Australia, Clark told his audience:

“Don’t put us in a situation where Aboriginal people are strapping bombs to themselves.”

For Clark to threaten and frighten Australians with the idea of indigenous Australians as suicide bombers is sickening and demeaning. For trivialising the deaths of 89 Australians he owes those victims families a profound apology.


Driven by the need to distract Aborigines from ATSIC's leadership, he seeks to focus their anger on external foes with his incendiary rhetoric and embrace of extreme causes.

Clark's single issue agenda as Chair of ATSIC has been the push to develop a treaty with non-indigenous Australia.

In May 2001 ATSIC produced a booklet entitled Treaty: let’s get it right. This publication advocates the negotiation of self-government in relation to traditional lands as part of a treaty in Australia.

This has been Geoff Clark’s cause celebre since 1990 when he became deputy chairman of the secessionist organisation, the Aboriginal Provisional Government.

He has also used his authority to set up an office within ATSIC headed by academic Larissa Behrendt - a fellow member of the Aboriginal Provisional Government since 1993.

In another gaffe, he thanked indigenous women who elected men to all but one seat on the ATSIC board, saying:

“You’ve returned the traditional role to Aboriginal men”.

In recent weeks Clark has also been in the headlines for all the wrong reasons.

Firstly there was the controversy that erupted at the revelation of an in-principle decision of the “old” ATSIC board to pay his legal costs up to a maximum of $45,000 in defending charges relating to his involvement in a violent pub brawl with police.

As a general principle, people holding official Commonwealth positions have costs funded by the taxpayer only if the legal action arises in the course of the performance of their duties.

To quote an opinion piece written by veteran political journalist, Michelle Grattan:

“[This] matter, on any common sense reading does not seem to relate to or arise out of Clark’s official duties. (If Alexander Downer intervened in a pub spat over Iraq and was charged with assault, should taxpayers have to pay his costs if he lost the case?)

A payment would fly in the face of ATSIC’s own guidelines for these services; they make it clear that help should go to those ‘who cannot afford to obtain private legal assistance’.”

Clark went on to tell the judge that any decision to imprison him would have an impact on "race relations" in Australia.


And then there was last week’s revelation by The Australian that ATSIC paid $31,000 for the travel costs of Geoff Clark’s wife Trudy when she accompanied him on a taxpayer funded jaunt to Ireland, where he delivered a speech to an audience of about 50 people.

According to Remuneration Tribunal guidelines, taxpayers should fund spouse travel only “when the office holder’s employing body certifies in writing that it is demonstrably in the interests of the Commonwealth … for the office holder to be accompanied by their spouse.”

But Clark justified the $31,000 extravagance by claiming that his wife “deserved a break” and is “entitled to a free trip a year”.

Geoff Clark has accumulated an impressive range of critics and precious few supporters.

Following his recent re-election Lois O’Donoghue was moved to comment: “we deserve better than that to take us forward”.

In a thinly veiled swipe at the former administration, of which Clark was the chair, Democrat Senator Aden Ridgeway said: “I can only hope the ATSIC elections give us new outcomes, fresh blood and new ideas.”

Former Chair of ATSIC, Gatjil Djerrkura also called for an overhaul of the last ATSIC board claiming constant politicking was destroying the peak body and demoralising the communities it represented. “I think if ATSIC were to survive under the present circumstances, it needs change at the top”, he told The Australian, “it’s not advancing much progress and initiatives and enthusiasm among the people ATSIC is supposed to represent.”

Les Malezer, a former executive assistant to Geoff Clark claims ATSIC lacks a strategic agenda while promoting greed and self interest. He further claims ATSIC’s top elected officials are “highly over-paid compared with their capacity to lead and represent the people."

While the ATSIC gravy train rolls on, ordinary Aborigines continue to suffer.

Generous government funding combined with a lack of accountability has created a feudal system in Aboriginal Australia, and the privileged elite of ATSIC have no incentive to tell us that the system is dysfunctional.

The stigma associated with the ATSIC leadership has poisoned the organisation, while no significant progress has been made in addressing any of the key areas of Aboriginal disadvantage - education, employment, health, and sexual and domestic violence.

ATSIC has had thirteen years to demonstrate its capacity to make a difference. It has failed. Its culture is one of corruption, nepotism and elective victimhood. The time has come for radical change.


Beyond ATSIC - the short term reform agenda

At the outset I proposed reforming ATSIC to be an advocacy body and removing its service delivery and operations aspect.

There is of course a compelling argument to retain indigenous involvement in many of these activities but not under the aegis of ATSIC. There is overwhelming anecdotal evidence that campaigns against alcohol abuse, petrol-sniffing and crime will not meet their target if they are not genuinely community-based, exploiting the authority of tribal elders and community figures.

This is where Aboriginal organisations can play a critical role.

Community driven programmes are essential to remove the conditions that have led to passive welfare dependency in indigenous communities.

Noel Pearson is one of the most pre-eminent thinkers on indigenous policies. He is a man of great ability and purpose. In a previous edition of Options Pearson wrote that: “The safety net as a permanent solution for able -bodied people, is not just undesirable, it is destructive”.

According to Pearson the answer is no t an increase in government funding but the development of a social partnership between government, indigenous organisations and communities and individuals.

Perhaps these partnerships between government and communities could be more effective if established directly, rather than by working through the dubious intermediary of ATSIC.

Relying on a single body also fails to account for the diversity of Aboriginal problems. Raising education standards in remote communities is a different task to reducing crime and absenteeism amongst urban Aboriginal youths. One of the great strengths of the decentralised structures favoured by liberals is their ability to tailor solutions to specific communities.

It is clear that funding should not pass through ATSIC. Giving ATSIC a monopoly role as a dispenser of funds to other Aboriginal organisations, many of which are managed by senior ATSIC officers, is a failure of good management.

Government should provide funding directly to local community organisations, with ongoing reviews of funding based on performance. This will establish a competitive environment for Aboriginal organisations, encouraging innovation and industry.

ATSIC's role should thus be limited to advocacy and policy development. Further reforms may be necessary to make it more democratic and


representative. But with responsibility for service provision and the distribution of funds removed from it, the urgency of these more difficult reform tasks will be reduced.

Beyond ATSIC - the long term reform agenda

In the long term, education is the silver bullet.

In the new economy the information rich are the wealth accumulators while the information poor seldom enjoy personal fortune.

Nowhere is educational disadvantage greater in Australia than in indigenous communities. Indigenous Australia is being held back primarily because a sub-standard knowledge and skills base excludes the majority from participating in the real economy.

The late Charlie Perkins recognised this in the 60s when he called for special resources to provide for tertiary education of indigenous Australians. He recognised the empowerment that comes with education.

Pivotal to addressing the dynamics of Aboriginal disadvantage is to cultivate the educational opportunities and life lo ng learning capabilities of every individual.

While it is important to ensure that Aboriginal children are able to engage with the education system, this does not mean that their curriculum should be altered in ways that disadvantage them. While it may appeal to some education academics to see state education of aborigines as an opportunity to revive dying languages and cultural practices, the emphasis must be on skills relevant to the job market.

The goal is the economic empowerment of individuals. Unless individual Aborigines are able to integrate into the national economy as participants, not recipients, their standards of living will remain unacceptably low.

The challenge does not stop at the end of school years. Life long learning empowers individuals, giving them job skills, job mobility and therefore job security. Adults who are passive and inert learners risk being estranged from the labour market.

That is why Work for the Dole, Green Corps and Job Network are so important. These programmes e nsure that the skills base of those who are temporarily out of work doesn’t become stagnant and gives participants the opportunity to develop new skills and gain additional experience.

Noel Pearson believes that mutual obligation programmes go to the heart of the solution, offering the two -fold advantage of skilling individuals and rebuilding communities.


These measures will bring indigenous Australians into the real economy, providing them with opportunities and the capacity to make an economic and social contribution.

It’s a policy that complements the Community Partnerships Noel Pearson has built with Westpac, Boston Consulting Group, the Body Shop and Myer Foundation which are helping to create enterprises such as a furniture factory, an art centre and a tourism venture. As Pearson explains:

“the great advantage of the corporate sector is their normal work is around wealth creation and … climbing ladders. And it’s about time we hung out with some people who know how to climb ladders.”

Or, as Treasurer Peter Costello once wrote: “Economic growth is still the best poverty-buster we have yet discovered.”


Dignity for Aborigines does not lie in the ideology of state-sponsored cultural programmes and separate political and social institutions. Aborigines need the same as every other Australian - skills that will allow them individual self-determination.

Unfortunately, Labor's irresponsible policies in this area have created a pervasive culture of entitlement, reinforced by a peak Aboriginal body which cultivates a sense of grievance in the Aboriginal community to distract from the gross incompetence with which it has gone about its mission.

It is easy to despair over the magnitude of that mission. Certainly, the performance of ATSIC gives little cause for hope. Yet as liberals, we should hardly be surprised that a state monopoly model has given rise to inefficiency and failure.

Rather, we should have faith in the basic liberal principles of empowering individuals and communities to help themselves. Applying these principles to the issues that confront indigenous Australians would give the Aboriginal community a renewed sense of hope and opportunity.

In the longer term, I believe such reforms would demonstrate the effectiveness of those liberal principles to the wider community, when a seemingly intractable problem begins to be resolved.

But in the short term, the solution cannot begin until the discredited structures of Labor's monopoly model are swept away.