Exquisite Synchrony

The Henry Tax Review, the National Congress of Australia’s First Peoples and the Marginalisation of Aboriginal Political Interests

It was exquisite synchrony when, on Sunday May 2, the steering committee of the National Congress of Australia’s First Peoples was announced and the Henry Report on Australia’s Future Tax System, as well as the government’s response to it, was unveiled. On the one hand, empowerment of Indigenous people and on the other hand, marginalisation of Indigenous political interests. Such has been the pattern of Australian public policy on Indigenous issues since the year dot.

But lets go back a few steps. Why should anybody even bother to connect the two events on May 2?

The fact is taxation reform is vital to the future of Indigenous Australia – on two fronts, as several submissions to the Henry Tax Review argued, there needs to be a dynamic understanding of native title and land issues by the taxation department and, equally importantly, the tax system treats investment in Aboriginal economic enterprise as well as community and cultural enterprise like lepers. These critical issues have only been cursorily addressed in the voluminous Henry report.

It also seems to me ironical that the person with experience on Indigenous issues on the Henry committee was the departmental secretary for Indigenous Affairs -  Jeff Harmer – who had presided over the demolition of ATSIC and the dispersement of Aboriginal matters into the far corners of the Commonwealth bureaucracy.

So on day one of its life, the Henry Review puts forward a significant challenge for the new National Congress. There are many significant questions including: will the Henry Review’s negligent treatment of Aboriginal economic issues be able to be reviewed and redressed through the new, independent national body or by any other means? And what in the future will the capacity of the new body have to influence important mainstream governmental reviews such as that of the Henry committee, as well as private corporate thinking?

The Henry Tax Review offers very little to Aboriginal Australians. Unless Aboriginal Australians match the economic and demographic profile of non-Aboriginal Australiansthen there is nothing in the Henry Review for them. Put aside the Rudd's government'sinsipid response, the Henry review is viewed as setting out the tax reform agenda for the next twenty years,  so it is even more discouraging and disappointing than Rudd.

On the face of it Australia seems to continually want to create an Aboriginal politicalsideshow with great hoopla but then leave out Aboriginal issues when it really counts. Of course this, along with the sensationalist press on ATSIC’s Chairman at the time, was the rhetoric that Mark Latham and John Howard used to argue for the scrapping the national Aboriginal organisation, the Aboriginal and Torres Strait Islander Commission, in 2004.  The conservatives’ argument was that it would be more effective to bring Aborigine perspectives into Commonwealth departments and to coordinate Indigenous policy from there. However what seems now clear is that by scrapping ATSIC and casting its functions to the four winds of the Commonwealth bureaucracy, John Howard took Aboriginal politics back a generation.  Now dealing with government on any significant Indigenous matters is a nightmare process. Even localised routinematters that were once handled by a competent and well loved local Aboriginalworkfare are extremely difficult to resolve.

What we have seen since ATSIC’s demise is the Canberrifcation of Aboriginal  affairs. Whatever its faults, ATSIC's offices in local Aboriginal communities were dynamic and one of the few places in local communities where black faces and black management predominated.  Since 2005 it has been a great shame to visit empty ATSIC offices in local areas and to see them gradually overrun by non-Aboriginal bureaucrats flying in and out, each wave requiring more and more education than the last.

The new National Congress of Australia’s First Peoples fixes some of the problems of ATSIC. The body is truly independent. It is not beholden to government for anything and can be the master of its own fate. But it also faces a tremendous challenge. Other national peak bodies have paying memberships such as trade unionists or private companies that can finance their operations and their local organising and lobbying efforts. No matter what the NCAFP now has in its kitty it would take billions to build such capacity in urban, regional and remote communities.

But that said the strongest dimension of the National Congress is its independence and its capacity to do something outside of government. Of course government dominates Aboriginal Australians. It is the primary funder of every dimension of Aboriginal lives. The task of the future is to create an economic foundation for Aboriginal independence and this is why the Henry Review is critically important.

The National Congress and all Aboriginal Australians face a situation where it is vital to attract private capital investment.

The sort of investments that are needed in Aboriginal communities (including those in micro enterprise, micro entrepreneurs, small and medium sized business as well as in major infrastructure projects and large scale commercial economic development) are never going to get going in the current Australian capital market place. Nor will the difficult work of reconciling Aboriginal interests with mainstream non-Aboriginal economic opportunities get started. A revolution in the way taxation treats investments in Aboriginal enterprise is needed.

Nugget Coombs, a former head of Treasury, left his mark on Aboriginal affairs as did Professor Charles Rowley, They created one of the lasting and worthwhile monuments of Aboriginal policy: the tax deductible Aboriginal corporation courtesy of the 1976 Aboriginal Councils and Associations Act. But these are horse and buggy measures compared with what is now needed.

Aboriginal people themselves who are working in the mainstream should be given the option of having all of their taxation reinvested back into an Aboriginal economic, social or cultural enterprise of their choosing. Aboriginal people who have superannuation should have the capacity to invest all of their superannuation savings back to safe Aboriginal economic opportunities. These things alone would create a new head of steam for private ventures in Aboriginal communities.

But beyond this the wider mainstream investment community needs to be given strong incentives to invest in a new Aboriginal private sector. What is urgently needed is a 150%. tax investment credit for investments in Aboriginal commercial developments and this should include profitable cultural and social enterprise.

Above all, Aboriginal Australia needs its own dynamic private sector. Many of the problems that beset Aboriginal Australia are too complex and multi-faceted to be tackled by government who invariably make things worse. But at present they are also too expensive and distracting for business. For example hiring Aboriginal workers is not just a matter of making a pledge or putting the appropriate wording in a job advertisement in the newspaper. With the best will in the world there are a great many complex issues that take business way out of its comfort zone and there needs to be economic incentives for them to do so. The only way that such issues will be tackled is by creating an industry of Aboriginal trouble shooters who have the patience, knowledge and capacity to solve problems. One good thing that John Howard did do was to create a $20 million dollar fund for the Aboriginal Employment Service. Provided they are fiscally astute the AES, like Charles Rowley's Aboriginal corporations, will be around for a long time. The AES does go to the lengths that are necessary to get Aboriginal people into jobs. But what is needed is 200 similaragencies working at different levels of employment and Aboriginal economic development. Funding these agencies cannot be done in the way it was achieved by Dick Estens and  AES, nor can it be created through Aboriginal leaders lobbying corporate leaders.

Changing the taxation system is the only general way we can create the large scale investment culture that rewards Aboriginal enterprise and the investments in it.

Then there is the currently dead economic status of Aboriginal native title and collective lands. In these contexts, an 150 per cent investment credit would revitalise interest in the provision of leases and investments.

There is much more to be written about and discussed on all of these subjects. The point is that the National Congress of Australia’s First Peoples will fail unless it has a great wind within its sails. It needs to be lobbying for the current or future Federal government to provide a 150 per cent tax investment credit for investments in:

- Aboriginal micro enterprise

- job and workplace base training

- Investments in small and medium sized enterprise

- new start up commercial contracts involving wholly owned Aboriginal enterprises

- the commercialisation of Aboriginal corporations.

These are the all important issues that Sam Jeffries, Kerry Arbana and their colleagues must now grapple with, but not only them, if ordinary Australians are serious about Aboriginal development, then we all must get behind the National Congress now to get that strong wind blowing in their sails. Let us hope that in the future the synchrony of mainstream policy and Indigenous interests will come together at least in some from of creative tension. Apart from symbolism, for which it currently gets an A+, the current government and bureaucracy understands very little about these matters.