Private Misery v Public Misery: Ken Henry, Aboriginal Australia and the Resources Tax

Ken Henry – King of Canberra – Head of Treasury, Canberra’s most powerful department – says the resources tax will be a winner for Aborigines. Well everything is all right. All is correct in the universe again. Jenny Macklin Minister for Indigenous Affairs says thanks Ken. There is nothing to worry about. We can all sleep peacefully in our beds, our consciences clear. Oh no! If ever there was an indication that this government and this bureaucracy just don’t understand the real problems besetting Aboriginal Australia then his statement that “some of the money raised from the proposed resources tax should be used for indigenous development” is it. What this really means is more of the same.

As we read the assuring phrases of Ken Henry's post budget reply. Let us remember one thing. Ken Henry is Head of Treasury, the Commonwealth’s most successful government department. It is the key to Canberra power. Our founding fathers never intended the Commonwealth to have a supreme domination of the public income raising measures for the nation. They understood how dangerous it was for a government remote from local people and issues to have a dictator like capacity to control national taxing and revenue raising  powers. The great man of our Constitution, Andrew Inglis Clark, envisioned a Federal system of localized government which had representation in the Commonwealth Senate and where revenue powers were evenly divided between the Commonwealth and local spheres of government. Remember that in Clark’s day State governments were the equivalent of local government – colonies were small and concentrated around the major cities of the country. None of Clark’s vision has transpired. Instead we are the most centrally bureaucratic country on earth and at the epicenter of this giant central bureaucracy is Ken Henry telling us everything will be all right for Aborigines.

It has largely been bureaucratic opportunism and unforeseen historical events that have led Canberra and Treasury to be such powerful players in the lives of all Australians. It is a continual frustration for all Australians – it is an ongoing tragedy for Aboriginal Australians.

So when Ken Henry says Australia’s natural resources belong to all Australians including people not yet born. He means that on behalf of all Australians past and future, Canberra, and specifically Treasury, should be the extractor, guardian and allocator of the property rights of all Australians past and future. In other words, Ken Henry and Treasury are the great arbiters of the Tom Albaneses and Marius Kloppers of the world. They are the Robin Hoods extracting fairness from the super rich companies of the world. Many of a theoretical social democratic bent have believed these things to be gospel for a very long time. But in the practical world we have a situation where Treasury and the Canberra bureaucrats and politicians, not only collect taxation but determine how and when it can be spent: so we trade the private misery of dealing with the Albaneses and Kloppers, for the public misery of mis-allocated Commonwealth funds. In reality the idea that Henry and his colleagues are nobly collecting and spending taxes for all Australians does not bear scrutiny, and the idea that they are the answer for Aboriginal Australia’s social, cultural and economic development is either ignorant, arrogant or insulting.

Canberra and the Commonwealth is the most efficient sphere of taxation collection  from the nations citizens and corporates. But having collected it, Canberra and the Commonwealth should not have such a powerful say in its allocation. As we have seen with the stimulus spending on schools, the national insulation debacle, the SIHIP disaster in the Northern Territory and the decades long tragedy of Aboriginal social and economic development; the Commonwealth and its mandarins are just plain terrible at delivering efficient, multi-dimensional localized projects. In NSW over the last 24 hours we have had the spectacle of Michael Coutts-Trotter, Director General of Education, valiantly defending his wife’s administration, the Rudd government in Canberra. On the school infrastructure disaster, he says, these are large projects. In the great majority of projects things have gone extremely well! Can one imagine Harvey Norman or Marius Kloppers standing up at a shareholders meeting saying that bullying customers to take products that they didn’t want, on a timescale that would have unsafe outcomes for children, with a 20 per cent failure in customer satisfaction and hundreds of millions of dollars of wastage were great outcomes for the company. All this at the direction of breathless Canberra bureaucrats.

So when Ken Henry says “is there a case for some amount at least of that income {from the proposed resources tax} going to support Indigenous economic development?, I would say very firmly yes, absolutely yes” should we say “eureka” or “so what”?

In forthcoming articles we will talk about what should be happening on the ground and how a combination of private and public resources needs to be deployed to make it happen.