I acknowledge the Wurundjeri people of the Kulin Nations and their elders, past and present.

It is a great honour for me to present the Sixth Renate Kamener Oration to her family, friends and guests and to the members of the Australian Jewish Democratic Society and their guests. It is also a great honour to do so here at Ormond College which I hold in great esteem for its marvelous capacity to educate our young and make them responsible citizens of Australia and the world by instilling in them a sense of responsibility, by honing their intelligence and by instilling compassion and tolerance in them. I did not meet Renate Kamener but if I had, I am sure we would have had some great discussions. From all accounts, she was remarkably brave and compassionate, rare qualities to sustain throughout a life of difficulty and heartbreak. With her husband Bob, she took great risks in opposing that racist and inhumane regime, giving expression to her commitment to end racism and to the right of all to dignity. In the Rabbi’s eulogy to her, it was remembered for instance, that

They provided shelter when one of the group was pursued by the authorities, and when he eventually ended up in the notorious Fort prison in Johannesburg, Renate would visit him there.

Eventually she became a refugee from the South African regime, and came to Australia with her husband Bob, where her commitment to equality and reconciliation found fertile ground. Her work to bring about Israeli-Palestinian reconciliation, and early membership of the local Friends of Peace Now led to community building here in Australia, and a great legacy.

Renate helped to establish the Australian Jewish Democratic Society.  After the start of the second Intifada, Renate closely involved in establishing the Muslim/Jewish group Salaam Shalom.

 

Glyn Davis, our Vice Chancellor of the University of Melbourne, acknowledged her as one of those

tireless, unsung people who create a community.  Amid a lifetime of commitment, Renate is fondly remembered for her work among refugees, including Muslim women.

Renate herself certainly did make a difference to many lives, in her teaching and in her deep engagement with so many community organisations committed to peace and reconciliation and fundamental human rights. 

 

The scholarship established by Bob, Larry and Marty and the AJDS in Renate’s name assists Indigenous Students studying at the University of Melbourne.

I second the observation made by my predecessors in delivering this Oration in her honour that

The scholarship for Indigenous students at the University of Melbourne, supported by this Oration, is a fitting memorial to Renate Kamener’s passion for justice.

In the same way that Renate’s family have supported Indigenous students, recognizing the power of education to bring about equality, I want to raise economic development as one of the important pathways out of poverty and exclusion, and to the good life for Indigenous people in Australia. My consideration of the economic challenges in achieving Indigenous parity, I believe, is a contribution to understanding the measures required to succeed in ‘closing the gap’ of the many types of Indigenous disadvantage.

 

A history of economic exclusion of Indigenous people throughout Australian history - from the frontier encounters to the 'work for the dole' measures that persist - have left us with difficult economic challenges. If we hope to achieve Indigenous parity, we need effective policies and government and private sector commitment. Government and private sector procurement policies that include Indigenous businesses and build them into supply chains are important. Employment and training strategies are equally important. However, there will be little progress in achieving Indigenous parity if we do not address the weaknesses in the approaches adopted by successive governments.

 

Many are anxious about my proposition that overcoming poverty and economic exclusion is the most effective pathway to overcoming Indigenous disadvantage and achieving Indigenous parity across all socioeconomic indicators. Their anxiety has to do with a baseless fear that Aboriginal people will “lose our culture” if we become equal. This is nonsense, as many successful Aboriginal people have proven. Let me cite Wayne Bergman, who was the Director of the Kimberley Land Council for many years, now Chief Executive Officer of Kimberley Regional Economic Development Enterprises, said:

Aboriginal culture cannot survive without an economy to support it. And to build a viable Indigenous economy, we must be allowed to control our land and sea country and to use the leverage it gives us to build an economic foundation for our future.

 

Throughout the world, there is broad consensus that the only sustainable exit from poverty is economic progress, with development that is inclusive of the most disadvantaged. Here in Australia, despite decades of unprecedented growth nationally, entrenched poverty remains a reality for a significant proportion.

It may surprise you that half the Indigenous population is likely to achieve levels of parity in their socioeconomic conditions while the other half of our population are more than likely to remain in desperately poor conditions which give rise to their high levels of morbidity, low rates of life expectancy, education, employment and housing.

 

The Prime Minister’s 2015 Closing the Gap report to Parliament sums up the situation: the target of halving the gap in employment outcomes between Indigenous and non-Indigenous Australians by 2018 will not be achieved. Further, it says that there was a decline in employment outcomes since the 2008 baseline.

 

Indigenous Australians living in remote areas are a forgotten people when it comes to inclusion in the country’s prosperity: the resources boom rarely trickled down to lift living standards in their communities and now they face the prospect of coping with even less because of the demands of fiscal consolidation and restraint by governments at all levels.

We desperately need a better way.

Leveraging our social and economic environments to move Indigenous people into education, training and jobs remains our biggest challenge.

Deloitte Access Economics recently provide a credible answer to the national “What if” question: where would Australia stand economically if Indigenous Australians over the next generation (by 2031) were to achieve the same life expectancy, education and employment outcomes as other Australians? In essence, this is the ‘business case’ for introducing a new development paradigm. This scenario provides an indication of the very significant benefits that could flow from achieving economic development for all Indigenous people, rather than just half as now.  And these gains would not be secured solely by Indigenous people: they would be shared widely with the population as a whole. The key message is that so long as gaps remain, heavy economic and social costs must be borne, while huge potential benefits go begging.

 

Deloitte’s key findings are that:

  • our economy as a whole would be richer by some $24 billion per year (or 1.15% of GDP);

  • there would be a much larger tax base, lifting revenues by over $7bn;

  • higher wealth amongst Indigenous people would translate into a dramatic reduction in spending (mostly on welfare) of almost $5bn;

  • closing education and health gaps would boost jobs for Indigenous people by almost 40,000; and

  • the gains for those in remote Australia would be disproportionately large: some $6.5bn, or more than a quarter of the projected gains in GDP from closing the gap would be realised for the Indigenous people living there.

 

This necessarily is only a scenario; and certainly not a forecast of what we can expect to happen through continued application of “business-as-usual” settings for Indigenous policy (cycles and all). To achieve anything like this will require a new paradigm devoted to development, targeted at that 50% of Indigenous people who are largely disconnected from the mainstream economy, including many who have withdrawn from the workforce.

The key issue is establishing the most supportive incentive and regulatory framework, together with the needed public and private investment to turn this situation around, and the strategy to deliver this.

 

If the benefits of Australia’s prosperity are to be fairly shared with all Indigenous citizens, a new paradigm of Indigenous economic development is needed, with a readiness to embrace bold initiatives and translate it into action. This imperative is most critical for those in remote parts of Australia. Compared to the rest of the nation, their education, employment and business development are all stuck around the bottom of the pack. Indeed, the parallels are closer to those groups in developing countries who have been excluded from the global economic improvements of the past few decades.

 

Indigenous people want to take responsibility for changing this situation – for changing it dramatically and inter-generationally. This requires a new policy and funding paradigm across the Federation. It requires governments changing their focus to the mix of incentives and disincentives affecting the scope and pace of economic development, to enable Indigenous led development and towards much more productivity in government expenditure on services for Indigenous Australians.

There has been extensive thinking and policy development undertaken by Indigenous people their leaders and organisations in recent years, the Empowered Communities Design Report. Along with the Close the Gap initiative, these go some way toward overcoming the key obstacle: the inability of governments to find a way to systematically and comprehensively engage with Indigenous Australians on policy design. These initiatives point governments and other stakeholders toward the further reforms so urgently requireds.

 

One of the most important Indigenous initiatives in decades is called Empowered Communities. The leaders of eight Australian regions across the country have met during the last two years to develop a new approach based on their combined experience of attempting, year after year, to bring about community development and economic inclusion amongst their peoples.

The leaders worked with a team of experts to deliver a comprehensive report to the present Prime Minister, The Hon Tony Abbott, and his government. This Report contains the new approach that Indigenous leaders believe will bring about the necessary change in a cost effective manner and deliver efficiencies and outcomes in a timely manner.

They developed vision for Empowered Communities,:

Indigenous peoples empowering themselves and governments sharing, and in some cases relinquishing, certain powers and responsibilities, and supporting Indigenous people. It is premised on a two-pronged development goal: to close the gap on the social and economic disadvantage, and to preserve Indigenous cultural and linguistic heritage for future generations.

The aim of Empowered Communities is to ensure that:
 

  • the lives of Indigenous people within an Empowered Communities region are supported and guided by a set of social norms that will lead to prosperous individuals and families and vibrant and strong communities; and

  • government funded programs and services are prioritised to support Indigenous people towards this aim.

Restoring social norms is fundamental to Empowered Communities. A strong commitment to these norms is required to be an Empowered Communities region. Regional agreements and funding contracts will be prioritised around services needed to establish or restore the following norms:

  1. Children attend school every day, are on time, and are school ready.

  2. Capable adults participate in either training or work.

  3. Children and those who are vulnerable are cared for and safe.

  4. People must abide by the conditions related to their tenancy in public housing.

  5. People do not commit domestic violence, alcohol and drug offences, or petty crimes.

Reform Policy Principles

The work of Empowered Communities will be underpinned by a Policy of Responsibility, which has two parts:

  1. public policy should not restrict Indigenous responsibility; and

  2. there is an obligation to act to enable Indigenous individuals and families to achieve responsibility.

 

We do not say that governments should go away. They have an important role to play, particularly the Australian Government – provided they have their act together and are guided by a proven theory of action. Fundamentally, that role must be that of enabler: to set the conditions for success by removing barriers and perverse incentives that support the current ‘welfare paradigm’, while opening pathways and using positive incentives to accelerate desired development. Governments can’t create or lead lives for people; it is a fatal conceit when they try. It is all too often overlooked that government action through various welfare and other services can have the unintended consequence of reducing Indigenous human capital, rather than enhancing it.

 

Indigenous people must therefore carry the responsibility for driving this. It is they who must build human capital, assets, businesses and wealth – and do what’s needed to transition out of poverty, built on a strong educational foundation. This means being prepared to take risks; and learning the lessons of the past, including an over-dependence on government to solve problems and less than fully productive investments of Indigenous time and money.

But it also means new attitudes ways of operating by governments, the business sector and the community more generally. The needed transformation will take time – to collect needed data, to inform and involve those affected, and to embed new thinking and practice, including learning from those both here and overseas.

 

There have been several positive steps taken by the current Australian Government which have the potential to advance Indigenous economic development. These include by way of example:

 

  • the new Indigenous Procurement Policy applying from July 2015;

 

  • new Indigenous employment targets for in the public sector and financial support to major corporate to expand their Indigenous workforce; and

 

  • growing recognition that native title rights have a major role to play in advancing Indigenous people’s development aspirations, including through provision of additional funding from 2015-16 for Prescribed Bodies Corporate to use their native title rights to progress development opportunities.

 

This is very welcome.

 

We must challenge the idea, however, that everything that governments say they are doing to help Indigenous people do actually help their development – because whatever their intentions, the incentives created by public programs, the red-tape and regulatory obligations can and often do work perversely. 

 

We also acknowledge important developments evolving in the private sector that are setting a far more supportive environment for Indigenous groups to advance their interests through productive negotiations over use of their land, such as in parts of the mining sector. We have seen several major corporates leading and actively participating in initiatives such as Reconciliation Action Plans and Generation One (aimed at boosting Indigenous employment) and policies and programs promoted by peak bodies such as the Business Council of Australia and the Financial Services Council.

The private sector is an integral player if our ambitions are to be realised. Importantly, we have discovered how this can occur to mutual advantage through business development and regional economic development.

 

Opportunities and incentives are needed to better link Indigenous businesses with private sector capital and expertise, including a well-targeted approach in remote areas. Building on communal Indigenous assets and developing Indigenous businesses will not be sufficient. An inclusive agenda ultimately requires pathways for every single individual and family to be successful in the broader economy and to accumulate assets and wealth including from the communally owned assets.

 

We know that many Indigenous groups are looking for long-term investment solutions to:

  • build wealth for the next generation;

  • reduce dependency on government funding;

  • diversify away from traditional bank deposits and earn higher returns on other investments; and

  • plan beyond the finite sources of funding such as mining royalties.

 

There a few Indigenous-controlled assets, but in the main the productivity of Aboriginal assets, especially communal assets, falls well short of what is achievable. Scope exists for them to play a far greater part in overcoming Indigenous poverty in a sustainable way. But this requires significant change in a number of key fields, including the legal vehicles for managing Indigenous assets and a lack of transparency about their management.

There is also important discussion growing within Indigenous circles about the disbursement of native title payments for land access (often erroneously referred to as “Aboriginal royalties”) and the investment strategies being applied. How to get the best balance between providing short-term assistance and supporting longer-term and sustainable development opportunities for the future are the key questions being addressed, for instance, in the Tribal Wealth Review, for which I am one of the reviewers. The Cape York Partnership, founded by Noel Pearson, established the Review last year to provide advice to Governments and to Aboriginal institutions on the most effective use of Aboriginal assets and the reform of the policy environment required to enable this. Time restrictions do not permit me to discuss all aspects of this important work.

 

Too often in the past the tendency has been toward immediate consumption, which has constrained the growth of Indigenous assets that should also benefit Indigenous generations to come.  Little consideration has been given to the net present value of these assets and most policy, especially private sector policy, has tended towards the establishment of charitable trusts and long term accumulation over unleashing the net present value of these assets through investment in enabling measures to improve living standards now. Education, employment and business development in our communities lags behind and yet our own assets are locked away in conservative accumulation funds for a far off future, one that on present trends will be far worse for half of our population.

 In addition, there has been little investment in building a framework that allows traditional owner groups to make decisions as a group. At present the most important decisions they need to make are delegated to non local administrators who know little about the measures required to build capacity for groups to make informed and strategic decisions for their own well being. 

 

This situation results in part from weaknesses in Indigenous governance and from poorly informed investment choices. Indigenous people must own the challenge of maximising their assets and do what is within their control to address it. But other players have a significant bearing on the broader operating environment, including the opportunities and incentives for maximising Aboriginal wealth. All governments should align their policies to

 

  • enable individual success, through benefits from communal assets and employment, savings and investments;

  • provide support for Indigenous businesses to enable their success by training in prudential and transparent governance and reporting, business training, and the mentoring required to be successful in leveraging these opportunities;

  • unlock and realise the full potential of Indigenous-owned assets – communally-held land and financial assets – by leveraging more and better economic development opportunities; and

  • align individual and community interests to enable and stimulate development through further reform of the land tenure and native title environment to allow individuals to develop lands in a manner that is beneficial to both individuals and communities.

 

The recommendations of the Tribal Wealth Review will provide a detail framework for policy reform with regard to these matters.

Indigenous business development is an important pillar of the changes we propose and which requires further policy development. Indigenous businesses employ Indigenous people at a rate of at least five times that of other Australian businesses. In some sectors, that rate is estimated at one hundred times.

State and territory governments, given their relatively large workforces and responsibilities for roads, infrastructure, housing, hospitals, schools and other essential services, also need to play their part.

Both as employers and as major purchasers of goods and services, governments can drive market behaviour and create demand for first Australian employment and business.

Almost two million Australians are employed in the public sector, and the Commonwealth alone employs approximately 250,000 people, and purchases over $39 billion in goods and services annually.

The Indigenous Opportunites Policy (IOP) has been replaced by a new policy, the Indigenous Procurement Policy. The old policy aimed to provide more opportunities for first Australians and businesses through government procurement and the introduction of an exemption in the Commonwealth Procurement Rules for Indigenous businesses. It held great promise but failed to deliver meaningful results.

 

 

At this stage, the policy is aimed to apply to all non-corporate Commonwealth entities subject to the Commonwealth Procurement Rules. However, entities that are not required to comply with the CPRs are encouraged to adopt the policy as best practice.

The policy has three parts:

  1. A target number of contracts that need to be awarded to Indigenous businesses.

  2. A mandatory set-aside of contracts for Indigenous businesses to apply in certain situations.

  3. Mandatory minimum contractual requirements for Indigenous employment and Indigenous supplier use applying to certain Commonwealth contracts.

Commonwealth buyers can purchase directly from Indigenous small to medium enterprises (SMEs) for contracts of any size and value using the Indigenous business exemption.

 

This provides Indigenous businesses with a big advantage - they do not need to complete costly tender processes. Indigenous business must still demonstrate value for money, but this can be done through a simpler quote process.

 

An Indigenous business is any business that is 50 per cent or more Indigenous owned.

In the past, government procurement policies have not been effective in driving first Australian employment. Those policies enabled contractors to pay lip service to their contractual obligations, often because of loose ‘best endeavours’ clauses.

Business Australia estimated that in 2012–13, only a handful of first Australian businesses secured 0.001% of the overall Australian Government spend (around $6.2 million of the $39 billion spent). These policies, while well intentioned, lacked any kind of accountability, sanctions or incentives to compel agencies or their contracted suppliers to comply.

Penalties or other ramifications for non delivery were and remain rare. In contrast, contractors have shown great flexibility and adaptability to employ first Australians when there is a contract at stake. Again, driving accountability gets real results.

In relation to the new Indigenous Procurement Policy, the Commonwealth has some work to do. At present, when Commonwealth grants are made to the States and Territories for infrastructure developments, such as roads and road upgrade, ports, bridges and so on, there is no condition applied to these grants to guarantee that Indigenous businesses are offered opportunities to tender and provide goods and services in these projects.

 

It is therefore critical that all future National Partnership Agreements between the Australian and State/Territory governments include a provision requiring the adoption of a new Indigenous procurement policy. Where a State or Territory already has an effective Indigenous procurement policy in place, that policy should apply to funds provided under the partnership agreements.

The Australian Government’s Grant Guidelines should have similar intent, especially if Indigenous people are the prime beneficiaries of the grants, to give preferential treatment to Indigenous organisations and enterprises to deliver services, especially when they have a successful track record.

 

The Australian Government could work with the Business Council of Australia to encourage and facilitate private sector mentoring of Indigenous business people, having regard to well-proven programs operating in North America, such as the very successful Mentor-Protégé program in the United States of America.

 

Indigenous businesses offer jobs and training to Indigenous people at far higher rates than other businesses. Procurement policies and approaches that give Indigenous businesses opportunities to tender for the billions of dollars of government spending on goods and services will create jobs and bring marginalised Aboriginal people from welfare dependency into the private sector economy.

 

This is the most effective way to overcome disadvantage and close the gap. In the Territory, where the Aboriginal population is expected to grow from 30 to 50 per cent of its population in the next 30 years, this is the most urgent policy challenge.

Focussing on the economics in the NT has led to better outcomes in social indicators, such as employability, education, health and justice outcomes.

To give you one example, the best justice reinvestment strategy is employment. I know from my own business experience that giving training and job opportunities to Aboriginal men and women who have had contact with the criminal justice system enables them to support their families like anyone else, pay for groceries at a supermarket, live in a house, send their children to school, have aspirations and hope for their future and learn how to live the good life.

 

This in turn sustains local economies and communities, and as the Aboriginal men and women thrive in their jobs, so do their communities.

It is also enables us to maintain our cultures. If we have a job, we have the financial resources to invest in our cultural practices; we have the opportunities to take our cultural traditions with us into our workplaces and community settings, just as the great Adam Goodes has done. We should all strive to be like him: excellent in endeavours and proud of our Aboriginal heritage.