Opinion & Commentary
Fat cats feed on needy
The 2010 Indigenous Expenditure Report confirms indigenous disadvantage is not a result of insufficient government spending.
In 2008-09, Australian governments spent $22 billion on indigenous Australians: $17bn on mainstream expenditure (health, education, welfare) and $5bn on specifically indigenous programs. This is an average of $40,000 per indigenous Australian (compared with $18,000 per non-indigenous Australian). But the figures conceal the real scale of indigenous expenditure in remote areas. More than 60 per cent of indigenous Australians (330,000) work in cities and regional towns. They access the same government services as other Australians and pay taxes. When government expenditure is adjusted for this group, the figures change dramatically.
About 215,000 indigenous Australians depend on welfare. Most (about 140,000) also live in cities and regional towns. The remainder (about 75,000) live in very remote communities.
If government expenditure on indigenous Australians is divided among the welfare-dependent, the average per head is $75,000.
But even this figure does not tell the real story. Urban indigenous Australians access similar services to non-indigenous welfare recipients. Most indigenous funding is supposed to go to the 75,000 people in remote communities.
If government spending is allotted to that 75,000, it is more than $100,000 per person. Where do the funds go? Some reach remote residents as welfare, but welfare is a job deterrent. It is part of the problem, not the solution.
Some is absorbed by remote education, health, housing and other services. Indigenous schools that receive government funding of more than $30,000 a student (in contrast to national averages of $10,000 to $12,000) have NAPLAN literacy and numeracy failure rates greater than 90 per cent (less than 10 per cent for mainstream schools). Remote indigenous housing averages $600,000 for a house that can be built privately in the same location for $300,000.
Most of the funds are absorbed by federal, territory and state bureaucrats, non-indigenous staff in communities, contractors, consultants and other members of a vast "indigenous industry".
Indigenous funding will continue to be wasted and perpetuate disadvantage until key areas - education, property rights (housing) and welfare - are reformed and there is greater accountability for how funds are spent.
Helen Hughes is a senior fellow at the Centre for Independent Studies. Mark Hughes is an independent researcher.
