Ideas@TheCentre
Government monopoly in the outback
For those of us living in cities and towns, it is hard to imagine having only one store to shop at – but this is the problem facing tens of thousands of Aboriginal and Torres Strait Islanders living in remote communities across Australia.
Isolated by impassable roads during the wet season and poor transport options, many remote Indigenous communities are dependent on their local community store for all their food needs.
When I visited East Arnhem Land last year, I was appalled at the prices and condition of the vegetables on sale at a local community store. The carrots were black and the apples were soft and bruised. The store had not reduced the prices of fruit and vegetables that had started to go off and the apples cost a dollar each.
In an attempt to improve the availability and affordability of fresh produce in remote communities, the Howard government established a company called Outback Stores in 2006 to manage stores. Communities hand over the day-to-day management of stores for a fee, and are encouraged to sign long-term (five years or more) management agreements with Outback Stores.
In return, Outback Stores promised to employ and train local Indigenous people to work in and eventually manage the stores. A recent Inquiry by the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs on remote stores received several complaints proper training had not been delivered (although Outback Stores did employ some locals).
Outback Stores may help address the poor mismanagement practices that have plagued Indigenous stores, but it does so at the price of crowding out competition and increasing Indigenous dependence on government.
Rather than reducing the monopoly that remote stores enjoy by being the only retail outlet in a township of a thousand people, Outback Stores has created additional monopoly problems. Its reliance on a few preferred suppliers has had a detrimental impact on wholesale suppliers traditionally serving remote stores. It has also made it harder for some community stores not signed up to Outback Stores to access food supplies.
The large amount of federal funding received by Outback Stores ($77 million to date) is not sustainable. What is needed is a clear exit strategy that supports and trains local Indigenous people to become responsible for the management of their own stores.
