Indigenous Territorians short-changed?

That’s the claim made in today’s Oz, quoting the NT Council of Social Service president Barry Hansen. The NT gets very high levels of Commonwealth Grant funding on the basis of a needs-based formula which is heavily influenced by the large proportion of indigenous people, living in remote areas that are costly to service. According to Hansen, the funding is largely spent on providing services to the wealthy (mostly white) suburbs of Darwin.

Mr Hansen pointed to the latest Commonwealth Grants Commission State Finance Inquiry working paper that showed the commission had assessed the Northern Territory Government’s expected per capita expenditure on indigenous services to be close to $218 million in 2006-07. The working paper’s assessment showed that the Northern Territory Government, whose grants from the commonwealth are not tied to the spending areas for which it is allocated, only spent $110 million.

I haven’t studied the NT accounts in detail, and I’ve only visited a few times, but I must say this is consistent with my understanding.

As an illustration, it’s worth comparing the Parliament building for the NT (pop 217 000) with the building in which the Legislative Assembly for the ACT (pop 339 000) which received self-government about the same time . The NT assembly is an imposing building. I don’t have a cost figure, but obviously it would not have been cheap. The ACT assembly meets in a low-rise office building, at least 40 years old and refurbished 15 years ago. (pics to come) It’s hard to see how the NT could have afforded its building on the basis of the local tax base, assuming that any compensation for the high cost of remote services was spent where it should have been. And what’s true of the buildings is true more generally of the capitals. While the ACT, and particularly its city centre, has got noticeably shabbier since the end of direct Commonwealth control and funding, Darwin looks like a place that is getting plenty of public expenditure.

Of course, impressions can be wrong and bloggers like Ken Parish at Club Troppo are much better-informed on the NT than I am. So I’ll follow this story with interest.

12 thoughts on “Indigenous Territorians short-changed?

  1. Darwin is real, Canberra is artificial. Darwin has more rights than Canberra in the same way that a human has more rights than a robot.

    I’m pleased to see that everyone has ignored this troll. Keep it up, guys – JQ

  2. This is a perennial issue and Ken Parish has looked at it before,

    On of the arguments mounted by the NT Govt is in the health feild where over half the Darwin Hospitals expenditure is on Indigenous patients. But if anything, this is the case study in the consequences of underexpenditure in remote comunities. Insufficient investment in preventative and primary health care services in the remote NT directly translates to increased bed days in the major hospital in Darwin, which of course the NT Govt argues is “indigenous services”. The flow-on effects are obvious – health-related employment and associated financial benefits accrue in Darwin and not in more remote areas.

  3. I don’t know the details of their funding split but I think its a valid point. Certainly in road infrastructure Darwin is extremely well serviced, and the territory gets a very high percentage of its road system covered under AusLink. By comparison the ACT pays for most of its own roads. It would be interesting to compare the total per-capita tax burden for NT versus other States and ACT. That would be the real test, assumign services were comparable.

  4. It would be interesting to compare investment in Aboriginal health with investment in non-Aboriginal health, and then compare mortality rates and so on. I suspect that the results would imply that current policies are valuing a statistical Aboriginal life much less than a statistical non-Aboriginal life.

  5. what was teh commonwealth expenditure on the Darwin rail link?

    What expenditures on defence are there that aren’t counted?

    (hmm, what company tax royalties are from holes in the ground in the NT?)

  6. I’m living in Alice Springs this year, and while I haven’t studied the accounts. my impression is that the NT government spends inadequate amounts on the many remote communities. Or even not so remote, such as the many town camps in Alice Springs, most of which don’t even have a single working pay phone, let alone things like washing facilities, rubbish collection, etc (hopefully, this situation will soon be much improved now the Federal government is taking over their management and planning to spend $50m on them).

    Peter Wood, I think you’d find that looking at health expenditure alone would give you the wrong story. Expenditure on Aboriginal health is high, with much higher rates of emergency presentation, hospitalisation, violent assault, many on long term dialysis due to renal failure, etc. And treating the rural indigenous population is often expensive just due to being rural and remote — a lot of Flying Doctor retrievals, for example. But more basic issues that the rest of the community takes for granted, like housing, running water, working telecommunications, policing, etc are where the deficit in spending is probably most apparent, along with basic preventative medicine.

  7. “the commission had assessed the Northern Territory Government’s expected per capita expenditure on indigenous services to be close to $218 million”

    So with 216,000 Territorians the total expenditure would be 47.1 trillion dollars

    /silly snark

  8. Welfare payments (ie payments based on need) are frequently spent in unintended ways not related to the need that justified the payments. Why should state (and territory) welfare be any different?

    Our system of government is upside down. We should have the vast bulk of the tax powers residing at the local level and the central government receiving it’s funding from local governments via a regular begging ritual. Not the other way around. This is one thing the structure of the EU has got right. The EU gets nearly all it’s funding from the nation states. It’s power to levy taxes directly on citizens of Europe is basically zero. Even under the proposed EU constitution this approach was to be institutionalised with any one nation having a power of veto over any attempts at tax centralisation. This model is one of the laudable aspects of the EU experiment and something federal system like Australia would be wise to replicate.

  9. According to the last set of figures I saw (which from memory were for the 2007 3rd quarter), the NT is second only to WA in per capita earned export income, mostly from mining and energy, with some help from agriculture and tourism.

    And any blame for the NT parliament house should be placed with the former ‘conservative’ CLP government, it was built on their watch.

  10. TerjP, in your proposal what would stop Stonnington or Manly councils from saying “we don’t need to pay taxes to the federal government” and effectively seceding from the Commonwealth, leaving the rest of the country to poverty?

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