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From: the Torres Strait Regional Authority To: Dr Kilian Perrem

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From: the Torres Strait Regional Authority To: Dr Kilian Perrem From: The Torres Strait Regional Authority To: Dr Kilian Perrem - Inquiry Secretary for the Standing Committee on Indigenous Affairs Department of the House of Representatives For the: Inquiry into food prices and food security in remote Indigenous communities The following submission is made on behalf of the Torres Strait Regional Authority (TSRA). Responses are provided against each of the nine Terms of Reference. TOR 1: The environment in which Remote Community retailers operate The population of the Torres Strait region – which includes the islands of the Torres Strait as well as the Northern Peninsula Area (NPA) on the northernmost tip of mainland Queensland – was estimated at 10,920 in the 2016 Census. Over 80% of residents are Torres Strait Islander and/or Aboriginal people, and within this population, there is a range of cultural and language groups. A number of Community Stores operate across the populated islands of the Torres Strait as well as the NPA. The main food supplier in the region (CEQ/IBIS), is set up as a Queensland Government statutory body under the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984. As such it is exempt from taxes (with the exception of FBT and GST). CEQ acts as a commercial enterprise for the benefit of residents and as such is required to provide communities with healthy food, drinks and household items at a fair price and apply its operating surplus or assets to promote, support and improve its services and general welfare of the communities it services (Part 7A, Division 1 60B of the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984. CEQ has stores across most of the populated islands of the Torres Strait as well as one in the Northern Peninsula Area and as a commercial enterprise (currently primarily in retailing) provides goods and essential services to Torres Strait, NPA and mainland Aboriginal remote communities. CEQ Corporate Office is based in Cairns servicing 22 retail outlets (including IBIS and Col Jones) in the Torres Strait and Northern Peninsula Area and five Community Supermarkets on the mainland. 1 The 12 remaining food stores across this very remote region are owned and managed by ALPA (operating in the region as Island and Cape) or are independently owned. Additional factors related to the environment in which these stores operate include: • they provide food retailing services across a number of remote islands and communities (most of which are only accessible by sea or air) • lack of economies of scale (they service small communities, spread over a wide area) • dealing with adverse weather and tide conditions which often impact on distribution • high running costs for items such as power, insurance, building and plant maintenance, and freight • complexities of Native Title • difficulties with staff retention and trade support • infrequent visitation to some remote island communities eg. Stephen Island does not have all-tide barge access and weather determines whether the monthly food barge can dock and unload. TOR 2: The licensing and regulation requirements and administration for Remote Community stores ALPA stores are Indigenous community owned and managed. Their management processes require significant input from, and consultation involving, clan and family groups across their founding communities. A significant proportion of their profits are returned back into these communities, for community run and managed enterprises and programs such as: • accommodation building, renovation and bespoke furniture making enterprises • supporting the ‘Remote Schools Attendance Strategy’ • benevolent programs that support local festivals and ceremonies, community buses, etc. • child and youth programs such as school holiday programs and drop-in centres • education programs including higher education hubs • literacy and numeracy training for their own staff; and • even subsidising the cost of freight of fruit and vegetables to help reduce costs in their stores CEQ/IBIS’s requirements under the Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act (1984) include: • a requirement to “… act as a commercial enterprise for the general convenience or benefit of the residents …” of the Torres Strait and NPA • Obligations to: “… apply its profits or assets to promote, support and improve its services and the general welfare, including the knowledge and skills, of the Aboriginal and Torres Strait Islander residents …” in the region (section 60B, p42) 2 CEQ/IBIS maintains a very strong financial position. Its net revenue from operations in the 2018-2019 financial year amounted to $98.1M, with a healthy ‘net return’ of $3.2M. However, despite its strong financial standing, and despite having the largest presence in the region (in terms of community stores), as outlined below, there does not seem to be significant commitment on CEQ/IBIS’s part, to fulfill the community obligations noted above. TOR 3: The governance arrangements for Remote Community stores CEQ has a board of management which is responsible for ensuring CEQ’s strategies for performing its functions and includes 10 members. At least 1 member is a consumer representative and community representative. There are 6 indigenous representatives on the current Board, including 2 from the Torres Strait region. Although the income invested from profit is for the benefit of the communities of the Torres Strait and the NPA, their direct contributions to the community over the last financial year (based on information from 2018-19 Annual Report) amounted to only $95,000 ($41,000 in donations and $55,000 in events sponsorships). By way of comparison: • the company returned $135,000 in performance bonuses for their 7 staff in top level management positions over the same period, on top of already generous salaries • 2018-19 Annual Report (p 27 of Annexure 1) shows salaries for these 7 positions total $1.2 million. The breakdown is CEO, $323k; General Manager (GM) Finance, $186k; GM Retail operations, $142k; GM Human Resources, $171; GM Business Development, $171k; GM Merchandise, $137k; Stakeholder Engagement Officer, $70k. • ALPA, over the same period, returned over $400,000 to their 5 Northern Territory communities (for projects such as listed in TOR 2 above). Promotions that once emphasised changing consumer behaviours, such as regular specials on healthy foods, and discouragement (through price mechanisms) of unhealthy items, along with employment of a nutritionist to promote healthy lifestyles in the community, seem to have been pared back over recent years. Instead CEQ/IBIS now take what seems to be a standard (mainstream) supermarket approach, promoting fortnightly ‘Best Buy’ specials and ‘Low Priced Everyday’ items, with a declining emphasis on healthy foods. For example, while their current specials (June 22nd to July 5th) include some fresh meats, fruit and vegetables, they also include a number of low nutrition, pre-packaged foods such as noodles, cup-a-soups, and sugary deserts (see Appendix 1), and even coke – all be it the ‘No Sugar’ variety. 3 In 2009, the Torres Shire Council highlighted in their submission to that year’s ‘Community Stores Inquiry’, there was a need to review CEQ/IBIS’s management, operations and purchasing to ensure it was serving the region in the most appropriate way. Possible ways that could be explored include: • Reinstating or strengthening programs such as ‘Healthy Choice’ and ‘Healthy eating/Healthy Life’ • Re-employing a nutritionist to promote healthy food options within the store and out in the community, through special events, educational activities, demonstrations and cooking workshops • Buying locally: This ‘goal’ has been mentioned ‘in passing’ in past Annual Reports, but has not been addressed in any substantial way, whereas it could be used to build local enterprise and economic growth in the region, providing a significant boost to the communities that CEQ/IBIS serve. For example, fresh produce such as seafoods could be sourced from established Torres Strait fishers and enterprises. While regular supplies of fresh fruit and vegetables might not be viable at present, there is potential for IBIS (as well as other local organisations) to support improved horticulture production in the region (eg: through investment in native gardens, nurseries, community garden projects). • More detailed reporting and ongoing price tracking is needed to substantiate IBIS’s claims regarding their efforts to keep the prices of healthy foods down. This would help to reassure key organisations and community members across the region, many of whom remain concerned about high prices. • Giving more control and say back to the community: At present, community representation (including board representation) and input into how the organisation can best serve the community, is very limited. With improved community involvement and direction, it may even be possible to negotiate that a set (reasonable) percentage of profits be set aside each year for ‘giving back’ directly to the community, as well as how this should best be shared. TOR 4: Comparative pricing in other non-Indigenous remote communities and regional centres It is not straight forward to directly compare pricing of foods in our region, compared to other ‘non-Indigenous remote communities’ but the following evidence is provided to support ‘anecdotal evidence’, that costs remain too high in the Torres Strait. • In a 2015 study, the ABS and the Department of Health partnered to compare CPI growth to food price increases over the 14-year period to 2014. Their analysis showed that nationally, fruit and vegetable prices grew faster than CPI (averaged at 2.7% per year). Vegetables had the fastest average annual rate of increase (3.8%), followed by fruit (3.0%). (Source: http://www.abs.gov.au/ausstats/[email protected]/Lookup/6401.0Feature+Article1Dec+2015 ) • The following table compares CEQ/IBIS’s most recent specials (from their one-page catalogue, 22nd June to 5th July 2020, as shown in Appendix 1) to the same or similar 4 • products from the 28 pages of specials available at Cairns IGA (for the week commencing 24th June).
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