Linking Indigenous Communities with Regional Development in Australia

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Policy Highlights Linking Indigenous Communities with Regional Development in Australia

Linking Indigenous Communities with Regional Development in Australia

here are approximately 800,000 In recent decades, there has been significant Indigenous Australians, which is 3.3% Indigenous innovation and entrepreneurship Tof Australia’s total population. Scientific with business growth in areas such as evidence suggests that mainland Australia construction, tourism, environmental services, was first settled by Indigenous peoples and arts and culture. However, significant gaps approximately 65,000 years ago. The in socio-economic outcomes compared to non- intimate relationships between spirituality, Indigenous Australians remain. These gaps are livelihoods, kinship, and place are central to larger in rural regions. understanding Indigenous Australians. It is the world’s oldest continuous living culture and This study, undertaken prior to the COVID-19 Aboriginal and Torres Strait Islander peoples pandemic, provides recommendations to make a vital contribution to contemporary the Australian Government about how to Australian society. Indigenous Australians are improve economic development outcomes for also important for the future of the national Indigenous peoples at a local and regional level economy. For example, the amount of land around three pillars: with Indigenous ownership and interest now covers approximately half of Australia’s land 1. Developing statistical frameworks and mass. data governance for Indigenous well- being; Indigenous Australians play an important role in the development of regional economies. 2. Creating an enabling environment Compared to the non-Indigenous population, for Indigenous entrepreneurs and small Indigenous peoples are more likely to be business; located in predominantly rural regions (48% compared to 17% for the non-Indigenous 3. Implementing a place-based approach population). As such, they are relatively more to economic development that empowers important to rural economies in terms of Indigenous Australians. labour supply and consumption, and play a key role in unlocking the growth potential of regional economies.

2 Policy Highlights

1. Indigenous well-being, statistical frameworks and data governance

Since the 1970s, Australian Indigenous peoples 1.1 ustralia’s Indigenous population is have had their rights recognised, which for Acharacterised by its relative growth, youth, some includes land and rights to development. and concentration in rural areas as well their Today, Indigenous Australians are developing connection to land and traditional knowledge competitive and innovative businesses that that gives rise to competitive businesses and range from mining and construction, tourism, has significant growth potential renewable energy, ecosystem services, arts and creative industries. In many cases, traditional Place is a key organising feature of Australia’s knowledge (an evolving system of knowledge Indigenous economy. Kinship relations of and practices developed over millennia) is a different First Nations stretch back millennia fundamental component to these business and emphasise spiritual connections to distinct ideas. Australia’s Indigenous population is lands. Australian Indigenous policies up to the younger than the non-Indigenous population late 1960s were characterised by dispossession with a median age of 23 compared to 38. and assimilation. Often, this resulted in Indigenous peoples are also more likely to the disruption and loss of traditional live in rural regions compared to the non- territories, dependency upon religious and Indigenous population. Over time, the state institutions, and barriers to economic population is becoming more urbanised. participation.

Figure 1. Population distribution by type of region, 2016 Population growth rates 2001-2019 in small OECD regions

80% Note: Based Indigenous on the OECD Territorial 70% non-Indigenous Classification.

60% Source: Calculations 50% based on data drawn from 40% ABS Census of Population and Housing, 2016 , 30% TableBuilder for Australia. 20%

10%

0% Predominantly rural Intermediate Predominantly urban

resource based and have lower population 1.2 here are significant well-being inequalities densities (Queensland, the Northern Territory Tbetween Indigenous and non-Indigenous and Western Australia). Unemployment for Australians - these gaps are larger in rural instance varies from 9% (Australian Capital regions Territory) to 27% (Northern Territory). These results are similar to the employment rate. At national level, inequalities between Indigenous Peoples in predominantly rural Indigenous and non-Indigenous populations regions have the most disadvantage position manifest themselves across far too many across multiple indicators. For example, the indicators - for example, the gap in upper unemployment rate of Indigenous Peoples secondary school attainment for 25-64 year in predominantly rural regions is 6 pp higher olds is 40 percentage points (pp) between the than in predominantly urban regions, and Indigenous and non-Indigenous population upper secondary school education attainment and the gap in life expectancy is 10 years. of 25-64 years olds between urban and rural There is significant variation at the State Indigenous Peoples is 16 pp lower in rural and Territory level. The largest gaps are populations. evident in the States and Territories that are

Table 1. Gaps in well-being indicators, Indigenous and non-Indigenous population, by type of region, 2016

Urban Intermediate Rural Employment rate gap -20 -27 -32

Unemployment rate gap 8 12 15

Self-employment rate gap -6 -9 -10

Educational attainment -31 -31 -31

Household internet access -5 -9 -11

Note: Percentage point difference between Indigenous and non-Indigenous outcomes. Source: Calculations based on data drawn from ABS Census of Population and Housing, 2016, Table Builder for Australia.

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Figure 2. Gaps in selected well-being indicators between Indigenous and non-Indigenous peoples at the national level, 2016

Absolute values

45 Percentage points

0 Unemployment Life Expectancy Income Employment Education

Note: The gap in life expectancy represents the gap between the life expectancy of Indigenous peoples and non-Indigenous peoples relative to the life expectancy of non-Indigenous peoples. The gap in income is defined as the difference between median weekly earnings of Indigenous and non-Indigenous peoples relative to median weekly earnings of non-Indigenous peoples. Source: Calculations based on data received from the ABS.

1.3 tatistical frameworks have advanced - by the Australian Bureau of Statistics (ABS). Sbut the inclusion of Indigenous values The ABS also employs Indigenous engagement and perspectives, and the empowerment of officers, and adapts collection methods for Indigenous groups to collect and use data remote areas. Efforts to implement reforms needs to become priority recognise the need to better link existing datasets to improve coverage. However, Despite progressive improvements in data the implementation of these reforms is collection about Indigenous peoples, gaps not monitored, which depend upon co- remain and inclusion of Indigenous values operation among the Commonwealth, States and perspectives needs to be improved. and Territories. Support to empower local Indigenous geographies (based on First Indigenous institutions to collect data and Nation territories) are not part of the use it to inform community decision-making territorial classification, which reflects how is generally lacking. This includes Indigenous- government agencies (rather than Indigenous specific data governance models, and the Australians) are primarily driving the framing availability of funding and technical support to and organisation of statistics. The main build data collection and analytical capabilities. mechanism for communicating Indigenous well-being outcomes in Australia is the elected recommendations for improving 1.4 “Closing the Gap” framework. The design and Sstatistical frameworks and data governance organisation of these statistics is driven by government agencies, which is reflected in National Indigenous statistical frameworks and lacking statistical products for local Indigenous tools can be improved by: communities and missing survey instruments to collect sufficiently disaggregated data about Introducing a consistent Indigenous issues that matter for Indigenous peoples (e.g. business identifier that acknowledges traditional knowledge). Further, research is the stage of maturity of the Australian heavily weighted to health and social issues, Indigenous business sector, into the and in comparison, evidence about Indigenous Australian business registry system, business and economic development issues, is the tax office, and business surveys lacking. In addition, there are inconsistencies undertaken by the ABS. and gaps related to data about Indigenous businesses across governments, not for Increasing the frequency of the National profit and private sectors because there is no Aboriginal and Torres Strait Islander Social common definition for Indigenous business. Survey (NATSISS) from six to every four This makes it difficult to make accurate years to provide more timely data about and comparable statements about the size, Indigenous populations. Alternatively, composition and trends in this sector. consider re-aligning the ABS survey model to streamline NATSISS and the six yearly Mechanisms to include Indigenous Australians NATSIHS (National Aboriginal and Torres in the governance of data are focused on Strait Islander Health Survey) sample and government agencies and miss to empower questionnaire content into a more regular local Indigenous institutions. Indigenous single survey. representatives have an advisory capacity in the creation and dissemination of statistics

6 Policy Highlights

Working with Indigenous organisations agreements, data sharing protocols) to and community representatives enable the sharing of data between to develop indicators and data by service providers and Aboriginal remoteness category related to organisations (e.g. to support collaborative subsistence, access and use of traditional initiatives such as Empowered lands and waters, and internet access and Communities). use (potentially by increasing the scope of NATSISS). Embedding data and analytical capacities into the National Indigenous Australians Ensuring that the monitoring of progress Agency (NIAA) regional network to provide through “Closing the Gap” includes support communities to utilise data in disaggregated analysis and reporting planning and decision-making. by remoteness category, and compares progress across different types of regions. Ensuring the monitoring reports on the Partnership Agreement on “Closing the Working with Indigenous organisations Gap” include a component on progress and community representatives to in improving Indigenous statistical develop pilots on statistical reporting frameworks, addressing data linkage based on the traditional boundaries of issues, and supporting Indigenous data language and social groups. sovereignty.

Increasing access to local data that can be used by Indigenous groups for community planning by:

Developing an online platform for local Indigenous communities to disseminate data tools, build capacity, and share lessons and good practices.

Providing seed funding for Indigenous- led data projects and development of local indicators, data analytics and GIS capabilities.

Strengthening Indigenous data governance by:

Supporting Indigenous-led institutions to develop data governance models, research ethics guidelines, and protocols for data use and sharing.

Removing administrative barriers (through changing procurement rules, service

2. Creating an enabling environment for Indigenous entrepreneurs and small business

Indigenous economy is legal rights over the 2.1 ndigenous entrepreneurship and business use of land, water and sub-surface resources. Idevelopment is critical to self-determination Over the past 50 years, the amount of land and unlocking the potential of regional with Indigenous ownership and interests has economies – geography shapes opportunities increased significantly in Australia. In 2017, 48.5% of Australia’s land mass had some form Entrepreneurship presents Indigenous of Indigenous rights, and a further 28.1% was peoples with the opportunity to use assets subject to claimant application for Native and resources in ways that align with their Title. Current arrangements for managing and objectives for development, build wealth and regulating Indigenous lands create barriers to create jobs. It can support self-determination economic development, including complex and and reduce dependency relationships. lengthy procedures, dependency on multiple Typical market failures, such as asymmetric local, state and Commonwealth agencies, information and the inefficient allocation weak links with local municipalities, and lack of credit, are often more pronounced in the of authority and capacity to map land and Indigenous small business sector. This can identify areas for development potential. be due to the regulatory and administrative Overall, local Indigenous institutions lack arrangements governing Indigenous lands, effective control of land. discrimination and poor credit histories. Geography is an important factor in shaping ndigenous communities value development 2.2 the economic development opportunities Ioutcomes that strengthen cultural well-being available to Indigenous communities. and this is driven by local innovation Development opportunities and challenges differ whether firms are located in a The analysis of Indigenous economic metropolitan region, rural regions close to development includes six diverse places and cities, or in rural remote regions. Cities offer their communities. These range from remote a greater diversity of opportunities due to places with limited resources and amenities the scale and density of economic activity. In over remote paces with abundant resources contrast, rural regions have thin markets, lower and amenities to those close to cities and levels of human capital, and often depend in metropolitan regions. Many communities upon specialising in tradeable activities. strive to join economic development with the strengthening of connections to country Land tenure arrangements shape trajectories and culture. In rural remote areas with large of Indigenous business and economic Indigenous populations the development development. A key characteristic of the

8 Policy Highlights

context is shaped by traditional hunting, from reforming employment services towards fishing and food gathering, cultural obligations, increasing demand for Indigenous business and sharing resources amongst kinship groups. through preferential procurement. The These communities have also developed Australian Governments 2018 Indigenous opportunities linked to the primary sector Business Sector Strategy identified and tourism. Local Indigenous leaders and measures to improve access for individual institutions have played a key role in activating entrepreneurs and business owners to finance these opportunities. and business support services. Despite this, there are still a number of weaknesses in Developing local Indigenous economies is the policy framework that need addressing, a complex task that requires strong local including: failing to include Indigenous institutions and flexibility from governments. perspectives about development; unclear Effective local Indigenous-led development roles and responsibilities between different institutions are needed to provide leadership, levels of government; a failure to integrate facilitate development priorities, build Indigenous priorities in land use regulation evidence through data, coordinate investment, and administration, and; a lack support and operate community businesses. for local Indigenous institutions leading in Local Indigenous institutions (Aboriginal community economic development. There Corporations, Land Councils, and Prescribed is an opportunity to improve the policy Body Corporates (PBCs)) take on these roles, framework and address these gaps as part of but generally do not have the skills and the implementation agreement of the Joint resources needed to do this in a sustainable Council on the “Closing the Gap” report. way. Government policy frameworks and decision-making across levels of government n terms of programme delivery and lacks a vision for Indigenous economic Iimplementation, gaps in supply-side support 2.4 development based on strengthening culture need to be addressed, along with making it and connections to country. Policy settings easier for entrepreneurs, business owners related to Indigenous economic development and local institutions to navigate the existing tend to focus on public procurement and support industrial development opportunities. Engagement with local governments and The Australian Government’s Indigenous Regional Development Australia (RDA) Procurement Policy has generated impressive Committees are absent or weak. results, and there are opportunities to strengthen this initiative. In 2015, the 2.3 lthough policy frameworks are advancing, Australian Government set a target of 3% Amore efforts are needed to recognise the of the total value of public procurement to unique strengths of Indigenous economies Indigenous businesses by 2019-2020. It also and the importance of community economic has mandated set-asides in remote areas development. to incentivise Indigenous participation, and minimum Indigenous content requirements All Australian Governments have made on public procurement contracts. This policy significant progress in policy frameworks to has increased the value of contracts awarded support Indigenous economic participation, to Indigenous businesses increased from AUD but challenges remain. The focus has shifted 6 million to over AUD 1 billion in three years.

Additionally support is provided in terms of Indigenous entrepreneurs, business owners and concessional loans and performance bonds communities face complexities in accessing as inadequate capital and assets prevented existing programs and services. Indigenous participation in public works. The Australian communities and entrepreneurs struggle Government also supports registration and to navigate the range of business support matching through Supply Nation, a non- available. Often this results from programmes profit entity. As this market matures, better and services being delivered by different support is needed to support firms at key intermediaries (Commonwealth and State transition points. Improved market efficiencies agencies, local government, and not for profit can happen by simplifying in preferential entities) that do not have strong relationships procurement rules and coordinating public with Indigenous communities, or consistent investment between levels of government. presence in some places. Importantly, many of these institutions are not Indigenous-led or In remote regions, there are a number of owned, which means economic development specific programme and implementation capabilities are not necessarily developed challenges. Preferential procurement policies within communities. are less effective in low-density economies because of thin markets. Other types of elected recommendations for creating policy interventions, such as reforms to San enabling environment for Indigenous 2.5 Indigenous land tenure and building the entrepreneurs and small business capacity of local institutions to promote community economic development, can Ensure that the Joint Council on “Closing improve this. The Australian Government’s the Gap” Framework and associated Community Development Programme (CDP) implementation arrangements include the is the service for job seekers in remote following: areas, to which a business incubator pilot was recently introduced. However, this will Inclusion of Indigenous values and not succeed without a local entrepreneurial perspectives about development, and and business eco-system to support it, and the unique economic contribution and these different elements are external to the strengths of Indigenous Australians. programme (e.g. physical premises, mentors, and financial intermediation). This approach Integration of the broad range of policies also needs to recognise the different forms that support Indigenous business and of entrepreneurship (not for profit and linked economic development (business support, with traditional knowledge and cultural land use regulation and administration, obligations). Finally, primary sectors in remote infrastructure, employment and skills, and areas (mining and resources, farming, and local institutions). fisheries and aquaculture) are capital intensive, and Indigenous groups tend to lack the capital Identification of different forms to participate as equity partners. This reduces of Indigenous business (individual incentives for economic development and the entrepreneurs, community based opportunities for Indigenous Australians to enterprises, and social enterprises) and the benefit from it. differences across territories.

10 Policy Highlights

Alignment of policy outcomes across Increasing strategic planning, capacity levels of government and sectors, building and economic development clarification of roles and responsibilities support for local Indigenous institutions. across different levels of government (including local government). Consider support for the establishment of Indigenous-owned local financial institutions, Ensuring that evaluation frameworks including: disaggregate outcomes across different types of regions. An initial capital injection from government and ongoing funding to cover Increase opportunities for Indigenous-owned a proportion of operational costs. businesses in the public procurement market by: Developing partnerships with mainstream financial institution and philanthropic Harmonising Indigenous procurement foundations to increase the potential pool rules across jurisdictions (e.g. setting a of capital available to Indigenous financial common target and timeframe, thresholds institutions. for direct negotiation/ set asides, and requirements for suppliers).

Providing more effective support for entrepreneurs and small businesses to participate in public procurement (e.g. pre- establishment and establishment phases to access finance, insurance and required certifications, cash flow management, business strategy).

Improve opportunities for Indigenous-led economic development on traditional lands and in remote regions by:

Prioritising implementation of recommendations identified in the 2014 investigation by COAG on Indigenous land administration reform and use allowing traditional owners to generate economic development opportunities (within the framework of the Joint Council).

Strengthening the Remote Indigenous Business Incubation model, by ensuring this pilot has the elements in place to support entrepreneurial ecosystem.

3. Implementing a place-based approach to economic development that empowers Indigenous Australians

3.1 place-based approach requires a long-term strengthening co-development institutions Acommitment to strengthening Indigenous required for community economic capacities to promote economic development development. These intermediaries include at the local level regional advisory services (that can provide technical assistance and policy advice), Local Indigenous institutions are the Indigenous research institutions (that can foundation of this place-based approach, build a body of knowledge, produce data, however; capability gaps reduce their and promote knowledge-exchange), and effectiveness. There are a multiplicity of community brokers (who can coordinate local Indigenous institutions across Australia. and build linkages to access resources). These include Indigenous municipalities, Governments at all levels need to consider Indigenous corporations and co-operatives, how they can use policy, grant funding, and PBCs. Local institutions are important for coordination, facilitation, and service design to community economic development because strengthen this eco-system. they facilitate negotiation and dialogue and activate development processes. Often, local overnment needs to facilitate economies 3.2 Indigenous institutions are unable to fulfil Gof scale and shared decision-making for these functions because they lack own source local Indigenous institutions revenues, have restricted mandates, and do not have the right mix of skills and capabilities. Local Indigenous institutions also require Capability gaps include leadership, community mechanisms that strengthen regional planning, technical skills (e.g. finance and legal), partnerships to build scale, access ideas and business and commercial skills. Current and resources, and mobilise investment capacity building support is insufficient to opportunities. Frequently, local Indigenous address critical gaps. institutions do not have the scale or scope to address complex economic development Strengthening the ecosystem that supports issues. Furthermore, connections with these local institutions will enable them institutions that shape local and regional to take a leadership role in economic and development policies are lacking. This results community development. Currently, capacity- in inconsistent links with: building programmes target individual institutions while economic development Local governments with responsibilities programmes focus on individual firms. in areas such as community planning, More consideration needs to be given to local economic development, local

12 Policy Highlights

infrastructure, and service provision “Closing the Gap” provides an opportunity to (noting these operate under different develop a more coherent and comprehensive States and Territory legislative national policy framework for Indigenous frameworks). economic development, which can be used as a basis to better coordinate action at the The Australian Governments RDA local level and shift to a longer-term funding Committees that undertake regional approach. strategic planning, identify and facilitate projects, disseminate information about elected recommendations for implementing 3.3 government programmes, and inform Sa place-based approach to economic government of regional priorities. development that empowers Indigenous Australians The Regional Network of the National Indigenous Australians Agency (NIAA) has Strengthen the capacities of local Indigenous the potential to play a stronger role in institutions to promote community economic implementing a place-based approach. development by: The NIAA is shifting towards a more place- based approach focussed on working with Consolidating existing funding support for local communities to identify opportunities institutional capacity building into a single and bottlenecks, and coordinating within programme (alongside the other 5 themes government, private and philanthropic sectors of the Indigenous Advancement Strategy). to address them. Yet, the staff in the regional network do not have sufficient capability Increase funding to address capability and tools – such as entrepreneurial skills, gaps and re-focus support on community planning frameworks, and budget strengthening institutional capacities that flexibility – to implement this place-based address these gaps (leadership, technical approach and adjust for diversity of conditions skills e.g. finance and legal, and business across Australia’s First Nations. and commercial skills) at critical points in the lifecycle (e.g. pre-establishment of A place-based approach requires governments PBCs). to facilitate opportunities for meaningful participation, coordinating and aligning Expand the range of institutional capacity policies, and investments at the local level. building activities including support Without a formal representative institution for community planning, business case of Indigenous Australians, the quality of development, and local area data. engagement and consultation with them is inconsistent across Commonwealth Strengthen the role of Indigenous-led departments and agencies, and between third party organisations in delivering levels of government. Over the last two programs including support to develop decades, there have been many changes to guidance, share good practices and organisational structures in Indigenous Affairs. lessons, and coordinate local efforts. The institutional landscape at a local level is complex and small scale with ad-hoc and inconsistent support. The Joint Council on

Build scale in Indigenous community and The NIAA taking a whole of government economic development by: leadership role in monitoring consultation, promoting best practices, and delivering Working with local governments on training and guidance. developing good practice guidance, tools, and leading practices on the role of local Establishing a model for shared local government in Indigenous community and decision-making through the Joint economic development. Council on “Closing the Gap” that enables agreements on local area outcomes Consider adding Indigenous economic and pooling of budgets between levels and community development to the RDA of government to support Indigenous Charter, and sharing best practices on how community and economic development. RDAs work with Indigenous communities.

Including regional scale collaboration as a criteria in relevant programme streams of the Indigenous Advancement Strategy.

Embed a place-based approach in the operational model of the NIAA regional network by:

Re-scoping roles, training and mentoring to develop entrepreneurial skills and capabilities for staff (i.e. Community development, stakeholder engagement, data analytics and business support)

Delivering guidance, tools and material to support community planning for Indigenous groups, and providing resources and expertise for Indigenous organisations to develop and use data.

Improve the inclusion of Indigenous peoples in Australian Government decision-making and reform multi-level governance and funding arrangements by:

Developing a common framework and good practices for consultation across Australian Government departments and agencies.

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About this Policy Highlights

This booklet reproduces highlights from the Linking Indigenous Communities with Regional Development in Australia report. Find out more about the OECD work on regional and rural policy: http://www. oecd.org/regional/rural-development/

Photo credits

José Enrique Garcilazo > [email protected]

Full report > https://oe.cd/pub/3wY

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