Basic Income Makes Basic Sense for Remote Indigenous Australia

In this essay, republished from the Green Institute’s ‘Can Less Work Be More Fair?’ discussion paper on Universal Basic Income and a shorter working week, Professor Jon Altman argues that a new Basic Income scheme has the potential to deliver remote living Indigenous people forms of alternative economy.

 

The employment situation in remote Indigenous Australia is a disaster. Even the optimistic spin peddled by the Turnbull government’s latest annual Closing the Gap report delivered in early 2016 (1) notes that only three in ten Indigenous adults in remote Australia are in work resulting in high welfare dependence, poverty and in some situations social dysfunction associated with inactivity. For many young people who experience even higher levels of unemployment, there is a deep sense of anomie and hopelessness about future prospects.

The Productivity Commission, in its recent performance assessment of the National Indigenous Reform Agreement (2) highlights that Indigenous employment outcomes deteriorate with remoteness. For example, the gap in the employment to population ratio between Indigenous and non-Indigenous Australians was more than 38 percentage points in remote and very remote areas compared with 28 percentage points across the population as a whole.

There are two paradoxes and one worrying reality embedded in this disparity.

First, for working-age non-Indigenous Australians living in remote areas, employment rates are higher than in major population centres. This is partly because these people move to remote Australia for work, often at mines and on an almost expeditionary, sometimes fly-in, fly-out, basis.

Second, more and more of remote Australia is coming under some form of Indigenous land title under land rights and native title laws. The Productivity Commission notes that attachment to country is important from a cultural perspective; it is not surprising that when people get their ancestral lands back they want to live on or near them. But the number and range of available mainstream employment opportunities in remote Australia are limited.

The worrying reality is that this situation is likely to get worse rather than better. The Productivity Commission notes geographic influences, structural employment changes and the effects of the business cycle as emerging challenges, but fails to highlight the role that automated intelligence and robots will play in reducing employment possibilities. This is despite rhetoric from government about ‘Developing the North’ and the possibility of trickle down employment and business benefits that historically have had minimal impact on Indigenous circumstances.

The worrying reality is that this situation is likely to get worse rather than better.

Such challenges are not new for Indigenous people in these areas. Since colonisation and the destruction of the hunter-gatherer mode of production, Indigenous people in remote Australia have faced constant livelihood challenges. These challenges were exacerbated by centralisation associated with the establishment of missions and government settlements; colonial and mission authorities kept people busy but attempts to establish any productive economy based on market capitalism failed. And in many cases Indigenous labour was engaged but often at below award or no pay. This all changed from the late 1960s with citizenship and notional equality; now people needed to be paid for their labour at award rates or else be entitled to receive welfare. Unemployment rates soared, and remote communities faced a labour surplus crisis.

In the late 1970s and with the intellectual guidance of HC Coombs, a new approach was piloted to address this employment deficit: the Community Development Employment Projects scheme, or CDEP. This was an innovative program that saw notional welfare entitlements pooled to provide funds to pay people for parttime work. The scheme began in 1977 and by the time it reached its peak in 2004 it had expanded to total over 35,000 participants, primarily in remote Australia, and 265 administering community councils or organisations.

In 1987, I was commissioned by the Australian Council of Employment and Training to canvass options for providing cash to the smallest and remotest Indigenous communities, called outstations or homelands. (3)

Using the Canadian Cree Income Security Program as a model, I recommended the establishment of a Guaranteed Minimum Income for Outstations program (a form of Basic Income) and a Capital Fund for Subsistence (a form of Stakeholder Grants). My own research undertaken while living at an outstation in Arnhem Land in 1979 and 1980, and literature search of the available Australian evidence, indicated that people at outstations were generally active in self-provisioning, but lacked access to cash income. The social democratic welfare system designed for people assumed to be temporarily unemployed was not a suitable policy instrument to address these unusual post-colonial circumstances where there were no mainstream labour markets.

The social democratic welfare system designed for people assumed to be temporarily unemployed was not a suitable policy instrument to address these unusual post-colonial circumstances where there were no mainstream labour markets.

While my recommendations were never seriously considered by the Hawke government, during the following decade a similar approach was developed on the quiet by some CDEP organisations. CDEP was refigured to distinguish its application in a variety of ways including to pay for part-time employment, as originally intended, but also to provide basic income support to people living at homelands without any labour markets.

BY JONNY WHITE (G20 APRIL 1ST) [CC BY 2.0 (HTTP://CREATIVECOMMONS.ORG/LICENSES/BY/2.0)], VIA WIKIMEDIA COMMONS

CDEP worked well as a Basic Income in such situations because people were not defined as unemployed and so were not ‘activity tested’ by social security officials; and importantly, any additional income that they earned was not income tested and so they did not experience the disincentive effects of the social security taper—extra income earned did not result in the reduction of Basic Income from CDEP. And those receiving CDEP as Basic Income were trusted to pursue productive activity in market and non-market activity, inside and outside the home, uninterrupted by the constant surveillance of the state and its agents.

CDEP had a number of other features that made it popular with Indigenous people. First, participants in the scheme were classified as employed not unemployed. Second, it was community organisations who decided what constituted work and how myriad versions of the ‘no work, no pay’ rule would be applied. Third, all formal work undertaken under CDEP was at award rates. Finally, community control and the linking of administrative and capital resourcing on a formula basis gave CDEP organisations a degree of political power, autonomy, flexibility, and enhanced capacity.

From 1996, with the election of the Howard government, CDEP increasingly came under discursive assault; it was demeaned as being no different from welfare and, like welfare, seen as playing a part in the perceived dysfunction of Indigenous communities. From 2005, after the abolition of the Aboriginal and Torres Strait Islander Commission that administered the program, CDEP was incrementally dismantled over a decade, first in more settled regions and then in remote Australia. The ideologically-laden economic rationalist reasons for abolishing CDEP were that it promoted inactivity, it was a ‘comfort zone’ that prevented people taking on mainstream jobs (real or imagined), and that it provided a means to avoid labour migration, including to available work in mining during the boom times.

This dismantling occurred during a time when policy-making was supposedly based on evidence. A considerable body of evidence was provided to the government to show the value of CDEP as social investment. Let me provide two examples from my own research.

In November 2003, I was invited to present my views on development alternatives to the now disbanded Ministerial Council on Aboriginal and Torres Strait Islander Affairs. In this presentation I used empirical data from the west Arnhem Land region in the Northern Territory to illustrate how, with minimal stateprovided income support, Kuninjku people living there in the most remote and difficult circumstances were able to engage with market capitalism through arts production; were able to partially self-provision with bush foods; and were making contributions to biodiversity conservation and carbon abatement through their land and resource management activities. CDEP as Basic Income was generating productive and income generating possibilities in both the market and customary sectors of local economies in what I termed a hybrid or plural economy. With reference to the hybrid economy, I suggested that “[by] looking to maximise participation in all sectors, without getting too caught up in policy rhetoric about economic independence or equality, development outcomes that match Indigenous aspirations with state policy goals, can be achieved” (4).

Early in 2005, with two academic colleagues, I used official statistics to demonstrate that CDEP has positive economic, social and community development impacts. To summarise briefly, people on CDEP were afforded the opportunity to work more hours and earn extra income than the unemployed. They were also able to participate in more fishing or hunting and in more ceremonies and community activities than either the mainstream employed or the unemployed (5). The data analysed came from the National Aboriginal and Torres Strait Islander Social Survey undertaken by the ABS in 2002 and covered all of remote Australia not just one region.

Despite such evidence of relative success, CDEP was incrementally ‘reformed’ to extinction and replaced by the Remote Jobs and Communities Program (RJCP) in 2013. Then, from 1 July 2015, RJCP was cunningly rebadged the Community Development Programme (or CDP) in an attempt to cash in on the relative popularity of the previous scheme: CDEP and CDP are difficult to pronounce differently, especially in Aboriginal English.

Both RJCP and CDP are fundamentally different from CDEP. They were designed first and foremost as employment programs for situations where there is little formal employment and, as noted above, prospects look grim. Even so, the 35,000 participants in CDP are all living in remote Australia and almost all Indigenous are classified as unemployed. If aged 18–49 years, they are required to work, up to 25 hours a week, five hours a day, five days a week, for a Newstart payment at hourly rates of ‘pay’ that are well below minimum awards, as in colonial times. The only incentive to participate in what is defined by the government as ‘work-like’ menial activity that mimics ‘real’ work (increasingly described by Aboriginal people as ‘bullshit jobs’) is the threat of being punished for not turning up for such work or basic training. The punishment meted out is called ‘breaching’ and it carries financial penalties that leave participants destitute and dependent on family.

Indication from recently published job seeker compliance information complied by Lisa Fowkes (6) is that CDP participants are copping more and more financial penalties for non-compliance at many times the rate for the unemployed in more settled regions. For example, for the first two quarters of 2016, penalties for 35,000 participants exceeded 16,000 per month; during the first year of CDP, over 125,000 No Show No Pay penalties were applied to participants. In terms of gaps, CDP penalties outstripped those for jobactive (the employment service for mainly non-Indigenous unemployed in urban and regional centres) participants, even though they account for only 5% of the number in jobactive. The chances of being breached are 20 times higher under CDP. People are being impoverished by a discriminatory program whose supposed objective is to get them into work.

All of this suggests that Indigenous employment policy, much of which is just paternalistic welfare looking to discipline remote living Indigenous people, is in disarray. The Australian government wants to close employment gaps but has merely managed to shift people from CDEP work onto work for the dole welfare; and its policies are further impoverishing and marginalising many in remote Australia.

All of this suggests that Indigenous employment policy, much of which is just paternalistic welfare looking to discipline remote living Indigenous people, is in disarray.

The challenges in remote Australia are twofold: market capitalism is not working for Indigenous people because it is largely absent; and government programs are not working because their institutional design is erroneously looking to replicate a form of market capitalism in remote Australia that has historically worked in non-remote Australia but that even there is now shedding labour. The Australian state and its apparatus are pursuing ideologically-constructed utopian ideals of employment parity that will never be attained.

Under these circumstances, a new Basic Income scheme has the potential to deliver remote living Indigenous people forms of alternative economy, where there is little mainstream opportunity and no intention to migrate. CDEP as Basic Income has been empirically demonstrated as able to productively support livelihood activity, especially where market, state and customary (or non-market) opportunity can be creatively mixed.

It is unfortunate that many of the community-controlled organisations that successfully delivered CDEP have now been shattered and depoliticised as part of the ‘reform’ strategy of successive federal governments over the past decade. Some of these institutions of Indigenous Australia took years to build up the capacity needed to support productive activity by their community members in extremely difficult circumstances. It is likely that it will take years again for appropriate institutional strengthening to evolve to facilitate productive livelihoods for remote living people, many living on their ancestral lands, many delivering important ecological services and carbon abatement to the nation.

Basic Income has been a successful mechanism for supporting ways of economic life valued by remote-living Indigenous people in the past and could do so again in the future. With time, Basic Income might be adopted in more densely populated regions and by non-Indigenous Australians. The marginal cost of such a scheme will be negligible; its potential to close all sorts of gaps significant. Neoliberal governmentality paradoxically favours very orthodox imagined solutions to complex issues of remote development where diverse unorthodoxy is urgently required.

The time has come, as employment gaps for Indigenous Australians grow, to trial Basic Income as an alternative ‘social investment’ approach and to objectively evaluate the outcomes (7) —if such evidence based policy making remains possible in today’s hyper-politicised policy environment where ideology seems to be the key factor in any assessment. I suspect that, in any objectively-assessed competition of policy approaches for remote Indigenous Australia, a Basic Income scheme will win out easily—a far superior approach to the current neo-paternalism CDP masquerading as a work-creation program that is destructive and deeply impoverishing already impoverished people. Basic Income is an alternative worthy of serious consideration.

 

End notes:

(1) Australian Government, Closing the Gap Prime Minister’s Report 2016. Canberra: Department of Prime Minister and Cabinet, 2016, p28.

(2) Productivity Commission, National Indigenous Reform Agreement: Performance assessment 2013–14. Canberra: Productivity Commission, 2015.

(3) Altman, JC and Taylor, L, The economic viability of Aboriginal outstations and homelands. Canberra: Australian Government Publishing Service, 1989.

(4) Altman, JC, Economic Development and Participation for Remote Indigenous Communities: Best Practice, Evident Barriers, and Innovative Solutions in the Hybrid Economy, CAEPR Topical Issue 4/2004. Canberra: Centre for Aboriginal Economic Policy Research, the ANU, p6.

(5) Altman, JC, Gray, M and Levitus, R, Policy issues for the Community Development Employment Projects scheme in rural and remote Australia, CAEPR Discussion Paper 271/2005. Canberra: Centre for Aboriginal Economic Policy Research, the ANU.

(6) Fowkes, L, Impact of CDP on income support of participants. In K Jordan and l Fowkes (compilers) Job creation and income support in remote Indigenous Australia: Moving forward with a better system. Canberra: Centre for Aboriginal Economic Policy Research, the ANU, 2016.

(7) Altman, JC, Basic income for remote Indigenous Australians: prospects for a livelihood approach in neoliberal times. In J Mays, G Marston and J Tomlinson (eds) Basic income in Australia and New Zealand: Perspectives from the neoliberal frontier. Basingstoke: Palgrave Mcmillan, 2016.

 

Jon Altman is a research professor at the Alfred Deakin Institute for Citizenship and Globalisation at Deakin University in Melbourne and an emeritus professor of the Australian National University in Canberra located at the School for Regulation and Global Governance (RegNet). He is also an adjunct professor at the Research Institute for the Environment and Livelihoods at Charles Darwin University in Darwin. From 1990–2010 he was the foundation director of the Centre for Aboriginal Economic Policy Research at the Australian National University. Jon has a background in economics and anthropology and over many years has been a tireless advocate for the need for critical, grounded and independent academic research to have influence on issues pertaining to indigenous economic justice in Australia and elsewhere. Much of his research has focused on land rights and native title, alternate forms of economy, and the rights of indigenous peoples to live on their ancestral lands. Much of his field research since 1979 has focused on the west Arnhem Land region in the Northern Territory.