A speech by Mr Eddie Fry, Chairman Indigenous Land Corporation and Indigenous Business Australia
Developing Northern Australia Conference 2017 – Progress, Growth, and Investment.
Tuesday 20 June 2017.
Firstly, I would like to acknowledge the Traditional Owners of the land on which this conference is being held and I pay my respects to Elders past and present.
In a speech in 2005, former Indigenous Affairs Minister Amanda Vanstone infamously stated that Indigenous Australians were “land rich but dirt poor”.
A year earlier in 2004, Warren Mundine, then Vice President of the Australian Labor Party remarked that communal land ownership left the beneficiaries “asset rich…but cash poor”.
Former Indigenous Affairs Minister, Jenny Macklin MP in 2008 evoked a similar view in her “Beyond Mabo” speech when she talked of the “”the great Australian paradox” – that the traditional owners of the land are the poorest people living on it”.
In 2015, the White Paper on Northern Development repeats the sentiment attributing it to “Indigenous Australians [who] sometimes talk about being ‘land rich, dirt poor’”.
The observation about the untapped wealth of Indigenous Australians’, despite their vast property estate and particularly in Australia’s North, appears to be founded on two perceptions.
One is that the Indigenous Estate has significant current and under-utilised economic value.
And the other is that the rights that attach to the Indigenous Estate are not commercially valuable or influential.
In fact, the Indigenous Estate, its potential and its assets, both tangible and intangible, are vast and hold the key to successful Northern Development.
The two key challenges or pillars for development therefore become:
- growing and managing the Indigenous Estate so that strategic and informed choices can be made; and
- establishing an ecosystem and structure for Indigenous economic development, including so as to attract investment,
It is critical that these two pillars are aligned with the aspirations of Aboriginal and Torres Strait Islander communities.
The nature of the Indigenous Estate and its assets
The Indigenous Estate extends across remote, regional and urban Australia.
It is currently estimated that under a range of titles and agreements, the Indigenous Estate covers up to some 40% of Australia.
Across Australia’s vast north, the Indigenous Estate includes both tangible and intangible assets.
Tangible assets are obvious – they are the land and waters and the resources located on or within them.
Intangible assets include things such as cultural and intellectual property rights as they exist in forms of expression (arts, dance, music, language); traditional cultural, environmental and bioscience practices and other forms of traditional knowledge.
Moreover, the Indigenous Estate is dynamic – it is growing through:
- Acquisition, development and management of land;
- The flows of funds from royalties and rents from resources,
- Land use and other agreements, and the investment of those funds – domestically and internationally;
- Development and growth of Indigenous businesses;
- Revitalisation or enhancement of intellectual and cultural property and knowledge and new forms of expression and works.
The assets of the Indigenous Estate are in demand.
But, without properly leveraging these assets and engaging with the Aboriginal and Torres Strait Islander communities who control access to these assets and their aspirations, Northern Development is doomed to fail.
To ensure that those projects and ideas which have the best chance of succeeding to create opportunity, wealth and choice, we need to properly understand the assets (both tangible and intangible) that exist on the Indigenous Estate.
In undertaking such a mapping exercise and then making choices about which activities should proceed, we need to be clear about drawing a distinction between the absolute physical measure of these assets and their availability and include economic and technological considerations in our assessment.
The physical existence of assets in any one location on the Indigenous Estate is only one dimension to successful economic activity.
Success also depends on the available technological solutions and the costs of delivering that product or service relative to prevailing prices.
An activity that may be marginal or not economic now, may become viable later as regulation change, innovation and technology change to drive down costs.
Similarly, clarity and certainty as to access to the assets of the Indigenous Estate is critical.
Limitations on access, disputes, poor and uncertain policies and processes and inability to navigate the web of complexity to the assets can drive away opportunity and choice for current and future generations.
For that reason, I am heartened by the Australian Government’s decision to appoint a new Indigenous Commissioner to the Productivity Commission to lead the Commission’s work on policy evaluation.
Policy will play a key role in developing the North.
Northern Australia’s proximity to the expanding middle class across Asia, and the demands for food, services and goods, will be crucial. The Indigenous Estate must look north to this market and these enormous opportunities.
No other time like now has ever been so important to getting the settings right.
While there might have been investigations and databases that outline the assets of particular regions or landholdings, there has not been a properly structured mapping exercise to identify the assets of the Indigenous Estate. Nor has there been appropriate consultation with relevant Aboriginal and Torres Strait Islander communities about what they see as the aspirations and opportunities within their regions or areas or interest.
A proper mapping exercise on this scale is critical.
Only when we truly understand the suite of assets held within the Indigenous Estate and align these with the aspirations of their owners -the relevant Aboriginal and Torres Strait Islander communities – will the Indigenous Estate’s potential in Northern Australia be unlocked and links established with the broader Australian and International economy.
In undertaking this mapping exercise, we must think creatively about leveraging opportunity from the Indigenous Estate to realise benefit and drive economic development for Aboriginal and Torres Strait Islander communities.
Getting the settings right for Indigenous economic development
With these challenges in mind about the nature of the asset and the importance of linking it with the broader Australian economy, the challenge becomes how to establish an ecosystem for Indigenous economic development so as to grow and develop the Indigenous Estate in line with the aspirations of Aboriginal and Torres Strait Islander communities.
On this challenge, the Harvard Project on American Indian Economic Development says, and I quote;
“Achieving economic development is a social problem which requires a social response through members of a society organising themselves and their productive capacity through formal and informal institutions of social control and organisation.”
The development of strong formal and informal institutions is essential for the regulation and facilitation of economic development in Northern Australia and across the Indigenous Estate.
Establishing and resourcing institutional structures to enable community goals to be set and achieved is a critical factor that requires much attention.
Indeed, establishing, developing and supporting these formal and informal institutions is the key to unlocking the productive capacity of the Indigenous Estate and the contribution it can make to Northern Development.
In this regard, creating a coordinated economic development framework is essential.
Too often we have seen poorly planned arrangements delivered through a patchwork of Commonwealth, State and Territory policies delivered by a myriad of government, Indigenous, private and not-for-profit organisations, each with its own measures of success and aspirations to remain relevant and sustainable.
Within a coordinated economic development framework, efficient and effective project approval processes are essential to attract investment and support innovative ideas; but this need not be at the expense of the Indigenous Estate.
On the contrary, those institutions who negotiate on behalf of traditional owners and govern access to the Indigenous Estate must be supported to establish governance structures and processes that are sufficiently agile to participate effectively in economic and investment activity, while also reflecting cultural and community needs and expectations.
To achieve truly beneficial arrangements, these institutions must also learn the power of partnerships to develop commercial capability.
To realise opportunity and choice for Aboriginal and Torres Strait Island individuals, groups and communities, we need to recognise the importance and role of public and private investment in the Indigenous Estate.
This could take many forms – from investment in new infrastructure to investment in economic activities in the expectation of making a rate of return.
Investment in new infrastructure and economic activities can provide funds and/or a greater ability for the delivery of essential community services and other benefits.
Failure to develop settings that attract public and private investment will lead to a failure to realise the full value of the Indigenous Estate’s assets and potential and to create choice and opportunity.
Global market settings invariably will have a strong influence on the level and location of investment in new economic activities and opportunities on the Indigenous Estate.
The location of Asia so close to the North cannot be ignored in such assessments.
Growth in investment in economic activities will also be associated with opposition to certain activities; and such reasoned and informed opposition is important and necessary, for it will lead to appropriate planning restrictions and environmental conditions.
Politics, both local, regional and national, can play a strong role in determining how attractive investment appears.
If private investment is not encouraged, or if there is blind faith in certain ownership structures, thereby denying the benefits diversity in ownership structures or through partnerships can bring, then external capital will become more difficult to attract.
Consequently, to attract investment in the Indigenous Estate, we need to make sure the settings are right in the following:
- We need to understand and appreciate the nature of the assets;
- We must ensure political and social stability;
- We need to create a clear process for gaining access and realising the economic benefit of investment;
- That development rights must be negotiated through engaging with land rights or native title regimes (either through leases and/or Indigenous Land Use Agreements); and
- We need to ensure there is an appropriate and properly resourced administrative and legal framework across the Indigenous Estate.
We also need to ensure we don’t just focus on turnover or revenue from economic activities – We also need to consider the value added from such activities
A range of benefits will accrue from increasing economic activity on the Indigenous Estate.
- Income – as the initial spending works through the economy of the Indigenous Estate;
- Employment, through increased jobs as economic activity generates a wide range of additional benefits beyond just the numbers employed;
- Infrastructure, associated with economic activity and projects;
- Supplier industries, to supply goods and services to projects and activities taking place on the Indigenous Estate;
- Education, training and technology – economic activity involves a wide range of skills and occupations, most of which require further education and training.
Collaboration on Northern Development
I now go to the key point of my presentation that is – Without ensuring that Northern Development occurs in alignment with the aspirations of Aboriginal and Torres Strait Islander people it will be doomed to fail at worst or proponent activity will be significantly slowed.
Governments and project proponents must fully engage with the Indigenous Estate, its institutions and its people to understand its opportunities.
To minimise risk, attract investment and truly engage with the assets and potential of Northern Australia, collaboration is therefore essential.
That is why it is important that leaders of key Indigenous institutions who govern access to and engagement with the Indigenous Estate must be supported to establish a Northern Australia Indigenous Development Committee.
I note that Senator the Hon Matt Canavan, Minister for Resources and Northern Australia, has recently announced a Ministerial Forum on Northern Development the first meeting of which will be held in Darwin later this year.
I would see a Northern Australia Indigenous Development Committee as playing a critical role at a Forum like this, for it is essential that the views and ideas of that Northern Australia Indigenous Development Committee, representing key Indigenous institutions, are listened to.
This key Indigenous Development Committee would carry out the following functions:
- Identify and communicate opportunity, risks and priorities for land and resource projects on the Indigenous Estate;
- Provide advice on identifying pathways for engagement with the Indigenous Estate;
- Ensure outcomes are sustainable and directed towards achieving financial sustainability and economic independence for the Indigenous Estate;
- Develop partnerships to help build capacity and expertise and to link the Indigenous Estate to appropriate expertise and advice;
- Advise on infrastructure development and foster collaboration and build a pipeline of priority infrastructure projects; and
- Establish an enabling environment for investment through the development of partnerships, and public/private relationships.
With the necessary skills, capabilities, relationships and commercial expertise, the two organisations for which I am Chair, Indigenous Business Australia (IBA) and the Indigenous Land Corporation (ILC) stand ready to assist Indigenous and other institutions both to formulate a Northern Australia Indigenous Development Committee and to support its work.
To truly harness the potential of Northern Development, understanding the assets of the Indigenous Estate and properly engaging with it is critical.
However, it will be essential to establish, support and grow institutions to create a framework for Indigenous economic development – without this, Indigenous economic development within the overall Northern Development landscape will not be a success.
To get to this point, we need:
- A clear, concise and consistent framework in which each institution participating in Indigenous economic development understands its strategic role and required capabilities;
- To map and identify key areas of the Indigenous Estate and where current and future opportunities can be leveraged, in line with the aspirations of Aboriginal and Torres Strait Islander communities;
- To support institutions that manage, and govern access to the Indigenous Estate for the benefit of Aboriginal and Torres Strait Islander people to develop commercial capability, resources and agility to give confidence to stakeholders – and to identify and establish partnerships to enable this to occur; and
- Government and institutions to look beyond electoral cycles and short-term self-interest to work with Aboriginal and Torres Strait Islander groups, communities and individuals to focus on the future that these groups, communities and individuals wish to achieve.
Across the Indigenous Estate, economic development outcomes could be enhanced and increased through investment in new activities and through raising the efficiency of existing economic activities and of processes and policies.
We also all need to increase our efforts generally to generate dialogue to bring together the different elements that make up the value chain on the Indigenous Estate to ensure that each component is working for the benefit of the Aboriginal and Torres Strait Islander individuals and communities.
Barriers and inefficiencies need to be addressed and solutions created: inadequate access to finance, weak institutions and poor policies are problems that must be fixed.
The time is now and the opportunities are current – the burgeoning Asian middle class to the north of Australia represents a once in a lifetime moment for the Indigenous Estate to harness its potential.
Working collectively, strategic and informed choices can be made by establishing an ecosystem for Indigenous economic development that is aligned with the aspirations of Aboriginal and Torres Strait Islander communities.
I strongly believe that, unless there is proper engagement with and participation by Indigenous people in developing the North – suitably empowered and resourced to succeed – then we will continue to talk of First Australians being “land rich but dirt poor”.