The Council of Australian Governments in 2009 vowed to Close the Gap between Indigenous and non-Indigenous Australians on health, education and employment. It’s hardly surprising that Indigenous spending has grown over the years to cater for this initiative.
Indigenous Expenditure Report 2017 by Productivity Commission estimates that Federal and State spending on Aboriginal and Torres Strait Islanders was more than $33 billion in 2015-16 which was a real increase of 24 per cent since 2008-09.
In dollar terms, this amounts to an annual spending of $44,900 per Indigenous Australian, twice the equivalent spending per person on the rest of the Australian population.
This might be hard to swallow, especially by those harbouring the views that Aborigines get it so much easier than all of us do and politicians spend obscene amounts on them without achieving notable outcomes. But, this would require a bit more explaining.
The Annual spending of $44,900 per Indigenous people relates to more than 150 spending categories, including social security payments as well as government spending on health, all levels of education, law & order, housing, community welfare, transport and a share of the cost of the public service and defence.
It is to be noted that most of this spending comes in the form of services provided, rather than cash in hand. Australian State and Territory governments provide a bit over half of this spending and the outlay of the Federal government is a bit less than half of it.
The productivity Commission report divides the sending of $44,900 into two categories: the “mainstream services” which are available to all Australians regardless of ethnic origin and the “Indigenous-specific services,” exclusively for Aboriginal and Torres Strait Islanders.
The latter accounts only 18 per cent of the total spending, equivalent to $8,082 a year per Indigenous person. This still leaves the yearly cost per person of mainstream services for Indigenous people exceeding the equivalent cost for other Australians by $14,368.
Why Indigenous Australians are more expensive than non-Indigenous Australians by $14,368 a year? This might be explained by the greater intensity of Indigenous people’s use of mainstream services. For example, the rate of unemployment in Aboriginal and Torres Strait Islander communities is much higher than other communities in Australia.
A disproportionate share of law & order spending is devoted to these communities. On average, Indigenous people are younger which necessitates a disproportionate spending on education. Indigenous and Torres Strait Island communities live in remote or very remote areas of this country and this requires a greater share of spending on these Australians.
Public expenditure on Indigenous people is substantial for State and Federal governments. All three levels of Australian governments (Federal, State and local councils) should be more efficient in consulting, allocating and utilising these funds. Too little is known on the effectiveness of these spending programs.
The relevant government agencies should make more data available to the public for research. The private and public sectors should conduct more research into what works and what doesn’t in spending programs devoted to Aboriginal and Torres Strait Islanders.