Chapter Four Economic development

Economic development brings businesses, goods and services into local economies and creates opportunities for employment and training. The Government is working to ensure Aboriginal and Torres Strait Islander people have the same opportunities for economic participation as other Australians by improving education and employment outcomes and increasing the number of Indigenous businesses operating across Australia.

The biggest gains in Indigenous employment and prosperity are likely to be in regional and urban areas where there are more market opportunities and where the majority of Aboriginal and Torres Strait Islander people live. However, targeted effort is needed to support economic development in remote Australia, where disadvantage is most concentrated and severe. The Government’s role is to set conditions conducive to Indigenous businesses and investment. Economic development relies upon Indigenous entrepreneurship, community support and leadership, and private sector investment and involvement.

The Australian and state and territory governments have agreed through COAG to the development of a new strategic framework that puts Indigenous economic participation at the heart of the national agenda. This recognises that economic participation underpinned by cultural participation leads to improved social outcomes. The framework will ensure an economic development lens is applied to all investment in Indigenous communities so the provision of government goods and services can create business and employment opportunities for Aboriginal and Torres Strait Islander people. It will also support an increased focus on place-based solutions, increased economic independence, and a reduced reliance on welfare (COAG 2015).

Building the Indigenous business sector

Each year the Australian Government purchases goods and services valued at billions of dollars. In 2012-13, Indigenous businesses were estimated to have secured only 0.02 per cent ($6.2 million) of the overall Australian Government procurement commitment of around $39 billion.²⁶ The Government’s Indigenous Procurement Policy started on 1 July 2015. It aims to significantly increase procurement from Indigenous businesses:

• In the first six months, the Government awarded contracts valued in total at $36 million to 52 Indigenous businesses²⁷ in a range of sectors, for the delivery of goods and services as diverse as electrical cabling and financial literacy resources. An interim target of 0.5 per cent is set for 2015-16, which will gradually increase to three per cent by 2019-20 for domestic contracts.
• Indigenous businesses will have the opportunity to quote first on all contracts in remote areas as well as for all contracts valued between $80,000 and $200,000.
• For high value contracts – $7.5 million and over – in specified industry sectors, mandatory minimum requirements for Indigenous employment and Indigenous supplier use apply.

The policy puts Aboriginal and Torres Strait Islander businesses at the front and centre of the way the Government does business whether through direct contracts or through joining the supply chains of some of Australia’s largest companies.

The Indigenous business sector continues to benefit from assistance from Indigenous Business Australia (IBA) which offers loans to prospective and existing Indigenous businesses on terms that are generally outside commercial lenders’ risk tolerance. In 2014- 15, IBA approved 49 new business loans worth a total of $18.3 million and 365 businesses received business advice or support.

Remote business development

Obstacles to economic development are high for remote Aboriginal and Torres Strait Islander communities. As their distance from larger markets increases, the cost of doing business also rises. Consumer bases become smaller and infrastructure is less adequate. The Government is supporting Indigenous business development in remote Australia:

• Indigenous Enterprise Development (IED) – boosts the number of Indigenous-owned businesses and creates jobs by helping entrepreneurs overcome the two biggest barriers to establishing a business: getting the right help at the right time and access to finance.

Under the IED, $30 million is available to start and grow sustainable businesses or social enterprises, of which $25 million is earmarked for enterprises in remote Australia. Entrepreneurs who can demonstrate their business idea could be commercially viable are offered a tailored support package which could include business planning support, start-up funding and up to two years’ worth of post-establishment mentoring. To ensure Indigenous businesses are established from the outset according to commercial principles, start-up grants only cover part of the required start-up capital; the rest must be covered by a commercial loan.

• Indigenous Visual Arts Industry Support (IVAIS) – more than 7,000 Aboriginal and Torres Strait Islander artists are supported to generate income via the Indigenous visual arts industry. Operational funding to around 80 Indigenous-owned art centres supports the production and promotion of Indigenous visual art as well as employment and professional opportunities for over 300 Indigenous arts workers. In some remote communities the local art centre may be the only generator of external income. The work of many of the artists is now internationally recognised.
• Indigenous Language and Arts (ILA) – $22 million to support the revival and maintenance of Indigenous languages including more than 60 language activities across a network of over 50 Indigenous language organisations. A range of arts projects including contemporary theatre, music, visual art and screen based works, jewellery, traditional weaving and carving are also supported.

Infrastructure

Infrastructure underpins opportunities for Indigenous economic development:

• National Broadband Network (NBN) – will improve access to fast broadband to foster innovation, better service delivery and new industries. Over the next three years, the Government will spend $6.7 million helping to maximise access to new internet services previously unavailable in remote communities.
• Mobile Black Spot Programme – RoundOnewill deliver 499 new or upgraded mobile base stations across regional and remote Australia, providing new and upgraded handheld coverage to 68,600 square kilometres and new external antenna coverage to over 150,000 square kilometres. A further $60 million has been allocated to the second round.
• Road upgrades – the $262 million upgrade of the Peninsula Developmental Road and other community infrastructure will improve accessibility to Cape York, support the growth of the local industry and increase economic activity in Indigenous communities. Upgrade of the main access road in the Anangu Pitjantjatjara Yankunytjatjara Lands ($106 million) will cut the high costs of service delivery and provide employment opportunities for local residents.
• Air services – in remote Indigenous communities, vital air services carrying passengers and freight including fresh food, medicines and other urgent supplies are subsidised. Where not commercially viable, aerodrome infrastructure is maintained and safety inspections are carried out at remote airstrips.

Developing Northern Australia

Aboriginal and Torres Strait Islander people who have a direct interest in large parts of the north have an integral role to play in the development of Northern Australia, which is a key priority for the Australian Government.

The Government is investing $1.2 billion to develop the North, through the Our North, Our Future, White Paper on Developing Northern Australia, with a focus on land, water, business, trade and investment, infrastructure, workforce and governance. This will create new opportunities for Aboriginal and Torres Strait Islander people to share in economic development. This includes:

• $600 million for a Northern Australia Roads Package (which includes targets for Indigenous employment and supplier use).
• $200 million for the northern component of a new National Water Infrastructure Development Fund.
• $75 million for a new Cooperative Research Centre in the North to investigate climate, soils and biosecurity, with a strong focus on agriculture.

The White Paper will create Indigenous-specific opportunities for economic development, while protecting the Indigenous cultural and natural assets that make the north so unique.

• Support for native title holders to build their capacity and effectively engage with potential investors ($20.4 million from 2015-2019).
• Funding fortownshipleasenegotiationsandland administration measures aimed at increasing economic activity on Indigenous land by making transactions on Indigenous land easier ($17 million from 2015-2018).
• Expanding opportunities for Indigenous Ranger groups to support increased biosecurity surveillance across the north ($12.4 million from 2015-2018).
• Funding for land tenure pilots as practical ‘next steps’ for investors wanting to develop projects that demonstrate the benefits of tenure reform ($10.6 million from 2015-2019).
• Consideration of options to use exclusive native title rights for commercial purposes.
• Supporting the native title system with the aspiration of finalising all existing native title claims within a decade (around $110 million a year over the next four years).

This is in addition to investments of $5 billion for infrastructure projects announced in 2015-16 and $100 million for the Northern Australia Beef Roads Fund.

Land and economic development

Land is a significant asset base for Aboriginal and Torres Strait Islander people that can support their economic independence. Together, governments are working on how they can better support Aboriginal and Torres Strait Islander people to leverage their land assets for economic development, as part of the mainstream economy. All jurisdictions have agreed to implement the recommendations of the COAG Investigation into Indigenous land administration and use, subject to their unique circumstances and resource constraints (COAG, 2015).

Township leases are a lever for economic development, delivering long-term tradeable tenure to underpin commercial activities and home ownership. They simplify leasing and land use across a whole town and makes it possible for individuals to obtain long-term subleases to support a loan.

Leasing agreements have the potential to modernise Indigenous land arrangements. In Gunyangara in North-East Arnhem Land, a Memorandum of Understanding has been signed between the Australian Government and the Gumatj clan to negotiate a community entity township lease.

Harnessing traditional Indigenous cultural knowledge

The application of traditional Indigenous cultural knowledge has the potential to strengthen the economic future of Australia in a range of areas.

In May 2015, the Minister for Indigenous Affairs delivered title to several areas of land under the Aboriginal Land Rights (Northern Territory) Act 1976 to the Yanyuwa people, in the Borroloola region of the Northern Territory. This will allow Jawuma (Black Rock Landing) to be developed as an operational hub for the li-Anthawirriyarra (people of the sea) Sea Ranger Unit, which manages the Yanyuwa Indigenous Protected Area as part of the National Reserve System of protected conservation areas. This initiative will support community aspirations for small-scale enterprise activities, including tourism, cultural interpretation and contract service delivery. The traditional owners have committed over $100,000 and have attracted the support of a number of government and private sector partners.