On October 26, The Stringer published Gerry Georgatos’ article – $25.4 billion spent on Aboriginal disadvantage is a lie. On October 30, another version of Georgatos’ article was published as the front page story of The National Indigenous Times – A $25.4 billion lie!

Dr Warren Mundine’s response:

Last week’s front page of the National Indigenous Times was intended to debunk one of the common myths about Indigenous Affairs funding – that Aboriginal and Torres Strait Islander people are personally receiving around $25 billion of special government funding.

NIT points out that this $25 billion figure includes Indigenous people’s share of funding that is provided to all Australians equally (such as social security, education and health). Based on its analysis of the latest Productivity Commission report NIT estimates that, of the funding allotted specifically to Indigenous Australians, a majority is spent on bureaucrats, advisers, contractors and the like, many of whom are non-Indigenous.

These figures are no surprise to me. On the ABC’s Q&A last month I said that Senator Scullion and I had estimated during a quick review that around a third of Government funding for Indigenous programs doesn’t even make it past the front doors of office buildings in Canberra and other cities. It’s like an inverted pyramid – funding passes through several layers of bureacracy and other administration before reaching the people it’s intended to help, by which time it’s substantially depleted.

This is why one of the first acts of the Prime Minister’s Indigenous Advisory Council will be to get a precise understanding of where funding is actually landing. Administrative and auxillary functions will be just as much a focus of the review as anything else.

However, the NIT article also created some new myths.

The first is that the Council has been set up to find savings or improve the budget bottom line. This is incorrect. The Council has not been established because of concern that too much money is being spent. It’s been established because the lives of Indigenous people are not improving enough. I certainly don’t believe that there are “billions to be saved by cutting into Indigenous programs” as the article stated.

The second myth is that the problems could all be solved simply by redirecting funding away from bureacracy and administration and directly to Indigenous people. This is a false hope. Poverty isn’t solved by giving communities money. Poverty is solved by economic development, by communities making money.

This year The Economist reported the extraordinary figure that between 1990 and 2010 the number of people living in extreme poverty globally halved – reducing from 43% to 21% as a percentage of the total population of developing countries. This equates to 1 billion people lifting out of extreme poverty over a 20 year period.

According to The Economist, two-thirds of a country’s poverty reduction comes from economic growth. In the 3 decades after China began to implement economic reform, for example, its extreme-poverty rate fell from 84% to 10%. The remaining third of poverty reduction is mainly through greater equality. This could include things like democracy, reduced corruption and equal access to education for girls, for example.

Indigenous communities will be no different. The only way we’ll see poverty and disadvantage reduce, and ultimately eliminated, is through commercial activity and economic development. Maintaining good community and organisational governance is of course a given.

I think Indigenous media and opinion is misreading the mood in Australia. There is genuine goodwill amongst the Australian public towards Aboriginal and Torres Strait Islander people and a strong desire to see a closing of the gap, particularly the business community. People don’t quote the $25 billion figure to disparage Indigenous people or because of concern about the money. When people quote the $25 billion they are are expressing exasperation that the gap isn’t closing despite Government efforts and despair that if such large amounts invested aren’t making a difference then what will?

The $25 billion figure symbolises the failure of a 40 year strategy to bring Indigenous people to an equal standing with other Australians – even that the part of the funding which is for services and benefits available to all Australians. This is because Indigenous people disproportionately rely on government services and benefits such as public housing, social security and health services. The size of that figure reflects the fact that Indigenous people are far more likely to be poor, unemployed or suffering from chronic illness.

I would like nothing more than for the $25 billion figure to go down – not through cutting services and benefits, but through Indigenous people needing fewer of these services and benefits in the first place. I would like to see fewer Indigenous people receiving welfare and more Indigenous people in real jobs. I would like to see fewer Indigenous people in need of medical treatment for Type 2 diabetes, heart disease and kidney disease and more Indigenous people fit, healthy and smoke-free. I would like to see fewer Indigenous children needing intervention or specialist health care and improved maternal health. I would like to see all Indigenous children going to school every day.

We need to stop being defensive about funding and start working with government to identify and implement real change for Indigenous people. We need to stop being fixated on programs and start focussing on results in education, jobs, commercial activity and economic development.

The Indigenous Advisory Council is not a razor gang but it will only endorse a strategy of spending and service delivery that achieves demonstrated outcomes for Indigenous people. We should all demand this.

Nyunggai Warren Mundine is Chair of the Prime Minister’s Indigenous Advisory Council.