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Social Justice Report 2001: Chapter 2: Mutual obligation, welfare reform and Indigenous participation: a human rights perspective

Social Justice Report 2001

Chapter 2: Mutual obligation,
welfare reform and Indigenous participation: a human rights perspective

obligation, welfare reform and Indigenous participation: a human rights

obligation and welfare reform

obligation – some general concerns

and conditionality

for breaching

obligation and equality

obligation, practical reconciliation and Indigenous welfare reform

obligation, welfare reform and practical reconciliation – Indigenous-specific

context of Indigenous marginalisation

obligation and Indigenous cultural values

– Indigenous empowerment and effective participation

obligation, welfare reform and Indigenous participation: a human rights

In recent years
a mutual obligation approach has been adopted to reform public policy
on welfare and employment issues. There has been much discussion about
the applicability of this approach within an Indigenous policy context.
It is seen by many as consistent with Indigenous cultural values such
as reciprocity and an emphasis on community, as well as suggesting
an antidote to the damage caused by intergenerational poverty, of
which long-term welfare dependency and a crippling short-term local
cash economy are often features. This chapter evaluates the appropriateness
of a mutual obligation approach to addressing the deeply entrenched
and severe disadvantage and marginalisation faced by Indigenous people
from the perspective of human rights standards. There exists in Australia
a history of seeking administrative solutions to issues related to
Indigenous economic marginalisation. We should not rush to a wholesale
acceptance of a mutual obligation policy approach on the basis of
a superficial attractiveness and apparent consistency with Indigenous
cultural values or for reasons of political expediency. Consideration
must be given to whether such an approach actually empowers Indigenous
people and communities to take control of their lives and be self-determining.
On this basis, we must question the ease with which an emphasis on
‘welfare dependency’ and ‘self reliance’ has distracted
attention from the broader spectrum of issues related to the economic
marginalisation faced by Indigenous people.

obligation and welfare reform

A mutual obligation
approach has formed the philosophical basis for reform of the welfare
system by the present Federal Government since its election in 1996.
The mutual obligation principle asserts that the provision of government
assistance is not simply a matter of right or entitlement, but something
that must be reciprocated by the citizen through meeting a range of
obligations and responsibilities. In the context of welfare reform,
the onus has shifted from the State’s obligation to provide income
support for those citizens unable to exercise their right to work
(temporarily or otherwise) to the obligation of the unemployed citizen
to perform certain duties - such as seeking work, undertaking training
or accepting temporary employment - in exchange for this support.
In a speech delivered to the National Press Club, titled ‘The
future of welfare in the 21st century’, the Minister for Family
and Community Services outlined the government’s rationale for
a mutual obligation approach to welfare reform as follows:

A modern safety
net is not about blaming the victim, or penalising or punishing
disadvantaged people. Nor is it necessarily about more government
intervention or throwing money at problems. It is about helping
people avoid and move out of welfare dependency and giving them
real opportunities. And, it is about people on government payments
accepting responsibility and an obligation to help themselves by
making a contribution to the economy and society as much as they

This approach
has its origins in the liberal democratic notion of a social contract
existing between individual citizen and state.[2]
Under this contract, ‘all members of society have obligations
to sacrifice certain individual freedoms in the pursuit of collective
advantage and mutual benefit’.[3] In mutual
obligation policies an understanding of this contract is being re-worked
in terms of individuals’ obligations ‘to live off their
own (or their family’s) labours, to be self-reliant rather than
reliant on others and to avoid being a burden to fellow citizens’.

This approach
is accompanied by an understanding that some form of active participation,
geared toward developing greater ‘self reliance’, is preferable
to ‘welfare passivity’ or ‘dependency’. This shift
in public policy has been presented as a necessary development in
the face of social and economic change that has meant the State is
unable to sustain the former standards of its social security net
due to factors as diverse as the impact of rapid globalisation, advances
in technology and an ageing population.

Many of the principles
which underpin this approach are imported from public policy developments,
characterised as a ‘Third Way in Politics’, in other western
democracies. These include ‘workfare’ introduced by President
Clinton in the United States in 1996 and the offer of a ‘New
Deal’ to the unemployed by British Prime Minister Tony Blair
in the United Kingdom in 1997.[5]

social security system has always had some degree of compulsion built
into the receipt of income support since its introduction in the 1940s,
such as requirements that recipients engage in job-seeking or some
other form of approved activity in return. However, since the late
1980s there has been greater public acceptance of the notion that
obligations should be required of benefit recipients, accompanied
by increases in the level of conditionality of income support programs.

Following a major
review of the welfare system in 1988, the Hawke and Keating governments
introduced a range of modifications to labour market programs to ensure
greater compliance by income support recipients through targeting
and providing incentives to encourage work and reduce welfare dependence.
This emphasis on ‘reciprocal obligation’ was crystallised
in the 1994 white paper on employment, Working Nation of which
the Job Compact for the long-term unemployed was central. Through
this initiative, the Government sought to provide the long-term unemployed
with a guaranteed job within 6-12 months along with a program of targeted
assistance. This was accompanied by high penalties for unemployed
people who did not accept a reasonable job offer.

When the Coalition
came into government in 1996 Working Nation was replaced by
more market-oriented initiatives which included the downsizing of
labour market programs, deregulation of the training market, and privatisation
of the employment assistance service with the introduction of Job
Network from May 1998. In accordance with the mutual obligation principle,
tighter requirements were introduced for the receipt of benefits and
harsher penalties enforced for failure to comply (such as the ‘breaching’
of the activity test).

A major pillar
of this approach has been the Work for the Dole (WFTD) program, which
was piloted in November 1997, then steadily increased from 25 000
places in 1998–99 to 50 000 places a year by July 2000. The WFTD
program requires income support recipients to ‘actively seek
work, constantly strive to improve their competitiveness in the labour
market, and give something back to the community that supports them’.[6]

It encourages
greater self-reliance and specifies three broad classes of activities
- employment and community participation, training and intensive assistance
- for fulfilment of mutual obligation requirements. From 1 July 2000
all income support recipients were required to sign a ‘Preparing
for Work Agreement’ that stipulates commitments to undertake
activities to seek work.

In September
1999 the Minister for Family and Community Services announced the
government’s intention to conduct a wide-ranging review to examine
such issues such as inefficiencies of the welfare system, welfare
dependency (especially intergenerational), and ways of countering
the problems that result from a reliance on income support.[7]
On 17 August 2000 the Reference Group on Welfare Reform delivered
its final report, Participation Support for a More Equitable Society
(the ‘McClure Report’).

The report found
that the existing social support system was no longer appropriate
to the current social and economic environment, and that it was failing
those it was intended to support. It argued that the system needed
to be transformed to increase people’s opportunities for social
and economical participation to avoid the creation of long-term disadvantage
and intergenerational cycles of joblessness. Principal failings of
the current social system identified were: fragmented service delivery
arrangements with inadequate participation goals; overly complex and
rigid categories of pensions and allowances; inadequate incentives
for participation and inadequate rewards for work; and insufficient
recognition of participation. The report put forward five inter-related
features for effective reform and development of a participation support

  • Individualised
    service delivery
    – income support is to promote social
    and economic participation consistent with individual capacities
    and circumstances, and service delivery will assist individuals
    in identifying and achieving participation goals;
  • A simpler
    income support structure
    – development of a ‘dynamic
    and holistic system that will recognise and respond to people’s
    changing circumstances over their life cycle and within their own
    family and community context’;[8]
  • Incentives
    and financial assistance
    – to encourage and enable participation
    in line with people’s differing circumstances and the cost
    of participation;
  • Mutual obligations
    – ‘underpinned by the concept of social obligations. Governments,
    businesses, communities and individuals all have roles. Governments
    will have a responsibility to continue to invest significant resources
    to support participation. Employers and communities will have a
    responsibility to provide opportunities and support. Income support
    recipients will have a responsibility to take-up the opportunities
    provided by government, business and community, consistent with
    community values and their own capacity’;[9]
  • Social
    – a key strategy for building community capacity
    to increase social and economic participation in which business
    and the community are to play a major role through four processes:
    community economic development, fostering micro-businesses, community
    business partnerships and social entrepreneurship. This strategy
    seeks to go beyond a traditional philanthropic or fundraising approach
    to invest genuine social capital (stronger networks, trust and shared
    values) in communities.

The government
responded in part in December 2000 by committing to build a new welfare
system that retains the social safety net for the disadvantaged but
provides incentives for increased economic and social participation.
The government endorsed the broad direction of the McClure Report
and its five principles, including development of ‘a simplified
welfare system that encourages people to participate in mutual obligation
activities according to their ability’.[10]
It also committed to making welfare reform one of the highest funding
priorities of the 2001-02 Budget and to developing a consultative
forum, with representatives from the welfare, business and community
sectors, to gain views on the design and implementation of future
measures before the Budget. They did not, however, give specific details
of a budgetary investment to support the report.

While some aspects
of the Government’s response received cautious support from the
Australian Council of Social Services (ACOSS), President Michael Raper
criticised it on the grounds that:

People had
a right to expect a guaranteed funding package (not just a promise
to give it ‘high priority’ in the coming Budget); a commitment
to increase inadequate payment rates; a guarantee of effective employment
for all long-term jobless people; and a reduction in the harsh penalties.[11]

To date the welfare
reform package (‘Australians Working Together’) that formed
the centrepiece of Budget 2001 represents the government’s most
substantial response to the McClure Report. ‘Australians Working
Together’ included modifications of existing government employment
assistance and mutual obligation policies to improve personalised
assessment and service, and to increase training and work experience
opportunities as well as earnings and incentives to work. It introduced
initiatives in the following areas: a Working Credit to support part-time
and temporary casual work; a Personal Support Programme to assist
those whose personal problems deterred them from finding work; and
a Transition to Work Programme to help parents, carers and mature
job seekers returning to the workforce. There were also enhancements
to the Intensive Assistance scheme, extra WFTD places and opportunities
for community work, and new Training Credits for jobseekers to gain
work-related skills.

The ‘Australians
Working Together’ package committed $1.7 billion over a four-year
period to welfare reform, with much of the expenditure to begin in
July 2002. The budget also estimated a ‘claw back’ of $800
million from this figure, with the implication that this money would
come from people moving off welfare payments. However, in light of
projected increases in unemployment figures, the money is more likely
to come from penalties. As it stands, the package falls short of the
$1 billion recommended by McClure to address welfare reform over the
next four years. ACOSS estimates indicate that a budget commitment
of $4 billion over the next 2 years is necessary to achieve the structural
change for genuine welfare reform.[12] There are
as yet no indications as to whether the government intends to implement
the McClure Report’s recommendations in their entirety.

obligation – some general concerns

There are a range
of concerns about the current approach to mutual obligation and welfare
reform. This section will consider those for which the impact is often
exacerbated in the case of Indigenous people. The following will consider
mutual obligation within the framework of practical reconciliation,
the broader context of addressing Indigenous disadvantage and Indigenous
specific welfare and employment programs.

and conditionality

Article 6 of
the International Covenant on Economic, Social and Cultural Rights
emphasises the obligation of the State to support the individual’s
right to work in equitable, non-coercive terms, by requiring the State
to ‘recognize the right to work, which includes the right of
everyone to the opportunity to gain his living by work which he freely
chooses or accepts’ and to take appropriate steps to safeguard
this right. Article 6(2) also provides that the State must take steps
‘to achieve the full realization of this right [including] technical
and vocational guidance and training programmes, policies and techniques
to achieve steady economic, social and cultural development and full
and productive employment’ while doing so ‘under conditions
safeguarding fundamental political and economic freedoms to the individual’.

The mutual obligation
approach has been criticised for the conditionality and coerciveness
of the contract that it creates between the State and citizen, which
results in an unbalanced and inequitable focus on the obligations
of the unemployed.[13] To ensure equity, the justness
of the mutual obligation contract needs to be established. This means
that the terms on which the State institution places obligations on
the income support recipients in exchange for rights to welfare entitlements
must be fair. The equitable treatment of income support recipients
should also be ensured through enabling them to exercise a reasonable
level of consent in accepting the conditions for receipt of entitlements.
That is, the relationship should not be a coercive one: the income
support recipient should be in a position to have ‘voluntarily
accepted the benefits of the arrangement or taken advantage of the
opportunities it offers to further one’s interests’.[14]
However, rather than providing the unemployed with a greater level
of choice and opportunity to realise what should be a right to work,
the aim of the current mutual obligation policy is to:

increase the
attractiveness of work compared to welfare through a combination
of welfare conditionality and in-work benefits. The former is designed
to modify the behaviour of social security recipients (possibly
through coercive measures) in order to make them more prepared to
seek (paid) work, while the latter is intended to make the transition
to work more financially attractive to them. The differences arise
in the scope and severity of conditionality and in the nature of
the tax, benefit and labour market changes designed to increase
the attractiveness of work.[15]

Anna Yeatman
has described the mutual obligation contract between unemployed citizen
and the State as ‘a contract between unequals where the function
of this inequality is to provide a paternalistic direction to the
individual who is thus positioned as the client of the more powerful
party to the contract.’[16] The harsh penalties
incurred through the breaching of current income support requirements
provides an example of how increased levels of coerciveness have resulted
in the inequitable treatment of unemployed citizens by the State.

for breaching

Breaching refers
to the penalties imposed on income support recipients (Newstart and
Youth Allowance) who fail to meet the Activity Test and other administrative
requirements. Ongoing payment of benefits is dependent on meeting
the Activity Test, a threshold set to indicate that the unemployed
person has made reasonable efforts to find work or to improve their
employment opportunities. The Activity Test includes requirements
that unemployed people apply for up to 10 jobs per fortnight (subject
to some discretion on behalf of Centrelink officers), and participate
in mutual obligation activities such as WFTD, Green Corps or the Job
Placement, Employment and Training Programme.

Penalties may
be imposed for not meeting requirements such as attending an interview,
contacting a Job Network member within 7-14 days, declaring earnings
correctly from employment and voluntary unemployment.[17]
Failure to meet administrative requirements such as return of a review
form also constitutes breaching. Penalties for breaching the Activity
Test mean a reduction or cancellation of payment – the rate of
reduction relates to whether a breach has occurred in the last two
years. At present, the rate of payment reduction is 18% for 26 weeks
for a first breach; 24% reduction for 26 weeks for a second; and 8
weeks with no payment for a third breach. All administrative breaches
incur a 16% reduction for 13 weeks.[18] On this
basis, unemployed people can face penalties of between $837 and $1,431
for breaches such as the failure to attend an appointment.

ACOSS points
out that these penalties are ‘disproportionate and unjustifiably
harsh compared to those applied by Magistrate Courts for criminal
convictions’.[19] Their research also found
that breaches were sometimes applied without seeking a ‘reasonable
excuse’ from income support recipients. Breaches can be overturned
through appeal, which often means greater financial hardship while
the person seeks to justify his or her situation.

Research conducted
by ACOSS has shown an ‘explosion’ of Activity Test breaches
over the past three years, with a 310% increase since June 1998 (and
a particularly high rate of increase during the eight months from
July 2000). Overall, they estimated ‘approximately 349,100 breaches
applied for the 2000-01 year represent[ing] a 189% increase in the
number of penalties applied in the three years from June 1998’.[20]
During 2000-1, an estimated total of $258.8 million in penalties was
imposed on unemployed people:

This amount
represents a cost to the individuals penalised, their families and
also the broader community that is called on to provide additional
support during periods of reduced or no payment. While this amount
is also a ‘saving’ to the Government, it comes at the
cost of tremendous hardship and increased poverty among unemployed
people, as well as the extra cost that is passed on to charities
and community welfare agencies.[21]

In addition,
ACOSS and others have drawn attention to the burden that these harsh
and inequitable penalties place on already disadvantaged jobseekers,
including ‘homeless people; people with mental illness; jobseekers
with drug and alcohol related problems; people with literacy and numeracy
problems; people who have acquired brain injuries; young people; and
Indigenous Australians’.[22]

Research conducted
by the Centre for Aboriginal Economic Policy Research (CAEPR) and
commissioned by the Department of Family and Community Services (DFACS)
indicated that during the period June 1997 to March 1998 national
breach rates were ‘consistently higher among indigenous identifiers
by a factor of about one-and-a-half in relation to activity test breaching
and a factor of two in relation to administrative breaching’.[23]
Factors identified for the higher rates of Indigenous breaching included
lower levels of literacy and higher rates of mobility amongst the
Indigenous population; lack of confidence dealing with bureaucracies;
a lower propensity to seek appeal or review of breaching; inadequate
postal services to some remote and rural areas; lack of appreciation
of difficulties for Indigenous people seeking employment; unfamiliarity
with Centrelink teleservices; and CDEP and Abstudy administrative

The study further
identified features of income support and employment assistance administration
such as ‘general tensions and ambiguities in income support administration,
different office cultures and roles, the cultural and social content
of rules and procedures and the diversity of the unemployed’
[24] as having significant impacts on Indigenous
benefit recipients. A recent DFACS paper stated that in 1999 to 2000,
‘almost 1 in 2 Indigenous people in some centres – notably
in some of Sydney’s western and inner suburbs have incurred breaches’,
[25] which demonstrates the continuing vulnerability
of the Indigenous unemployed to the current penalty system.

The penalty system
for breaching demonstrates one of the more damaging implications of
mutual obligation policy. It holds unemployed citizens chiefly responsible
for their employment status while downplaying the accountability of
the State to generate the circumstances for increased employment opportunities
for its citizens.[26]

This level of
coercion at the individual level also stands in marked contrast to
the ambiguity and lack of enforcement of the obligations of business
and other sectors of the community.

The McClure Report’s
commitments to mutual obligations underpinned by social obligations
and social partnerships entail recognition of the importance of obligations
and responsibilities ‘across the whole community, not just between
the government (on behalf of the community) and the individual in
receipt of income support’, [27] including
corporate entities such as business enterprises and trade unions.
[28] At the same time a strong emphasis remains
on ensuring the contribution of (unemployed) individuals to the ‘community’:
‘Income support recipients will have a responsibility to take-up
the opportunities provided by government, business and community consistent
with community values and their own capacity.’ [29]

However, given
that individuals at the bottom of the labour market face harsh penalties
for ‘breaching’, it is reasonable to request that forms
of compliance and regulation be applied to ensure that business meets
its social obligations. Some strategies suggested to increase corporate
mutual responsibility include: tax breaks, preferred tendering to
businesses that, for example, recruit or train Indigenous people,
and bonus payments from government to businesses that contribute to
the community. [30] The McClure Report recommends:

… establish[ing]
a national framework of triple bottom line (social, environmental
and economic) auditing for the corporate sector sponsored by the
Prime Minister’s Community Business Partnership with business
organizations and professional associations.[31]

In considering
options for extending obligations and responsibilities across the
community, the viability of developing community capacity and enhancing
social capital through social partnerships involving business stakeholders
also needs to be assessed. [32] Notions of forming
partnerships are often largely based on assumptions of good will,
and the inequalities between business and other players, including
issues such as the precarious position of some disadvantaged communities
and whether they can offer business adequate incentives to work with
them, need careful consideration.

obligation and equality

A formal equality
approach is evident in aspects of mutual obligation policies for the
Indigenous and mainstream communities. Much mutual obligation discourse
operates on the assumption that all citizens are on a more or less
equal footing, that there is little difference between their circumstances,
and that most people exercise a degree of choice in regard to their
current situation, whether employed or in receipt of income support.
This outlook is implicit, for example, in the Prime Minister’s
delineation of self reliance as one of the chief values of the Australian

The first of
these principles goes to the heart of the Australian ethos, to the
heart of our national self-image and to the hopes we hold for ourselves
and for our children – Self Reliance. We believe, as we always
have, that ‘the only real freedom is a brave acceptance of
unclouded individual responsibility’. And in making policy
since we took office, that encouragement of self reliance, of giving
people choice, of rewarding those who can and do take responsibility
for themselves and their families has been at the forefront of our

As Yeatman comments:
‘the new discourse of self-reliance is non-discriminatory and
egalitarian in its assumption that each individual would prefer to
be self-reliant if they could be.’ [34] This

assumes that social and economic change should be driven through
changes in the circumstances, skills and opportunities of individuals.
Equally, it assumes that the wider social problems which are associated
with welfare dependency can be addressed through changing the circumstances
of individual lives. [35]

To this end,
the McClure Report, for example, proposed ‘a model of individualised
service delivery’ that ‘offers targeted assistance based
on an individual’s needs, capacities and circumstances’
to ‘enable individuals with very different levels of need for
assistance to be streamed into levels of service intervention based
on their capacity for economic and social participation.’ [36]

To date there
has been a lack of sensitivity to the specific circumstances of individuals
in the application of measures that support the notion that unemployed
citizens would prefer to be self-reliant, but lack the effective capacity
in terms of training, education, and expertise. [37]
The educative aspect of programs such as Work for the Dole, for example,
has been found to possess limited relevance to furthering the employability
of income support recipients, which makes the purpose and value of
increasing obligations for individuals in addition to existing obligations
to seek employment questionable. [38] The scheme
lacks ‘substantial employment experience in mainstream jobs (which
was offered by Jobstart), relevant vocational training (which was
offered by Jobskills), and ongoing personal support (which is offered
by Intensive Assistance providers)’. [39]

Feedback from
participants in an independent study of WFTD revealed that: ‘The
large majority of participants had not only experienced paid employment,
but many had kept a job for twelve months or more in the past. This
calls into question the program’s objective of creating a work
culture and teaching basic work habits’.[40]
After completion of the program, 80% of participants were still unemployed
five months later.

Other data recently
released on WFTD’s employment outcomes indicated that:

… only
27% of former participants were in employment 3 months later. This
rises to 33% if those who moved on to other employment schemes (such
as Job network services) are excluded from the figures. However,
this is still a poor outcome, compared with former ‘Working
Nation’ labour market programs that also provided paid employment
experience: Jobstart (59%) and Jobskills (41%), and Intensive Assistance
provided through the Job Network (36% in 1999-2000). [41]

An ACOSS analysis
of the WFTD scheme has suggested that the ‘main reason its poor
outcomes is that … [it] was not designed in the first place to
help people into employment’. [42] It suggests
that rather than continuing to fund WTFD the government deploy more
funds to Intensive Assistance through the Job Network to ‘organise
more substantial paid employment experience in mainstream jobs (both
with and without formal training) for those who need it. After all,
the ultimate goal is to get people working for wages, not working
for the dole’.[43]

The compulsion
for the unemployed to work or fulfil some equivalent activity on the
grounds of their obligations to the taxpayers is also questionable
given that most income support recipients have been regular income
taxpayers at some stage or may be in the future and already pay a
range of other taxes such as the goods and services tax. The notion
of the ability to pay tax as the defining aspect of community membership
is highly reductive in any case, as it suggests a certain priority
or status for economic participation over other forms of contribution
to the community.

The application
of this ‘non-discriminatory and egalitarian’ concept of
the citizen to extend self-reliance and active citizenship to all
social groups – that is, the expectation of active participation
in mutual obligation of all adult individuals, including women, Indigenous
and disabled peoples – has the potential to increase the injustices
and inequities experienced by the disadvantaged, as illustrated by
the impact of breaching.[44] Kinnear notes that:

As a general
principle, the idea that members of society should cooperate to
secure the mutual advantage of all is reasonable, compelling and
vital to social justice. But to single out certain groups, especially
disadvantaged groups, for special and mandatory obligations is a
distortion of this principle, especially in circumstances where
the disadvantaged groups have limited or no choice.[45]

The lack of employment
opportunities available for certain groups means that these policies
are likely to be harsher in their impact on them than on other sections
of society.[46] Fincher and Saunders highlight the
impact of locational disadvantage:

The types of
citizen our governments, media, even educational institutions celebrate
as successes are: hard-working, in paid employment, entrepreneurial,
efficient, so that they are self-funding and self-helping and not
drawing from the public payroll for pensions or allowances. The
types of locations that benefit (though only implicitly as Australian
governments exhibit limited regional or spatial thinking and planning)
are those that are the places of work and residence of those citizens.
These locations are primarily metropolitan… Paid employment
is apparently to be ever more synonymous with citizenship in Australia.[47]

Other significant
factors contributing to increasing poverty and inequality – and
this is highly significant for Indigenous Australians – include
lack of education and employment skills, and family history of unemployment
or precarious employment. Peter Travis argues that lack of employability
is a more significant indicator of poverty than low income:

In principle,
low income can be easily remedied. The combination of low skills
and low participation in either education or the labour market is
far more difficult to alter. This is the basis for the concern that
leads commentators to use terms like “marginalisation”
or “social exclusion”.[48]

The focus of
government employment policy at the level of the individual ignores
the need for, or possibility of, systemic change including attention
to structural inequalities that might generate more employment opportunities.
The emphasis on tackling welfare dependency can also serve to obscure
the impact of these issues:

If Australia
faces a “crisis” of increasing numbers of individuals
who are trapped in cycles of demoralised welfare dependency, this
may justify a hard-line response of conditional benefits and mandatory
individual mobilisation. If, on the other hand, the problem is one
of increasing inequality, structural poverty and entrenched disadvantage
then the solutions should focus on the reduction of inequality and
the redistribution of wealth.[49]

As UnitingCare’s
report on poverty observes, ‘not only does work not necessarily
lift people out of poverty but there are also not enough jobs for
all those who are looking for work’.[50] A
comparison of the number of unemployed persons and duration of unemployment
against job vacancies Australia-wide indicated that ‘even in
a perfect labour market where skills exactly matched job vacancies,
there would still be more than 6 unemployed people for every job available’.[51]

obligation, practical reconciliation and Indigenous welfare reform

Since 1996 the
introduction of a mutual obligation approach to welfare reform has
been accompanied by a shift in the basis of Indigenous policy making
in general to what has subsequently been termed ‘practical reconciliation’.
The introductory chapter gave some discussion of the practical reconciliation
approach and a more detailed examination is provided in Chapter 6
of this report. [52] Practical reconciliation focuses
on countering issues relating to Indigenous disadvantage in the areas
of education, health, housing, and employment as opposed to other
issues which are said not to not lead to concrete change and therefore
to be ‘symbolic’.

Practical reconciliation
and mutual obligation fit hand in glove. In the most recent budget
statement, Our path together, the Minister for Reconciliation
and Aboriginal and Torres Strait Islander Affairs describes the Government’s
approach as focused on ‘practical measures aimed at increasing
self reliance, breaking the cycle of welfare dependency and improving
the health of Aboriginal and Torres Strait Islander people’.
[53] Previous budget statements have similarly noted,
for example, the commitment of the Government to assisting ‘more
indigenous people to break away from welfare dependency and in return
[improve] their social circumstances in areas like employment, housing,
health and the criminal justice system’.[54]

But while mutual
obligation can be seen as integral to the process of practical reconciliation,
to date there has been very little focus on the Indigenous-specific
dimensions of welfare dependency in debates about general welfare
reform and mutual obligation.

This has been
one of the main criticisms directed towards the McClure Report and
the government’s response to it, by a range of Indigenous and
non-Indigenous commentators. Both the McClure Report and the government
response have been seen as providing a limited, tokenistic consideration
of the specific issues facing Indigenous people caught in the welfare
system. [55] This is despite the extent of Indigenous
contact with the income support system, and with Indigenous people
being unemployed at over two and a half times the rate of the general
population. [56] This figure is significantly higher
if Indigenous participants in CDEP schemes are counted as unemployed.

The McClure Report
emphasised that given the level of Indigenous disadvantage, systemic
discrimination by business towards Indigenous people needs to be addressed
and further strategies for private sector employment developed. In
addition to targeting assistance to individuals, it suggested the
establishment of local job creation schemes, local and regional development
initiatives, small business development assistance and group enterprise
development assistance. [57] The McClure Report
cited the Gwydir Valley Indigenous Employment Strategy as an example
of a ‘successful collaboration of Commonwealth and local governments,
industry associations and local businesses’. [58]

The McClure Report
has been criticised for its lack of consideration of some of the contextual
factors affecting Indigenous employment status, such as the limited
employment and regional development prospects in certain rural and
remote areas. [59] It does not give any detailed
discussion of issues concerning the cultural appropriateness for Indigenous
people of the emphasis on individualised service delivery central
to the report’s proposed participation support system.

The key emphasis
of the government’s policy approach to Indigenous employment
and welfare issues is on increasing Indigenous participation in the
formal economy, especially within the private sector. Government policy
seeks to achieve this largely through the Indigenous Employment Policy
(IEP) and the Community Development Employment Projects (CDEP) Scheme.

The Indigenous
Employment Policy is the centre-piece of this approach. It commenced
on 1 July 1999 and consists of three elements, namely the Indigenous
Employment Programme, Indigenous Small Business Fund and a package
of measures to improve outcomes from mainstream programs (such as
Job Network and Work for the Dole).
The Indigenous Employment Programme includes: Wage Assistance, an
incentive to help Indigenous job seekers find long-term employment
by giving credit breaks to employers; bonuses for CDEP participants
placed in outside employment for at least 20 hours a week; a project
to place more Indigenous Australians in the private sector; structured
training and employment projects; a foundation to utilise voluntary
service to Indigenous communities; and a national Indigenous cadetship

The Indigenous
Small Business Fund was established to support the development of
Indigenous businesses and enterprises. It seeks to improve Indigenous
access to business preparation and support through providing business
management programs, and through skills development programs such
as mentoring, networking, advisory services and market development.
Individuals can also apply for assistance to develop a business plan.
It is jointly funded through contributions over a three-year period
of $6 million from the Office of Small Business of the Department
of Employment, Workplace Relations and Small Business and $5 million
from ATSIC.

The third aspect
of the Indigenous Employment Policy instigates measures to improve
the accessibility of mainstream programs, particularly Job Network.
Areas targeted for improvement included coverage by Job Network catchment
areas; the establishment of Indigenous employment specialists; and
requirements for job providers to include Indigenous service strategies.

The Commonwealth
Grants Commission’s Report on Indigenous Funding 2001
commented positively on the employment outcomes achieved under the
Indigenous Employment Program – a ‘significant proportion
of IEP assistance is being delivered to remote regions, and the employment
outcomes being achieved under IEP seem to be good relative to outcomes
for Indigenous people from mainstream assistance programs’.[60]
However, it found that Job Network was not widely accepted in the
Indigenous community, that it had varying levels of accessibility,
especially in remote regions, and that poor employment outcomes continued
despite a more equitable rate of commencements in Intensive Assistance
(one of its employment services). Evaluation of Job Network Stage
One indicated that Indigenous job seekers ‘were concerned about
the quality and type of assistance being delivered’. [61]

Indigenous Business
Australia (IBA) was recently established through the Aboriginal
and Torres Strait Islander Commission Amendment Bill 2000
to expand
the functions of the Aboriginal and Torres Strait Islander Commercial
Development Corporation (CDC). It seeks to: refocus business client
expectations on commercial objectives; enable ATSIC to outsource its
commercial services; encourage a shift in the culture surrounding
Indigenous business support; and appoint a full-time chairperson to
enable IBA to expand, particularly in its pursuit of joint venture

The Community
Development Employment Projects (CDEP) Scheme is also central to the
government’s approach. The CDEP Scheme has been in operation
since 1977. It enables local Aboriginal organizations to provide employment
and training as an alternative to unemployment benefits. CDEP participants
forgo their rights to social security entitlements and receive wages
from CDEP organisations at a similar level to benefits in return for
part-time work. A CDEP grant to an organisation also provides on costs
funds for the administration of projects and the purchase of materials,
equipment and services. The CDEP Scheme operates in a diversity of
contexts across Indigenous Australia, and provides a base for training,
skills and enterprise development, as well as contributing to other
economic, social and cultural outcomes in communities. The Scheme
is led by the communities and participants involved, and any activity
that benefits the community can be a CDEP activity. There are currently
over 300 Indigenous community-based organisations and over 30,000
Indigenous people, about one-third of all Indigenous people in employment,
participating in the CDEP Scheme.[62]

One of the advantages
of the CDEP program is that it has evolved and adapted in response
to the uniqueness of Indigenous labour force circumstances, and has
significant social, economic and cultural benefits such as supporting
traditional aspects of community life, and contributing to social
cohesion and the viability of communities in remote areas.

The CDEP Scheme
has a significant place in the history of struggle for Indigenous
rights. The Scheme was initiated at Bamyili in the mid-70s as a negotiated
alternative to ‘sit-down’ money in response to problems
experienced by communities as a result of introducing cash incomes
through the social security system. Although discriminatory references
to Aboriginal people were removed from social security legislation
in 1966, full access to social security benefits did not occur for
Indigenous people until the late 1970s and in some remote communities,
not until the early 1980s. The CDEP Scheme was thus a very progressive
development in so far as it enabled Indigenous access to the social
security system but sought to give some protection to economic, social
and cultural rights by making adaptations to that system.

The CDEP Scheme
has inevitably been compared with the Work for the Dole program. It
has received renewed attention in light of current debates about Indigenous
people and welfare passivity. Noel Pearson, for example, has commented
on the CDEP Scheme as a moderately successful example of the application
of the ‘reciprocity’ principle.[63]

The Scheme’s
evolution as an adaptation to the employment circumstances and labour
market realities of Indigenous Australians in the post-1967 ‘rights’
era has made it difficult to define. It has been variously described
as an employment program, a form of income and a form of welfare benefits,
a source of training or skilling, community development, a transition
to employment in the mainstream labour market, a substitute provider
of essential services, a source of community cohesion and cultural
maintenance, an Indigenous initiative and even a form of self-determination.

While the CDEP
Scheme has experienced continued popularity – there have always
been more wanting to join the Scheme than can be accommodated –
it has had its share of detractors as well as supporters. Issues of
equity with the non-Indigenous workforce and possible discrimination
on the basis of race have been major sources of contention.

In 1997, the
federal Race Discrimination Commissioner released a report examining
the Scheme, The CDEP and Racial Discrimination. The report
found that while the CDEP Scheme is race-based in that it applies
only to Aboriginal and Torres Strait Islander peoples, it is designed
to deal with the disadvantage experienced by Indigenous communities
in their access to social security and mainstream labour market programs
and opportunities. Moreover, it seeks to do so in ways that enhance
the economic, social and cultural rights of Indigenous peoples. As
such it was seen as being adapted to the concrete circumstances of
Indigenous communities, for example, in overcoming difficulties faced
by those in remote locations, and therefore not discriminatory. The
CDEP Scheme was also found not to be racially discriminatory in so
far as it does not disadvantage non-Indigenous people.

The Report had
some specific concerns, however, about the administration of the Scheme.
Much of these related to the lack of consistency by Commonwealth agencies
in the treatment of income derived from the CDEP Scheme. Serious inequities
were caused by the definition of CDEP as a Commonwealth-funded program
under the Social Security Act, which barred CDEP participants from
becoming DSS customers and receiving the same services and allowances.
The Scheme was also inconsistent in its treatment of pensioners. Following
the findings of this Report and also those of ATSIC’s independent
review of the CDEP Scheme, changes were introduced to address these
inequities in the Further 1998 Budget Legislation Amendment (Social
Security) Bill 1999
that came into effect in March 2000.

Further changes
were announced in the 2001-02 Budget to align the CDEP scheme more
closely with the Indigenous Employment Policy. $48 million, including
new funding of $31 million, was allocated to CDEP organisations to
take on the role of Indigenous Employment Centres and assist ‘up
to 10,000 participants make the transition from CDEP work experience
into paid employment’. This is to be achieved through the coordination
of work experience, job search support and access to training to CDEP
participants, and through support and mentoring assistance to Indigenous
job seekers outside CDEP. [64] This funding is to
commence in February 2002 and it is envisaged that it will apply in
cities and regional centres where there are greater employment opportunities.

This new funding
partly responds to concerns expressed by ATSIC that the expectations
over recent years that CDEP schemes will give priority to the development
of business enterprises and related employment, and also to expanding
the number of participants who move into employment outside the Scheme,
has placed greater pressure on CDEP without providing appropriate
support. This is because these expectations require:

… greater
liaison with the State, Territory and Commonwealth government Departments
and agencies with employment, training and business support responsibilities.
Some agencies, especially Centrelink, have contracted their service
delivery to private contractors, with a reduction along the way
of the previous capacity to deliver services in remote areas. Changes
in status of CDEP participants between unemployment, CDEP employment,
participation in training, and employment outside CDEP also have
involved an enormous expansion of form-filling, liaison and detailed
record keeping by CDEP administrators, on behalf of participants
and the government agencies.

In summary,
the demands on the CDEP administration staff in community organisations
have become overwhelming, and nearly all of the projects have suffered
at some time, particularly in the planning of work programs around
community development objectives determined by participants, and
in prompting staff turnover. [65]

ATSIC contrasts
this pressure with the development over the past two years of the
WFTD Scheme for unemployed people in the general community:

Although it
draws on unemployed people in established urban areas where costs
are much lower, the allowance for operating costs (“on costs”)
of projects is, on average, 25% greater than is provided under the
CDEP Scheme funding. This comparison confirms that the pressures
on CDEP staff are the result of serious under-resourcing, particularly
when the difficulties of operating in the remote and rural locations
of most CDEPs are taken into account. It is the situation which
Indigenous critics of government funding describe as “setting
it up to fail”. [66]

Inequities still
remain between the level of operational funding support provided for
CDEP and that provided for the Work for the Dole program, despite
a review by the Department of Finance and Administration and support
from ATSIC and a Department of Prime Minister and Cabinet recommendation
of a $300 per participant increase for training and work initiatives
within CDEP. Such an increase in operational funding would ‘ensure
appropriate supervision and the achievement of even greater training,
employment and community development outcomes’ and without it,
‘CDEP organizations will continue to struggle to provide adequate
supervision to CDEP workers and to ensure adherence to occupational
health and safety standards’. [67]

The failure to
provide additional operational funding to CDEPs means that, in the
words of the ATSIC Chair, the Scheme ‘remains the poor cousin
of the mainstream work for the dole program despite being the voluntary
forerunner and setting the scene for the principles of mutual obligation
and community participation’. [68]

For remote communities
with fewer job opportunities, the 2001-02 Budget allocated $32 million
from July 2001 for Community Participation Agreements. These are to
be trialled in approximately 100 communities with arrangements whereby
they design and negotiate their obligations and activities in return
for income support, and plan for better delivery of services at the
local level. The Agreements are to increase social capital by providing:

… a way
[for income support recipients] to make a practical, positive contribution
to their families and communities…. [to] give communities a
way to involve everyone in community life, help them identify the
services they need most and give them the support to access them….
[to] support activities such as leadership, strengthening culture
and community governance. [69]

The initiative
was developed in response to the McClure Report’s lack of extensive
treatment of Indigenous welfare reform issues. Despite its exclusion
from the interdepartmental process on welfare reform, ATSIC approached
the government with a proposal for Community Participation Agreements
in remote communities which formed the basis for this initiative.
The modelling currently taking place with the Mutitjulu Community
as a prototype for the implementation of the CPA initiative in remote
communities will be discussed further in Chapter 3.

obligation, welfare reform and practical reconciliation – Indigenous-specific

In addition to
the general concerns raised above about the mutual obligation approach,
there are a range of other concerns that relate to the specific circumstances
of Indigenous people and to which attention must be devoted in any
attempt to reform welfare or increase the economic participation of
Indigenous people.

These concerns
do not relate to the applicability of the mutual obligation approach
per se to Indigenous people. As Social Justice Report 1999

The concept of
mutual obligation is, of course, not alien to Indigenous peoples.
Many Indigenous people argue that it is a concept that is fundamental
to Indigenous social and cultural values. Indigenous people do not,
for example, see themselves as “users” of land. They are
related to and part of the land, with custodial obligations to nurture
and protect it. [70]

Instead, the
concerns relate to the extent to which the mutual obligation approach
underpins current government policy approaches to Indigenous welfare
reform and economic independence to the exclusion of initiatives to
address the broader context of Indigenous marginalisation.

The combination
of the rhetoric of mutual obligation, focused on self-reliance and
responsibility, and practical reconciliation, emphasising practical
and real outcomes in priority areas, is a powerful one. Both approaches
share a number of common features.

Both mutual obligation
and practical reconciliation see the main interaction in society as
an individualised one, which is State-centred and focuses on the obligations
of the individual to the State and vice versa. The coerciveness with
which these obligations are imposed can act as a replacement bureaucratic
and punitive form of control of Indigenous people and their engagement
in the mainstream society.

Mutual obligation
and practical reconciliation are also emotive at a very simplistic
level, particularly in the language that is used to explain them.
Mutual obligation, for example, uses populist rhetoric such as ‘pulling
together’, ‘having a go’, and ‘a hand up not a
handout’ [71] to focus attention on the perceived
deficiencies of the individual. As UnitingCare explain:

For all the
use of warm and fuzzy words like ‘participation’ and ‘inclusion’,
a clear division is being drawn in society which depicts the ‘poor’
as less than fully human. Such a division is exacerbated by a redefinition
of citizenship – which rests not on a series of rights and
entitlements in an egalitarian state but, rather, upon the individual’s
responsibility to make good her or his incapacities or failures.

Mutual obligation
encourages a picture of ‘irresponsible’ people failing to
meet their duties to society despite the support and commitment shown
to them. Practical reconciliation similarly creates a picture of the
Government as concerned about achieving concrete outcomes in areas
such as health and education, as opposed to addressing symbolic measures
with the implication that the latter are irrelevant to improving the
day to day livelihoods of Indigenous people. It seeks to discredit
and close down debate about issues that do not fit within this framework,
such as a formal apology or a treaty, even where they are perceived
by Indigenous people to be of central importance to their advancement.

The language
of mutual obligation and practical reconciliation is a significant
concern when considered in the context of the adequacy of the overall
commitment of government to addressing the socio-economic marginalisation
of Indigenous people, which shall be discussed later in this section.

Both mutual obligation
and practical reconciliation are also ahistorical. They are firmly
grounded in the present circumstances of the individual and give little
attention to the causal factors, or underlying issues as the Royal
Commission into Aboriginal Deaths in Custody described them, of Indigenous
disadvantage. As stated in the introduction, they strip Indigenous
disadvantage of its historical context and admit no contemporary,
ongoing consequences. Consequently, nothing is seen to be particularly
distinctive about Indigenous disadvantage or the necessary response
to it.

context of Indigenous marginalisation

Current Indigenous
employment and welfare policy responds to the situation of Indigenous
people by striving for equality of participation in the formal economy
and through increasing ‘self-reliance’ through greater economic
participation. Promoting such participation is quite obviously necessary
and measures to facilitate this in a culturally appropriate manner
(be it through the specific focus of mainstream programs and agencies
on greater accessibility or through specifically targeted measures)
are to be welcomed.

But such an approach
is limited. It does not acknowledge the broader fabric of social and
economic factors that contribute to the level of Indigenous disadvantage
and economic marginalisation such as dispossession, systemic racism,
[73] structural inequality and social marginalisation.

Colonising processes
have left a range of effects on Indigenous populations that are inter-related
and continue to contribute to the current context of Indigenous disadvantage.[74]
These include intergenerational poverty, welfare dependency, over-representation
in the justice system, substance abuse, family and societal disintegration,
spiritual and cultural dislocation, and environmental damage. The
level of control exercised by the State over many aspects of the lives
of Indigenous people has been central to the creation of this context
of disadvantage.

In addition,
other factors – historical, demographic, geographic and cultural
– make improvements to Indigenous employability and economic
participation difficult to facilitate. These factors include poor
health, low educational levels of Indigenous people (which is of increasing
concern with the rapid technological change in the labour market),
over-crowding of living conditions and low self-esteem.

Urging self-reliance
for many Indigenous people in this context, without acknowledging
or adequately addressing these underlying factors, is fanciful. When
combined with punitive, coercive measures it is potentially vindictive.
It is highly probable that it will also result in the opposite of
the intended effect – rather than inspiring people to raise themselves
out of a position of extreme marginalisation, it can in fact further
demoralise them especially if support is inadequate.

These factors
are compounded in regional and remote areas for reasons often relating
to ‘locational disadvantage’, [75] such
as the lack of business development and employment opportunities,
but also the embeddedness of government service provision and activity
in community organizations; embeddedness of individuals in wider social
networks not contingent on economic participation; and divisions within
communities for historical, cultural or political reasons. [76]
Poor resource endowments and market linkage associated with ‘remoteness’
are also reasons for underdevelopment, with the development opportunities
provided by major mineral deposits and the opportunities for tourist
and cultural industries being exceptions in some remote areas. [77]
The requirement to undertake certain mutual obligation activities
can also be problematic, due to distances to be travelled, and lack
of appropriate work activities.

As a consequence,
the mutual obligation approach over-stretches itself in its application
to Indigenous welfare reform by assuming that ‘the intensity
and scale of ... personal and social problems, wrongly attributed
to welfare dependency, can be addressed through mechanisms which both
enable, and ultimately compel, individuals to engage with the formal

The experience
of the CDEP Scheme to date suggests that this is unlikely, with the
Scheme predominating in areas where economic opportunities are most
limited rather than providing a lever for economic transformation.[79]
Notably, however, the recent report of the House of Representatives
Standing Committee on Aboriginal and Torres Strait Islander Affairs
on the situation of urban-dwelling Aborigines urges greater funding
for CDEP placements in urban areas on the basis that CDEP is able
to provide greater opportunities for advancement, work training and
employment than mainstream programs. [80]

‘welfare reform must be accompanied by labour market reform in
mainstream Australia and [that is] why significant progress for indigenous
Australians will not be achieved without sweeping economic reform’.

A comparison
of the current approach to the findings and recommendations of the
1985 Report of the Committee of Review of Aboriginal Employment
and Training Programs
(the Miller Report) [82]
indicates the extent to which a more holistic approach to Indigenous
employment and welfare reform has been eroded in the past 15 years.

The Miller Report
undertook to assess the effectiveness of the 1977 National Employment
Strategy for Aboriginals (NESA) in addressing employment equity between
Indigenous and non-Indigenous populations. The Report concluded that
‘the Strategy can be said to have had only marginal impact on
the overall Aboriginal employment situation’, with levels of
Indigenous unemployment and economic dependence remaining high, and
that the causes for this lay in ‘the social and structural problems
faced by Aboriginal people in providing for their livelihood’.

It also emphasised
that adequate treatment of these issues was beyond the scope of an
Indigenous employment and training strategy, as they concerned ‘access
to and control of land and other resources, local government arrangements
for Aboriginal towns, relationships with other forms of local government,
access to development capital and involvement in particular industries’.
[84] The Report urges:

… the
government to adopt a policy of support to Aboriginal people which
goes beyond the welfare, housing and municipal services industries
and which should be directed towards Aboriginal people becoming
more independent by enabling them to provide for their own livelihood.
Programs to achieve this will be longer-term, involve real training
and result in Aboriginal control of resources, as well as access
to jobs in the regular labour market. [85]

By contrast,
the current policy approach to welfare reform runs the risk of collapsing
the complex issues surrounding Indigenous disadvantage into the category
of ‘welfare dependency’ and of keeping the focus firmly
on the individual recipient rather than the broader aspirations of
Indigenous peoples. As I noted above, the language of mutual obligation,
and to a lesser extent practical reconciliation, is a blaming language
which sets up assumptions about the individual recipient.

This absolves
the various levels of government from their responsibility to facilitate
the circumstances for greater Indigenous participation, such as genuine
economic reform, and in some instances to provide basic citizenship
entitlements such as functional municipal services and infrastructure
for communities.

The CDEP Scheme,
for example, has a history of supplying essential services to some
communities (such as health services, child-care services, housing
and infrastructure construction, garbage collection, community maintenance),
sometimes becoming the entry point for government, especially in remote
areas. Indeed, ‘in remote communities, CDEP is often the only
institution; it represents governance. As the Spicer review said,
‘Without it, some remote communities would simply not exist’.[86]
The CDEP fills gaps in government service delivery by providing specific
employment, training and community development initiatives for Indigenous

The focus of
mutual obligation on the individual’s responsibilities also shifts
the focus away from the adequacy of the measures adopted by government
to address the broader context of Indigenous marginalisation.

To date each
of the Social Justice Reports have emphasised the importance of ensuring
governmental accountability for the outcomes of service delivery to
Indigenous people. As last year’s report noted, we must ask whether
enough is being done to overcome the level of inequality faced by
Indigenous people (that is, to close the gap) or whether we are merely
doing enough to manage the inequality.

Assessing the
impact of different forms of ‘social cost’ can play a significant
role in developing a human rights approach to disadvantage. If the
costs incurred by government attempts to address social problems (for
example, through remedial programs) do not make significant inroads
into the economic marginalisation of Indigenous people, then a government
can be said to be merely managing the ‘cost of the status quo’
and the costs associated with the latter are likely to escalate. A
long-term commitment to restructuring the relationship between Indigenous
and non-Indigenous people through the provision of adequate resources
would not only have better prospects for changing the circumstances
of Indigenous people but may also ‘lead to the progressive reduction
and eventual elimination of the social costs accrued to Indigenous

CAEPR has made
estimates concerning the social cost of achieving parity between Indigenous
and other Australians in the workforce. These indicate that if Indigenous
unemployment was made commensurate with that of the rest of the population,
there would be major savings to government in payments to the unemployed,
increases to tax revenue and national production, as well as improvements
in areas such as Indigenous health. [88] They warn
that if significant action is not taken soon to address Indigenous
employment status, the current situation is likely to deteriorate
further due to the relatively high Indigenous population growth and
the ‘difficulties of economic catch-up in a rapidly changing
and increasingly skills-based labour market’. [89]

A relevant example
of managing rather than overcoming Indigenous disadvantage is the
continuing over-reliance on the CDEP Scheme. At various times, the
CDEP Scheme has been criticised on the grounds that it runs the risk
of becoming a ‘life-time destination’ for the Indigenous
unemployed rather than a ‘conduit to other employment options’
[90] and that it is ‘a second-rate labour market
created by government that traps people into low-paid and part-time
work and protects them from the rigours of the real labour market’.
[91] These considerations have no doubt motivated
the government into introducing, through the Indigenous Employment
Strategy, bonuses for moving people off CDEP into paid employment.

The CDEP Scheme’s
lack of a prescribed time-frame and long-term employment goals implies
that it exists to support a problem perceived as intractable or maybe
just not worthy of significant commitment to redress. However, recent
estimates indicate that the younger age structure of the Indigenous
population may lead to greater employment need as the Indigenous population
aged 15 years and over is expected to grow at 2 % per annum over the
decade from 1996, compared to 1 % for the rest of the population.
As a consequence it has been estimated that in the first decade of
twenty-first century, the costs to government of low income disparity
are estimated to grow significantly and ‘maintenance of employment
levels at current unacceptably low levels will remain dependent on
continued expansion of the CDEP Scheme’. [92]

These factors
indicate that government expenditure on Indigenous employment is still
relatively low in comparison to need. They also draw attention to
the inadequacy of the CDEP Scheme as a special measure in the face
of levels of Indigenous employment need and inequality that continue
to escalate. Funding shortfalls for health, housing and infrastructure
against estimates of Indigenous need further compounds this situation.
These are areas that impact on the well-being and employability of
Indigenous people, a point emphasised by the recent Health is life
report. [93]

A further concern
is that the language of the mutual obligation approach can potentially
promote intolerance among the wider society. In the case of Indigenous
policy, such intolerance also exists on a broader scale with common
myths about Indigenous people receiving special benefits through the
level of government expenditure on Indigenous disadvantage. The rhetoric
of mutual obligation can effectively operate to transfer community
dissatisfaction at the level of outcomes achieved by government to
the Indigenous population itself. This is a highly undesirable outcome,
which can undermine broader community support for reconciliation,
among other things.

The ‘practical’
focus on addressing welfare dependency through mutual obligation means
that a range of inter-related factors – social, cultural, political
and historical – integral to reversing Indigenous marginalisation
are being consistently obscured from the social policy lens.

obligation and Indigenous cultural values

The mutual obligation
approach is often said to be appropriate for countering Indigenous
welfare dependency on the basis that it is consistent with Indigenous
cultural values such as reciprocity and an emphasis on community.

Noel Pearson
has made the following comments about the effects of ‘welfare
poison’ since 1967:

The irony of
our newly won citizenship in 1967 was that after we became citizens
with equal rights and the theoretical right to equal pay, we lost
the meagre foothold that we had in the real economy and we became
almost comprehensively dependent upon passive welfare for our livelihood…
we find thirty years later that life in the safety net for three
decades and two generations has produced a social disaster. [94]

A consequence
of this dependency on welfare has been that ‘the responsibilities
of individual citizens toward other citizens and their responsibility
to contribute to the common good’ [95] has
been eroded in Aboriginal societies. Pearson advocates mechanisms
for reinstituting traditional values of ‘reciprocity’ in
order to address the social breakdown and community dysfunction on
the Cape York Peninsula on the basis that ‘you need both rights
and responsibilities to develop and participate in a successful society’.
[96] He has also argued for the need for Indigenous
communities to re-discover a sense of obligation or responsibility
to other community members in the wake of a ‘rights-based’
welfare regime that has given way to passivity and a sense of entitlement.

Pearson recently
described the effects of passive welfare on Aboriginal society as
follows in the Perkins Memorial Oration:

Passive welfare
has come to be the dominant influence on relationships, values and
attitudes of our society in Cape York Peninsula. Indeed we are now
at a stage where many of the traditions we purport to follow are
too often merely self-deceptions (that we care for each other, that
we respect our Elders, that we value our culture and traditions)
and the ‘traditions’ which we do follow are in fact distortions
conditioned by the pathological social situation which passive welfare
has reduced us to: we sit around in a drinking circle because we
are Aboriginal. [97]

While Pearson
advocates that Indigenous people need to exercise responsibility for
their own self-determination, he also emphasises the responsibility
of government:

Many people will
take what I’m saying about the poison of passive welfare as a
justification for their argument that the government should not be
providing ear marked resources to Aboriginal people, but I do not
support those ideas. It is the government’s responsibility to
coordinate and facilitate the solution of an urgent social crisis.
It has the responsibility to facilitate our return to the real economy.
However the government can only facilitate a solution, it cannot solve
the problem. It also follows from what I have said that the government’s
responsibility is only transitory, or at least not indefinite. [98]

approach includes support for a substantial investment by government
to the development of a regional interface between Indigenous organisations
and communities on the Cape, and government departments and agencies
and other stakeholders. Modelling based on this approach was outlined
in Chapter 4 of last year’s Social Justice Report.

Joseph Elu, the
Chairman of Indigenous Business Australia, made a similar call in
his Menzies lecture series speech in March 2001 for ‘governments
to stop sheltering communities and wrapping them up in cotton wool
for “their own good”’, and to move beyond subsidising
Indigenous disadvantage with welfare payments. It is time, he stated,
to ‘open up debate about what is working and empower our communities
to make choices about what is an appropriate program for our peoples’
[99] with both government and the private sector.
He pointed to the need to advance economic development by providing
‘access to capital, on proper and equitable terms’ to Indigenous
communities, and to create an environment that encourages private
sector involvement. He further suggested that governments and the
private sector consider initiatives for establishing an economic base
for Indigenous Australians such as: industry incentives; taxation
incentives; creation of economic development zones; legislation for
requirement of Indigenous involvement in the expenditure of government
contracts; and compulsory community services for Australian financial

approach has received wide support and been cited as an exemplary
model of mutual obligation by both sides of politics.[101]
It has also played an integral role in the establishment of the Cape
York Partnership plan between Indigenous communities of the Cape and
the Queensland Government.[102]

comments have, however, to a large extent been appropriated by the
government and policy makers and have been used to justify an approach
to Indigenous policy making that is not based on the recognition of
Indigenous rights. Indeed, his approach to reciprocity is regularly
cited as support for the argument that rights in general are not ‘practical’
and do not contribute to improving the livelihoods of Indigenous peoples.
For example, in an article in the Age published in July of this year,
the federal Minister for Reconciliation and Aboriginal and Torres
Strait Islander Affairs claimed that:

More Australians
should listen to Cape York Aboriginal leader Noel Pearson… He
has said that the organisations representing indigenous people have
become so caught up in a rights agenda that they have forgotten the
importance of taking responsibility for their own issues.[103]

However, Pearson’s
argument is that: ‘The substantial agreement has to be that the
country is going to respect the rights of Aborigines to autonomy and
self-determination and, in turn, it means that Aboriginal; people
will accept that they need to take responsibility for their own self-determination’.[104]
He has recently stated that both sides of Australian politics ‘continue
to be half right in the policies that they are prepared to advocate’,
and that the ‘Coalition will better understand the problems of
responsibility but will be antipathetic and wrong in relation to the
rights of Aboriginal people: they advocate further diminution of the
native title property rights of Aboriginal Australians’.[105]
As Patrick Dodson has explained, ‘The Government wishes to drive
a wedge between the concept of rights and welfare but also between
those who advocate a rights agenda and those who seek relief from
the appalling poverty’.[106]

The misrepresentation
of Pearson’s insights by political commentators to suggest that
the attainment of equal rights has led to welfare dependency and a
social disaster in communities presents a false picture of efforts
since 1967. It implies that first, a rights culture was fully implemented
and second, it consequently failed and accordingly it should be abandoned.

Such a suggestion
ignores the fact that the institution of equal rights at the formal
level was 170 years late. The exclusion of Indigenous people from
mainstream services was broader than an exclusion from welfare –
it was also an exclusion from any form of participation in the formal
economy or society through lack of access to education, health, housing
and infrastructure of a comparable quality to that available to the
rest of society.

There are a number
of consequences of this history of exclusion. Fundamentally, removing
barriers to access does not address the deeply entrenched marginalisation
that has resulted. Many Indigenous people were left without the skills
necessary to participate on an equal footing in the employment market.
Low levels of education and a life experience that does not include
employment has also had legacies for subsequent generations.

What this situation
requires is the commitment to processes, accompanied by adequate resources,
which allow Indigenous people to catch up rather than to seek to compete
on the basis of what is clearly not a level playing field. There remains
a lack of adequate commitment to this purpose.

In this context,
a situation of welfare dependency is ‘an inescapable conclusion…
(and) is part of the historical legacy of the dispossession of Aboriginal
people and their continuing exclusion from economic power structures
rather than the making of Aboriginal people themselves’. [107]
As ATSIC have noted, access to welfare has ‘unintentionally,
and perhaps paradoxically, created poverty traps from which it is
hard to escape’.[108]

The Centre for
Aboriginal Economic Policy Research has also argued that the rapidity
with which Indigenous people have moved from a situation of exclusion
from the mainstream economy to dependency on welfare by the beginning
of the 1990s has been a major shift. [109] Clearly
it is time to move beyond this. It requires acknowledgement, however,
of the structural barriers of the past that remain of contemporary

What has fundamentally
been lacking before and since 1967 is a rights culture that respects
Indigenous people and provides them with the opportunity to participate
on an equal footing in Australian society. The refusal to tolerate
the discriminatory practices of exclusion from welfare, education
and participation in the mainstream society and economy any longer
was merely the first step on the road to a culture of rights and respect
for Indigenous people. It is disingenuous to suggest otherwise.
Pearson’s call for greater reciprocity and community responsibility
is also not an either/or suggestion. It is completely consistent with
a rights framework, and indeed, as the rights framework for reconciliation
set out in Social Justice Report 2000 demonstrates, it is an
integral component.

The equation
of the Pearson approach with the government’s mutual obligation
and practical reconciliation agenda also applies to the concepts of
reciprocity and community. Significant differences exist between Pearson’s
representation of these values and those which actually apply in an
Indigenous cultural setting, specifically with regard to whom reciprocity
is owed and to which community.

In his discussion
of ‘reciprocity’ as it features in Pearson’s proposals
for Aboriginal welfare reform, David Martin distinguishes between
reciprocity as a principle of social obligation in Indigenous communities
and mutual obligation as articulating a particular relationship between
the State and the individual. Reciprocity in this sense applies ‘between
the individual and his or her particular community, family and local
group’, whereas mutual obligation applies ‘essentially between
the individual, as an autonomous actor, and the state, representing
an undifferentiated “community”’.[110]

The goal of the
latter is to ensure that ‘people … take their place as individuals
in an increasingly mobile workforce within a globalised order’
[111] through participation in the formal economy.
This means that Indigenous participation in traditional and cultural
forms of reciprocity is not necessarily easily factored into the mutual
obligation equation.[112] However, the CDEP Scheme
has operated to support aspects of the more traditional lifestyles
of some communities and the Community Participation Agreements are
to recognise certain social and cultural forms of participation. But
as David Martin has observed:

…the obligations
accorded significance by Indigenous people are typically not to
the wider, largely non-Indigenous society, from which after all
they have historically been excluded or at best marginalised: on
the contrary, their obligations lie within Indigenous society itself,
for example to specific kin or within ‘family’ networks.[113]

Forms of non-economic
participation often fulfil certain obligations and contribute to ‘community’

For example,
not having any employment in the Australian labour market may actually
empower many traditional Indigenous peoples to hunt, fish, paint,
and live on the country. Indeed, the extra hours of ‘spare’
time may facilitate more extensive participation in ceremonial activities,
thus increasing what may be loosely defined, in the Indigenous context,
as ‘social capital’.[114]

In addition,
many Indigenous Australians are:

already meeting
their obligation to community by participating in community building,
cultural maintenance and family support activities, including: volunteer
roles in community organizations; the CDEP scheme; income distribution
among family members; caring for sick and elderly people –
rather than placement in nursing homes; and reinforcing tradition
and culture.[115]

In her research
on communities at Yuendumu in Central Australia and Kuranda in North
Queensland, CAEPR researcher Diane Smith found that:

Family members
fall back upon culturally-based values, their own system of shared
child care, and networks of economic support and demand sharing.
This Indigenous system of support is a form of risk-pooling that
keeps many families financially afloat. It constitutes precisely
the kind of ‘social participation’ and ‘social capital’
identified by the McClure Report as the very base of strong families
and communities.[116]

However, this
kind of ‘social participation’ and ‘social capital’
may fall short of public policy agendas to stimulate labour market
participation. Certain social support activities may be seen as comparable,
or even more important or predictable than such participation: ‘Attractive
salaries, travel and accommodation or guarantees of special support
and promotion opportunities may not compensate for the loss of social
support many Indigenous people feel when entering a mainstream labour
market program’.[117]

There has been
an increasing emphasis on community capacity building and social obligations
in mutual obligation policy development since the McClure Report.
However, as the above discussion indicates, the term ‘community’
carries some complex connotations in the policy Indigenous context:

the ‘community’
… is not just an aggregation of individuals, as the non-Indigenous
welfare policies would have it. Nor is it an undifferentiated ‘community’.
Rather, reflecting basic Indigenous structures, it should be seen
as being comprised of ‘family’ or other relevant sub-groupings.[118]

The construction
of ‘community’ as a focus of Indigenous policy since the
mid-1970s in the post-assimilation Whitlam era has imposed some additional
limitations. This approach has established an array of Aboriginal
community organizations as ‘gate-keepers’ and ‘avenues
of self-determination’ at the local level:

… enabl[ing]
the government to distribute funds for welfare programs and the
delivery of services to Aboriginal people. It was seen as the medium
which would automatically be culturally appropriate, democratic,
and at the same politically and socially acceptable to the majority
of Australians.[119]

However, many
of these ‘communities’ are based in former colonialist institutions
and practices of missions, reserves and pastoral stations and the
dispossession and relocation of Indigenous populations. These constructions
of Indigenous communities have in fact contributed over time to the
erosion of Indigenous social, cultural and economic rights and the
development of intergenerational poverty and welfare passivity. [120]
This is reflected in the term ‘mission mentality’ which
was coined by Aboriginal activists in the 1980s to describe ‘the
“dependency” upon the government handout system that Aboriginal
people have become conditioned to’. [121]
The continued use of these culturally inappropriate classifications
of ‘community’ has the potential to contribute to the assimilation
process, as it embeds the loss of Indigenous wellbeing and social
cohesion by undermining traditional authority structures and kinship
responsibilities, on occasion exacerbating pre-existing inequities
and intra-Indigenous conflict. [122]

Care must be
taken that the application of whatever public policy prescriptions
may be in vogue, especially without adequate consultation and negotiation
with Indigenous people, does not have the potential to inflict further
damage as the following observations on the use of the term ‘social
capital’ in Indigenous policy indicate:

Social capital
is an important notion which helps open up a vision of Australian
society in which Indigenous people actively participate. Yet any
vision of what an ‘ideal’ society might look like in the
future is usually constructed by theorists with little or no dialogue
and negotiation with Indigenous Australians … The reality is
a social and political vision which can inadvertently perpetuate
the marginalisation of Indigenous Australians unless they assimilate
on white terms.[123]

While Indigenous
people in urban and rural centres are often supported by mainstream
services, those living in more remote areas often depend ‘almost
totally on the coordinated processes of several different government
jurisdictions, underpinned by financial support from the Aboriginal
and Torres Strait Islander Commission (ATSIC)’.[124]
It is necessary to find ‘the appropriate type of social and infrastructure
program to suit people whose distinct culture alienates them from
the demands of some institutions in which they are governed’.[125]
In discussing remote settlements, HREOC’s Review of the 1994
Water Report observes that the challenge is to reconcile current service
delivery issues for remote Indigenous communities with ‘the rights
that members of those communities may seek to exercise’, particularly
‘the principle of non-discrimination; the principle of distinct
status; and group as distinct from individuals’. It states:

These factors
are more closely linked with recognition and respect for another
culture rather than providing access to conventional market opportunities.
The challenge is to meet distinct group needs (households and communities)
on Indigenous land, through delivery mechanisms which are cost-effective,
demand driven and sustainable.[126]

– Indigenous empowerment and effective participation

This chapter
has raised a number of concerns about the application of the combination
of practical reconciliation and mutual obligation to Indigenous people.
Ultimately, these concerns relate to this approach’s narrow definition
of the relationship between Indigenous people and the mainstream society,
and the punitive way that it seeks to impose the relationship through
harsh penalties.

To date this
approach has failed to transform the relationship between Indigenous
people and the mainstream society so that it is conducted on a basis
of greater equality and in a manner that is freely determined by Indigenous

As a consequence,
while it strives for empowerment at an individual level, mutual obligation
does so from a position in which the government is not prepared to
relinquish the power and control that it holds. The unwillingness
to change the existing power dynamic ultimately constrains the relevance
of the mutual obligation approach to achieving lasting and sustainable

Changes to this
power dynamic, through the effective participation of Indigenous people
in decisions that affect them, are essential.
On the eve of the 2001-02 budget ATSIC released a document which sought
to examine the policy approaches that underpin Indigenous policy formulation.
The central contention of ATSIC was that for all programs and policy
proposals, the ‘values and aspirations that are meaningful to,
and express priorities of, Australia’s Indigenous peoples must
be the basis for the policy approaches being taken’.[127]

the question that should be answered in relation to each proposed
initiative is, simply ‘Will this activity enhance Indigenous
people’s capacity to achieve what is important to them and, in
its development and implementation, contribute to the empowerment
of Indigenous peoples and the achievement of their objectives and
priorities?’ [128]

It is difficult
to see that mutual obligation fulfils this criterion in its present
form, particularly given that it is about the responsibilities and
duties of the individual Indigenous citizen rather than about the
obligation of the State, within an historical framework, to ensure

… ‘mainstream’
programs and service providers… adapt their program policies
and administrative requirements and practices to accommodate the
legitimate values, beliefs and lifestyles of their Indigenous clients.[129]

Its terms of
reference are simply too narrowly focused to fully appreciate and
take account of the broader context of the everyday lives of Indigenous
Any proposed levers for ‘breaking the welfare cycle’ should
be evaluated to see whether they generate long-term, targeted outcomes
or merely offer yet another round of potentially self-defeating quick
fixes. Serious application, including consideration of the use of
special measures, needs to be made to the question of how an adequate
investment can be made to build both financial and human capacity
to address Indigenous employment need, particularly in the futures
of our young people. Any commitment to overcoming disadvantage should
also involve a full democratic partnership with Indigenous people,
‘[e]nsuring that [Indigenous] individuals and communities are
adequately involved in decisions that affect their well being, including
the design and delivery of programs’. [130]
It should also provide support for Indigenous autonomy in terms that
recognise and respect cultural difference and the right to self-determination,
particularly in the form of strategies for capacity-building and increasing

These issues
are explored in greater detail in the next chapter of this report.
In particular, it examines the necessity for devolving power to the
community level, through development and support for building the
capacity of Indigenous communities to determine their own destiny
and take control of their lives. Within this context, a mutual obligation
approach can be more meaningful in the longer term.

1 Newman,
The Hon J, ‘The future of welfare in the 21st century’,
Speech, National Press Club, Canberra, 29 September 1999, p1.

2 See
Kinnear, P, ‘Mutual obligation: Ethical and social implications’
(August 2000) Discussion Paper Number 32, the Australia Institute,
Canberra, pp10-22, for a detailed discussion of the origins of a social
contract in seventeenth and eighteenth century philosophy.

3 ibid,

4 ibid,

5 Scanlon,
C, ‘The network of moral sentiments: The third way and community’
(2000) 15 Arena journal 59, pp57-79.

Parliament of Australia Parliamentary Library, ‘Current issues:
Social Policy Group: Welfare review’, Parliament of Australia,
Canberra, 2000, p6.

ibid, p2.

8 McClure,
P, (Chair), Participation Support for a more equitable society:
Final report of the reference group on welfare reform
, Department
of Family and Community Services, Canberra, July 2000, p6.

9 ibid.

Newman, the Hon J, ‘Welfare reform encourages people to reach
potential’, Media release, 14 December 2000; Department
of Family and Community Services, Government response to the final
report – Ministerial statement
(11 December 2001). See ACOSS, ‘Still a long road ahead for fair
welfare reform’ (February 2001) Impact, p6, for some discussion
of the Government’s response to McClure.


12 See
ACOSS, ‘Benchmarks for fair welfare reform: Adequate incomes,
real opportunities and fair obligations’ ACOSS Info 303
(May 21 2001).

13 See
Kinnear, P, op.cit, for further discussion of a social justice basis
for mutual obligation within contract theory. For some critique of
the current mutual obligation approach see also Yeatman, A, ‘Mutual
Obligation: What kind of contract is this?’, in Shaver, S, and
Saunders, P, (eds), Social policy for the 21st century: Justice
and responsibility
, Vol.1, SPRC, NSW, Sydney, 1999, pp255-68 and
Raper, M, ‘Examining the assumptions behind the welfare review’,
in Saunders, P, (ed), Reforming the Australian welfare state, Australian
Institute of Family Studies – Commonwealth of Australia, Melbourne,
2000, pp250-70.

14 Rawls,
J, A theory of justice, Oxford University Press, Oxford, 1973,
pp111-12, quoted in Kinnear, P, ibid, p15.

15 Saunders,
P, ‘The changing social security policy context: Implications
for the CDEP program’, in Morphy, F, and Sanders, W, (eds), The
Indigenous welfare economy and the CDEP Scheme
, CAEPR Research
Monograph No.20, CAEPR, Canberra, 2000, p24.

Yeatman, A, op.cit, p264.

‘Breaching the safety net: The harsh impact of social security
penalties’ ACOSS Info 305
(14 December 2001) p7.

ibid, p10.

ibid, p3.

20 ibid,

21 ibid,

ibid. See also ACOSS, ‘Call for suspension of third breach
penalties of 8 weeks no payment’, ACOSS media release,
13 August 2001.

23 Sanders,
W, Unemployment payments, the Activity Test and Indigenous Australians:
Understanding breach rates,
research monograph no. 15/1999, CAEPR,
Canberra, 1999, pix.

ibid, p114.

25 Moses,
J, and Sharpels, I, ‘Breaching – History, trends and issues’,
Paper 7th National Congress on Unemployment, Sydney, 30 November –
1 December 2000, cited in ACOSS, ‘Breaching the safety net’,
op.cit, p22.

Kinnear provides a useful table outlining the range of possibilities,
from ‘willing but unable due to lack of jobs’ through to
‘unwilling to work despite availability of jobs and absence of
any inhibitor’, noting in regard to the former option that ‘[c]urrent
policy side-steps this issue.’ See Kinnear, P, op.cit,

27 McClure,
P, op.cit, p5.

28 ibid,

29 ibid,
pp6, 46.

ATSIC, ‘Social Welfare Reform: ATSIC submission’, CDEP and
Employment Policy Branch, Canberra, January 2000, p15.

McClure, P, op.cit, p41.

ibid, p46.

33 Howard,
The Hon J, ‘Transcript of the Prime Minister the Hon John Howard
MP - Melbourne Press Club address’, Speech, 22 November 2000,

34 Yeatman,
A, op.cit, p256.

35 Martin,
D, ‘Community development in the context of welfare dependence’,
in Morphy, F, and Sanders, W, op.cit, p33.

36 McClure,
P, op.cit, p10, 12. McClure’s model does however draw
on social partnerships with other stakeholders, the implications of
which are discussed below.

37 The
McClure Report factors emphases on assessment of individual circumstance
and the need for the broader community to exercise obligations to
the unemployed, particularly through capacity-building and partnerships,
into its proposals for a Participation Support System. See discussion

Kinnear notes that one response from the welfare sector to the Government’s
application of mutual obligation policy has been that ‘it is
unacceptable to compel unemployed people to undertake activities that
cannot be demonstrated to enhance their long-term position’.
Kinnear, P, op.cit, p7.

‘Does Work for the Dole lead to work for wages? ACOSS analysis’
(November 2000) ACOSS Info 223
(23 December 2001), p1.

40 Kinnear,
P, op.cit, p7. The independent study was Sawer, H, ‘One
fundamental social value: Participants’ views on Work for the
Dole’, RMIT, Melbourne, 2000.

ACOSS, ‘Does Work for the Dole lead to work for wages?, op.cit,
p1. ACOSS’s analysis was based on data from DEWRSB, ‘Work
for the Dole net impact study’, August 2000, and DEWRSB, ‘Labour
market assistance outcomes’, June quarter 2000 (September 2000).

42 ibid.

43 ibid.

See discussion in Yeatman, op.cit, pp 258-9. Following Budget
2001, mutual obligation requirements for parenting payment recipients
were introduced and are to be implemented over a two-year period.
Mature Age and Partner Allowees are to be encouraged to transfer to
Newstart, and from July 2003 there will be no further grants of these
Allowances. Requirements to undertake an approved activity or WFTD
have been extended to 39 year olds, and those between 40 and 49 will
be required to complete specific amounts of study, part-time or community
work or a mutual obligation activity.

45 Kinnear,
P, op.cit, p19. The tendency of ‘breaching’ to penalise
disadvantaged sections of the population, such as Indigenous people
and youth, is an example of the discriminatory effects of this policy

46 Peter
Saunders notes the findings of a survey conducted in 2000 on community
attitudes to social change and social policy indicated that: ‘While
a large majority favoured requiring the young employed and, to a lesser
degree, the long-term unemployed, to do just about anything as a condition
of getting benefit … [t]here was much greater reluctance to impose
activity test requirements on the older unemployed and those with
young children, and strong opposition when it comes to people affected
by a disability.’ Saunders, P, op.cit, p3.

47 Fincher,
R, and Saunders, P, ‘The complex contexts of Australian inequality’,
in Fincher, R, and Saunders, P, (eds), Creating unequal futures: Rethinking
poverty, inequality and disadvantage, Allen and Unwin, Crows Nest,
NSW, p33.

48 Travers,
P, ‘Inequality and the futures of our children’, in Fincher,
R, and Saunders, P, op.cit, p121.

Kinnear, P, op.cit, p34.

50 Leveratt,
M. The Other Centenary: One Hundred Years of Poverty Lines and
, Uniting Care Victoria, June 2001, p8.

51 ibid.

See also Aboriginal and Torres Strait Islander Social Justice Commissioner,
Social Justice Report 1999, HREOC, Sydney, 2000, pp2-7; Aboriginal
and Torres Strait Islander Social Justice Commissioner, Social
Justice Report 2000
, HREOC, Sydney, 2000, Chapter 2.

Ruddock, the Hon P, ‘Our path together’, media release,
22 May 2001.

Herron, the Hon J, ‘Removing the welfare shackles’, media
, 18 March 1998; ‘Removing the welfare shackles: A
discussion paper on a reform initiative for Indigenous economic development’

55 For
discussion, see ATSIC, ‘Welfare reform: a brief history’
(Autumn 2001) ATSIC News, p5, and Altman, J, ‘”Mutual obligation”,
the CDEP scheme, and development: Prospects in remote Australia’,
in Morphy, F, and Sanders, W, (eds), op.cit, pp125-34.

Australian Bureau of Statistics, ‘Labour force characteristics
of Aboriginal and Torres Strait Islander Australians: Occasional paper’,
(2000) ABS Canberra. In February 2000, the Indigenous unemployment
rate was 17.6% compared to 7.3% for non-Indigenous people. This does
not include those people who are not actively seeking employment or
people on CDEP.

57 McClure,
P, op.cit, p38.

58 ibid,

59 Altman,
J, op.cit, pp128-30.

60 Commonwealth
Grants Commission, Report on Indigenous Funding 2001, Commonwealth
of Australia, Canberra, 2001, p254.

61 ibid.

62 For
an overview of the issues surrounding CDEP, see Race Discrimination
Commissioner, The CDEP Scheme and racial discrimination: A report
by the Race Discrimination Commissioner
, Commonwealth of Australia,
Canberra, 1997, pp1-23; Morphy, F, and Sanders, W, op.cit; and Spicer,
I, Independent review of the Community Development Projects (CDEP)
Office of Public Affairs, ATSIC, Canberra, 1997.

Although he makes the further provison that CDEP be ‘fixed up’
by ‘reinsert[ing] the original goals of reciprocity and responsibility
into this resource’. Pearson, N, Our right to take responsibility
– discussion paper, Cape York Land Council, Cape York Peninsula,
June 1999, p67.

Vanstone, the Hon A, and Abbott, the Hon T, ‘Our path together:
Support for CDEP Participants to get a job’, Australians working
together – Helping people to move forward, Fact Sheet 6
Commonwealth of Australia, Canberra, 2001, p1. Other funding was allocated
to improve Indigenous access to mainstream services, such as through
additional funding of $9 million to improve Centrelink’s remove
area servicing strategy; $10 million for increased education and training
assistance; as well as $32 million for improved assessment for Indigenous
and eligible job seekers; and access to Training Credits of up to
$800 per participant in Job Search Training and Intensive Assistance.

Aboriginal and Torres Strait Islander Commission, Directions for
change – Aboriginal and Torres Strait Islander 2001/02 Budget
, ATSIC, Canberra, 2001, pp8-9.


67 Whitby,
T, (Commissioner), ‘Changes to CDEP’, ATSIC – Budget
response’, media release, 22 May 2001, p1.

68 Clark,
G, (Chair), ‘2001 Budget – A mixed bag’, media release,
22 May 2001.

69 Vanstone,
the Hon A, and Abbott, the Hon T, ‘A fair deal for Indigenous
Australians’, Australians working together – Helping
people to move forward, Fact Sheet 2
, pp1,2.

70 Aboriginal
and Torres Strait Islander Social Justice Commissioner, Social
Justice Report 1999,
t, p3.

71 See
further: Howard, the Hon J, op.cit, and ‘Transcript of
the Prime Minister the Hon John Howard MP, Menzies Lecture Series,
Perspectives on Aboriginal and Torres Strait Islander Issues’,
, 13 December 2000.

72 Leveratt,
M, op.cit, p7.

73 ABS
and CAEPR research found that: ‘There is a statistically significant
negative effect of Aboriginality on the probability of employment.
Most of the difference in the employment probabilities between Aborigines
and non-Aborigines cannot be explained by the standard human capital
variables but rather by factors associated with Aboriginality’.
ABS and CAEPR, National Aboriginal and Torres Strait Survey: Employment
outcomes for Indigenous Australians,
ABS Cat. No. 4199.0, ABS,
Canberra, 1996.

74 See
summary of reasons for Indigenous disadvantage in Aboriginal and Torres
Strait Islander Social Justice Commissioner, Social Justice Report
2000, op.cit,

75 See
Fincher, R, and Saunders, P, op.cit, p20ff for discussion of
the spatial concentration of disadvantaged in Australia.

76 See
Martin, D, op.cit, p34 and Altman, J, op.cit, p128-9. Altman
is writing in relationship to the prospects of establishing relationships
between government, the business, the community and relationships
apropos the McClure Report.

77 Altman,
J, ibid, p129-32.

Martin, D, op.cit, p34.

79 Altman,
J, op.cit, p126.

House of Representatives Standing Committee on Aboriginal and Torres
Strait Islander Affairs, We can do it!: The needs of urban dwelling
Aboriginal and Torres Strait Islander peoples
, Parliament of Australia,
Canberra, 2001, paras 7.28-7.32.

81 Saunders,
P, op.cit, p27.

82 Miller,
M, (Chair), Report of the Committee of Review of Aboriginal Employment
and Training Programs
, Australian Government Publishing Service,
Canberra, 1985.

83 ibid,

, p9.

85 ibid,

Spicer, I, op.cit, p4.

Aboriginal and Torres Strait Islander Social Justice Commissioner,
Social Justice Report 2000, op.cit, p26. In the Canadian context,
the Commissioners for the Report of the Royal Commission on Aboriginal
Peoples proposed that the application of substantial resources by
Government over a twenty-year cycle was necessary to restructure the
relationship between Indigenous and non-Indigenous peoples. See Royal
Commission into Aboriginal Peoples, Volume 5: Renewal: A twenty
year commitment, Minister of Supply and Services
, Ottawa, 1996,

88 Hunter,
B, and Taylor, J, The job still ahead – Economic costs of
continuing Indigenous employment disparity,
ATSIC, Canberra, 1998,
Executive summary.


90 Spicer,
I, op.cit, p4.

ATSIC, ‘More than Work for the Dole’ (Autumn
2001) ATSIC News, p 8.

Altman, J, ‘The economic status of Indigenous Australians’,
CAEPR discussion paper no.193, CAEPR, ANU, Canberra, 2000, p16.

For example: ‘A good education affects employment opportunities,
which in turn impacts on income levels, access to good housing and
health care. Poor health and poor quality housing, in the other hand
affect school attendance, the ability to study and ultimately educational
outcomes.’ House of Representatives Standing Committee on Family
and Community Affairs, Health is life: Report on the inquiry into
Indigenous health
, Commonwealth of Australia, Canberra, May 2000,
p72. Shortfalls in Indigenous-specific funding will be discussed in
Chapter 6.

Pearson, N, ‘The Light on the Hill’, Ben Chifley Memorial
Lecture, Bathurst Panthers Leagues Club, 12 August 2000, p6-7.

95 ibid.

96 Pearson,
N, Our right to take responsibility, op.cit, p22.

97 Pearson,
N, ‘On the human right to misery, mass incarceration and early
death’, Dr Charles Perkins Memorial Oration, McLaurin Hall, University
of Sydney, 25 October 2001, p9.

98 ibid,

Elu, J, ‘Indigenous economic empowerment: Fact or fiction’,
in Perspective on Aboriginal and Torres Strait Islander policy,
Menzies Research Centre Ltd, Barton, ACT, July 2001, pp19-20.

100 ibid,

101 See
for example, Latham, the Hon M, ‘Making welfare work’, in
Botsman, P, and Latham, M, (eds), The enabling state: People before
, Pluto Press, Annandale, N.S.W., 2001, pp115-31 and
Abbott, the Hon T, ‘Mutual Obligation and the social fabric’,
Bert Kelly Lecture to the Centre for Independent Studies, 3 August

102 The
Partnerships plan forms one response to the Queensland Government’s
Ten Year Partnership policy and Queensland Justice Agreement.

103 Ruddock,
the Hon P, ‘Aborigines reach a turning point: the public is coming
round to practical reconciliation based on individual responsibility’,
Age, 23 July 2001, p15.

104 Cited
in ‘Reconciliation has to wait, says Pearson’, Koori
, 11 July 2001, p5.

Pearson, N, ‘On the human right to misery, mass incarceration
and early death’, op.cit, p1.

Dodson, P, ‘Beyond the mourning gate – Dealing with unfinished
business’, Wentworth lecture 2000, Canberra, 12 May 2000, p14.

107 Royal
Commission into Aboriginal Deaths in Custody, National Report –
Volume 2
, AGPS Canberra, 1991, p377.

108 Aboriginal
and Torres Strait Islander Commission, Recognition, rights and reform,
ATSIC, Canberra, 1995, para 1.8.

Altman, J and Sanders, W, From exclusion to dependence – Aborigines
and the welfare state in Australia
, Centre for Aboriginal Economic
Policy Research, ANU, Canberra, 1991.

110 Martin,
D, op.cit, p 32.


112 See
Rowse, T, ‘McClure’s “Mutual obligation” and Pearson’s
“reciprocity” – can they be reconciled?’, paper
for the Academy of the Social Sciences workshop: ‘Mutual obligation
and welfare states in transition’, University of Sydney, 22-23
February 2001.

113 Martin,
D, op.cit, p32.

Hunter, B, ‘Social exclusion, social capital, and Indigenous
Australians: Measuring the social costs of unemployment’, discussion
paper no.204, CAEPR, Canberra, 2000, p2.

115 ATSIC,
‘Social Welfare Reform: ATSIC Submission, op.cit, p.7.

116 Smith,
D, quoted in ATSIC, ‘More than Work for the Dole’, op.cit,
p 17

117 Schwab,
R, ‘The calculus of reciprocity: Principles and implications
of Aboriginal sharing’, CAEPR discussion paper no.110, CAEPR,
Canberra, 1995, pp.15-16, quoted in Rowse, T, ‘Representing the
two culturesof Indigenous poverty’, SPRC Conference paper, 4
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Martin, D, op.cit, p7.

119 Peters-Little,
F, ‘The community game: Aboriginal self-definition at the local
level’, AIATSIS research discussion paper no.10, (10 November
2000), pp12-13.

ibid, pp17-18.

ibid, p18.

122 ibid.

123 Dudgeon,
P, Abdullah, J, Humphries, R, and Walker, R, Social capital and
increasing Aboriginal participation in mainstream courses: Weaving
the threads of social fabric or spinning another yarn
, Centre
for Aboriginal Studies, Curtin University of Technology, Perth, 1998,
p 5, quoted in Hunter, B, op.cit, p25.

Fletcher, C, ‘Aboriginal regional Australia: The hidden dimension
of community governance,’ Regional Australia Summit paper, Parliament
House, Canberra, 27-29 October 1999, p2.

ibid, p1.

126 Aboriginal
and Torres Strait Social Justice Commissioner and Acting Race Discrimination
Commissioner, Review of the 1994 Water Report, HREOC, Sydney,
2001, pp 71-2.

127 ATSIC,
Directions for change, op.cit , p1.

128 ibid.

129 ibid,

130 Aboriginal
and Torres Strait Islander Social Justice Commissioner, Social
Justice Report 2000, op.cit,