Speech by The Hon Jenny Macklin MP

Harnessing opportunities for future generations of Indigenous Australians – Speech to Native Title Conference 2010, Canberra

Location: Native Title Conference 2010, Canberra

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First, I want to acknowledge the traditional custodians on whose land we are meeting today – whose cultures we honour as among the oldest continuing cultures in human history.

And I would like to pay my respects to Elders past. And Elders present- who are today’s custodians and whose continuing connection to land we respect and celebrate.

Today on Mabo day we reflect on the Mabo legacy. Remembering and paying tribute to Eddie Koiki Mabo and his remarkable achievements. And today I also want to acknowledge all of those who have followed in Koiki’s footsteps.

I also want to thank Marcia Langton for her leadership, the intellectual rigour she applies to Indigenous policy and her advocacy for Indigenous people.

I would also like to acknowledge Marcia Langton’s very important work – along with others here today – as a member of the Native Title Payments Working Group

As you know the Working Group was convened with the Attorney General to advise the Government on reforms to the Native title system – and I will have more to say about this later.

But first I want to talk about the ongoing challenges we face in maximising the potential of native title as a platform for long-term Indigenous economic development – now and for generations to come.

These are challenges that also play into the robust national debate we are having across the country about how all Australians can fairly share in the benefits of the resources boom.

For Indigenous Australians, this requires continued, concerted effort to make certain the millions of dollars flowing from resources projects to native title holders and claimants are used to strengthen sustainable economic and social development.

It includes strengthening the capacity and governance arrangements of Indigenous corporations. So that we maximise and protect the benefits which flow from native title agreements.

The communal and inalienable nature of native title means that this generation of native title holders has responsibility for the next generation – to achieve their own aspirations, but also to build a better future for their children and grandchildren.

As Marcia has said, we must also deal with the reality that the mining boom won’t last forever.

In fact, projections from Treasury, the Australian Bureau of Agricultural and Resource Economics and Geoscience Australia calculate the indicative life of our supplies of iron ore to be 70 years. This is based on the latest research and on current levels of production.

It drives home the urgent and shared responsibility we have – as policy makers and Indigenous leaders. We must do all in our power to guarantee this once in a generation opportunity, offered by the mining boom, is used to build economic and social independence in Indigenous communities.

This means using all the levers available to us to make sure financial transfers, from resource developers to native title holders, are responsibly structure and managed. We must make the most of this opportunity to create an economic future for generations of Indigenous Australians.

All of you here are only too familiar with what’s been described as ‘the great Australian paradox’. Where the traditional owners of resource-rich land are the most disadvantaged and poorest people living on it. Where the many successful initiatives of Indigenous leaders and organisations co-exist with community dysfunction. And where, from this environment of despair, Indigenous filmmaker Warwick Thornton makes a film about despair and survival and takes Samson and Delilah to Cannes. Where it wins the Camera d’Or and is described by critics as one of the finest movies to come out of Australia.

This paradox has seen generations of children grow up in appalling poverty, with frightening levels of overcrowding, high arrest and incarceration rates, disturbing levels of violence, neglect and endemic unemployment.

What we are confronting has been generations in the making. It didn’t happen overnight and it won’t be fixed overnight. In Government, we have been doing the hard work to put a brake on this cycle of despair and hopelessness.

With an ambitious policy reform agenda. And an unprecedented investment in housing, health, employment and education to help meet our targets to close the gap.

We are addressing decades of under-investment in services, infrastructure and governance by successive governments.

We are working to rebuild positive social norms – like going to school, having a job – because genuine long-term change is only possible when people take responsibility for themselves and their families.

And we are building new, respectful and productive relationships with Indigenous Australians to help empower Indigenous people to drive change.

Indigenous economic development is central to our agenda. Last week, with the Deputy Prime Minister Julia Gillard and Employment Participation Minister Mark Arbib, I released a draft of an Indigenous Economic Development Strategy. I urge you all to be involved as we continue to develop this strategy.

It is a strategy that spans all of Government. It sets out an ambitious forward agenda in five key areas to expand the opportunities for Indigenous Australians in the economic life of the nation.

Through better access to quality education. Through employment. Through self-employment. Through legal, welfare and governance frameworks. And through financial security and independence.

We want Indigenous Australians to have every opportunity to contribute and be part of the Australian economy. This includes sharing the benefits generated by the mining boom.

A Resource Super Profits Tax will help achieve this. It’s a major reform with significant benefits for Indigenous Australians.

Let me put this in context.

Before the last mining boom, one dollar out of every three dollars of mining profits was returned to the Australian people through royalties and resource charges. But by the time the boom ended, it was only one dollar out of every seven. If the taxpayers’ share had remained constant over the past decade or so, Australian governments would have collected $35 billion in additional revenue.

The Resource Super Profits Tax is a more effective tax than existing ‘ad valorem’ taxes because it only cuts in when projects become profitable above a threshold level. This assists marginal projects to continue operations longer than they would under a tax regime based on the value of production. It also makes marginal projects more viable.

Treasury modelling suggests that under the new tax, mining investment will rise by 4.5 per cent, mining production will increase by 5.5 per cent and employment will jump seven per cent over the longer term.

Native title holders and their communities can expect to share in this increased development.

There will be important tax incentives for mining companies to invest in the training and skills of Indigenous people.

The costs of employment, training and support for Indigenous employees, provided they are legitimate operating costs, can be deducted before the super profits tax is calculated.

Legitimate costs for goods and services provided by suppliers, including Indigenous suppliers, will also be deductible.

Payments made under agreements with Native Title holders will be considered as costs of production, contributing to the reduction of taxable profits for resource projects.

The Government is conscious not to affect payments made under agreements with native title holders and will ensure that the design of the RSPT takes this into account.

A new infrastructure fund will also be established using proceeds from the RSPT with significant benefits flowing to resource rich states.

The ongoing resources boom, complemented by this huge investment in infrastructure, opens the door to significant business opportunities for Indigenous contractors and suppliers.

And recognising the reach and capacity of Indigenous suppliers and contractors to change the Indigenous economic landscape, important changes to the way the Government does business come into effect next month.

From 1 July, Australian Government projects worth more than $5 million – $6 million for construction projects – in regions with significant Indigenous populations must include the use of Indigenous suppliers and training and employment for local Indigenous people.

The mining boom has the potential to drive lasting development in remote communities and we want to hear the views of Indigenous people – particularly the views of the native title representative bodies – on how to maximise this potential.

Following high level engagement with the mining industry, the Government’s Resource Tax Consultation Panel will release an issues paper for stakeholder and community comment. I encourage all of you to contribute your comments and submissions.

Over the coming decades, the mining industry will continue to generate huge financial flows to native title holders with these payments administered by Indigenous corporations. As we all know, the quality of governance is critical to a corporation’s success. Whether it’s a major bank, an airline or a native title corporation.

It is clear that the existing regulatory rules applying to native title corporations are underdeveloped. This risks impairing their capacity to deliver financial security and independence for their communities.

Our challenge is two-fold.

We must respect the rights of native title holders to negotiate commercial agreements with resource developers.

At the same time, we must put regulatory arrangements in place to maximise the sustainable outcomes derived from these agreements.

This includes looking at reforming tax arrangements for native title payments.

We know that under the current tax arrangements many native title organisations choose to operate through charitable trust frameworks.

This minimises their tax burden but it also restricts their investment options because trust distributions can only be made for charitable purposes.

There are also restrictions on the accumulation of assets across generations.

This is why my colleague, Assistant Treasurer Nick Sherry recently released a discussion paper looking at how we can reform these tax arrangements. I encourage you all to contribute to it.

We also want to expand policy discussion on other mechanisms to build stronger governance regimes in Indigenous corporations.

To achieve better outcomes in the use of native title payments.

We want your input into the discussion paper which the Attorney General and I will be releasing shortly.

It outlines a number of options.

These include the incorporation, under the Corporations Aboriginal and Torres Strait Islander Act or the Corporations Act, of native title organisations which are in receipt of native title payments.

As well, as the appointment of independent directors.

And measures to strengthen democratic controls within Indigenous corporations.

The discussion paper also outlines how a new oversight mechanism could provide advice on the quality of the agreement measured against best-practice arrangements.

This advice would be provided to resource developers and native title holders. We are considering these initiatives because it is essential these agreements are negotiated, structured and administered around a single goal. To build a platform for economic and social development for the long-term benefit of traditional owners.

We will continue to work together to make reforms to the native title system which respond to the changing needs and aspirations of Aboriginal and Torres Strait Islander people.

At the same time, we need to respond to the changing role and responsibilities of Native Title Representative Bodies.

I’m sure all of you are very aware of the changing native title environment in which we all operate. The mix of demands on Native Title Representative Bodies is slowly changing.

Responsibility is shifting from being almost entirely centred on the resolution of claims to new demands for post-agreement support and assistance including supporting Indigenous economic development.

This trend will continue as the rate of claim resolution gathers pace – and as governments adopt different approaches including alternative and broader settlements for some claims.

In the light of this, I will be reviewing the role and statutory functions of NRTBs to ensure they meet the changing needs of the native title system. In particular, the needs of native title holders after claims have been resolved.

And my Department is also looking at how we can provide structured and needs-based support for native title holders and traditional owners who accept alternative settlements.

With this work underway, I have also agreed to recognition periods that will extend to 30 June 2013 for all four of the NTRBs who applied in the current round.

This will bring all NTRBs into alignment. It will enable me to base a new, full round of applications for recognition in 2013 on the outcome of the review of NTRB functions. And, of course, to take into account the progress achieved with claim resolution over the next three years.

And, to help meet the identified shortage of experienced professionals working in the native title area, today I’m announcing the establishment of a Native Title Research Scholarship. With funding of up to $135,000, the new scholarships will support up to three students each year as they undertake post-graduate study relating to native title.

As all of us here know, the resources boom will continue to drive huge changes to Australia’s economic future.

The Government is taking action so all Australians can share the benefits of the boom.

Including native title holders who will continue to be significant beneficiaries of the resources industry under the new tax arrangements.

This brings with it a once in a century opportunity.

And a great duty and responsibility to use this opportunity.

It’s a responsibility that rests with us all.

With government, with the mining industry, with Indigenous leaders.

It’s our shared duty and responsibility to grasp this opportunity.

To forever change the lives of Indigenous Australians for the better.

Now and for generations to come.