Speech by The Hon Jenny Macklin MP

Sustainable Indigenous Communities Forum Minerals Council of Australia

Firstly, I’d like to thank Agnes O’Shea for the Welcome to Country, and pay my respects to the Ngunnawal people.

I also want to congratulate the Minerals Council for holding this forum as part of Minerals Week. It’s an indication of how seriously you view the inclusion of Indigenous Australians in the enormous prosperity being generated by the minerals industry.

And I want to offer the Australian Government’s appreciation of your industry’s preparedness to join with the Government to take up 1000 job seeker training places over the next four years for unskilled, unemployed Indigenous Australians.

The significance of the minerals industry to the Australian economy can’t be overestimated.

Over the past 20 years it has pumped $500 billion into the economy and employs 320,000 Australians.

I am told there are 341 new resource development projects currently on the drawing board across Australia.

Even if only a proportion of these come to fruition they will change the economic face of Australia, particularly remote Australia.

This has the potential to resolve what’s been described as “the great Australian paradox” – that the traditional owners of the land are the poorest people living on it.

Resolving this paradox is a challenge for Government, industry and Indigenous communities.

It’s a challenge that I know your industry is taking seriously.

Finding ways to create and sustain socially and economically viable communities across regional and remote Australia is a major challenge for the nation. It is even more challenging when most of the people in these communities are Indigenous.

It is a challenge that has bedevilled governments for the last fifty years.

The reason is that we are dealing with a complex social and economic reality involving competing cultural perspectives, poorly defined institutional structures, extremes of poverty and dysfunctional communities, and long-standing failure of government.

There are no easy answers.

All my experience in public policy tells me that if there is a simple solution, it would have been found.

Rather, we must move forward step by step, working on a range of fronts to make a difference.

New approaches must be developed and tried. But we must also be prepared to assess and evaluate what we do, and where the evidence points to failure or limited success, to change direction.

The Rudd government’s approach has been to set high level targets to close the gap, identify the policy building blocks which will move us there, and progressively put in place the policy and program settings to reach the targets we have set.

Reaching our employment target -halving the gap in employment outcomes within a decade – is critical to increasing Indigenous economic participation. This is not going to be easy but the fact that the Indigenous population is young and growing makes the imperative to act even greater.

Being in the labour market generates income but it goes much further than this.

Having a job gives people a sense of purpose. Having a job is the reason to get up in the morning. If you are involved in the economic life of your community you are connected to that community.

Being connected, having a sense of belonging is important for everyone’s social and economic inclusion, participation and wellbeing.

And when adults in a household go out to work each day children are far less likely to fall into the cycle of entrenched, intergenerational unemployment.

Lifting the Indigenous participation rate will take concerted and cooperative effort from government and industry.

It will also require broad attitudinal change across all sectors, including Indigenous Australians themselves.

Today, I want to talk about some of the key issues affecting Indigenous economic participation and development.

First, native title because it plays such an important role in the relationship between the resources sector and Indigenous interests.

Second, the contribution that the resources sector can make to social and economic development of Indigenous communities through increased employment.

Last week I was in Townsville to deliver the Eddie Koiki Mabo lecture and name the James Cook University library in his honour.

It was an opportunity to raise a number of issues related to improving the role of native title representative bodies, resolving outstanding claims and ensuring the effective use of payments negotiated between resource developers and native title holders and claimants.

Over the next two decades, agreements between resource developers and Indigenous groups will lead to quite extraordinary amounts of money flowing into the Indigenous economic realm.

This is particularly the case in the Pilbara, where some project agreements will transfer hundreds of millions of dollars into Indigenous trusts.

The challenge for the nation is to ensure that these financial flows are used to improve Indigenous economic status.

To do this, these financial transfers must be structured to increase wealth and capital assets within Indigenous communities.

It is imperative that these unprecedented financial benefits create employment and educational opportunities for individuals and are invested for the long term benefit of communities.

And they must be made to last for generations – not distributed as irregular windfalls to be frittered away for no long term good.

As Professor Marcia Langton says; “some agreements don’t deliver benefits to future generations who won’t have the benefit of the resource that’s being removed.”

Payments which flow to Indigenous companies and trusts must be distributed and invested equitably and effectively.

This will not be straightforward. It will demand innovative and far-sighted thinking on the part of government and industry. And, there will be a need for hard-headed leadership from Indigenous interests.

It may be considered by some to be outside the scope of appropriate policy – as not properly the subject of government interference or regulation.

But I believe it is the responsibility of government to work with people to harness whatever resources are available.

The huge proceeds expected to flow to Indigenous people from the mining boom have the potential to be harnessed for the benefit of social and economic advancement of current and future generations.

We will need new approaches to the ways payments are negotiated and structured to improve accountability and provide greater assurance to Indigenous interests.

This will involve a range of extraordinarily difficult issues and wide-ranging consultation.

Accordingly, the Attorney General and I have convened a small informal group of key players involved in native title issues to work through these issues over the next few months.

We have already asked Marcia Langton and Ian Williams to be part of this group and I hope you will take the opportunity to contribute.

Sixty percent of mining currently occurs on or near Indigenous land.

That means thousands of Indigenous Australians are living at the epicentre of a resources boom that is so short of labour it’s forced to fly in workers.

The minerals industry needs workers and Aboriginal people need jobs to build strong sustainable communities.

Yet the take up of Indigenous employees is relatively low.

The minerals industry needs workers and Aboriginal people need jobs to build strong sustainable communities.

Why isn’t the market working? Why aren’t comparatively poor Indigenous people of working age finding jobs in what is plainly an expanding and highly lucrative industry?

Market failure exists on both sides of the supply and demand equation.

On the supply side, the vast majority of theoretically available Indigenous job-holders are not job ready.

Low levels of numeracy and literacy, poor work histories, lack of role models engaged in active work, high levels of drug and alcohol use, the insidious and perverse impact of passive welfare all work to reduce the capacity of Indigenous working age individuals to be work and job ready.

Getting Indigenous Australians job ready is a complex issue.

As part of its $1.9 billion Productivity Places Program, the Government is offering 238,000 training places for the unemployed – among them many Indigenous Australians.

Training opportunities in the mining and construction industries are available with 21 mining-related qualifications.

I am also pleased to tell you today about the creation of up to 300 additional apprenticeships and traineeships for Indigenous Australians across the country. This has been made possible through the Australian Government’s partnership with Group Training Australia.

These apprenticeships will be in construction, transport, clerical, administration and management with 180 are earmarked for regional and remote areas.

They will give Indigenous trainees the opportunity for well-paid jobs often in trades where there are severe skills shortages.

Establishing a sustained and rigorous policy framework in the Indigenous affairs domain is critical.

On the demand side, many companies are yet to make the most of the workers who are available.

But others are showing the way forward in creating and sustaining strong Indigenous employment.

Among them BHP Billiton which has set itself targets to achieve:

  • 14 per cent indigenous employment among contracted workforce by 2012
  • 10 Indigenous contracts valued at over $50m per annum by 2010
  • Key indicators of health, education and employment improved by 20 per cent in Port and South Hedland, Newman and Jigalong
  • 20 indigenous professionals appointed by 2012
  • 40 apprenticeships created with contractors through the Indigenous Apprenticeship program by 2012

And Rio Tinto’s farsighted Argyle agreement in the East Kimberley, which recognises pre-existing Aboriginal relationships to the area, sets out ambitious employment targets and provides financial compensation to traditional landowners.

This involves the payment of monies into two trusts. One is focussed on the Aboriginal groups’ longer term aspirations for education, community development and investment for their children.

Another provides a shorter term income stream along with financial literacy training.

There are other companies also building employment targets into their business strategies but there need to be more.

Of course some problems have their roots in both sides of the demand / supply equation.

Even where Indigenous workers find jobs, they often fail to stay in them because of a range of issues.

For example, Indigenous workers who get a job lose their entitlement to public housing and a large proportion of their wages goes on rent in an extremely tight private housing market – hardly an incentive to work.

Indigenous students coming from remote areas to study at TAFE can’t get decent accommodation.

And as one senior company official pointed out to me, how can an employee perform satisfactorily if there’s nowhere to wash your clothes and overcrowding means you don’t get a good night’s sleep.

One solution is the construction of supported hostels to provide skills training for Indigenous apprentices and trainees while providing ongoing mentoring and peer support.

I recently visited one such hostel operated by the Wunan Foundation in Kununurra – a model I strongly support. I was inspired to meet a group of young Indigenous men all making huge strides towards achieving formal trades skills.

As a start, the Australian Government will establish four employment related hostels to provide accommodation for up to 100 trainees in the West Australian communities of Halls Creek, Derby, Fitzroy Crossing and Broome.

This is a joint project with the Western Australian Government, announced in April 2008. The Australian Government will contribute $10 million to fund construction, with the State Government taking responsibility for project management.

Both government and industry will need to look hard at what can be done to minimise the impact of social issues such as housing if we are to improve employment outcomes in this area.

I will certainly be looking to improve the provision of the basics of life to communities to increase their engagement with the real economy.

Housing, transport, improved literacy and numeracy, and improved drug and alcohol rehabilitation services, better access to financial literacy services and improved family support are key priorities.

The Government came to office with a firm commitment to make economic development a central plank in our policy framework for Indigenous Australia.

We are already moving on reform of the key areas of income support and employment services. Last week Ministers Gillard, O’Connor and I released a discussion paper which will underpin reform of the complex array of Indigenous employment services along with CDEP.

Staying on CDEP must not be the only employment aspiration for Indigenous people.

I have already mentioned our intention to re-examine the operation of aspects of our native title system.

The Prime Minister recently announced the establishment of the National Policy Commission on Indigenous Housing.

We have moved quickly to push ahead with an ambitious reform agenda which both requires secure land tenure for housing developments in remote areas along with the establishment of firm Indigenous employment conditions in the contracts underpinning these investments.

We recently negotiated a 40 plus 40 year township lease on Groote Eylandt and a comprehensive Regional Partnership Agreement which will underpin a range of economic initiatives on Groote.

And later this year, we expect to announce the over-arching Indigenous Economic Development Strategy, which will put in place the specific mechanisms to take the strategy forward. We will be looking for strong input from all stakeholders, including the mining industry.

Enhancing Indigenous economic participation in the life of the Australian nation is at the forefront of the Government’s policy agenda.

It will require vision, sustained commitment and rigorous policy analysis from all stakeholders.

The minerals industry has undergone a remarkable transformation in its attitude to dealing with Indigenous interests over the past two decades. It is now a hugely constructive and influential player in driving positive outcomes for remote Australia.

Remote Australia itself is undergoing a major transformation. The ongoing expansion of the resources industry is having a major impact.

For all of us, governments, Indigenous organisations and resource developers, the challenges of creating and sustaining indigenous communities will require new policies, new approaches, new ways of operating.

Change can be difficult and challenging. Yet we cannot go on as we have for the past three decades.

We cannot allow Indigenous communities to remain economically and socially marginalised, third world enclaves in a first world nation.

We cannot allow children to grow to adulthood without an education, and the basic skills which provide economic security.

We cannot allow rampant dysfunction to continue to create the preconditions for youth suicide, and allow foetal alcohol syndrome to constrain the life opportunities of so many children.

The key to carving out a viable future for Indigenous communities is to expand the economic choices and opportunities available to them.

To do this, we look to the Indigenous leadership and to leaders in business to play a vital part in helping us close the gap.