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Sep 18, 2007

Mal Brough and the command(eer) economy

Hidden in the 500 or so pages of the government's National Emergency Response legislation is Mal Brough’s plan to commandeer community stores -- an extraordinary move, which would be inconceivable anywhere else in Australia.


Hidden in the 500 or so pages of legislation of the National Emergency Response to child protection in Northern Territory Aboriginal communities is Mal Brough’s plan to commandeer community stores.

It is extraordinary legislation for a supposedly free enterprise government, and would be inconceivable anywhere else in Australia – or indeed anywhere in the western world.

In short, Brough is demanding that all community stores are to be licensed or customers receiving welfare payments under the “income management” regime will not be able to shop there – even if the store is owned by the community or traditional owners.

Further, if the Feds decide to revoke or vary the licence conditions of a store, the government has the power to declare that the assets and liabilities of the store belong to the Commonwealth and take over the operation of the store. If that sounds like theft, who knows? The emergency measures have suspended all administrative appeals against such actions.

At least one store at Yuendumu is facing the brunt of this legislation. Despite a legal requirement to give seven days notice of intent, the Commonwealth has already moved in and demanded all records and documents relating to the business. The “authorised officer” can assess the store’s financial structure, retail and governance. If Yuendumu store was to resist this, it would face fines of $6600 for withholding documents, and cop another $6600 if any false or misleading documents are supplied.

The key, of course, is Brough’s “income management” scheme, by which the Feds will control 50% of all welfare income on Aboriginal communities. One of the tasks of the “authorised officer” at places like Yuendumu is to determine if it is able to administer and comply with the Income Management regime.

And here is the rub. Already, Yuendumu has been asked if it can maintain detailed records of “approved” sales to welfare recipient customers spending their 50% quarantined incomes. Because this will not be in the form of cash, community stores will be obliged to reconcile this non-cash spending, and then invoice Centrelink, which will in turn decide whether the sales have been correctly allocated against “approved” purchases.

A large store like Yuendumu may conceivably have the cash flow to survive this impost on its business, though you can bet Centrelink will take weeks, if not months, to reimburse stores – meanwhile having to pay their suppliers on invoices that are rarely extended beyond 30 days.

But that might prove impossible, especially for smaller stores facing a dramatically reduced income base as people are thrown off CDEP onto Work for the Dole.

The store at the Gulf community of Robinson River last year had gross sales of around $1.78 million from a total community income through CDEP of $1.16 million, of which $93,000 was in “top up” wages. The store now has to contend with a 20% reduction in local incomes as people are moved off CDEP and onto Work for the Dole or training money – let alone access to the “top up”. The store predicts that this will dramatically reduce its capacity – even without the possibility of having the cost shifting of having to administer the Centrelink “quarantined” Income Management. Full time employment at the store is likely to be cut, along with CDEP workers.

Thus far there is no suggestion that the Feds will pay for these administrative tasks on behalf of Centrelink. The potential result is that stores will then be blamed for not managing financially – and then face a takeover by Canberra. Store owners such as progress associations, councils and traditional owner groups will face their assets being confiscated by the free wheeling, free enterprisers in Canberra.

And this is from Malcolm Brough who has recently claimed that collectivist, communist command economies don’t work. Go figure.


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