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Dec 9, 2008

ACCC alert: Macklin decides where dollars go in Yuendumu

Kevin Rudd’s Christmas bonuses will flow right past the Big Shop, straight into the tills of Outback Stores or down the 300 kilometres of rough roads to Alice Springs, writes Bob Gosford.

If the Federal Government’s continuing Northern Territory intervention has had one stand-out success it has been in centralising power in Jenny Macklin’s Department of Families, Housing Community Services and Indigenous Affairs.

Under new arrangements governing the control and licensing of community stores in the remote Territory, the department will not only take over the management of many of the Territory’s community stores, but also license any new operators. The department will then determine which stores can be used by Aboriginal people whose income it controls.

Outback Stores, currently owned by the statutory authority Indigenous Business Australia (IBA), is being taken over by the department. In recent months, IBA has expanded its empire of stores in the NT to 16, with more stores planned. That expansion has in large part been made possible by favourable legislative treatment and funding from IBA’s potential departmental owner.

According to John Kop, the CEO of Outback Stores, the transfer of ownership of Outback Stores from IBA started in early November and is currently undergoing “due diligence”.

In Yuendumu, the local Yuendumu Social Club, which operates the community’s “Big Shop”, has been trying to get a departmental licence to accept quarantined income for months.

In late November, the managers of the Big Shop wrote to Minister Macklin expressing their “extreme concerns” about possible Government-sanctioned manipulation of the local retail food market and the apparent stonewalling of applications for their shop to be licensed to accept income quarantined by the NT Intervention.

Yuendumu residents already have 50% of their welfare payments quarantined. Beginning this week, several hundred thousand dollars of Kevin Rudd’s Christmas bonus money will flow into Yuendumu. In Yuendumu 100% of those bonuses will be similarly quarantined.

The Yuendumu Social Club asked Minister for Indigenous Affairs Jenny Macklin:

How can it be considered fair trading or beneficial to the community to give this money to these residents and then tell them that they have to use it in only one store…or force them into Alice Springs…(w)hy shouldn’t the people in Yuendumu be given the same opportunities as people in town to decide where and on what they should spend their money on?

The Yuendumu Social Club store is locally owned and has operated since 1972, and, like many small stores in remote Australia, has had its share of financial and management troubles and triumphs. For over three decades The Big Shop has provided a full-service supermarket and service station in what must be one of the most difficult markets in Australia – virtually all of its clients live in grinding poverty, it is at the end of a long, expensive and dusty supply chain and can exercise little influence on its suppliers. It has never taken a dollar from any Government and has always supported local ceremonial and sorry business and sporting activities.

The other locally-owned store is the Mining Store, known locally as just “Mining”, which provides an idiosyncratic but locally-loved convenience store service from a converted Nissen hut. When the arrival of income-management at Yuendumu was announced in February 2008 neither the Big Shop nor Mining was interested in participating in that scheme. At the time the Big Shop was struggling in one of its occasional financial, management and administrative troughs and Mining was just not placed to provide the full service required to meet the particular standards required by FaHCSIA.

Unable to convince the Big Shop owners that they should participate in FaHCSIA’s income quarantining scheme, the NTER Task Force hunted around for an alternative. This is where the Outback Stores come in.

Outback Stores was established by the previous Indigenous Affairs Minister Mal Brough in 2006 and is wholly-owned (for now at least) by the Federal Government statutory authority Indigenous Business Australia.

16 of the 24 stores that Outback Stores operate across northern Australia are in the NT, where Outback Stores has been granted a preferential corporate licence to operate stores and receive welfare payments quarantined as part of Macklin’s Intervention. This means that, unlike any other proponent wishing to run a store on ‘prescribed land’ in the NT, Outback Stores does not have to go through the onerous and confusing requirements established by FaHCSIA in order to get a licence to operate.

Undoubtedly, the management and operational regimes established by Outback Stores have lifted the standards of service, governance and quality of store services in many communities, particularly those where only one store may have been struggling to make ends meet. But it is those townships where more than one store operates that many see that the preferential treatment given to Outback Stores by FaHCSIA and the NT Intervention task Force gives rise to real concerns about market manipulation and anti-competitive conduct.

Outback Stores provides a turnkey — “walk-in, walk-out” establishment service for new stores in remote communities. Outback Stores opened its store, the Nguru-Walalja store (known as “The New Shop”) at Yuendumu in August this year in partnership with the local Women’s Centre. The Outback Stores shop at Yuendumu is the only store here that can accept income-quarantined money or process the stored-value BASICS cards.

The Big Shop has had new management since 1 July 2008. FaHCSIA staff who have visited the store have commented favourably on the changes implemented by the new management, including a doubling of stock lines, stopping ‘book-up’, increased debt recovery and other initiatives. FaHCSIA staff were pleased with the changes and encouraged the new store managers to make application to process income-quarantined money. The Big Shop applied for a licence from FaHCSIA in August and has also applied to Centrelink for permission to accept BASICS cards. They say that all they have had in reply is confusion and delay.

It is now December and Kevin Rudd’s Christmas bonuses will flow right past the Big Shop, straight into the tills of Outback Stores or down the 300 kilometres of rough roads to Alice Springs.

In their email The Big Shop managers told minister Macklin:

This policy disadvantages the residents/consumers of Yuendumu by not offering them freedom of choice of where to shop in their own community. The inability of customers to spend their quarantined money in this store is damaging to the store and while we are making a recovery from previous mismanagement the inability to maximise our income opportunities can only be seen that way

Crikey asked the ACCC and Minister Macklin about the anti-competitive issues raised by the Big Shop managers. Minister Macklin has yet to reply. The ACCC referred Crikey to Macklin’s FaHCSIA.

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7 thoughts on “ACCC alert: Macklin decides where dollars go in Yuendumu

  1. eva cox

    Add this to the publication recently of the supposed proof that quaranting was working which was a survey of the stores on affected communities, and it becomes even murkier. As someone who is botha researcher and teacher of research methods, I would have failed any student who claimed evidence from biased sources was to be credible.I was already suspicious that stores that benefited from the intervention process were appropriate unbiased sources of data! And now we find that many are owned by the government.

    Tch Jenny, if this is your version of evidence based policy, pull the other leg!

    eva cox

  2. micheal brown

    We Are The
    Forgotten Australians
    Victims Of sexual Abuse, Physical Abuse, Slavery, Neglect, Emotionial Abuse, Physical Abuse, Torture, Mental Abuse, All Forms of Abuse. Of Which We, Were Only Children When We Suffered These Abuses, From Those employees That The States Had, Had To Care For Us In Their State Run Institutions, Orphanages,Girls Homes, Boys Homes, State Ward Homes, Remand Centres, State Run Church Homes,
    Still To This Day The State Of New South Wales Australia Continues To Cover Up The Abuse That We Victims suffered In these Homes That Were Run By The State Of New South Wales And That Of Other States And Territories Of Australia We Are The Victims The Goverment Of Australia Have Been Covering Up From The Australian Public As To The Abuses We Had Suffered While Under State Care By State Aurthorities. The Goverment Was Responsable For Our Saftey And Welfare. This Did Not Happen In Many Cases Of Which Have Been Recorded In Senate Inquiries, And The Courts. Yet The State Of New South Wales Will Not Acknowledge Us Victims For The Abuse That We Victims Suffered They Say The Records Such As, Excursion Log Book Records, Missconduct Log Book Rcords, Medical Log Book Records, Educationial Log Book Records, Work Log Book Records,
    They Say That These Records Were Either Lost, Missplaced, Or Either Destroyed. And This Was Stated In The Court Case By The State Crown Lawyers, Without The Victim Even Knowing Any Of This Information,
    We Are Real Victims And We Will No Longer Be Forgotten HuffnPuff

    also a lot of us victims suvive on the pensions because of what we suffered as children in these state run institutions,
    and not all of us people out here will be wasting any of the money mr rudd just handed out im lucky to have $50.00.dollars left after i pay my bills ,food ,and xmass presents , all this money has done for me is catch up on bills , nothing left for me to even going have a good time out and enjoy ones self .

    we suvive on very little

  3. Bob Gosford

    Further to Pam’s comments I note that in preparing this piece I left a phone message on the Yuendumu Women’s Centre phone advising that I wanted to speak to them about their partnership with Outback Stores but have yet to receive a response.
    One of the questions I would have asked them was about the cost of the renovations, fitout and on-going operations of the New Shop. This was a question I put to FaHCSIA, via Minister Macklin, and Outback Stores. The Minister has yet to respond. Outback Stores referred me to the Women’s Centre.
    It would be useful if the Women’s Centre would provide details of how much the renovations, fitout and ongoing management of the New Store has cost and who has, or will meet those costs – or have these been a grant, gift or loan to the Women’s Centre?
    I would invite the Women’s Centre to provide further details about the arrangements between Outback Stores, FaHCSIA and the Women’s Centre – these might include the nature of the Agreement between Outback Stores & the Women’s Centre – including management fees etc, and how, and where, profits from the store might be distributed.
    Another outstanding issue, and this has been raised elsewhere in relation to similar arrangements, is the nature of the Women’s Centre’s obligations for employment, human resources, insurance etc and the contingent liabilities arising from those matters.
    And if the Women’s Centre can clarify the involvement of the local Government Business Manager, FaHCSIA staff generally and the NTNER Taskforce (who I understand were involved in the broader Yuendumu stores issues at the highest level), this may help to ease the very real concerns that many people have about the patent lack of transparency surrounding these arrangements in Yuendumu and elsewhere.
    And, I have no issue with the Women’s Centre owning the new store – congratulations to them for being one of the few organisations in Yuendumu that has been able to force a favourable deal from the NT Intervention.

  4. Pam Malden

    As the manager of the Yuendumu Women’s Centre I would like to clarify the ownership questions surrounding the “Third shop” in Yuendumu.

    The Nguru-Walalja shop is not owned, managed or controlled by the government.
    Outback Stores do not own any part of this shop.
    This shop is 100% community owned.
    The Yuenudmu Women’s Centre is the overseeing body, there is a management committee comprising of community members and Outback Stores have been engaged by the Women’s Centre to manage this store.
    The Women’s Centre pays Outback Stores a management fee to manage the store on our behalf. This guarantees the community many things, including fresh food, competitive prices, a good range of product and management staff that adhere to a strict code of conduct and ethics.
    FaHCSIA placed no pressure on the Women’s Centre committee to engage Outback Stores, this decision was made by the committee based on their personal knowledge and opinions.
    FaHCSIA did not spend hundreds of thousands of dollars renovating the shop. In fact, it was only a drop in the ocean compared to the amount of funding organisations in Yuenudmu receive from the government.
    A community benefit fund has been established by the Nguru-Walalja committee for profit distribution. Profits from our first quarter of trading have been deposited into this fund which is administered by this same committee.

  5. Sally

    Sounds like the store refused to participate in income management in an attempt to thwart it and then when the government bypassed them to set up another shop to push on with income management, they now want in. I can well imagine that the government, after spending what must be a small fortune on a new shop would be hesitant to accept the turnaround from the big store.

  6. Catullus

    Thanks for the facts, Pam, & for shedding some light on this vexed issue. Maybe Eva Cox should dig a bit more deeply before she launches forth in future.

  7. Frank Baarda

    I’m the manager of the second store (the idiosyncratic one- thank you Bob!) at Yuendumu.
    Yes you are quite right, both stores refused to apply for a licence under the NTER legislation in an attempt to thwart income quarantining. From memory the wording on the letter to Major General Dave Chalmers from the Social Club’s lawyers was: “… we are getting mixed messages about Income quarantining and wish to wait for the proposed review before deciding on whether to embrace it….”. [This review subsequently came out strongly against COMPULSORY Income Management, but for all practical purposes was ignored and burried].
    The Intervention then proceeded to push on with setting up what I dubbed “the third store from the fifth column” in a fit of pique. And yes, I believe this cost hundreds of thousands of dollars.
    And yes, “they now want in”, but I’d like to point out that (again from memory) in the ‘letter of capitulation’ from the lawyers to Major General Dave Chalmers, in which the Social Club said they now wanted to apply for the licence, it was clearly stated that: “…this is in no way to be construed in that the Social Club and it’s committee are in favour of the Intervention and its methods or of Income Management…” The decision to apply for the licence was made under changed circumstances “…in the interests of the Social Club’s survival and to offer the Yuendumu community choice…”.
    There is a sharp contrast between the speed at which the third shop was fitted out and with which the Social Club’s application for a licence is being handled. Yes indeed: “….would be hesitant to accept the turnaround from the big store…..” but that doesn’t make it right.
    Incidentally large numbers of Yuendumu people have drifted into Alice Springs, and I believe the Intervention and Income quarantining have played no small part in this accelerated phenomenon.
    Perhaps I’m being paranoid- are they trying to turn Yuendumu into a ‘terra nullius’?