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Federal

Jul 1, 2011

The massive indigenous employment gap stagnates

How much more evidence that indigenous employment policies are not working will the Gillard government need before it changes its disastrous policy, write Professor Jon Altman and Dr Nicholas Biddle from the Australian National University.

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For most Australians, the global financial crisis is either something that is happening overseas (look at all those Greeks rioting) or a scare that never really came to pass (what were we all so worried about anyhow?). The Aussie dollar is higher than many people can remember, stock prices are up from their GFC-low and the unemployment rate is currently at about 5%. We are now back to talk of skills-shortages and infrastructure bottlenecks. For one group of Australians though — the Aboriginal and Torres Strait Islander population — economic circumstances aren’t so rosy.

Last year we published an article in Crikey titled Rudd Overpromises on Indigenous Unemployment. This was based on labour force data released for the first time since the election of the Rudd government in November 2007 and more importantly the setting of Closing the Gap targets in February 2008. Looking at indigenous employment levels at the national level, we found that during the first two years of the Rudd administration (when the GFC was having its biggest effect on Australia) the indigenous unemployment rate had increased from 13% to 18%, the employment gap was growing rather than declining.

In the article, we suggested that this growing employment disparity might be due to three factors: insufficient focus on indigenous employment support in the aftermath of the GFC; the hasty abolition of the CDEP scheme in regional Australia; and over-reliance on Andrew Forrest’s Australian Employment Covenant to deliver 50,000 jobs in two years.

We were surprised at the time that the media gave scant coverage to these official statistics that, besides the five-yearly census and the six-yearly NATSISS, provide the only means to hold the Council of Australian Governments accountable for its admirable target, to halve (not eliminate) the employment gap between indigenous and other Australians within 10 years. We were also surprised to receive criticism from Senator  Mark Arbib for our use of official statistics to highlight shortcomings in the Rudd government’s performance on indigenous employment creation.

Senator Arbib suggested that the ABS Labour Force Survey was an unreliable instrument for measuring change in Indigenous employment levels, which begs the question of why it is then published? In fact as we informed Senator Arbib this survey instrument is reliable especially if one tests for statistical significance using information of standard errors provided by the ABS.

On Wednesday the ABS again published the LFS now providing new information on the employment situation in 2010. The summary statistics (and the attention in the media) are again extremely disappointing. Between 2009 and 2010 the indigenous unemployment rate (for those aged 15-64 years) increased from 18.1% to 18.2%, an increase that is not statistically significant suggesting basically no change. This figure can be compared to the non-indigenous rate of 5.1% (compared to 5.5% in 2009). The indigenous unemployment rate is 3.6 times the non-indigenous rate and the gap is definitely not falling. The employment/population ratio for indigenous Australians has also remained relatively fixed at 47.7% in 2010 and 47.7% in 2009. The gap there has also not budged in the last year.

These findings are extremely worrying for prospects of halving the employment gap by 2018. We are three years down the 10-year track and the employment gap appears to have stagnated. Imagine the political ramifications of a national unemployment rate of over 18%!

Yet again these official statistics indicate that one of the major gaps in indigenous policy is between the Rudd and now Gillard government’s rhetoric that the situation for indigenous Australians is improving and the statistics provided by their own data collection agency.

It raises important questions about whether the Closing the Gap employment target has any policy integrity and more importantly what the Australian government should be doing differently. The Prime Minister might promulgate a national narrative of “jobs, jobs, jobs” and an indigenous policy dogma of “education, education, education” as if the two are automatically linked, but clearly in practice closing employment gaps requires more than just discourse and piecemeal provision of publicly underwritten work, a little here, a little there.

Here we return to our suggestions last year.

First, as we suggested then and our colleague Kirrily Jordan highlighted recently the Australian government may have been over-reliant on the promises of Andrew Forrest and the AEC to create 50,000 indigenous jobs in two years. There may be a need for a more active hands-on role for the Australian government in generating private and public sector employment.

Second, it borders on unconscionable for the Australian government to abolish the CDEP scheme in regional Australia and to effectively abolish it in remote Australia under such dire labour market circumstances. The CDEP scheme is an active workfare program that generates employment, enterprises and community development. Other ABS data has shown that those on the CDEP scheme are happier and healthier than those who are unemployed. It is ludicrous to drive people from this program into passive welfare in the name of creating proper jobs that are either not eventuating or not being taken up.

It is our strongly held view that setting abstract employment targets for some future date, “reforming” CDEP in the name of imagined proper jobs and relying on the promises of mining magnate Andrew Forrest and the AEC board is all too easy, but to date has proven futile in actually reducing employment gaps. There is need for some hard policy work to be done here: where do indigenous people hold competitive advantage in the labour market? What are the structural and institutional barriers to employment creation on a region by region basis? And what are indigenous aspirations, for employment and for livelihood, and how might these be maximised. Addressing such questions will require hard policy work but in our view such work is now more essential than ever if indigenous gaps, be they in livelihood outcomes or employment statistics, are to be reduced; and if investments are to be targeted to deliver appropriate forms of employment generating development.

How much more evidence that indigenous employment policies are not working will the Gillard government need before it changes its disastrous policy course founded too much on rhetoric and ideology and not enough on the hard reality of how hard it is to create livelihood opportunity especially in regional and remote Australia and to address historical legacies of neglect experienced by too many indigenous people.

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