This article was featured as part of ESSA’s annual Equilibrium publication.
There’s hardly an issue in contemporary Australia that is as complex and poignant as the condition of Aboriginal Australians. They are the victims of historical atrocities, and now the victims of a current social and policy malaise. For when we discuss this issue, we routinely conflate the desire for symbolic reconciliation and the issue of economic disadvantage, and in doing so, are committing a fatal error.
This needs to change.
Through a paternalistic policy mentality with the intention of recompensing for damage inflicted in the past, we’ve ostracized Aboriginal Australians from the real economy. Education, skills and employment opportunities have been trashed by a system characterized by passive welfare and state housing, entrenching all the wrong incentives and ultimately causing social distress.
Regrettably, the notion of self-determination and empowerment are particularly contentious, especially amongst those people who actually take an active interest in this issue. Much of the intellectual tide has, for decades, been unfavorable towards these notions. To the detriment of Indigenous Australians, the issue has thus developed immunity from serious and reasonable discussion.
Yet new ideas and approaches are starting to take hold. The focus is starting to shift favorably toward the principle of creating the right incentive environment to allow Aboriginal people to be incorporated into mainstream, real economic activity, through playing by the same rules as everybody else, and bringing about economic and social advancement from within.
This gradual change is built upon the notion that excessive paternalism and the consequent poor incentive environment have been detrimental to the economic, cultural and social wellbeing of Aboriginal Australians. And rather than being to the detriment of Aboriginal identity and culture, real economic and productive engagement results in a economic and cultural net benefit in the long run.
These are fresh and daring ideas that shed a new light on an enduring cultural and economic quandary.
The Emergence and Implementation of New Ideas
The Cape York Institute is a leadership and policy body that have embraced the task of integrating Indigenous people into the real economy. They’ve been particularly active in advocating against the harmful affects of a passive welfare system on the grounds that it has been a cause, not a remedy, for social distress amongst Aboriginal Australians over the years. Their agenda centres upon creating the right incentive environment to initiate economic and social progress. This has required tackling head-on the once rife welfare passivity that discouraged people from seeking work, and which ultimately led to great social disintegration.
The Cape York Welfare Reform Trial has experimented with overhauling the mainstream, passive welfare system, instead initiating a conditional welfare system. There are obligations attached to receiving welfare payments under this system, such as ensuring children attend school and are safe from abuse and neglect, not committing drug, alcohol and family offences, and abiding by tenancy agreements.1
The program has worked.
The Cape York Welfare Reform Trial has worked because it recognises the fact that the conventional rationale that welfare is meant to ensure security and pave the way for development has not worked in the case of Aboriginal Australians. Under the Welfare Reform Trial, there has been a surge in school attendance and a greater engagement with intellectual and cultural pursuits. This is extremely promising.
This is what happens when policy recognises the importance of incentives in guiding human behaviour. A mindset conscious of the fundamental principles of economics has had a remarkably positive effect. This highlights the significance of economic ideas and principles in bringing about positive economic and social change.
The Virtue of Wealth
The man behind many of the remarkable initiatives taken by the Cape York Institute has been leading Aboriginal intellectual, Noel Pearson. In an interview on the ABC’s Lateline in April earlier this year, Pearson powerfully expressed his own views of Indigenous Australia. Pearson made that point that,
“Money and materialism shouldn’t be seen as anathema to Aboriginal identity. Because it’s not anathema to the rest of Australia, so why should it be anathema to the identity of Indigenous people? And there’s still a lot of resistance to the idea of Aboriginal success. On the one hand we say we want it, but on the other hand there’s a kind of strong cultural and social resistance to it”.2
As Pearson indicates, a large part of any progress for Aboriginal Australians rests upon economic advancement, through a “jealous regard for the prospects of your own family”3, and this should not be resisted. Essentially, engagement with the real economy, where the same social and cultural standards apply for Indigenous and Non-Indigenous Australians, will not destroy Aboriginal identity. It is instead key to ‘closing the gap’.
Let’s Get Real
Incentives are a powerful guide to human behaviour. For Aboriginal people, this is no different; nor should economic progress by itself be viewed as a hollow objective. While Aboriginal Australians have been subject to the vilest of treatment in the past, which demands symbolic reconciliation, there still is an overwhelming need for social stability, prosperity and higher standards of living. Without this basic condition, efforts for greater symbolic reconciliation are far-fetched.
We need to recognise the power of economic progress in mending many social ills, and from there, symbolic reconciliation can have more resonance. When Aboriginal Australians can be actively engaged in the real economy leading better lives, we can be confident that there will be a much brighter future for all of us.