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Andrew Forrest

Andrew Forrest

Acknowledgements

I would like to extend my personal gratitude to the teams at Fortescue Metals Group and the

Department of the Prime Minister and Cabinet and the many others who downed tools and put their

shoulder to the review wheel at a moment’s notice and mostly with no compensation.

My deep thanks to Professor Marcia Langton, who welded the regular and spontaneous stresses of

the review’s challenges around her demanding duties at the University of Melbourne.

I am indebted to my family, particularly my wife Nicola and my three kids, who for most of the time over

the last nine months lost their father to compiling this review—ot only during its writing, but during the

rigorous travel schedule required to compile the collective wisdom that has gone into this document.

This review could not have been achieved without the tireless contribution and wonderful talents of

the team from the Department of the Prime Minister and Cabinet. I would particularly like to thank

Kate Gumley, Dianne Hawgood, Richard Eccles, Jan Goetesson, Tania Rishniw, Kristen Saunderson,

James McDonald and Matthew James; and I have particular gratitude for the courage and unselfish

contribution of time of our Parliamentary Secretary to the Prime Minister, Alan Tudge.

Our treasurer, Lee Trewartha, and information technology experts from Fortescue convinced me

that the technology for the Healthy Welfare Card was available to the world but simply needed

implementation on a mass scale, and Peter Meurs assisted my management and implementation

thinking greatly. Their time contribution was, however, minimal compared to that of my colleagues

Christine Nicolau, Corinne Hay, Jan Everett, Claire Lego, Damien Ardagh, Blair McGlew, Alexa

Morcombe, Tom Weaver and our head of Indigenous procurement, Heath Nelson. Heath’s experience

in Indigenous procurement (for Fortescue’s $1.6 billion of contracts to Indigenous companies) has

been invaluable to this review. External experts who contributed time freely, including Dave Faulkner

(in remote education), Ric Simes from Deloitte Access Economics, and Michael Rennie from McKinsey

& Company, have all earned our respect. I will be grateful if all of you could continue to respond

enthusiastically if required during the implementation phase.

I am grateful to Fortescue’s entire leadership team who accepted the review team’s commandeering

of all the main meeting rooms and support staff as we pulled together the final stages of this report.

My heartfelt thanks go to my Minderoo team, Hayley Martin, Marcelle Anderson, Matthew O’Sullivan,

Michael Starr, John Railton, Graham Forward, Fiona Stanley and Nicola for your great contribution in

many areas of the review—n particular, prenatal and early childhood education.

Finally, and definitely not least, the development of the Healthy Welfare Card on an entirely

community contribution basis could not have happened without Eftpos’ Bruce Mansfield and

Warwick Ponder, Westpac’s Claire Scott and Mark Tibbles, ANZ Bank’s Bryn Gaunt and Rohan Harrap,

Commonwealth Bank of Australia’s Angus Sullivan and Ian Wunderlich, National Australia Bank’s Kate

Cooling and Adam Lane, Woolworths’ Peter McConnell and Dhun Karai, Coles’s Robert Hadler and

Conrad Harvey, Metcash’s (IGA) Fergus Collins and Richard Roose, and MasterCard’s Eddie Gobler.

Please accept my deepest gratitude.

Andrew Forrest

iii

Contents

Acknowledgements iii

Introduction 1

Executive summary 3

Accountability for results 5

The package of recommendations 5

Why change is needed 6

The first Australians left behind 7

Likely life outcomes for first Australians left behind 8

Failure of the service system 9

Government approaches 11

Creating parity for all Australians 12

Key drivers for change 15

What first Australian leaders told us they should do 16

The need for an agreement between governments 17

The need for bipartisan support 18

Changes that benefit all Australians 18

Consultations and submissions 18

Summary of recommendations 19

Chapter 1: Prenatal, early childhood and education 19

Recommendation 1: Early childhood 22

Recommendation 2: School attendance 23

Recommendation 3: Improving educational outcomes 25

Recommendation 4: Stopping distractions to education 26

Chapter 2: The Healthy Welfare Card 27

Recommendation 5: Healthy Welfare Card 28

Chapter 3: Implementation and accountability 30

Recommendation 6: Implementation and accountability 31

Recommendation 7: Implementation 32

Recommendation 8: Agreement to implement the recommendations of this report 33

Chapter 4: Breaking the welfare cycle 34

Recommendation 9: Young people 34

Recommendation 10: Job seeker obligations 35

Recommendation 11: Breaking the welfare cycle 36

Chapter 5: Building capability, dismantling the cash barbeque and eliminating disincentives 37

Recommendation 12: Tax incentives 39

Recommendation 13: Employment services 40

Recommendation 14: Vocational education and training 41

Recommendation 15: Driver’s licences 42

Recommendation 16: Training in incarceration 43

Chapter 6: Incentives for housing and mobility 44

Recommendation 17: Housing 45

Chapter 7: Building employer demand 47

Recommendation 18: Government procurement 48

Recommendation 19: Top 200 employers 49

Recommendation 20: Support for employers 49

Recommendation 21: Public sector employment 50

iv

Chapter 8: Empowering people in remote communities to end the disparity themselves 51

Recommendation 22: Remote Job Centres 53

Recommendation 23: Local governance 55

Recommendation 24: Consolidating service delivery 57

Recommendation 25: Remote housing 58

Recommendation 26: Enabling leasing or freeholding of Indigenous land 59

Recommendation 27: Land access payments 60

Part 1: The wheel rim 61

Chapter 1: Prenatal, early childhood and education 62

What success looks like 63

Current approach to early childhood 69

Determinants of a healthy pregnancy 70

Brain development from conception to three years of age 71

Return on investment 72

Shifting government spending to preventative services 74

Being ‘school-ready’ 75

A solution—ntegrated case management for mothers from prenatal to three years of age 76

Challis Early Childhood Education Centre— success story 77

Results 77

Incentives for expectant mothers to access ante-natal care 79

Recommendation 1: Early childhood 81

School education 82

Quality education, school attendance and teacher quality are the keys 85

School attendance 87

Enforcing truancy laws 88

Achieving parity in attendance 89

Using family tax benefits to improve school attendance 89

Accountability for school attendance—aying states on actual attendance 91

Case management to improve school attendance 91

Better access to boarding schools and adequacy of ABSTUDY 92

Accountability for parity in educational outcomes 94

Proven methods of instruction in English and maths 94

Incentives for the best teachers 95

The role of principals 96

Recommendation 2: School attendance 96

Recommendation 3: Improving educational outcomes 98

Recommendation 4: Stopping distractions to education 99

Chapter 2: The Healthy Welfare Card 100

What success looks like 101

The search for a new approach 102

Empowering people through the Healthy Welfare Card 104

Smart payment system technology 105

How the Healthy Welfare Card would work 106

Introduction of the Healthy Welfare Card 107

Recommendation 5: Healthy Welfare Card 107

v

Part 2: The wheel spokes and hub 109

Chapter 3: Implementation and accountability 110

What success looks like 111

How governments can achieve massive change—fast 113

Paying for results and not process 114

The package of recommendations 114

Implementation is no smorgasbord 115

Taking this unique opportunity 115

Leadership for the implementation and measurement of successful change 116

Eliminating duplication through free access to data 117

An agreement between the Commonwealth, states and territories 117

What does success look like in urban areas? 120

What does success look like in remote areas? 121

Recommendation 6: Implementation and accountability 123

Recommendation 7: Implementation 124

Recommendation 8: Agreement to implement the recommendations of this report 125

Chapter 4: Breaking The Welfare Cycle 126

What success looks like 127

Young Australians on welfare: earn or learn 130

Mutual obligation and job seeker compliance 132

Complexity of the income support system 133

CDEP wages 134

Recommendation 9: Young people 135

Recommendation 10: Job seeker obligations 136

Recommendation 11: Breaking the welfare cycle 136

Chapter 5: Building capability, dismantling the cash barbeque

and eliminating disincentives 138

What success looks like 139

Taxation incentives (or saving the taxpayer $1 million per incarceration) 140

Pulling the market lever—creating and encouraging commercial power to assist

the most disadvantaged 141

Why tax free status? 148

Operating Work for the Dole on a commercial basis 150

Employment services 150

First Australian employment—Job Services Australia 154

Role of Work for the Dole and intermediate labour markets 155

Young workers 156

Job seekers with a criminal record 156

The vocational education and training system 158

Getting the basics right for work 163

Recommendation 12: Tax incentives 164

Recommendation 13: Employment services 165

Recommendation 14: Vocational education and training 166

Recommendation 15: Driver’s licences 167

Recommendation 16: Training in incarceration 167

Chapter 6: Incentives for housing and mobility 168

What success looks like 169

The social housing trap 172

Mobility for work 173

Home ownership 174

Recommendation 17: Housing 176

vi

Chapter 7: Building employer demand 178

What success looks like 179

Indigenous Employment Programme 181

Using Commonwealth procurement to create demand for first Australian business 182

Growing demand through government 184

Recommendation 18: Government procurement 186

Recommendation 19: Top 200 employers 187

Recommendation 20: Support for employers 187

Recommendation 21: Public sector employment 188

Chapter 8: Empowering people in remote communities to end the disparity themselves 190

What success looks like 191

Employment services in remote communities 195

Keeping people active and engaged 197

Empowered communities leading the way 199

Backing local leaders to get local people into work 199

Opting in and earned autonomy 200

Consolidating service delivery 200

Recommendation 22: Remote Job Centres 203

Recommendation 23: Local governance 204

Recommendation 24: Consolidating service delivery 206

Remote housing 207

Recommendation 25: Remote housing 208

Land—the key to economic development and home ownership 209

Barriers to home ownership 210

Land tenure constraints 212

Northern Territory land councils 212

Land-use regimes in remote areas—prerequisites to home ownership 215

Land access payments 218

Recommendation 26: Enabling leasing or freeholding of Indigenous land 220

Recommendation 27: Land access payments 221

Appendix A: Terms of reference 223

Purpose 224

Creating sustainable employment outcomes 224

Programme effectiveness and costs 225

Appendix B: Consultations and submissions 227

Roundtable meeting attendees, 15–22 November 2013 230

Additional consultations 231

Submissions 232

Abbreviations and acronyms 236

Notes 237

vii

Andrew Forrest

Introduction

I grew up near a remote West Australian town. As one of the few white kids in our outback

community to attend an Indigenous boarding hostel, I look back with fondness on this family of kids

who looked out for each other. We were brothers and sisters and some of my best mates in school

were my mentors. Those school friends have died, all of them too young. Since then, I have made

friends with people around Australia and the world, and among them are Indigenous people who

have the values that I was taught as a child are the most important.

It is a pretty game government that would appoint a philanthropist and entrepreneur to review their

programmes knowing we would not take an incremental or bureaucratic approach. In business and

philanthropy I make every dollar count: you must have an eye on the market at all times and be

absolutely accountable for performance and cost. In this world, the effectiveness of initiatives must

be absolute or discarded.

This review recommends a strategy that delivers a complete end-to-end solution, without the

baggage of attachment to current government policies and arrangements. Implemented in full,

it will end the disparity between Indigenous Australians and other Australians and comprehensively

build our society.

My early life gave me a life-long passion to experience parity between Indigenous Australians and

other Australians. This will only occur through gainful valuable employment. The nation’s most

glaring failure is the huge disparity in employment of Indigenous Australians and other Australians.

This does not have to continue.

The most important discovery I made in writing this report is that there is no disparity in employment

between first Australians with a decent education and other Australians. A decent education means

leaving school with Year 12 or equivalent qualifications and the ability to go on to further education

and training. There is employment parity now for first Australians with Certificate III or IV level

training that most apprentices undergo, diploma or university qualifications.

Therefore, I have used the full breadth and scope of my terms of reference to ensure the

recommendations include everything required to ensure we achieve parity in education outcomes

for first Australians. We must doggedly remove the impediments, raise our expectations dramatically

and pursue accountability for Indigenous education until we reach parity in outcomes between all

Australian kids.

Hoping for a different result while doing things the same way defines insanity. My approach relies on

a dedicated national, state, community and family team effort. Changed attitudes and behaviours

from parents, community Elders, teachers and principals—ut particularly from governments—re

essential. Only this will bring the disparity to an end.

Thank you to everyone who gave their time, views and shared passions with me. I am greatly inspired

by the energy, innovation and determination of everyone I have met across Australia. Your yearning

to see an end to the disparity and make the most of the nation’s capital will be realised if these

solutions are implemented in total by our governments.

Andrew Forrest

1

• Procurement opportunities

• Employment services

• VET and training

• Mobility support

• Home ownership

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

2

Executive summary

My report is a call to all Australians. It is time to end the disparity between our first Australians and

other Australians. Jobs give individuals the opportunity to choose circumstances, to take control of

their lives and to provide for their own and their children’s future. This preserves Indigenous culture

and ensures its relevance for future generations.

Nothing destroys family and traditional culture quicker than despondency, dependency and poor

lifestyles. My childhood was populated by Indigenous leaders who proudly wore the mantel of

their own culture and upheld and ensured the preservation of their laws and traditions. Aboriginal

ceremonies like corroborees were often held in short distance from our homestead so everyone

could take part. There was never any discussion that their ability to lead in the workforce and

enjoy a modern standard of living would conflict with the love of their culture. They competently

conversed in both English and Indigenous languages. Since then, the ability of Indigenous people to

be employed is not assured. Indeed, the disparity resulting from the large proportion of Indigenous

Australians who are disengaged from the workforce has reached crisis levels—ence this report.

Ending the disparity has defeated successive well-intentioned governments of every political

persuasion at the Commonwealth, state and territory levels for decades. Progress has been made

in some areas, but most concerning is the growing gap in employment outcomes. Education and

employment have the capacity to end the disparity, but a massive 30 point gap in employment

outcomes between Indigenous and other Australians exists despite the tens of billions of dollars

spent by governments to address Indigenous disadvantage.

The great belief that this disparity is with us forever is put to the sword when you learn that there is

no disparity in employment between first Australians with a decent education and other Australians.

A decent education means leaving school with Year 12 or equivalent qualifications and the ability to

go on to further education and training. There is employment parity now for first Australians with

Certificate III or IV level training that most apprentices undergo, diploma or university qualifications.

We need to be clear about education as the right of every child. Parents who send their children to

school every day accord this fundamental human right to their children. Children who are not sent

to school regularly are denied this right, the right to a normal standard of education and the skills to

become capable citizens. Without these, they will be unable to enjoy the standard of living of other

Australians. Unless a child has enough sleep and nutrition, and arrives clean and properly clothed at

school, he or she cannot learn. Illiteracy and innumeracy are disabilities in our society. While teaching

standards and schools must be reformed to ensure that Indigenous children are educated, their parents

must also play their part and send their children to school at least nine out of 10 school days. Only

wholesale change of community attitude has sufficient potency to create the change which will see

every Australian child given a fair go in life. Marcia Langton has described the failure of parents to send

their children to school as ‘child abuse’. I agree. I urge a radical change in community attitudes to parity

in school attendance and education standards for Indigenous children. If the community, our leaders,

and especially parents, demand the right of children to be educated, so too will our school systems

change to provide every opportunity for Indigenous children to reach their full potential.

In a nutshell, it’s time to end the paternalism, to expect able first Australians to stand on their own

feet and become independent, and for governments and government-funded non-government

organisations (NGOs) to remove the impediments so that they can.

3

Almost half of our first Australians have already stepped up and are not disadvantaged. They enjoy

strong family lives and are living proof that the disparity can end. They lead successful lives and

have successful careers. They receive a good education, are employed, pay taxes and support their

families. They are succeeding, like us, because of education and employment.

Australians and other Australians. In fact, first Australian women with a degree have higher

and 2012 the total number of Indigenous students enrolled in higher education increased by

Whichever way you look at this, only employment will end the disparity, and employment is only

possible if we remove all impediments to parity in education.

Given the undeniable fact that there is no employment gap, or disparity, for first Australians who

are educated at the same level as other Australians, the full force of our community leaders and

governments must pack behind the achievement of parity in educational outcomes as the national

priority. This starts with individual responsibility during pregnancy, intensive early childhood

preparation and decent schooling. It doesn’t mean more money—t does mean we empower our

education and training institutions with expectations and the tools to remove the disparity in results

between first Australians and other Australians.

An additional 188,000 Indigenous Australians will have to find work in the next five years if we are to

No existing federal, state or territory government policy has any hope of meeting this challenge if the

current policies continue.

We have failed so far because there is:

necessary changes rather than empowering first Australians themselves

programmes and how they are implemented

disadvantage, rather than preventing it, so success is limited and very expensive

extending the trajectory of cost, lost opportunity and misery to individuals and to the country

passive income lifestyles for providers and recipients.

4

We have no interest in merely halving the employment gap. These piecemeal efforts simply justify a

thousand different, small, yet highly expensive measures that may or may not work. They also cost

the taxpayer a fortune. Projects that exist on government funding but do not measure themselves

against highly capable and transparent outcomes should be discarded. We already have massive

levers we have not yet used to end the disparity—the power of the market, enforcing truancy laws

and changing our attitudes to expect and demand more for first Australians.

One of the elements we need to address quickly is the lack of cooperation between the states

and territories and the Commonwealth. It is vital that the jurisdictions cooperate fully in the

implementation of these measures.

The cooperation ‘gap’ must not continue. The politician or public servant to resist this process must,

by their behaviour, be deemed as having little priority for creating parity with their fellow Australians.

Accountability for results

Governments must hold themselves accountable to the public for the combined effectiveness of their strategies and the merit of individual programmes by meeting robust performance measures.

Because they are existing on the public purse, so they must be prepared to publish their outcomes for the public and put funding at risk, paying on performance and results, not process.

Critical to sound implementation are accountability milestones where a pre-agreed performance schedule is measured, and if found lacking, immediately corrected. We should accept no less than this level of accountability for delivering on results and the bottom line, as we do in the private sector.

Accountability is the key to ensuring effective implementation. The My School website is a major step forward in accountability of public services and we can build on this to shine a spotlight on the effectiveness of our collective efforts to end the disparity. This review proposes that all governments provide quarterly and annual reporting to a central depository. I recommend the establishment of a CreatingParity website for this purpose. This would apply the same discipline used by the private sector to listed public companies to detail progress. It would enable early corrective action where required and provide clear evidence that use of precious taxpayers’ money is being carefully scrutinised and results are being achieved.

The CreatingParity website should identify:

• the extra tax contributions generated by first Australians as they take up and keep jobs

• the savings to the taxpayer as programmes are consolidated and eventually made redundant

• clear evidence of the beneficial impact as government investment shifts from reactive spending to preventative services such as early childhood.

The package of recommendations

The recommendations in this report represent an interdependent and comprehensive package of measures. If implemented, they will prepare those who are capable but lack the necessary skills and motivation with the training to enter the workforce. They will create opportunities, engage and provide incentives for first Australians, prevent disadvantage by initiating intensive early childhood development and education, and support the most vulnerable to make sound life choices and manage their finances. They will provide strong incentives recognising that only first Australians themselves can make the necessary lifestyle changes, and only employers and the market can deliver real jobs.

5

Measures such as intensive prenatal and early childhood services, strict education focus, tax incentives and the proposed Healthy Welfare Card are imperative. These are some of the flagship measures in the

report that are designed to achieve the seismic change needed to end the disparity.

Each chapter in this report links to the other chapters and includes specific recommendations and

implementation strategies. The measures bolster each other and rely on each other to give the

cumulative impact necessary to end the disparity. They are not presented as a smorgasbord (to be

picked and chosen from) but are proposed as an integrated suite of policy solutions to the growing

issue of first Australians’ disengagement.

The extent of disengagement where welfare has taken hold is such that only comprehensive and

coordinated change introduced across the board will succeed where past efforts have failed. The

initiatives are necessarily broad and powerful to meet the growing challenge of first Australian

disparity for the benefit of every Australian.

Expressed simply, if the recommendations are not implemented in full or, if the ministers and the

departmental heads who advise them decide to pick and choose recommendations, we will not end

the disparity. In particular, federal, state and territory governments need to publicly proclaim their

determination to create the parity which all Australians yearn for in a cohesive and collaborative way.

It is important not to use these measures as chips in a funding bargain.

Australia’s economy and society has been held back by this issue and it has had an impact on the

standard of living of every Australian. We should be well past throwing money and paternalistic

solutions at Indigenous Australians. Instead, we need to set and drive high expectations and equal

opportunity. Apart from the social responsibility of every Australian, the economic benefit of ending

the disparity will compound to billions of dollars and eventually, through economic multipliers, to

tens of billions dollars each year.

Seismic, not incremental, change is required and the time for decisive action is now. These solutions

are not expensive and parity is completely achievable with sufficient will from each of us.

Why change is needed

Over the last two decades attempts to stem passive welfare have been like trying to hold back the

tide with a wire fence at the low tide mark, particularly in remote Indigenous communities. Wellmeaning

governments have unintentionally condoned the ‘soft bigotry of low expectations’ with

racism of low expectations’. This has helped no-one. As a first Australian woman you are more than

34 times more likely to be hospitalised for assault than your other Australian sisters. If you live in

the Northern Territory this will rise to 80 times. How can this welfare driven predicament be allowed

to continue?

There are 670,000 first Australians nationally and 21% live in remote Australia. Around 56% of the

first Australian population is under the age of 25, and a group of around 80,000 people will either

enter the workforce or the welfare cycle in the coming years, dependent upon the decisions we make

first Australians, go to school and get an education so they can work to support their families and

contribute to the prosperity of the nation.

6

The first Australians left behind

Regrettably, a proportion of first Australians have been left behind and suffer circumstances similar to

those of many other disadvantaged Australians. These outcomes are not caused by their Indigeneity,

but result from unemployment, welfare dependency, poor choices, limited capacity, remoteness, and

a lack of education, prenatal care and early childhood development. Every Australian parent knows

that these are the things that will give their child the best opportunities in life.

We recommend the immediate implementation of the policies recommended in this review

to enable all disadvantaged Australians to find direction, purpose and independence through

meaningful employment. Many of the measures we propose are for mainstream programmes and so

apply to all welfare recipients.

Sometimes governments have compounded these problems with the passive delivery of welfare

and services, treating symptoms and not preventing them. This is despite the evidence that shows

that the longer you are on income support, the harder it is to find a job and the higher the likelihood

of transferring to other income support payments. For example, income management was widely

regarded as very helpful for vulnerable people to stabilise their budgets and stay in stable housing.

However, it makes transitioning from welfare to a job very difficult and does not include individuals

in Australia’s mainstream financial services system, thereby increasing their dependence.

Employment outcomes for first Australians remain poor and are getting worse. Some 60% of all first

Australian 17- to 24-year-olds are not engaged in work or further education (compared to only 26%

30 percentage points below that of other Australians. In remote and very remote areas the story

is much worse, with only around 35% of the first Australian population of working age employed

compared to 83% of other people. Even in Western Australia, where the mining industry leads the

business sector in first Australian employment, the first Australians’ employment rate has fallen from

jobs—an increase of more than 100% on the current pool of working first Australians.

Without the dignity of work or meaningful participation, some have made irresponsible decisions

that will have a permanent impact on their future prospects. For example, incarceration rates for

first Australians are now 15 times that of other Australians and young first Australians make up a

large proportion of this group. Half of those under 18 years of age in detention across Australia are

As a nation, we spend over $1 billion each year on gaol and other corrective services for first

entrenched. The employment rate for male first Australian ex-offenders who have been in gaol at

some point in their lives is just 39% compared to 65% for first Australian men who have never been

to make incarceration an empowering experience that results in the individual being prepared for

independence and contribution to society on their release.

7

Likely life outcomes for first Australians left behind

Without change, what can a first Australian born in the 21st century expect in life? Compared with

their fellow Australian peers, a first Australian will be:

A first Australian in remote Australia can also expect to be:

8

Failure of the service system

Preceding governments of all persuasions have been guilty of allocating funding on an ad hoc,

imprecise basis without adhering to an all-of-government long-term strategy to completely end

the disparity in Australia. This has led to what Noel Pearson calls ‘the welfare industry’ and has now

proliferated into multibillion-dollar proportions. It represents a multibillion-dollar vested interest in

continuing the disparity. No doubt, these will be among the most ferocious critics of this review.

It is, however, my belief that the lack of faith in the possibility of parity between our first and all

Australians directly propagates the thousands of ineffective programmes that have attracted

funding. This reactive planning is often made on the basis of who gives the greatest presentation, or

occasionally who has the closest relationship with the responsible government executive or minister

backing their own winners and favourites.

It has led to disparate, often competing, agencies, government bodies, and NGOs (also often funded

by government) working regularly against each other. This is not surprising as each enterprise is

forced to compete for funding in a dog-eat-dog environment.

This hasn’t been the result of deliberate policy, it’s just happened. To guard against it, we need close

public scrutiny of the performance of our mainstream government services. We need to refocus on

addressing expectations and regenerating the responsibility of communities and families.

Are mainstream services being held to account? Are responsibilities being fully enforced and

accounted for? Is there sufficient glare of public scrutiny on their performance? Not yet. And are

they failing our first Australian brothers and sisters? Yes, but don’t blame them. We are all in a sense,

at least by association, guilty of the soft bigotry of low expectations. Where this has translated

into areas of very low performance—ike, for example, very low, continuing and systemic school

attendance—t may even be called the racism of low expectations.

The good news is that there are massive existing levers available right now within communities,

the market and governments that we can use better to end the disparity. These levers alone would

be sufficient to end the disparity, yet we have all been hugely distracted by the thousands of little

programmes that feed an army of people existing off the continuance of the disparity. Time after

time we have found that the support needed and the accountability required simply isn’t there. We

need to focus on these big levers and walk away from the expensive marginal benefit (at best) of the

thousands of little programmes.

Governments of every level must not cash in these cost savings until they have completely resolved

to implement the strategy for this review. Governments together must ensure that every first

Australian child, without exception, attends school nine out of ten school days and that these

necessarily courageous steps are underway with a priority on English and basic mathematics.

Subsequently, this review recommends that the government withdraws funding from all but the

most outstanding results-oriented and successful initiatives where their very livelihood relies on

sustained results, and in its stead brings all-of-government, community and successful family

expectation pressure to bear on ending the disparity, for once and for all.

Like other organisations in Australia that survive on merit, governments must hold themselves

accountable to the public for their results. The merit of individual programmes must be assessed

through robust performance measures that have been agreed prior to the first cheque being written.

9

As discussed elsewhere in this report, as government-funded service providers exist on the public

purse, so like the rest of us they must be prepared to be paid on results. Certainly the practice of

simply funding process, without putting payment at risk and rewarding results, must stop. Publishing

outcomes for public benefit is therefore essential.

Given this level of disadvantage faced by first Australians, the citizens of Australia are entitled to ask:

become more self-reliant, especially through employment?

training system for future jobs?

independence?

These are some compelling facts that give an insight into the inadequacies of the current solutions

and effectiveness of the service system:

not engaged in either education or work. The rates are staggering: around 60% nationally and

82% in very remote areas, compared to 26% nationally and 22% in very remote areas for other

for schooling to be effective. In the Northern Territory’s very remote areas (where 57% of students

in the Territory are educated, or 8,253 students), only one in five children is attending school at

Is this really what we want for Australian citizens? Do we accept that the employment rates for any

As so many Elders know, many first Australians want a hand-up—not a hand-out. They want to

help themselves.

There is no lack of government money being spent on services for first Australians. In 2010–11 more

10

Government approaches

The former minister for Families, Community Services and Indigenous Affairs, the Hon. Jenny Macklin

was a champion for first Australians and developed the first serious policy framework, Closing the

Gap, that delivered accountability for measuring the effectiveness of services to reduce Indigenous

disadvantage. She was persistent and ferocious in her pursuit for change and the example she has

set for me and many others is outstanding. However, a number of measures under this framework

did not get the traction and results on the ground and federal, state and territory governments have

dropped the ball. Much of this failure is in mainstream services, which has left us with:

remote communities as opposed to moving to where the work is

Australians.

All suffered from cherrypicking or partial implementation by governments.

This is why the Prime Minister, who has Indigenous Affairs in his portfolio, needs to guide the

full Cabinet to deliver parity in outcomes for our first Australians. Ministers Andrews, Pyne, Abetz,

Macfarlane, Payne, Dutton and Scullion need particular Cabinet support to implement these

measures to end the disparity. Treasurer Hockey and Minister Corman are encouraged to place these

savings into the long term, but extremely high-performing, investments of prenatal, early childhood

and education strategies recommended in my report. From an economic perspective the value

of this investment is proven conclusively. The immediate impact in the government’s current term

will be in an increase in revenues as many of the measures in this review are almost immediately

tax accretive.

It is critical therefore that the Commonwealth work collaboratively with its state and territory

government counterparts to end the disparity, using every lever described in this review now

available to them, and driving accountability for results with transparent reporting. Governments

may have their own initiatives, but I urge that these are always tested to ensure complementarity

and performance against those I propose.

We must make much better use of existing funding—ot cry for more. Overall, we must strongly

reduce the need for people to come into contact with the welfare system in the short and long term.

We must remove the disincentives to getting a job. We must make jobs more attractive and ensure

that welfare entitlements are such that transition to the workforce is reinforced, make better use of

the existing funding, and make sure first Australian workers of the future are given opportunities to

move to take up work and to contribute to the productivity of the nation.

11

Creating parity for all Australians

The wheel is one of the greatest inventions of man. In relation to this review, it symbolises firstly

the absolute importance of the axle of measurement and accountability that is critical to the

performance of all initiatives in the wheel.

Secondly, the spokes demonstrate that each initiative is reliant on the other to work and protect

it. The rim holds the whole mechanism together—without it, neither the spokes nor the axle have

integrity and the mechanism is useless.

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

12

Recognising that talent is universal but opportunity isn’t, the rim of the wheel is made up of:

- this provides the most critical health support in a person’s life, which is from conception to

three years of age

- it also provides improved attendance for school kids with mutual obligations for the Family

Tax Benefit of parental responsibility from prenatal to adulthood, which will give children

a healthy start in their early years and ensure they attend school every day. The payment

of Commonwealth education funding to state and territory governments on actual school

attendance will ensure the schools themselves are highly motivated.

- this introduces a new system to support welfare recipients to manage their income and

liabilities, save for the occasional bigger expenses like Christmas or school camps, and

encourages welfare income to be invested in a healthy life.

The encouraging and compelling evidence is that first Australians who get a decent education are

employed at the same rates as other Australians. A decent education means leaving school with Year

12 or equivalent qualifications and the ability to go on to further education and training. To end the

disparity we must improve growth and development from conception to three years of age, so that

children excel at school and further training and succeed in the workplace. It will take around two

decades for these children to reach working age, so we must have interim intensive services that are

described in the rest of the report for those who are already of school and working age.

The Healthy Welfare Card gives people the capacity to stabilise their financial arrangements to ensure

secure housing, payment of regular bills and food on the table. It means that individuals and families

can then concentrate on what they need to do to get a job and to ensure children go to school.

Driving the wheel’s axle are measurement and accountability. These performance measures are

critical. The question of how to solve some of the more difficult implementation challenges will arise

during each project, and can be met through breaking the challenge down to its various sub-tasks.

Each task can then have a delegated responsible executive and timetable to achieve it.

The Australian Employment Covenant links the funding of training to a guaranteed job. This

has been challenging for the government to implement over the last six years. However, even a

challenge this significant becomes achievable if it is broken into bite-sized sub-tasks and attached

to a performance-driven timetable. I have a specific implementation recommendation (6.1) that

will guide government success. Absolute determination to see the tasks through in the manner

described is the only guarantee of success.

There is a powerful practice from the business world that can be applied. Business occasionally

refers to what are called ‘value driver trees’, which break down the challenge into small achievable,

measurable steps that can be put into a Gantt chart to monitor and report on progress. This is a

fundamental tool for the project manager’s use in timetabling and measuring achievement levels in

a project. An example is provided in the Implementation point diagram on the next page. We need to

adopt the same approach.

13

14

Determine

industries

that need

regular new

employees

Agree

portion

funded by

government

Ensure there

is no soft

bigotry

of low

expectation

in participating

company

Agree

portion

funded by

company

Locate willing, capable employees and communities

Company Government Community

Limit funds to only trainers with employers

committed to employ trainees

Discuss and reach agreement

on expectations with individual

Initially ensure basic transport to

and from training for individual

Have

company

wholly

funded

and provide

training

Collect individuals personally from their homes

if they no-show, yet still want to change their lives

Give support so individuals are punctual.

Get candidates well presented, clean and fed until

they have established a routine themselves

Identify communities

willing to participate

Ensure individual commences a

healthy lifestyle at least a week

before training

Job Centres

speak to Elders and community

leaders and employers to

ensure total community

support for members who wish

to climb out of the welfare trap

Individual steps up to take

personal responsibility

Plan B

Give individuals and

communities information on

eligible terms and conditions

How training providers will operate under the VTEC model

Give

employees

clear

information

about training

requirements

Link to VTEC

and other

employment

services

Implementation point

I have used the strategy ‘How governments can achieve massive change—ast’ described on

page 113 time and time again to achieve difficult tasks and to bring in—n time and on budget—very challenging and major projects. I recommend them here to government.

This report therefore provides a balanced, integrated management and measurement driven approach

and how to do it, leading to change that will be transformational. The spokes of this wheel will:

engaged in full-time activity with limited discretion for exemptions

with real jobs for the most disadvantaged job seekers, and link training and employment

services to guaranteed jobs

particularly for families and job seekers from remote communities

and public sector, tailor-made partnerships with the top 200 companies and required levels of

government procurement to go to first Australian businesses

governance structure that empowers respected Elders, and has at least equal representation

by women. This governance structure will set and enforce social norms and job seeker

compliance. Changes in the structure of land ownership as supported by traditional owners

and other relevant first Australian groups will enable appropriate titles for home ownership

and investment. If applied properly and with discipline, some 20% of the Australian landmass

could be put to work with an ever-increasing contribution to the economy. This can be

achieved without ever compromising its ultimate Indigenous ownership.

Key drivers for change

There are key drivers to make the necessary systemic changes to shake off the passivity and entrench

personal and organisational responsibilities, including:

powers on the basis of trust and robust verification

15

What first Australian leaders told us they should do

These reforms will work only if first Australians themselves are involved in the design and

implementation of the reforms. Evidence shows that when leaders refuse to support any sense

of entitlement within their communities, and strongly encourage a culture of independence and

development among their people the community grows in both prosperity and social standards.

We have developed the ideas in this report with first Australians and modified our recommendations

according to their advice.

First Australians everywhere want a strong future for their children supported by educated, active

or working parents as positive role models and they will make the sacrifices to get it. They want

to nurture each individual’s talents to their full potential rather than be viewed as a burden of

disadvantage (where governments try and fix problems when it’s too late). First Australian parents

everywhere told us they can have no better reason to get and keep a job than to provide a better

future for their children.

First Australian leaders, particularly in remote communities, yearn for the authority to require

young people to earn or learn and not tolerate idleness. They believe that young children should

have strong role models so they can thrive in safe and well-functioning communities. They need

the government to back their cultural authority to set and enforce social norms and job seeker

obligations. This will empower local people to step up and take responsibility for managing their

own lives in a way that strengthens family and community wellbeing and vitality.

Instead of the crippling government oversight of thousands of small projects and funding

agreements, I propose that service delivery be consolidated in responsible, properly-governed first

Australian organisations with a system of verification to ensure probity and accountability.

Many Indigenous leaders who spoke to me during the course of this review believe it is essential that

they take responsibility for delivering these reforms. Local leaders are willing to be held accountable,

be responsible for dramatic change in the behaviours of their communities, and ensure that disparity

is ended for their children’s sake and the sake of generations to come. They need governments to

devolve the authority for decision making to them on the basis of trust and robust accountability.

As Professor Fiona Stanley recently pointed out:

We have got a juggernaut of spending that is wasted because Aboriginal people are not

appropriately engaged with the solutions. When Aboriginal people are engaged with the

solutions, not only do they work but the self-esteem within the Aboriginal community rises

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The need for an agreement between governments

All Australian governments are committed to improving the lives of their first Australians. What is

lacking is the published, regular, robust measurement of performance and effectiveness of policies

and their implementation. In discussions with the Prime Minister, the premiers and the Northern

Territory Chief Minister it was plain that no government in our nation is satisfied that we are on

track and they all accept that there must be major change and are happy to collaborate on this

important work.

They recognise that there have been many flawed policies, often competing against each other

at different levels of government, highlighting clear implementation failures. They know that first

Australians themselves are the key to ending the disparity and that to achieve parity a genuine

engagement must be developed urgently between governments and empowered first Australian

leaders.

Each government must be held to account with data published in a central data repository to

enable the public to examine the effectiveness of their efforts. This will allow for regular, robust

measurement of governments’ roles in delivering the changes. This is the level and accountability

appropriate for the nearly $12 billion from the Commonwealth alone. All politicians should be

prepared to stand and be measured for their efforts. Transparent, consolidated reporting is absolutely

critical to ending the disparity.

Employment services, welfare and housing are key areas where deficiencies have entrenched low

expectations—reas where our policies have failed to make the seismic shift in the outcomes that are

needed and are fundamental to ending disparity. As this is the Commonwealth’s domain it must take

the lead and make changes in these areas.

The states and territories have a similar obligation to ensure that the policies under their control take

full advantage of the changes that result from the anticipated Commonwealth changes. They must

lead changes to schooling, access to health and prenatal and early childhood support, housing and

vocational education and training. However, it will only be an effort of the whole that will see the

massive sustainable change needed for the creation of parity.

I propose a formal agreement between the Commonwealth and the states and territories as set out

in Chapter 3 of this report. The agreement should be signed by the nation’s first ministers to bind all

governments to work collaboratively to end the disparity in life outcomes for first Australians.

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The need for bipartisan support

The need for a long-term approach and bipartisan support across the political divide was stressed

by those attending consultations across Australia and in the hundreds of written submissions to the

review. First Australians and those working with them are rightly cynical about new government

reform and how long it will last. The fundamentals of the former government’s Closing the Gap

strategy have bipartisan support and give us solid ground to build on.

The Prime Minister has asked for my advice to end the disparity for our first Australians—ot to halve

the employment gap. Accordingly, a very different approach is required that tackles disadvantage

and disincentives in the current systems. The integrated suite of bold changes proposed in this report

will not just close this gap but end the disparity in full if we take the approach proposed.

If the government cherrypicks a handful of measures, the impact will be minimal. A few measures on

their own will not make a difference. This is the opportunity to leave partisan politics behind and for

all members of the Commonwealth, state and territory parliaments and assemblies to work together

to deliver lasting change for first Australians. Every elected member has walked through streets of

Australian communities where the disparity is so significant and understands that real change needs

to be made. We have a very rare and critical opportunity through this review to work cohesively and

deliver this change.

Changes that benefit all Australians

Some of the changes proposed to end employment disparity—such as remote community

governance and service delivery, remote housing and land reform—are specific to remote first

Australian communities. However, the more fundamental recommendations about changes to

the welfare system, using market levers, and moving to demand-driven employment services are

applicable to all welfare recipients of working age of any cultural or ethnic background, whether

they are first Australian or not. In every state and territory there are suburbs in large, prosperous

cities where intergenerational welfare is endemic and able people are disengaged from work and

education. For this reason I suggest the key changes should have national application.

Consultations and submissions

This report has been informed by forums across the country attended by over 1,600 people and

meetings with over 150 of Australia’s business and employment leaders, first Australian leaders

and other experts. It has also been informed by 349 detailed written submissions, with 270 of

these published, by agreement, on the website (see Appendix B). Many of the consultations and

submissions highlight the great initiatives that first Australians and others have been implementing.

I call these ‘beacons of hope’ and they have illuminated the way for many of the report’s

recommendations. Some are included as brief case study examples throughout the report.

18

Summary of recommendations

These 27 recommendations and the evidence and implementation strategy that supports

them, and the detail that backs them in the text of the chapters are critical to ending the

disparity. These solutions are not expensive and parity is completely achievable with the

strength of will from each of us.

Chapter 1: Prenatal, early childhood and education

Practically every parent we spoke to wanted to assure a strong future for first Australian children

supported by educated, active or working parents. They want to nurture kids’ talents to their full

potential rather than be viewed as a burden of disadvantage (where governments try and fix

problems when it’s too late). Parents said they have no better reason to get and keep a job than

to provide a better future for their children. Many reflected that they simply didn’t understand, or

weren’t informed of the very negative impact on their child’s start to life caused by aspects of their

own behaviour and lifestyle, including a poor diet and inadequate rest, unstable home environment,

alcohol and gambling and extended periods of unemployment.

They have a good point!

From conception to three years of age our brain function and major neural pathways are established

The average brain growth is almost infinite from a single cell to 380 grams at birth to 1.3 kilograms by

three years of age, and then only to 1.5 kilograms by 19 years of age when the brain’s mass reaches

its maximum. These learning pathways are what we all rely on to undertake more complex brain

functions like exercising judgement, problem solving and juggling priorities.

Multiple interconnected influences, from family environments to the availability of community

supports and economic resources are what affect the development of these pathways. A child who

does not receive the required support and stimulation during these early years commences formal

education without being ‘school-ready’ and the cycle of disparity has already started.

The most effective way to invest in a person’s future capabilities is a whole-of-childhood

approach starting before birth, with intensive effort in pregnancy and the first three years when

brain development peaks. This is the only way we will ensure that all children have reached the

developmental stages necessary for succeeding at school and for building on this success in

adolescence and adult life. We can prevent children from not succeeding initially at school and

developing problems that compound in later life.

This is especially so for first Australian children as they are twice as likely as other Australian children

to be developmentally vulnerable. Consistently lower birth weights and a higher incidence of

conditions such as foetal alcohol spectrum disorder (FASD) mean that children start from behind

before they get anywhere near the school gate.

Before we can address education, we need to get children into school with an even chance in life.

Without access to programmes that nurture good parenting, many Indigenous children face lives

ruined by parents who are simply not aware of the devastating impact that their lifestyle (drugs,

alcohol, poor nutrition) has on their children’s entire future.

19

Education experts have reported that children need a school attendance record of at least 80% for

schooling to be effective. In the Northern Territory’s very remote areas (where 57% of students in the

Territory are educated, or 8,253 students), only one in five children is attending school more than

80% of the time. All of the Northern Territory is classified as ‘very remote’ apart from the three town

centres of Darwin (including Palmerston), Alice Springs and Katherine. The average first Australian

attendance rate in very remote Northern Territory schools is about 58%, compared with almost 83%

in provincial areas. The recent Remote Schools Attendance Strategy has helped, but much more

needs to be done and in many more schools if we are to break the cycle of disparity.

Children should be at school every day to ensure they benefit from the education offered to them and are not left behind. This year, the Prime Minister set a new Closing the Gap target: to end the gap in school attendance within five years and achieve at least 90% attendance across all Australian schools, regardless of student background. Every attempt should be made to assist and support first Australians to send their children to school every day. As a last resort, if parents are not meeting the bare minimum 80% attendance requirement and no special circumstances apply, stronger action may be necessary and penalties applied.

States are not implementing truancy laws. The number of fines imposed on parents for cases of

truancy by any particular state or territory government over a 12-month period is very low, yet the

incidence of truancy is very high. This seems to be wilful negligence by governments and a refusal

to enforce their own laws. In Victoria, for example, it is reported that there have been no truancy fines

at all since 2006. In Queensland in 2011, just two fines were imposed, yet 36,000 students missed

20 days or more of school in the first semester of that year alone.

We all tend to manage efficiently what we are measured on and governments are no different.

It is inexcusable that a child be denied their right to a healthy future that is independent of welfare,

because government officials and schools are not paying attention to school attendance rates.

Paying states on actual attendance would give a clear focus on what is important. We must pay on

results, not process.

The Family Tax Benefit (FTB) is not conditional on good school attendance, but it should be.

Governments must make it clear to families applying for the FTB that the benefit is paid to enable

them to raise their children responsibly and make sure they are at school each day.

There is no disparity in employment between first Australians with a decent education and other

Australians. A decent education means leaving school with Year 12 or equivalent qualifications

and the ability to go on to further education and training. There is employment parity now for

first Australians with Certificate III or IV level training that most apprentices undergo, diploma or

university qualifications.

If we get early childhood development and school education right, we don’t need to invest in or

waste money by the billions in other areas as we do now. Measures relating to early childhood and

school education are a long-term fix. There is a generation of Australians who have not benefited

from education and many of the other measures in this report will be of greater significance in

assisting them.

20

Employers consistently report the lack of job-ready school leavers with basic literacy, numeracy and employability skills as one of the major impediments to finding first Australian workers. Schooling, particularly for building literacy and numeracy skills, is critical for developing the workers of the future. First Australian students are, on average, two and a half years behind other students. Results in maths, English and science are particularly poor. Increasing school attendance must become a national priority.

We need the best teachers teaching in schools where the need is greatest. The schooling system, primarily a state and territory responsibility, needs to give first Australian children the best possible start to life—recognising that an individual’s earning capacity is directly linked to educational attainment. Teachers should be carefully selected on performance and likelihood to succeed in challenging environments, and supported through incentives to make sure first Australian students are given the best chance to succeed.

There should also be no question in any school in Australia about the importance of teaching basic English and maths as a first priority. For readers about to leap on the argument that first Australians need to preserve their culture through their language, let me remind you that the quickest way to lose language is to be unable to record it. This happens when kids have the sound knowledge of the alphabet needed to document the languages of our first Australians, given their tradition of oral languages.

This has left hundreds of first Australian boys and girls with no means of supporting themselves into the future without welfare. Further, an ideological lack of emphasis on English and numeracy hinders these children for life, and yet the education systems of Australia are dominated by people who use Aboriginal language retention as an excuse for not ensuring English literacy. They have one set of expectations for their own children and a much lower set for Indigenous children.

We must not tolerate any excuse for lower standards in any child’s education, not traditions, not ceremonies, not football carnivals nor even visiting sport stars and royalty days, and particularly not the apathy of governments. Nothing must get in the way of any Australian child’s fair chance at life.

These recommendations, if implemented, will ensure Indigenous babies are born healthy without being disabled by FASD or ear disease, are sent to school every day, educated and skilled, and ready to succeed in the world of work.

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That all governments prioritise investment in early childhood, from conception to three years of age.

Governments must work jointly to agree on, and put into effect within 12 months, a new approach

that includes progressive investment to implement integrated early childhood services and

to dramatically improve attendance. This new approach should start with schools in the 200

communities that have the highest level of vulnerability and need (as determined by the Australian

Early Development Index’s results). If implemented successfully along the lines of existing proven

models, governments can consider further roll outs.

In order for young children to be school-ready when they enter formal schooling governments will

need to work jointly to coordinate and deliver intensive prenatal and holistic preventative early

childhood services in target communities. The implementation steps for delivering integrated

services for prenatal and 0- to 3-year-olds must include:

1.1 co-locating and coordinating health, nutrition and other support services within schools or

community hubs with outreach to schools with a single-point for accountability outcomes

1.2 providing schools with support to build principal and teacher capacity to collaborate,

engage with parents and external service providers, and to diagnose the needs of the school

community and deliver services that are responsive to local context, culture, priorities and

needs with accountability to a service standard

1.3 providing ready access to specialist services with the sharing of information between

government agencies including health, community, child protection and education services

to enable effective case management of vulnerable children and their families and optimise

electronic health records

1.4 converting the Newborn Supplement into an incentive for women to identify their pregnancy

as early as possible and be connected with a community nurse/case manager to coordinate

prenatal care and access to the services listed above. The community nurse or case manager

should work with a significant Elder to coordinate regular home visits to pregnant mothers,

identify and intervene in behaviours which could harm the unborn child, and link the pregnant

woman into community-based mother–hild support groups. This approach is especially

important for pregnant women in remote communities

* This is one of the few recommendations that cost money, but it is not considerable. My wife Nicola and I have watched a lower socioeconomic

area transform the performance of its children through the local school, which encouraged government services (already

available) to be located within its grounds and to be made available to parents from conception onwards. This initiative worked and is

immediately replicable. The other measures of this report will save much more capital than this recommendation will cost.

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1.5 providing comprehensive case management for vulnerable children from 0 to 3 years of age

and their families to allow for early detection of, and intervention in, developmental delays,

and provide a compulsory, structured explicit instruction programmes for three-year-olds led

by an early childhood professional

1.6 extending the School Enrolment and Attendance Measure (SEAM) and Remote School

Attendance Strategy (RSAS) programmes to each of the 200 sites, noting that the proposed

case management approach would replace SEAM social workers (subject to recommendation

1.1 and 1.3)

1.7 driving accountability with compliance against service standards and aggregate data of children’s

development and improvement over time to be published on the CreatingParity website.

Recommendation 2: School attendance

That governments work together to improve school attendance and be measured and

accountable to the public for their success.

To achieve parity, first Australian children must go to school at least nine out of every 10 days.

Governments should use every lever at their disposal to bring school attendance to this level (as a

minimum), including the implementation steps listed below.

2.1 Within 12 months state and territory governments should adopt the following measures to

improve school attendance:

2.1.1 implement existing truancy regulations to improve school attendance levels and achieve

the 80% minimum tolerance required for an effective education. Regularly report and

publicise their truancy record on the My School and CreatingParity websites

2.1.2 ensure schools that fall below the minimum tolerance of 80% attendance (subject to

upward adjustment) have an enforceable plan on how to reach parity in attendance

for first Australians with progress on these plans to be reported on the My School and

CreatingParity websites

2.1.3 provide simple, cost-effective systems to schools that support monitoring attendance

and parental engagement and build attendance to 90%

2.1.4 collect and provide school attendance data that accurately measure the attendance of

each student and provide this to the Commonwealth at the end of each school term

2.1.5 have ministerial executive accountability for results of truancy enforcement and school

attendance reported through to the CreatingParity website.

2.2 The Commonwealth Government should introduce a new mutual obligation requirement for

parents to ensure that children attend school in return for receiving the Family Tax Benefit. The

target attendance should be initially set at least 80%, with a later target of 90% of the school

year. The Commonwealth must take the following implementation steps:

2.2.1 amend the application form for the FTB to make clear the benefit is paid to enable parents

to raise their children and send them to school every day and to include a requirement for

applicants to acknowledge and give permission to check education attendance records

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2.2.2 change the FTB payment from an annual entitlement (that is currently assessed annually

and paid fortnightly) to a more regular monthly entitlement to enable validation of

school attendance data for each child, with the data shared by states and territories (see

recommendation 1), and evidence submitted through a simple, electronic system

2.2.3 apply financial penalties to those parents whose children fall below the benchmark of

90% attendance for the school year and report the aggregate data on the CreatingParity

website.

2.3 In support of the efforts by states and territories to improve school attendance, the

Commonwealth should pay school education funding to them based on actual attendance

rates, with data published regularly and support case management services provided for

students and families with particular challenges, and revise ABSTUDY and supports to access

boarding schools. This will be achieved by the Commonwealth Government taking the

following implementation steps:

2.3.1 paying schools funding to state and territory governments based on actual attendance

rates measured at the end of each term

2.3.2 publishing updated attendance data on the My School and CreatingParity websites each

month clearly indicating whether attendance levels of over 80% have been achieved and

tracking individual school trends over time

2.3.3 restructuring the School Enrolment and Attendance Measure to be part of the intensive

early childhood approach (see recommendation 1) and enabling the early childhood

case manager to implement a support and attendance plan for prenatal to primary

school age attendance for individual families. This should include enabling the case

manager—rather than Centrelink—to determine if the penalty should be applied. This

determination can only be made by the case manager in the long-term interests of the

client and not by the Centrelink officer

2.3.4 better targeting ABSTUDY by simplifying its administration, rewarding completion and

making it available to first Australian students from remote communities who board on a

weekly basis. Changes need to be made to:

2.3.4.1 ensure ABSTUDY is quick and easy to apply for and that it is sufficient to cover the

full costs of students attending boarding schools from remote communities

2.3.4.2 give families with children at boarding schools access to base rate FTB payments

during school vacations and ABSTUDY payments for the school term until they

finish Year 12 in recognition of the costs parents incur during the vacation

periods

2.3.4.3 establish regionally-based services to provide independent and professional

advice, including placement and retention assistance on education and training

options outside their community to families and students.

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Recommendation 3: Improving educational outcomes

That a high quality of school education is ensured, particularly for children in remote and disadvantaged areas as assessed by achieving parity in National Assessment Program – Literacy and Numeracy (NAPLAN) results so they have the best chance of employment.

This will be achieved by state and territory governments taking the following implementation steps:

3.1     having an enforceable plan to require these schools to reach parity in educational outcomes including using proven methods of explicit instruction and enabling other resources such as the Teach for Australia programme and external advice. Progress on these plans should be reported on the My School and CreatingParity websites

3.2     having English literacy and numeracy as the priority for all schools, by having an English language explicit instruction domain as the basis of each school day. This can be combined with all first Australian children learning and becoming literate in ancestral languages, provided that the priority of English is in place until NAPLAN parity is achieved

3.3     developing a workforce of high performing teachers who are independently assessed and recruited for excellence on the basis of their likelihood to succeed in tough school environments; and placing these teachers in priority schools for at least two to three years

3.4     offering professional development scholarships to teachers valued at $20,000 each and paying teachers at least 5% or more for teaching in schools where school attendance is less than 80%; increasing this to 10% if the school reaches 95% attendance over two years to provide incentive for the best teachers to work in the worst performing schools

3.5     using the top performing principals from schools that are achieving good results despite their disadvantage, to mentor principals and teachers

3.6     providing schools with a clear set of proven professional learning programmes that they can select from to support and improve the impact of the staff on student outcomes and attendance

3.7     ensuring school principals are given responsibility and information to advise Centrelink when exceptional circumstances mean access to welfare payments for under-19-year-olds are necessary.

25

Recommendation 4: Stopping distractions to education

That Commonwealth, state and territory governments, business, sporting organisations and

community leaders ensure that school attendance is not unintentionally undermined by

sports carnivals, visiting celebrities or any activities that can give families an incentive to take

students—particularly from remote schools—away from school for lengthy periods of time.

This will be achieved by the following implementation steps:

4.1 business and traditional owners agreeing to make land access and/or royalty payments in

school holidays

4.2 scheduling cultural ceremonies outside school hours or during the school holiday period, and

wherever possible being sensitive to schooling requirements in the timing of ceremonies

4.3 recognising that school attendance is critical, government-funded programmes and visits to

communities need to be scheduled outside school hours or during the school holiday period.

26

Chapter 2: The Healthy Welfare Card

Almost half of all working age first Australians rely on welfare payments as their main source of

income, compared to only 17% of all Australians.

The Healthy Welfare Card introduces a new system to support welfare recipients to:

All individuals and families benefit from a stable financial environment where regular bills and rent

are paid on time and there is food on the table, allowing them to concentrate on other concerns

including returning to work and raising and educating their children.

We need to make the necessary changes to Australia’s welfare system to empower individuals to use

it as it was intended. Welfare is provided to help people build healthy lifestyles and make the best

choices they can for themselves and their families—articularly their children. It is a social safety net

of last resort and should never be a destination, or support poor choices.

Income management was widely regarded as very helpful for vulnerable people, enabling them to

manage their budgets, save for expenses and stay in stable housing. However, it is complex, it can

be considered paternalistic and comes with a cost that renders it unsustainable and unsuitable for

broader application.

While income management is useful to stabilise an individual’s circumstances, it can make transitions

off welfare and into work more difficult. An alternative that provides similar support for welfare

recipients but includes them in the country’s mainstream banking and financial services system will

do much more to build financial literacy and independence.

This review would like to thank Coles, Woolworths, Metcash’s (IGA), National Australia Bank,

Commonwealth Bank of Australia, Westpac, ANZ Bank and eftpos Payments Australia Limited

for their assistance in evaluating the proposal for a Healthy Welfare Card. Australia’s own EFTPOS

system has stated that it can adjust its scheme rules to fully implement the Healthy Welfare Card

recommendation with the above participants through a combination of technical and operatorassisted

solutions. These will enable welfare recipients to purchase the goods and services required

to maintain healthy lifestyles, yet block those goods and services—uch as alcohol, drugs and

gambling—hat damage health, family wellbeing and ability to enter or return to work.

27

Recommendation 5: Healthy Welfare Card

That the Commonwealth Government implement immediately a Healthy Welfare Card scheme in

conjunction with major financial institutions and retailers to support welfare recipients manage

their income and expenses.

I recommend that this scheme be implemented so that an individual’s welfare payments, other than

age or veterans’ pensions, would be paid into a savings account drawn on with a Healthy Welfare

Card. This card directs spending to purchases that sustain and support a healthy lifestyle for the

recipients and any children of those recipients (e.g. essential goods such as food, clothing, utilities,

rent) and to savings for larger expenses.

This will be achieved by the Commonwealth Government taking the following implementation steps:

5.1 working with major retailers and financial institutions to apply the existing technology that can

already block prohibited goods at the merchant level

5.2 introducing requirements that emphasise that welfare is to support life’s essential costs—hat

the purpose and use of the account and card are to receive welfare payments, and that social

security payments are intended to provide conditional support for vulnerable individuals so

that compliance arrangements are understood by all recipients including all those who use, or

intend to use, social security payments inappropriately

5.3 banks and other financial institutions issuing the Healthy Welfare Card using existing debit card

technology

5.4 programming the card to block the issue of cash and the purchase of alcohol, gambling and

illicit services and gift cards at the point of sale

5.5 making the card fully redeemable at any Australian retail store or online facility that accepts

Visa and MasterCard with electronic and EFTPOS payment facility, with the exception of

alcohol and gaming outlets

5.6 protecting consumers with participating banks and financial institutions by using existing

technology to identify unauthorised or unusual patterns of purchasing on debit and credit

cards to expose potential fraud by retailers and card recipients

5.7 introducing penalties for retailers that accept the welfare card for payment of prohibited goods

or to issue cash— penalty for on-the-spot fines of $2,000 for every $100 of value for business

dealings prohibited by the card

5.8 reporting aggregate data on compliance, delivery costs and savings on the CreatingParity

website

5.9 commissioning the Australian Crime Commission and state and federal police to develop

appropriate strategies to manage any impact on organised crime as a result of the introduction

of the Healthy Welfare Card

28

5.10 having state police commissioners alerted that, in the short-term, as lifestyles are adjusted,

levels of petty crime may be temporarily elevated, before falling to levels lower than they were

previously due to the elimination of drug and alcohol abuse

5.11 having counsellors available in communities to assist people who come off serious alcohol or

drug addictions.

29

Chapter 3: Implementation and accountability

The recommendations outlined in the review must be accepted as a package. They are

mutually reinforcing and mutually reliant. They take a balanced approach and need to be

implemented holistically.

Any serious project requires even more serious management. Of the many multibillion-dollar

projects that I have successfully overseen, or have directly reported to me, there has been a

common thread of success wrought from a disciplined, mechanical style procedural approach.

A clearly measurable performance path is agreed to at the beginning of the project. Progress is

published and individual accountability ensures projects are delivered on time, within budget

and according to specification.

Accountability needs to be specifically defined for each initiative to the level of departments and

individuals responsible. We can’t use the usual bureaucratic processes to get individuals on board

and expect things to be different this time. We will need to use innovative methods to turn those

accountable into owners and joint problem solvers.

The idea is to bring everyone who is accountable for the pieces of this from across the system into

a room, with facilitators, and no-one is to leave until all solutions are defined, with measures and

outcomes, and approvals from all the departmental heads. The participants then come together on

a regular basis—et’s say quarterly—o review progress and problem-solve what’s not working and is

working and how to accelerate progress. This is a very effective approach but has never been done,

to my knowledge, in the Commonwealth Government.

Contained in each recommendation in this report is a series of critical implementation steps. I

have identified each step as important to the delivery of the measure so that this level of detailed

project planning may be undertaken to assure the success of the measure. We should be aware

that there will be a natural inclination to recycle existing projects as opposed to adopting new

methodologies for a total different result. To avoid this distraction, this report contains a series of

A lack of understanding of need, existing services, and the vested interests of service providers have

often resulted in duplication, service gaps and measures that merely treat the symptoms rather

than preventing them. During our consultations, many communities—particularly remote ones—

complained often about ridiculous duplication, fly-in fly-out providers that had little understanding

of the needs of the community and serious problems which were not being addressed. This review

has responded to a strong recommendation by the New South Wales Government for a system

where, before entering a community, all service providers register their activity and purpose so that

duplication and mismanagement are avoided.

We need to support our politicians to make the difficult decisions to close ineffective and legacy

programmes to redirect funds to this comprehensive approach.

* Thanks to McKinsey and Company and FMG Strategy for this input.

30

Through programme consolidation, the government must eliminate programmes that are paid the

majority of their funding without any evidence that they could or will meet prior agreed results and,

instead, introduce simple cost-effective service delivery arrangements which will free up funding.

The government must ensure that funding is used wisely to achieve the outcome for which it was

intended and make sure there is always a balance in interests in the awarding of contracts. You would

not let a fox look after the chicken coop! Similarly, allowing a service provider to judge their own

performance and authorise their own payments is not sound business sense. Governments must pay,

like the private sector does—almost or totally on results—and stop paying simply on process.

Like other organisations in Australia that survive on merit, governments must hold themselves

accountable to the public for their results. The merit of individual programmes must be assessed

through robust performance measures that have been agreed prior to the first cheque being written.

As discussed elsewhere in this report, as government-funded service providers exist on the public

purse, so like the rest of us they must be prepared to be paid on results. Certainly the practice of

simply funding process, without putting payment at risk and rewarding results, must stop. Publishing

outcomes for public benefit is therefore essential.

This will involve ambitious measures and project management methodologies that will always

attract criticism from those with current vested interests who have failed to deliver outcomes. These

criticisms must be dealt with and under no circumstances be allowed to prevent the well overdue

reform in the management and implementation of government-funded Indigenous programmes

and mainstream services.

I recommend redirecting the funding saved by these measures to implementing this review.

Recommendation 6: Implementation and accountability

That the implementation of recommendations be prioritised across all governments, closely

monitored and reported along the lines that are described by the value driver trees.

This will be achieved by the Commonwealth Government taking the following implementation steps:

6.1 establishing a taskforce to drive implementation of the recommendations across government,

led by a respected person with the authority, experience and independence to drive progress,

resolve all blockages and hold agencies to account, as described clearly in the section under

the heading ‘How governments can achieve massive change—ast’

6.2 using the Indigenous Advisory Committee to provide advice to the head of the taskforce and

to the Commonwealth Government

6.3 reporting annually on implementation of this review’s recommendations to parliament as part

of existing reporting arrangements

31

6.4 replicating and being compatible with the New South Wales Government’s Human Services

Data Hub, which provides a consolidated view of human services delivered across New

South Wales, on a national level (subject to further development). A data hub with information

from all state, territory and Commonwealth-funded human services programmes should

capture information such as the location, target cohort, funding and cost, as well as the

programme’s outcomes

6.5 making the national human services data hub accessible by the public and using it to identify

existing funding to assess need, identify service gaps, reduce the duplication of funding and

services, and ensure improved service coordination and transparency.

Recommendation 7: Implementation

That the Commonwealth, state and territory governments ensure that a major component

of funding for government-funded service providers is at risk if they fail to achieve

satisfactory performance.

This would involve ensuring there is a balance in interest to avoid conflict or disappointment in

outcomes, in all funding agreements. This must extend to between governments, and between

governments and providers, no matter whether the funding agreement is for provision of a service

or capital works. These arrangement must ensure that we only pay for results and not process,

and ensure the results have been agreed prior contract settlement.

This will be achieved by governments taking the following implementation steps:

7.1 agreeing on accountability milestones within pre-agreed performance schedules

7.2 ensuring that the accountability milestones are capable of clear measurement

7.3 taking immediate corrective action if contract performance is found lacking

7.4 publishing outcomes in the requisite detail on the CreatingParity website.

32

Recommendation 8: Agreement to implement the recommendations

of this report

That the Commonwealth, state and territory governments agree to sign a new multilateral

agreement to affirm their commitment to implement the recommendations of this report and be

held accountable for delivery, through regular public reporting on the CreatingParity website as

detailed in each recommendation.

This will be achieved by governments taking the following implementation steps:

8.1 cooperating with all necessary information-sharing in order to allow self-correcting

mechanisms like the Family Tax Benefit to provide incentives and encourage parents to send

their children to school

8.2 making a commitment that they will not use funding or any external issues to subvert the

executive outcomes recommended in the Creating Parity report

8.3 ensuring that the multilateral agreement pays careful attention to points 1–9 (outlined at

pages 118–19) in Chapter 3.

33

Chapter 4: Breaking the welfare cycle

The risk of condemning another generation of first Australians to a life on welfare is very real

if we don’t take decisive action. Indigenous circles often refer to the current generation as the

Lost Generation, and the long-term effects on children are as debilitating as that of the policies

that resulted in the Stolen Generation. Young first Australians, like all children, must be given the

guidance they need to establish the personal and work attitudes we all need later in life to ensure

successful independence away from the welfare system.

However, this is not happening now. More than 60% of 17- to 24-year-old first Australians leave

school without connecting to further study or work, compared to only 26% of other young

Australians. In remote areas this figure represents 82% of young first Australians. Everyone needs

to understand that this is why the disparity is growing so fast despite the billions of dollars spent.

For young people in particular, the lure of welfare over better choices must be removed.

All efforts must be focused on supporting them to finish school and make a successful transition

into work without ever interacting with the welfare system. This will require a much stronger

collaboration between all Australian governments, to ensure the welfare system does not create

perverse incentives for under 19-year-olds to leave school. Stronger collaboration will also allow

the Commonwealth to support state and territory governments to meet their responsibilities for

all school age children—n particular, to radically change the average attendance levels for first

Australian kids.

The current welfare system is complex for recipients and makes it difficult to calculate

whether getting a job will be worthwhile. There are about 20 welfare payments and a further

55 supplementary payments. Some payments are activity-tested; others are not. Participation

requirements vary according to payment type, work capacity, age and cohort. There is also a

wide range of exemptions to participation requirements that are applied with varying degrees

of consistency to working-age adults able to work. The application of exemptions needs to be

simplified so that they are only applied to those who have genuine reasons not to participate.

Recommendation 9: Young people

That young people below 19 years of age must be working or in school or other educational

institutions, training for a guaranteed job.

Young people identified at risk of leaving school are to be provided with additional support to

continue to study or connect to work. As principals have a key pastoral care role, they should

coordinate the support to ensure the young person has the best chance of completing their

education.

This will be achieved by the Commonwealth Government by taking the following implementation

steps:

9.1 requiring access to the Youth Allowance to be on the endorsement of the school principal,

and be available only through the Healthy Welfare Card, to help remove the incentive for

young people to leave school to get an independent cash income on welfare. They can only

receive this credit on their Healthy Welfare Card if they register or enrol at a Vocational Training

and Employment Centre (VTEC) or other employment service and train for a future trade or

guaranteed job, or return to complete their education

34

9.2 only funding programmes and services that demonstrate proven success in keeping young

first Australians at school (on a value for money basis) and assisting them to make a smooth

transition to work or tertiary study, with the bulk of funding paid on results

9.3 guaranteeing that young people at Year 12 equivalent or below, who cannot be encouraged

to complete their education, have immediate access to demand-driven employment services

such as a VTEC

9.4 working with state and territory governments so that principals and teachers identify ‘at risk’

young people early in their school careers; and working with the Commonwealth to provide

mentoring and support services to keep them connected to study or work

9.5 reporting aggregate (not individual) data to schools and alternative education providers via

the CreatingParity website. This is designed to ensure that the extent of disengagement by

young people with the education system can be measured and managed.

Recommendation 10: Job seeker obligations

That all discretion of Centrelink and job service providers to waive job seekers’ obligations and

grant exemptions and transfers to non-activity tested payments such as the Disability Support

Pension to excuse working age, capable welfare recipients from efforts to get meaningful

employment be removed.

This will be achieved by the Commonwealth Government taking the following implementation steps:

10.1 applying mutual obligation requirements to all payments for those who are of working age

and capable of work (i.e. all payments except the age and veterans’ pension)

10.2 reducing Centrelink’s role in job seeker compliance to spot checking of employment providers’

performance in job seeker compliance

10.3 reporting on the CreatingParity website the aggregate number of exemptions to job seeker

obligations for first Australians as provided by Centrelink and job service providers.

35

Recommendation 11: Breaking the welfare cycle

That the welfare system be simplified by reducing the number of different working age payments

available to a single unemployment benefit (with only a very limited number of supplements

available) along the lines of the 2009 Pension Review by Jeff Harmer.

This will be achieved by the Commonwealth making changes so there can only be one

unemployment benefit. It will be achieved with the following policy components:

11.1 ensuring people in similar circumstances with similar capabilities are treated in the same way

11.2 eliminating the discretionary waivers and exemptions to remove excuses not to work

11.3 reducing the unemployment benefit for under-21-year-olds to less than the full-time student

allowance to avoid creating incentives to leave study

11.4 renaming the youth unemployment benefit by removing the misnomer of Newstart Allowance

and replacing it with a more accurately titled ‘Unemployment Support’, and renaming the

Youth Allowance to ‘Transition to Work Allowance’

11.5 transferring recipients of wages through the Community Development and Employment

Projects (CDEP) to the Newstart Allowance (or the proposed new Unemployment Support)

and into the Remote Jobs and Communities Programme where it is replacing the CDEP

in communities. This is designed to ensure all job seekers have the same incentives and

obligations in return for income support.

36

Chapter 5: Building capability, dismantling the cash barbeque and eliminating disincentives

Almost 70% of first Australian job seekers, or around 50,000 people, are classified as the most disadvantaged in employment services, yet Job Services Australia (JSA) fails these people on all measures. These job seekers are the most expensive group to service, get the poorest outcomes from these services and churn through the inefficient system at the highest rates. Many will remain welfare-reliant as a result.

This is at the core of the Indigenous unemployment disparity and there is no effective government measure to deal with it in the current policies and programmes. Employers take on considerable costs and risks in employing these job seekers and need to have certainty of policy. Employers see wage subsidies as unreliable and unsustainable charity, with programmes turned on and off as governments’ needs change.

A new approach is needed, one that uses the tax system and the power of the market. Treasury may have a heart attack, but there are sound economic reasons for this recommendation. These individuals generate no tax and incur substantial costs to the nation as a result of the welfare, housing, incarceration, counselling and other service costs.

For example, up to 20% of this group are ex-offenders. The West Australian Government estimates that the cost to government incurred during the period from offence to resettlement is up to $1 million for one individual. The new system proposed in this report will pull the private sector into training and employing these individuals and provide special incentives for job seekers who relocate from remote communities.

Again, we must look to the power of business incentives to eliminate this entrenched disparity

and the high barriers to employment entry for individuals. We can achieve an end to this disparity

by encouraging commercial enterprises to train and employ the most disadvantaged Indigenous

people. We should allow the tax system to provide the incentive for business to go the extra mile

to train and employ the least capable in our society. These tax incentives will need to be substantial

and be awarded to those companies that meet strict ownership and employment criteria. It will be

essential to involve first Australian businesses, as they are about 100 times more likely to employ first

Australians than any other business.

Existing government policy has not eliminated the massive disparity that exists for these most

disadvantaged and vulnerable first Australians.

While the employment gap has grown, the JSA system is costing around $1.3 billion a year, yet

only 5% of employers use JSA to find workers. A further $1.1 billion is spent on supplementary

employment services, most of which also cannot boast proud track records. The JSA system, in

particular, doesn’t meet employer needs and perpetuates training for training’s sake. The incentives

are misaligned, focusing on supply-side (government-funded training companies) issues rather

than on where the demand is, with employers. We must pay only on results, not process. As I stated

previously, you wouldn’t give a fox responsibility for the chicken coop. Similarly, allowing JSAs to

authorise their own payments is commercially nonsensical. I have referred to this previously as a

balance in interests. Only employers are qualified to judge whether a trainer has delivered what the

job requires.

37

Vocational Training and Employment Centres

Vocational Training and Employment Centres (VTECs) connect first Australian job seekers with

guaranteed jobs and bring together the support services necessary to prepare job seekers for long-term

employment. The guarantee of a job before job-specific training starts is the key feature of VTECs and

payments exclusively reward achieving 26-week outcomes.

A VTEC is a specialised training provider, sometimes working in conjunction with a local TAFE in

partnership with regional industry, that delivers quality training programmes linked to the community

and business needs of the region. By providing quality, flexible training to upgrade skills, especially by

providing driver’s licence training, VTECs can get participants job-ready within six weeks to undertake

on-the-job training or further training courses, from entry-level Certificate l to apprenticeships and

traineeships, in a wide range of industry areas.

While governments claim JSA funding is outcome based, only 8% of it is at risk if providers do not

retain job seekers in work for 26 weeks. Compare this to a Vocational Training and Employment

Centre (VTEC) service, where 100% of their funding is at risk if 26-week outcomes are not achieved.

It’s pretty clear who will focus on getting and keeping people in long-term jobs.

There are hardly any surviving critics of the demand-driven guaranteed jobs approach. Recently

the government went to market to purchase new VTECs; some 50 interested providers applied and

were prepared to take the business risk of having their sole remuneration rely on them achieving a

26-week employment outcome. More than 4,000 training positions have been allocated to over 20

training organisations recently. Each training company is confident enough to take the risk on the

same basis as its students—.e. success.

Some 18,700 Indigenous people have stepped up to take real jobs under the Australian Employment

Covenant’s 61,000 job pledges. Twenty-six-week outcome data are available for 16,000 of these jobs.

Seventy-five per cent have reached 26 weeks. The issue now (thankfully) is not the jobs being

available; it is the capability of the Indigenous job seekers that is the challenge, and the government

must rise to meet this challenge. Hence the recommendations in this report.

The vocational education and training (VET) system, including TAFE, is currently moving towards

employer-directed job-specific training like VTECs—ut the progress is slow and sporadic. Training

for training’s sake has led to first Australians accumulating Certificate I and II qualifications that are

not valued by employers and rarely translate into a job. As the Business Council of Australia recently

observed, the VET training system is woefully unable to meet employer demand. Funds unfortunately

are being wasted on training for training’s sake, and substantial funding is paid on course enrolments

rather than completions.

Page 146 of the report makes it clear that the VET system must do more to link training to real jobs.

We must pay for training based on results as assessed by the satisfaction of employers and not just

provide funding for trainers to train for training’s sake.

We must try a whole new model. Billions of dollars have been wasted training people inadequately

to succeed in the work environment. This report strongly recommends that no further funding be

provided to any such training institute unless the courses are connected to real jobs.

38

Even some basic skills are taken for granted. A driver’s licence and literacy and numeracy are the most common requirements for employment. However, for many Australians these are the barriers to securing a job. Getting these fundamental skills into the individual is the key to unlocking that person’s career.

In many communities we spoke to, too many people regarded going to prison as a rite of passage and many young people wore it as a badge of honour. We must ensure that incarceration is an empowering experience and the individual on release is much better prepared for independence in society.

Offenders should exit the system being able to read, write and drive and with some vocational training to avoid reoffending. In particular, driver’s licences are critical, and to avoid the embarrassment of inmates driving out (or through) the front gate, simulators are recommended.

Recommendation 12: Tax incentives

That tax-free status be provided to new and innovative first Australian commercial enterprises

that create real jobs by providing the training grounds to eliminate the disparity for the most

disadvantaged job seekers.

These commercial operations should benefit normally from existing assistance, but not more than

any other employer can. They should be designed to allow one-to-one volunteer mentoring by peers

of a new disadvantaged employee.

This will be achieved by the Commonwealth Government taking the following implementation steps:

12.1 legislating to give effect to tax-free status for first Australian commercial enterprises that

are designed to allow one-to-one mentoring by peers within the workplace—which in my

experience is the optimal ratio of volunteer mentors to disadvantaged employees—and that

have:

12.1.1 a minimum of 25% Indigenous ownership and Indigenous board membership

12.1.2 a minimum of 60% of all employees who are Indigenous people

12.1.3 a minimum of 40% of all employees from the most disadvantaged job seekers

(currently defined as sourced from streams 3 and 4 in Job Services Australia)

12.1.4 at least 10% of Indigenous employees from remote areas.

12.2 requiring these companies to report their success in Indigenous employment on the

CreatingParity website

12.3 introducing a new mandatory requirement for the Commonwealth to procure 4% of its

$39 billion purchasing of goods and services from first Australian businesses

12.4 operating the government’s policy of Work for the Dole on a commercial basis so that taxfree

status can be used as an incentive to move organisations from a social enterprise to a

profitable business that employs the most disadvantaged job seekers.

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Recommendation 13: Employment services

That the Commonwealth Government replace and consolidate current Job Services Australia services and other work preparation and literacy and numeracy programmes with a demand driven system.

The design of the system should draw on the Vocational Training and Employment Centre model, where training and support are provided to get people into guaranteed jobs.

This will be achieved by the Commonwealth Government taking the following implementation steps:

13.1      only funding training when it is fully recognised by employers and linked to a guaranteed job

13.2      driving accountability and rewarding outcomes with payments that are heavily weighted to getting and keeping people in jobs for 26 weeks or more

13.3      selecting providers on the basis of demonstrated performance in meeting employers’ needs, achieving 26-week employment outcomes and establishing effective relationships with the Indigenous community

13.4      implementing the government’s policy of Work for the Dole so that activities reflect real workplace pressures and requirements through an intermediate labour market or preferably a commercial operation

13.5      providing driver’s licence, literacy and numeracy training using proven methods of explicit instruction as a compulsory part of Work for the Dole activities for those who need it

13.6      assessing job seekers on what they can do, not on the basis of their disadvantages

13.7      rigorously applying job seeker obligations, with exemptions and discretion strictly limited

13.8      changing suspension and financial penalties to have a next payday impact to drive job seeker behaviour

13.9      authorising providers to apply suspensions and financial penalties directly

13.10    providing case management support to build employability skills and address issues such as drug dependency, with in-job support wherever possible

13.11    redirecting savings from the consolidation of labour market programmes into intensive early childhood care and education as proposed in recommendations 1 and 2

13.12    transferring recipients of Community Development and Employment Projects wages to Newstart Allowance (or the proposed new name of Unemployment Support) to ensure all job seekers have the same incentives and obligations in return for income support

13.13    requiring Job Services Australia providers to report aggregate job seeker off-benefit outcomes, the cost of employment outcomes achieved and post-programme monitoring data for first Australians on the CreatingParity website.

40

Recommendation 14: Vocational education and training

That, in order to create job-specific employer-directed training, the Commonwealth, state and

territory governments, as joint regulators and funders, introduce vouchers for employers

redeemable at education providers to replace all funding for the vocational education and

training system, particularly the TAFE system.

These vouchers would only fund training that is designed by, and meets the needs of, employers.

This will be achieved by the Commonwealth, state and territory governments taking the following

implementation steps:

14.1 introducing voucher funding for vocational education and training that responds to employer

needs and that has a guaranteed job at the end. The level of funding would be tied to the

relative disadvantage of the job seeker (e.g. streams 3 and 4 would attract the highest level of

funding) and the employer would decide what training it wished to purchase in full or in part

with the voucher redeemable through the registered training providers

14.2 requiring vouchers for all qualifications and skill sets (including Certificates I–IV). Certificates

I and II would require a guaranteed job written into the voucher and it would only be

redeemable on completion of 26-week outcomes. An up-front payment or loan—deductable

against the structured outcome—could be made as a proportion of the voucher funding

(but it must be less than 50%—with best practice at 30%). With Certificate III and above,

courses would be designed by employers (not trainers) and participants would be assessed at

significant milestones for successful completion before the voucher could be cashed

14.3 redirecting savings from vocational education and training into intensive early childhood and

education as proposed in recommendations 1 and 2

14.4 making employers and industry bodies drive the content of courses under the Australian

Qualifications Framework to ensure relevance, and use employers’ satisfaction with the training

provided to drive performance-based payments in vocational education and training.

41

Recommendation 15: Driver’s licences

That all state and territory governments introduce a consistent approach to issuing provisional

‘locked’ driver’s licences for people who are unable to drive due to unpaid fines or other traffic

infringements so that they can get and keep a job by being able to drive.

This will be achieved by state and territory governments introducing a national locked licensing

model that has the following characteristics:

15.1 the licence is issued for employment only (a provisional licence) and is specific to one employer

15.2 the licence is specific to a particular geographic region and cannot be used outside that region

15.3 the issuing of the licence is based on successful completion of a skills test specific to the

geographic area and/or work site for which the licence is provided

15.4 the licence looks different to a normal driver’s licence so that it is readily identifiable

15.5 the driver is required to carry proof (e.g. a letter confirming employment from the employer

with a telephone number) to show, if they are pulled over by police while driving for work

15.6 provision is made for payment plans to pay off any outstanding fines or warrants for people

who are disqualified on that basis.

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Recommendation 16: Training in incarceration

That states and territories require compulsory participation of inmates, while in incarceration, in

proven methods of explicit instruction in English and maths, driver’s licences for those who need

them, and job skills training.

Successful completion of training would also be a condition of parole eligibility subject to time

constraints in prison. Inmates must be able to read, write and drive and have some vocational

qualification upon release.

This will be achieved by state and territory governments implementing the following steps:

16.1 providing individuals in correctional facilities and services with proven methods of explicit

instruction in maths and English

16.2 using simulation machines for offenders to accumulate the requisite minimum number of

hours of driving experience to sit and be issued with a driver’s licence, and where necessary

issuing driver’s licences for employment only (a locked licence) and specific to one employer

16.3 providing vocational education and training that is relevant to employers in the community

where the individual will resettle

16.4 ensuring that a substantial portion of funding to correctional facilities is dependent upon on

achieving outcomes based on the above

16.5 remunerating out-placement services on the basis of performance in successfully resettling

individuals in the community for 26 weeks or more without reoffence.

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Chapter 6: Incentives for housing and mobility

When we look at the reasons for serious disadvantage, we don’t have to go much further than

housing policy. Our system currently traps first Australians into living in remote communities,

whether they want to or not, even when there are no jobs there. When one is asking to end the

disparity through employment, this policy, perhaps, is the most irrational of all that this review has

considered. The Minister for Indigenous Affairs, Senator Nigel Scullion, is making major inroads into

the inefficiencies of the programmes and practices he inherited. We continue to support his efforts.

If we are to end the disparity, getting and keeping a job must be a rational choice for all first

Australians to make. There are many inputs to this choice, like the support and training individuals

receive, what they are obliged to do in return for welfare and what impact it will have on their

lifestyle, especially housing. Yet the comments made by Elders to me across Australia, such as

Mr Richie Ah Mat, a highly respected Cape York leader, support this case. He, like the other Elders,

state firmly that nothing changes a family’s life or improves its standard of living more quickly than

living in a home the family owns. This is particularly so for the safety and security of children, for,

among other reasons, visitors can be controlled.

People told us outright they would give up the dole for a job anytime—ut not if it meant losing

their house. The pull of low-cost housing, even on welfare, is too strong. An urgent shift is required.

We must use housing to make employment much more attractive, not less attractive. Right now, the

most expensive houses to build are those being built, with taxpayer funds, in communities where

there simply aren’t meaningful long-term careers for the majority of first Australians who live there.

The discount in housing must be applied when there are strong prospects of employment and

long-term careers.

Social housing is a significant part of the Australian welfare system; it has an estimated cost of more

than $7 billion over four years to the Commonwealth alone. For many of Australia’s most vulnerable

citizens, social housing is a valuable part of society’s safety net. About one-third or over 100,000

people are in social housing and on income support that requires them to look for work. Across

Australia the lowest rents are paid in the most remote social housing tenancies. For them, the social

housing system often undermines job aspirations and entrenches welfare reliance. A person can be

discouraged from taking a job because state and territory housing authorities deem that an income

higher than the dole means eviction from social housing.

Compulsory rent deductions from welfare payments would stop cheap or free public housing

becoming part of the welfare trap and support individuals relocating for work. It would also prevent

unnecessary evictions that result from rent default. These funds can and should of course go towards

rent or home loan interest subsidies when there are suitable job prospects and careers.

Job seekers, especially those in remote Australia, said they did not have the personal resources to

move for work. None we spoke to knew where they could go to get help with the cost of mobility.

In particular, people living in remote Indigenous communities who wish to leave for work must be

shown a clear way out. We need to build on existing programmes and significantly expand support

home communities without losing access to housing or employment.

* The Cape York Institute for Policy and Leadership introduced the team ‘orbiting’ in relation to Cape York communities—ee

http://cyi.org.au/wp-content/uploads/2011/08/Cape%2520York%2520Agenda%2520final.pdf. Broadly speaking, the term refers to

the mobility of Indigenous people from remote communities to take up education and employment opportunities in regional and

metropolitan centres, while also retaining their connection with ancestral lands.

44

Home ownership is a critical incentive to keep people in jobs and out of the welfare trap.

Most Australians have a job so that they can meet their aspiration of home ownership, to generate

wealth and provide security for their families. The 2011 census showed that 37% of first Australian

adults lived in owner-occupied homes compared to 70% of other adults.

Recommendation 17: Housing

That the Commonwealth, state and territory governments work together to put in place housing

delivery mechanisms to support and encourage workforce participation, optimise transition and

mobility to work, and remove disincentives and impediments to taking up work.

This would involve reforming land tenure arrangements, increasing mobility assistance, and

prioritising housing and home ownership for those in work.

This will be achieved by taking the following implementation steps:

17.1 Commonwealth Government:

17.1.1 building on existing mobility programmes by making accommodation part of a

support package for people relocating from remote communities to take up jobs that

includes access to secure accommodation in town; brokered assistance such as bonds

and rent advances for the private rental market; and case management for families

including financial management support and assistance with accessing schools and

health care

17.1.2 enabling Indigenous Business Australia to accept substantial private sector capital to

increase the capital available for employment home loans for first Australians

17.1.3 enabling Indigenous Business Australia—once a portion of the first Australian

employment home loan portfolio is performing to market expectations—to sell that

portion into the commercial markets in order to recycle those funds to create more

low-interest (initially) home loans for all first Australians, provided they have been

employed for 12 months or more

17.1.4 having the Australian Treasury credit-enhance up to $500 million (at a time) of first

Australians’ home mortgages. Indigenous Business Australia can then provide a credit

enhancement to its loan portfolio by way of a partially guaranteed loan book, which

will allow it to borrow funds at competitive prices from the banks

17.1.5 redirecting remote housing funding to increase first Australian employment home

loans administered through Indigenous Business Australia with generous deposit

assistance for first Australians who relocate from the remote areas to better labour

markets for work and retain a job for at least 12 months

17.1.6 deducting rent on a compulsory basis from income support entitlements for social

housing managed by the states and territories, and ensuring that the money is used to

subsidise rent for people who move to take up employment and pursue a career. Rents

should be set at 80% of market rates or at least cover the cost of the asset.

45

17.2 State and territory governments:

17.2.1 giving existing social housing tenants on activity-tested payments an incentive to

relocate to better labour markets to take up jobs a preference to a rental house at the

location of the job. After one year of employment this would trigger a purchase option

17.2.2 continuing eligibility for public housing for those who take up and retain work for up

to 30 months while they transition to the private rental market or home ownership

17.2.3 giving priority in the allocation of social housing to families in employment and

meeting social obligations, such as their children regularly attending school, over those

who are capable of working but choose not to

17.2.4 ensuring that all public and social housing tenants on activity-tested payments pay

rent at a comparable market rate (not less than 80% of the private market rate in a

comparable location), up to a reasonable cap, with an appropriate transition period

17.2.5 publicly reporting on the implementation of these new arrangements on the

CreatingParity website, including providing annual data on rents charged compared to

rents collected and the rent default rate to ensure social housing is not a welfare trap.

46

Chapter 7: Building employer demand

There is no reason apart from poor policy and attitude that our first Australians can’t have parity in

employment. Education and training is available, but everyone in these industries should feel the

satisfaction of knowing their students will find meaningful long-term employment at the satisfactory

completion of their courses.

As Australians we want to see every one of us have a fair go at making a decent life.

To get to this point in a reasonable timeframe, our efforts need to deliver results quickly. We cannot

simply wait for improvements in prenatal early childhood education and general education to

correct the education and health environment for our young people. Our policies must also help

immediately those of training and working age.

The gap in the employment rate between first Australians and other Australians has widened from

27 to 30 percentage points between 2008 and 2012–3. First Australians are around four times

more likely to be unemployed than other Australians and this disparity will grow without effective

interventions. As stated previously in this report, the majority of our first Australians are young and

thousands will be entering the labour force in the coming years unprepared for employment and

without any of the necessary work-ready skills. These people will have no choice but to become

welfare-dependent unless our policies change dramatically. As mentioned, by 2018 we need to find

188,000 new jobs to close the employment gap, of which 80,000 would be for kids and new entrants

into the workforce. This rapidly worsening situation will doom young first Australians to a life of

poverty unless effective policies are implemented.

Real change will only take place if there is a close partnership between the Commonwealth

and private enterprises. Employers of first Australians are telling us that the current Indigenous

Employment Programme structure is riddled with red tape and is difficult to navigate. There is a

real opportunity to harness the good will of Australian businesses to provide real growth in jobs

for first Australians.

Although the employment gap is much wider in the private sector, it is not appropriate for the

government to expect the private sector to do all the heavy lifting. While the most serious inroads

into employment disadvantage will be in the private sector, the government must do its share. The

Commonwealth alone employs 250,000 people and state and territory governments collectively

employ many more.

It is also important to support first Australian businesses, as this, in turn, will lead to more jobs for first

Australians. Indigenous majority-owned businesses are about 100 times more likely to employ first

Australians than other businesses. The Commonwealth should support the growth of Indigenous

businesses and first Australian commercial enterprises with its $39 billion annual purchasing of

goods and services.

47

Recommendation 18: Government procurement

That the Commonwealth Government purchase at least 4% of its goods and services within four

years (either directly or through subcontractors) from first Australian businesses (with a minimum

of 25% Indigenous ownership) and in particular from the new first Australian commercial

enterprises once they are established.

This will be achieved by the Commonwealth Government taking the following implementation steps:

18.1 setting the required level of 4% over four years, with an annual increase of 1 percentage

point to achieve an overall 4% increase over four years in purchasing goods and services

from first Australian businesses. The rate of, and achievement made towards, the targets must

be published in agencies’ annual reports and be monitored quarterly on the CreatingParity

website

18.2 holding portfolio ministers and each department and agency accountable for meeting

portfolio procurement levels and milestones towards them, with requirements set out in

department and agency heads’ employment contracts

18.3 requiring bidders for government tenders to detail a first Australian engagement strategy that

sets out their approach to delivering the required level for first Australian employment and

purchasing from first Australian firms

18.4 setting the level of first Australian employees in successful contracting companies in nonremote

areas to the public sector level in the jurisdiction where they are based (at a minimum)

to be consistent with either the underlying first Australian population in that jurisdiction or 4%

(whichever is higher at the time of tendering to government); and in remote areas setting the

level at the greater of at least 20% or the first Australian population of that region

18.5 including in criteria for all tenders a substantial weighting in assessment where companies

with a first Australian workforce consistent with the underlying first Australian population in

that jurisdiction or 4% (whichever is higher) receive the maximum score against that criterion

18.6 capturing required levels of first Australian employment in contracts and enforcing them.

Failure to meet contractual obligations should affect the awarding of any future government

contracts to the company

18.7 defining first Australian firms that qualify for preferential Commonwealth procurement

policies as those that have 25% or more first Australian ownership and management and can

demonstrate significant first Australian employment outcomes.

48

Recommendation 19: Top 200 employers

That the Commonwealth Government provide the top 200 companies in Australia and those

with a strong track record of first Australian employment, with tailored contracts to increase the

proportion of first Australians among their employees.

Best practice would be 4% over four years, but with a minimum requirement of 4% over five years.

More time should be provided to achieve 4% first Australian employment for those organisations

that have a significant proportion of very highly skilled or professional positions for which there are

currently insufficient qualified first Australians.

This will be achieved by the Commonwealth Government taking the following implementation steps:

19.1 establishing a ‘Corporate Leaders Group’ to share best practice across employers and industries

19.2 issuing invitations to the largest companies and those with a strong commitment and track

record in first Australian employment, to participate in the Corporate Leaders Group

19.3 negotiating individually tailored contracts with these companies that provide for payments

rewarding retention of employees at 26 weeks and that require overall growth in their first

Australian workforce to be reported in their annual reports and monitored quarterly on the

CreatingParity website

19.4 supporting these employers to take the most disadvantaged job seekers by having effective

demand-driven employment services like Vocational Training and Employment Centres

working with employers

19.5 publicly celebrating the successes of this group with the involvement of the Prime Minister at

an event and as companies sign up to the group.

Recommendation 20: Support for employers

That the Commonwealth Government ensure the Indigenous Employment Programme funds

training only when there is a guarantee of an ongoing job and has the flexibility to package

support according to employers’ needs.

This will be achieved by the Commonwealth Government taking the following implementation steps:

20.1 removing the unnecessary limitations on school-based traineeships

20.2 funding initiatives with proven success—particularly for connecting disadvantaged groups

(such as pre-release prisoners and disengaged young people) with jobs

20.3 broadening eligibility for cadetships to include para-professional opportunities—for example,

bookkeeping, retail, and some engineering and construction industry jobs

20.4 requiring the Indigenous Employment Programme to report aggregate job seeker off-benefit

outcomes, the cost of employment outcomes achieved and post-programme monitoring data

for first Australians on the CreatingParity website.

49

Recommendation 21: Public sector employment

That the Commonwealth, state and territory governments each set and enforce public sector first

Australian employment targets of 4% within four years for each portfolio with a minimum of 4%

within five years, but with no individual portfolio with less than 3%.

This will be achieved by Commonwealth, state and territory governments taking the following

implementation steps:

21.1 holding department and agency heads accountable for meeting the target and milestones

towards it

21.2 requiring that progress towards the target be published in agencies’ annual reports and be

monitored quarterly on the CreatingParity website

21.3 increasing the number of offers of cadetships to first Australian university students and

ensuring there is a guaranteed job at graduation.

50

Chapter 8: Empowering people in remote communities to

end the disparity themselves

Every Australian has the right to choose where they live, but not to disregard the law of the land or

accepted social norms wherever they live. The accepted social norms for families and communities

all across Australia are that children go to school, adults go to work or are meaningfully engaged, and

residents feel safe and secure in their homes and neighbourhoods.

However, this is often not happening when the occupants do not own their own home. Due to the

lack of individual responsibility, these houses often become severely overcrowded. Individual land

ownership needs to be unlocked quickly for first Australians to resolve this problem themselves and

own or build their own houses. This would also save enormous taxpayer-funded construction costs

and minimise ongoing maintenance bills.

Despite improvement over the last 10 years in some health indicators, dependence on welfare has

not reduced in first Australian communities. At the same time school attendance and achievement

have dropped, people are suffering the effects of alcohol and drug abuse, and there continues to be

overcrowding in some locations like the Northern Territory.

Only 35% of first Australians in remote areas are employed in real jobs, compared to 83% of other

Australians in the same areas. Of these jobs, only half are in the private sector. A staggering 82%

of first Australian 17- to 24-year-olds in very remote communities are not fully engaged in work or

study. More than a quarter of young women in very remote areas have already given birth to two or

more children (compared to 4% of other young women across Australia) and their children are much

more likely to be affected by foetal alcohol spectrum disorder. Almost two-thirds of first Australian

children in very remote communities are assessed as ‘vulnerable’ through the Australian Early

Childhood Development Index.

The Remote Jobs and Communities Programme has not worked. Employers and providers find it

confusing and bound by rules. Job seekers are frustrated because it promotes training for the sake of

training, and so often real jobs do not emerge after training.

First Australian leaders want to assure a strong future for first Australian children supported by

educated, active or working parents. They want every child to be nurtured to reach their full

potential. Parents can have no better reason to get and keep a job than to provide a better future for

their children.

Sober and respected first Australian leaders with cultural authority in remote communities called

for the authority to require young people to earn or learn and not tolerate idleness, so that young

children can have strong role models and can thrive in safe and functioning communities. It is

imperative that they are supported by government to do so.

Recommendations in this chapter give local communities the opportunity to set up local governance

arrangements that support jobs, school attendance and community safety. These arrangements can be

built using the approach taken by the Empowered Communities group, but they need to be designed

to be rolled out on a major scale. The arrangements should complement not duplicate or compete with

functions of local government.

51

The creation of a national human services data hub based on the New South Wales Government’s

existing data hub, set out in recommendations 6.4 to 6.5, will be critical to removing duplication,

ensuring funding is allocated to the area of greatest need and allowing the public to hold

governments accountable for funds spent and results achieved in servicing all communities.

We are relying on the New South Wales Government to prove this system and warmly congratulate

its initiative.

Government service delivery to remote first Australian communities has not been sufficiently

effective and it is now time to both encourage and prepare community leaders to be responsible

for the health, school attendance and career achievements of their member families.

It is difficult for leaders and others in remote communities to understand how and why decisions

(that can have a huge impact in a small community) have been made by distant governments

in Canberra, Perth or Darwin. A fly-in fly-out service may not deliver sufficiently strong trusting

relationships between provider and clients, resulting in low usage rates, poor service and

unaddressed need. On top of welfare, this approach creates even more passivity in communities.

As Professor Fiona Stanley points out, the answer is to encourage Indigenous people to actively

participate in all the decisions that involve them.

Even more important than competent and honest self-management of communities is the ability to

own your own home and develop business on your own land. For most Australians economic security

comes from home ownership or business investment to build self-reliance and complete the journey

out of passivity and into financial independence. Reliable land tenure, predictable under common

law, underpins most advanced economies.

Similar to the way mining and pastoral leases can coexist with Indigenous ownership of the land,

first Australians should be allowed to take up long-term leases on their land. The Commonwealth

needs to actively engage in a promotion of long-term leases that will encourage first Australians

to raise finance to buy a home or start a business without affecting the underlying title (just like

what happens in the Australian Capital Territory) and to dispel the misinformation concerning this

issue. A long-term lease on Indigenous land should be no less valuable than a long-term lease on

Commonwealth land.

The ability to purchase and use available land for home ownership and business is the key to

prosperity, empowerment and financial independence for first Australians and their families. More

than 20% of Australia is now Indigenous-owned under various land rights regimes, or exclusively

controlled under native title, but it generates very little economic wealth or independence for the

traditional land owners in many areas.

In fact, to underscore how necessary this measure is, there are fewer than 20 homeowners on

Indigenous land with long-term leasing in all of Australia. Yet, if we unlock this land in the manner

suggested, some 20% of Australia’s land mass, which is currently chronically underutilised, may be

put to work by first Australian businesspeople and homeowners. Unlocking this land in the manner

recommended in this report with strict timetables for land councils and governments will bring

significant sustainable economic advantages to first Australians and, correspondingly, the wider

Australian economy. This multiplier effect of introducing reliable individual land title underpins all

advanced economies and could be substantial.

52

Northern Territory land councils and native title representative bodies are funded by the

Commonwealth to support Indigenous rights to land recognised or provided through

Commonwealth land rights legislation and facilitate the representation and assistance of native

title claimants and holders in the pursuit and exercise of native title rights. This is because the

formal recognition and exercise of native title rights can contribute to greater economic and

social participation for first Australians. The Commonwealth provides annual funding of around

$128 million a year for these purposes. Land councils and representative bodies have a significant

role in working with land owners and native title claimants and holders, and the work is often

complex and sensitive. Nevertheless, there must be incentive to be responsive to the wishes of

traditional owners and native title holders for timely advice and action.

Elders, many of whom are native title holders, claimants or land owners, shared with me their

aspirations for intergenerational economic and social development. They want to be sure these

opportunities are not wasted on poor choices. Rather than just payments to individuals, a package of

community benefits can do much to build the capacity of individuals where it helps the community

interests and therefore the broader community—for example, low-cost loans or grants that

encourage small businesses within communities such as a bakery, a laundromat or a butcher; or lowcost

home construction or home purchase loans, scholarships and support to go to boarding school.

Recommendation 22: Remote Job Centres

That the Commonwealth Government replace and consolidate current Remote Jobs and Communities Programme services and other work preparation and literacy and numeracy programmes with demand-driven Job Centres, drawing on the Vocational Training and Employment Centre model, where training and support are provided to get people into guaranteed jobs.

This will be achieved by the Commonwealth Government taking the following implementation steps:

22.1     only funding training when it is fully recognised by employers and linked to a guaranteed job

22.2     driving accountability and rewarding outcomes with payments that are heavily weighted to getting and keeping people in jobs for 26 weeks or more

22.3     selecting providers on the basis of demonstrated performance in meeting employers’ needs, achieving 26-week employment outcomes and establishing effective relationships with the Indigenous community

22.4     implementing the government’s policy of Work for the Dole with mandatory participation for all unemployed people from day one. Activities should reflect real workplace pressures and requirements through an intermediate labour market or preferably a commercial operation 22.5 providing driver’s licence, literacy and numeracy training using proven methods of explicit instruction as compulsory part of Work for the Dole activities for those who need it

22.6     assessing job seekers on what they can do, not on the basis of their disadvantages

22.7     rigorously applying job seeker obligations, with exemptions and discretion strictly limited

22.8     changing suspension and financial penalties to have a next pay day impact to drive job seeker behaviour

22.9     authorising providers to apply suspensions and financial penalties directly

22.10   providing case management support to build employability skills and address issues such as drug dependency, with in-job support wherever possible

22.11   offering a mobility package for work-ready people moving from Remote Jobs and Communities Programme regions to areas with strong labour markets, to take up jobs, with effective support at the destination location

22.12   redirecting savings from the consolidation of labour market programmes into intensive early childhood care and education as proposed in recommendations 1 and 2

22.13   transferring recipients of Community Development and Employment Projects wages to Newstart Allowance (or the renamed Unemployment Support) to ensure all job seekers have the same incentives and obligations in return for income support

22.14   requiring Remote Jobs and Communities Programme providers to report aggregate job seeker off-benefit outcomes, the cost of employment outcomes achieved and post-programme monitoring data for first Australians on the CreatingParity website.

54

Recommendation 23: Local governance

That community decisions about job seeker compliance and social norms be made locally by a

local responsibilities board and not remotely.

Honest and hard-working Indigenous leaders deserve support under a system of trust and

verification to run their own communities. It is a very small minority that let down the vast majority,

causing large departments to be established to rigorously monitor the competence and honesty of

management of local communities.

However, under a system of trust and verification, this review believes it is now time for the

Commonwealth to support wide community governance arrangements. This must enable local first

Australian leaders with cultural authority to have the power to encourage, develop and enforce job

seeker obligations, and administer and enforce the economic and social norms (accepted across

Australia) in their communities. This will be achieved by the Commonwealth Government taking the

following implementation steps:

23.1 adopting lessons learned through the Family Responsibilities Commission’s activities in Cape

York, and other successful local governance arrangements. Communities could opt in to work

in partnership with governments to ensure adults are in work, children attend school every

day, communities are safe and the obligations that come with receiving welfare payments are

complied with. This will include:

23.1.1 authorising already existing, functional community governance groups to take a strong

role in the new arrangements

23.1.2 providing assistance to develop the capability where such arrangements do not

already exist

23.1.3 inviting communities to opt in to design and deliver these arrangements

23.1.4 working with communities to develop and implement 20 to 30 of the new governance

arrangements over the next 12 months

23.2 ensuring the new governance arrangements operate through a board of respected Elders,

a minimum of 50% of whom are women. The boards will have:

23.2.1 strategic oversight of local service delivery, including government services and grants, through credible local organisations

23.2.2 the power to set out and enforce rules, expectations and consequences in relation to matters such as work, schooling and other social norms

23.2.3 the power to hear and determine appeals by individuals against a decision to withhold, or income-manage, welfare payments

23.3 making sure board members are supported to:

23.3.1 stand behind their decisions when challenged by those who are affected

23.3.2 get training in areas such as literacy, corporate governance and ethical decision making, with appropriate mentors, such as retired magistrates and judges

23.3.3 occupy these roles as paid positions with a sunset clause to ensure membership is

refreshed on a regular basis

23.4 operating on the basis of trust and a system of verification that ensures accountability to

government and community residents through measures such as:

23.4.1 recognising and rewarding good governance and performance with earned autonomy,

increased scope of decision making and greater flexibility

23.4.2 investing in enforcement of drug and alcohol laws by police and other relevant

agencies

23.4.3 either providing training and guidance in relation to discrepancies, or, where there

is illegality, investigating and prosecuting under the law

23.4.4 conducting random and spot audits to check appropriate use of funding and identify

both incompetence and illegality

23.4.5 ensuring accountability flows all the way to the minister if prosecutions are not

undertaken

23.4.6 using mainstream quality accreditation and accounting standards to build skills and

competence.

56

Recommendation 24: Consolidating service delivery

That, to reduce duplication and improve outcomes from service delivery from services aimed at

improving employment and social wellbeing of first Australians, the Commonwealth, state and

Northern Territory governments engage with Local Responsibilities Boards to consolidate and

integrate service delivery in credible local first Australian organisations.

This will be achieved by taking the following implementation steps:

24.1 Commonwealth Government:

24.1.1 ensuring transparency across all funding to remote communities so that the future

service mix meets the needs of the community, and addresses the Prime Minister’s

top priorities of all children going to school, all capable adults going to work and safe

communities

24.1.2 delivering the revised employment services (the new Job Centres) in conjunction with a

comprehensive range of support services including:

24.1.2.1 assisting people into local or out-of-town jobs with job mobility support

24.1.2.2 showing individuals that using different bank accounts to manage their income

enables them to budget to meet responsibilities for extended families, manage

their household budget, and set aside savings for a house

24.1.2.3 supporting transition into home ownership

24.1.2.4 seeking out local first Australian business opportunities, and helping establish

enterprises where viable.

24.2 State and Northern Territory governments (in partnership with the Commonwealth):

24.2.1 supporting already existing, functioning groups of respected leaders as they work

through the opt-in process for the new model

24.2.2 strongly encouraging communities to opt in and supporting those that do

24.2.3 once a community has opted in, consolidating state and territory services and

delivering those services through the Job Centre as far as possible

24.2.4 where there are state or territory services (e.g. health clinics) that may require separate

delivery arrangements, ensuring there is coordination and cooperation with the Local

Responsibilities Board and the Job Centre

24.2.5 ensuring transparency across all funding to remote communities so that the future

service mix meets the needs of the community, all children go to school, all capable

adults go to work, and communities are safe.

57

Recommendation 25: Remote housing

That governments ensure the approach to remote housing on Indigenous land is revised to

include performance-based funding to move to a sustainable system with strong incentives for

workforce participation and home ownership.

This will be achieved by the Commonwealth, state and Northern Territory governments agreeing on

a new approach to social housing delivery that has the following implementation steps:

25.1 state and territory governments enforcing tenant obligations for public housing, in particular

in remote communities

25.2 only building new social housing in remote communities on land with secure tenure that can

be used for business investment and private home ownership, through long-term leasing or

freehold title, where traditional owners agree

25.3 state and territory governments giving priority in the allocation of social housing to families in

employment and meeting social obligations, such as their children regularly attending school,

over those who are capable of working but choose not to

25.4 publicly reporting on the implementation of these new arrangements on the

CreatingParity website, including rents charged compared to rents collected and the rent

default rate, to ensure remote social housing is not a welfare trap for those capable of work

and of working age.

58

Recommendation 26: Enabling leasing or freeholding of Indigenous land

That governments create the ability for traditional owners to convert their land to freehold or

hold the underlying title with a 99-year lease owned by the home or business owner, so that it can

be mortgaged or traded through the open market and so that traditional owners can build their

houses on allotments on their own land.

This will be achieved by taking the following implementation steps:

26.1 Commonwealth Government:

26.1.1 using its funding leverage and, specifically, its powers to devolve decision making

to more regional structures (to ensure land councils are responsive to the wishes

of traditional owners who have requested to freehold or lease their land to enable

business investment and/or home ownership)

26.1.2 driving accountability for land council performance by stipulating a short timeframe

(30 days) to determine requests to pursue development where the Northern Territory

Government has provided the necessary prerequisites (such as cadastral mapping,

town planning and other essentials) and where there are indisputable instructions

from the traditional owners for housing allotments for freeholding or leasing, and land

councils have not acted in a timely fashion. If this timeframe is not met, the request

should be automatically escalated to the responsible minister to take up with the land

council and must be resolved within two months

26.1.3 investing in social housing in remote Indigenous communities only where there is

appropriate land tenure to enable business investment, economic development and

private home ownership

26.1.4 publicly reporting the implementation of these new arrangements on the

CreatingParity website to ensure Indigenous land is open for business where traditional

owners want this and the number of applications that are escalated to the minister

beyond the 30-day point and the two-month point

26.1.5 introducing suitable performance-based payments into funding arrangements for land

councils and native title representative bodies and service providers.

26.2 State and the Northern Territory governments:

26.2.1 ensuring arrangements are in place to achieve private investment and home ownership

on Indigenous land with the agreement of traditional owners along with the necessary

land administration arrangements

26.2.2 with the agreement of traditional owners, establishing and implementing on

Indigenous land with long-term leasing or freeholding that enables private investment,

robust land planning and administration systems, cadastral surveys and town plans,

and maintaining and delivering local government services that will assure the value of

land and assets constructed in remote areas.

59

Recommendation 27: Land access payments

So that land access payments can be applied to the economic and social progress of traditional

owner and native title groups and ensure intergenerational benefits, that the Commonwealth

Government consider the recommendations in the report of the Taxation of Native Title and

Traditional Owner Benefits and Governance Working Group.

The working group’s recommendations need to be carefully considered and where appropriate

updated and strengthened in the context of the recommendations of this review with the aim

of removing the disparity of the first Australians. Implementation of the recommendations

of the working group should be accorded priority in the Indigenous Affairs portfolio in the

Prime Minister and Cabinet portfolio. In particular, the recommendations of the working group

should be acted on to:

27.1 clarify that the named applicants of native title agreements have fiduciary obligations to their

native title or traditional owner group

27.2 provide for the regulation of private agents involved in negotiating native title agreements

and, further, regulation of those in management roles in relation to land access payments

27.3 provide for the establishment, under statute, of a trust that would be the holder of native

title agreement funds when there is no prescribed body corporate or other appropriate funds

management entity to receive them

27.4 enable a process of capital investment and distribution as described in the report for the

benefit of the community

27.5 if native title holders and land owners agree, review existing agreements to improve

governance and the provision of community benefits in the agreements and to clarify the

applicants’ fiduciary obligations.

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• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

Part 1: The wheel rim

Chapter 1: Prenatal, early childhood

and education

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

What success looks like

There is parity between first Australian and Australian prenatal and infant health, early education and

education outcomes.

Prenatal

nation’s births.

professionals for prenatal care.

Early childhood

grow into healthy young people.

grandparents active in their mentoring role.

out of 10 days.

school attendance and a healthy environment for children.

Education

achieve parity in education for their students.

including, where required, access to boarding school.

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There are two elements that are critical in binding these reforms together into an integrated reform

package and both are critical to the reform process. As described in the executive summary, they will

act like the iron bands that hold the frame of a wagon wheel together:

There is employment parity now for first Australians with Certificate III or IV level training that most

apprentices undergo, diploma or university qualifications. To remove the disparity we must get

growth and development from conception to three years old right, so that children excel at school

and further training and succeed in the workplace. As it will take around two decades for these

children to reach working age, we must have the interim intensive services described in the rest of

this report for those who are already of school and working age.

Before we can address education, we need to get children into school. Education experts have

reported that children need a school attendance record of at least 80%, for schooling to be

effective. In the Northern Territory’s very remote areas of (where 57% of students in the Territory

are educated, or 8,253 students), only one in five children is attending school more than 80% or the

time. The average first Australian attendance rate in very remote Northern Territory schools is about

58%, compared with almost 83% in provincial areas. The Commonwealth Government’s School

Attendance and Enrolment Measure and the recent Remote Schools Attendance Strategy and other

measures have helped where they are in place. Much more needs to be done to ensure children go to

school every day.

A key theme from all of the consultations was the strong support to nurture children to succeed in

education and their future careers. Getting a job and finishing school makes sense when it is part of

making a future for your children.

International and local research, practice and experience have proven that the time from conception

to three years of age is the most formative in any individual’s life. One of the greatest, if not the

greatest tragedy of first Australians disparity and indeed all disadvantaged children, is the irreversible

impact of poor care on an unborn child.

Unexpected pregnancies and rampant peer group pressure on young adults to participate in regular

and excessive drug and alcohol consumption, particularly in remote first Australian communities,

has significant and detrimental impacts on a developing foetus, not to mention the impact on a

young mother unprepared for parenthood. However, even less severe lifestyle impacts, such as

poor nutrition, have been proven to have lifelong effects on a child. It is critical for young and newly

expectant mothers to have antenatal check-ups and understand how they can best nurture their

babies during pregnancy.

A healthy pregnancy is crucial to the early stages of a child’s life. Tragically, alcohol and drug

consumption during pregnancy does occur—uite often out of ignorance. Foetal alcohol

spectrum disorder is a significant issue and we should be on the constant lookout to prevent

it. Parenting programs for Aboriginal women and men must be a priority, and health services

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Further, many kids at high risk of abuse, due to overcrowded housing and abundant alcohol and

drug availability, are more vulnerable to unplanned pregnancies. They must be encouraged through

school to complete their education and move into a career, even if they have suffered an unplanned

pregnancy. The Healthy Welfare Card and the other measures of this review are expected to make

major inroads into the behaviour that causes unplanned pregnancies. However, specific support from

family and community carers makes a major difference. Further, prevention beyond the measures of

this review that should also be adopted include sex, sexually transmitted disease, drug and alcohol

education in communities and schools where there is a high incident of unplanned pregnancy, and

youth suicide.

There is a pattern of governments, communities and families failing to intervene during the critical

period from conception to three years of age. This has led to a lifetime of disadvantage for at-risk

children.

Virtually every aspect of early human development, from the brain’s evolving circuitry to

the child’s capacity for empathy, is affected by the environments and experiences that are

encountered in a cumulative fashion, beginning early in the prenatal period and extending

The value of early intervention cannot be over-estimated as a tool to mitigate the negative effects

of poverty and disadvantage on children’s short- and long-term prospects on their physical wellbeing

and motor development, language and literacy development, cognitive development, general

knowledge, social and emotional development, and executive functions.

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Opportunities for

achievement and

recognition of

accomplishments

Responsive parenting

(i.e. appropriate care,

stimulation and

monitoring)

Optimal brain

development in utero

and

early childhood

Healthy pregnancy,

no maternal smoking,

alcohol and drug abuse

Healthy nutrition in

utero and throughout

childhood

and adolescence

Social and economic environments supportive to child rearing—especially

absence of poverty and exposure to violence

Academic success and

other achievements

Effective learning,

communication and

problem-solving skills

Effective self-regulation

of emotion, attention

and social interaction

Personal achievement,

social competence and

emotional resilience

Availability of positive adult role

models and engaging community

activities

Positive interaction with peers

Positive

interaction with

adults

Genetic

factors

Reduced

exposure to

harmful drugs

Sense

of social

connectedness

Sense

of selfefficacy

and self

worth

Healthy

beliefs

and clear

standards

With thanks to Professor Fiona Stanley

66

With thanks to Professor Fiona Stanley

Low socio-economic status, maternal

infections, drug use and exposure to

neurotoxins

Adverse parenting and

exposure to violence

Self-regulation of emotion,

attention and social

interaction

Poor problemsolving

skills

School and

learning

difficulties

Low selfesteem

Alcohol and drugs

Violence and crime

Increasing

psychological

difficulties

Depression

Suicidal behaviour

Acute stress,

significant loss

Peer

problems

Negative

thinking

patterns

Diet and

nutrition

Genetic factors

Early neurological (brain development)

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To stop the cycle of disparity we need to achieve more than the elimination of poor drug and

alcohol choices. We need to support pregnant mothers to have healthy pregnancies through

prenatal programmes and continue to support their children through intensive early childhood

programmes and effective methods of schooling. In combination with the Healthy Welfare Card,

such an investment will be transformational and produce resilient, confident workers for the future.

It will ultimately save billions of dollars for governments in future welfare and health costs, grow the

economy and attack the problem of first Australian unemployment at its root cause.

Mainstream natal and prenatal care is often insufficient in its reach and intensity to meet the

complex needs of families in disadvantaged and at-risk communities. Australia’s consistently poor

and declining education results and increasing strain on welfare demonstrates the need to intervene

back at this period and not understand how governments could have failed to prevent such longterm

human capital cost for Australia’s most vulnerable citizens yet continued to spend billions in

support after they became victims.

Key facts

• Disadvantaged children are less likely to develop the required social competence and verbal communication skills to be school-ready.

• First Australian students are on average two to three years behind in reading and maths by the time they are 15 years old.

• 4.2 million, or 40% of the workforce, is currently below the minimum language, literacy and numeracy (LLN) standard needed to function in a knowledge economy.

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What we heard

• Children are our future; we should prioritise our efforts for them.

• Building the capacity of parents and carers for children under five is critical.

• Lack of educational attainment is the biggest barrier to employment.

• Helping newly pregnant women and mothers with unexpected pregnancies is critical.

• Alcohol and substance abuse is taking its toll on children and young families.

• Communities need to rally together to ensure the future of their youngest members

is guaranteed.

Current approach to early childhood

Across government, the early childhood education system is complex and the provision of services

is patchy and disjointed. While the Commonwealth is responsible for parenting payments, aspects of

healthcare and children from 0 to 3 years of age, the states and territories are responsible for formal

preschool education, health and community services.

The states and territories currently also meet the costs of supporting children with additional needs

in schools. Both levels of government have a mix of some services for vulnerable families but these

are rarely coordinated. If children were better prepared for school these costs could be lower.

The lack of cohesion between Commonwealth, state and territory governments and between

relevant departments enables at-risk children to slip through the cracks and miss out on intervention

for serious developmental problems. Medical specialist services that are already funded by the

government are often ineffective and inaccessible for disadvantaged children. The reality for atrisk

children is that because their home lives are so chaotic it is unlikely they will make it to a GP

for a referral, onto a waiting list and eventually to a specialist appointment months later. Further,

the mothers of such children are less likely to access critical information and support networks to

educate them about the impact their lifestyle has on the unborn foetus. The common reports of

foetal alcohol spectrum disorder in some first Australian communities is sad evidence of this.

An analysis of the Programme for International Student Assessment results from 2000 to 2006

showed that ‘Indigenous students who had attended preschool for more than one year, scored, on

Given the critical importance of pre-school education for life outcomes, governments had

established a target and invested heavily to ensure 95% of all first Australian four-year-olds in remote

communities had access to early childhood education by 2013. Early estimates were that the target

had been achieved, but recent changes to population confirms that enrolment was much lower than

expected, with only 85% of remote first Australian children enrolled in preschool in 2013. We must do

better than this for first Australian children; we must double our efforts, better engage parents and

ensure first Australian children in remote areas get the benefit of access to essential early education.

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Integrating these early childhood, medical and child protection services across governments, to

improve access and provide holistic support for families prior to birth and throughout school, is

critical. It is important to note that the integration of existing services plays a major role in the cost

efficiency of highly effective intervention initiatives. Many of these services are already funded by

governments but operate as silos and are uncoordinated, leading to a lack of comprehensive and

preventative case management. Research shows that the provision of services that are collaborative

and coordinated produce outstanding and long-lasting results for children in these programmes.

Early childhood development and adult literacy are often discussed as separate topics, yet the interrelatedness of these concepts is of utmost importance. Research shows that the most effective services to support lifelong learners begin at birth, involve families, target the poorest children, are sufficiently intensive and long-lasting, and are holistic—they include health, nutrition, and parenting.

Services need to support both the parent and the child.

Supporting first Australian parents who need support to become literate and numerate so they can be their child’s first teacher is just as critical a life skill as a job skill. Literacy and numeracy support is covered in Chapter 5.

Determinants of a healthy pregnancy

A mother’s lifestyle is a significant determinant in the future of her children and their prospects for an

independent future. Antenatal substance abuse poses significant risks to the unborn child.

Alcohol consumption during pregnancy can cause foetal alcohol spectrum disorder (FASD) and

lead to damage to the brain structure of the developing foetus. The incidence of FASD in Australia

is difficult to quantify. For first Australian children, estimates vary between 0.15 and 4.7 per 1,000

births. For the total population, estimates vary between 0.01 and 0.7 per 1,000 births. The estimates

this condition may include physical, mental, behavioural and/or learning disabilities with lifelong implications.

Smoking during pregnancy can result in lower birth weight, increased body mass index, decreased

lung function and increased risk for development of asthma. First Australian mothers are almost

four times more likely to smoke during their pregnancy than pregnant women nationally, and this

proportion increases in more remote areas.

Illicit drug use during pregnancy means babies are more likely to be born preterm, have lower birth

weight and head circumference, require resuscitation, be admitted to special care nurseries, and have

longer stays in hospital. An Australian study has found that the number of newborns suffering serious

Alcohol, tobacco or drug use during pregnancy, or a combination, is likely to deliver children born

with symptoms that impact on their lifelong development and wellbeing, such as problems at school,

health and mental health problems, problems with alcohol and other drugs, and unemployment. The

cost to children, their families and community and government is significant in terms of health, life

trajectories and finances.

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Evidence shows that participating in antenatal and parenting education programmes significantly

the best chances for healthy foetal development. Yet first Australian mothers are less likely to

access antenatal care or, if they do, tend to leave it to later in their pregnancy than other Australian

allied health delivery during pregnancy is essential to deliver practical therapeutic programmes with

community-based support.

The clear message from the research suggests that if we are to improve the outcomes for

children in very vulnerable areas we need to focus as much on protecting their developing

Child health services particularly in rural, remote and disadvantaged metropolitan areas often

lack coordination, efficiency, and engagement with schools and families. Coordinating services,

in line with the integrated services delivery model discussed below makes them more efficient,

and improves the access and outcomes for the family. It is also imperative that the use of e-health

and mobile health services are increased to enable cost-effective and stable service provision

in remote areas.

Brain development from conception to three years of age

By the age of three years, a child’s brain has reached 90% of its adult size. During this time our

brain function and major neural pathways are becoming hardwired and many learning pathways

community supports and economic resources affect the development of these pathways. When

damage occurs, such as FASD, only very serious and expensive intervention can make possible a

The average brain growth is almost infinite from a single cell to 380 grams at birth to 1.3 kilograms

by three years of age, and then only to 1.5 kilogram by 19 years of age when the brain’s mass reaches

its maximum.

Neural networks affect the speed at which the child can process and retain information and absorb

new information. These learning pathways are what we all rely on to undertake more complex brain

functions like exercising judgement, problem solving and juggling priorities. A child who does not

receive the required support and stimulation during these early years commences formal education

without being school-ready and the cycle of failure has already commenced.

Most families, including first Australian families, provide opportunities for young children to develop

and thrive and make good transitions into school and work. However, many first Australian children

are vulnerable before they are born and therefore cannot reach their full potential as young children

or adults.

The Australian Early Development Index (AEDI) is a measure of children’s development in the first

year of full-time primary schooling across five selected domains—hysical health and wellbeing,

social competence, emotional maturity, language and cognitive skills, and communication skills and

general knowledge. Children who score in the lowest decile of the AEDI population assessed in any

domain, are classified as ‘developmentally vulnerable’ since they demonstrate a much lower than

average ability in the developmental competencies measured in that domain.

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In remote Australia the picture is starker. The AEDI shows that nationally, first Australian children are

more than twice as likely to be developmentally vulnerable than other children for every domain,

as vulnerable on at least one AEDI domain is much higher in remote areas than it is in the major cities

and regional areas.

Source: Australian Early Development Index 2012, Department of Education, unpublished data owned by the Department of Education and

managed by the Social Research Centre.

It is this reality that means a child’s development at 22 months of age is one of the best predictors of

from before pregnancy and throughout the first three years of their child’s life.

Return on investment

Early experiences can translate into school readiness, academic success, and lifetime wellbeing.

Success builds upon success. When more children in a community are ready to learn,

community-wide levels of human and social capital rise. (James Heckman, 2000 Nobel Prize

winner in Economics)

A nation which desires a highly competent population for the future to cope with the demands of

the emerging knowledge-based world and global economy needs all its children to have access to

a stimulating and healthy environment during the critical early years of development, regardless of

family circumstances. Investment in the early years will have a substantial long-term economic gain

for Australia as a whole.

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60

50

40

30

20

10

0

r

Figure 1: Proportion of Indigenous and non-Indigenous children assessed to be vulnerable

on at least one AEDI domain by remoteness area, 2012

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60

50

40

30

20

10

0

2,500

2,000

1,500

1,000

500

0

r

2007–08

2008–09

2009–10

2010–11

2011–12

2012–13

Investments in the early period of life are more important than investments in education, postsecondary

education, and remedial health care. The period of early child development is greater in

importance for the quality of the next generation than the period children and young people spend

in education or post-secondary education.

The economist Jacques van der Gaag has demonstrated the economic benefits of investing in early

before a child enters school, this is currently where public spending is the lowest.

Figure 2: The rates of return on human capital investment decrease with age, with the

highest return on investments at preschool age

Source: Heckman, J 2006, ‘Investing in disadvantaged young children is an economically efficient policy’, presented at the Committee for

Economic Development, The Pew Charitable Trusts & PNC Financial Services Group Forum on ‘Building the Economic Case for investments

in Preschool’, New York, 10 January.

There is a mismatch between opportunity and investment. The investment made in the first three

years of a child’s life gives the greatest returns, by far. According to one international study, with

But while it is clear from all the evidence that, not only is education the key to a productive society

and that jobs tend to follow, it must be remembered that early intervention is long-term. There is still

a generation of neglected Australians who know nothing better than a life of welfare. For this cohort,

there are other more intensive measures, which are proposed in other chapters of this review.

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2,000

1,500

1,000

500

0

r

60

50

40

30

20

10

2007–08

2008–09

2009–10

2010–11

2011–12

2012–13

Shifting government spending to preventative services

Each year, government spending on protecting and removing children from their homes far

outweighs spending on services that strengthen and support families, enabling them to maintain the

family unit and raise healthy children. Funding is geared almost five to one towards interventions to

protect children after harm has been done, rather than investing earlier as a preventative model.

In 2012–13, there was approximately $3.218 billion spent on protective services compared to

approximately $664 million on preventative services. In 2010–11, total government spending for

early child development for first Australians was $233 million compared to $980 million for child

protection and out-of-home care services. Between 2007 and 2012, governments have increased

spending on child protection and out-of-home care services on average by 7.5% annually (a total

Intensive family support services are an immediate alternative to the removal of a child from their

home. While spending on intensive family support services has increased at a greater proportion

than child protection (around 30%), the total is still substantially below spending on protective

services; and, for the first time since 2003, declined between 2011–12 and 2012–13, from $375

million to $304 million (see Figure 3).

Figure 3: State and territory government spending on child protection and family support

(expenditure adjusted to 2012–13 dollars)

* Since 2011–12, family support services have included non-intensive services (lower level support to families in need), causing the

reported spending to almost double; however, since the initial jump, spending on family support services has declined by 8.7%.

Productivity Commission.

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We still need to continue to protect children from harm, but government spending patterns need

to be reversed, over time, so that the focus is on early intervention. The objective of governments

must be to move the focus from highly expensive and inefficient ‘cures’ to preventative measures

from conception through to early childhood. This will also have the effect of generating significant

downstream savings and boosting the productivity of our nation as we dramatically improve the

capacity of our future workforce.

The case for redirecting government, community and business focus to the early years is clear. If

we continue to ignore what the research and reality are telling us, we will continue to fail our most

vulnerable children. It is paramount that all efforts to lift communities out of disadvantage are

underpinned by an evidence-based approach to early childhood, before the cycle of failure has

commenced. Supporting an at-risk child from conception must be the norm, not the exception.

Being ‘school-ready’

Most families, including first Australian families, provide adequate opportunities for young children

to develop and thrive and make good transitions into school and eventually, work. However, many

disadvantaged children, especially first Australian children, are vulnerable before they are born and

start school and don’t reach their full potential as young children or adults.

Developmental vulnerability at kindergarten tends to be compounded throughout life, with children who have difficulty making their transition to school more often ending up with poor educational attainment and low functional literacy; leaving school early; being at higher risk of unemployment and delinquency; and being more prone to substance misuse, crime and suicide.

Evidence from NAPLAN shows that students who perform poorly in Year 3 continue to perform poorly in Year 5 and Year 7. This shows that disadvantage is unlikely to be overcome as a child progresses through school. The impact of poor literacy and numeracy skills of those who do join the workforce is holding business back.

The statistics speak for themselves. The Australian Bureau of Statistics 2006 Adult Literacy and Life Skills Survey (ALLS) revealed that Australian language, literacy and numeracy levels have shown little improvement in the decade since the 1996 International Adult Literacy Survey (IALS).

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In order to reduce the resource intensive and economic burden of remedial education and preemployment

programmes, early intervention must occur before formal education starts.

A solution—integrated case management for mothers

from prenatal to three years of age

The problem and solution are clear. In order to lift the life outcomes of Australia’s most disadvantaged

and at-risk children, we must invest earlier in evidence-based support services to provide targeted

support for those most in need.

According to international and local research, components of an integrated and, most importantly,

Services need to be located as close as they can be to those who need it. The capacity for primary

schools to reach families with children aged 0 to 3 years of age through their older sibling, along with

their community settings makes them ideal locations for integrated services. School-based services

which support children and their families from conception to formal school entry ensure optimum

parenting and early child development support for the most sensitive period of brain development.

Access to these services can vastly improve outcomes for children’s behaviour, learning and health in

later life. The earlier in a child’s life these programmes begin, the better.

At the same time, we need to ensure that a clear message is delivered to all Australian parents—namely, that school attendance is not negotiable. The recent Remote Schools Attendance Strategy is

having a positive impact, but much more needs to be done to ensure that all children have access to

education and in many more schools.

Governments should work jointly to agree and implement a new approach within 12 months which includes progressive investment to implement integrated early childhood services and to dramatically improve attendance. The new approach should start with schools in the 200 communities that have the highest level of vulnerability and need as determined by the Australian Early Development Index, the National Assessment Program –Literacy and Numeracy, attendance results and the proportion of first Australian children. Should this initial approach prove successful, governments can consider further rollouts.

A successful early years integrated services intervention programme has been implemented at Challis Primary School in the Armadale region of Perth. The success of this model has demonstrated locally how major improvements in children’s development can be achieved within a few short years if comprehensive case management with a range of essential services occurs effectively.

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Challis Early Childhood Education Centre—a success story

Located in Armadale, a low socio-economic community in the south-east region of Perth, children

attending the Challis Lower Primary School had experienced years of consistently poor and declining

academic, health and social outcomes.

In 2009, the principal of Challis Lower Primary School sourced independent funding for the

implementation of an early intervention programme. After conducting research on brain

development, the principal identified the need to start from (or before) birth. There was emphatic

evidence that the greatest brain growth period is between conception, birth and three years of age

and that this is the most critically important time to possibly have an impact on a person’s entire life.

The key to the programme is the integration of already existing services on the school grounds.

These services include:

Results

The impact of the Challis integrated early service model is measured using the performance

indicators in primary schools (PIPS) tool administered by the University of Western Australia.

The PIPS tool is used to assess children when they first enter primary school and measures their

progress in literacy, numeracy and phonological awareness at the start and end of their first school

year. It diagnoses student areas of strength and weakness, predicts future performance and

identifies individual children who might benefit from early intervention.

According to an assessment of the Challis programme by the Telethon Kids Institute

(commissioned by Minderoo Foundation) using PIPS data, ‘the period immediately prior to and

following introduction of the new model reflect a profound local improvement’ (see Figures 4

were in pre-primary in 2013), performed at a better-than-state average, despite being from one of

the most disadvantaged communities in the state.

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2012

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2007–2008–2009–2010–2011–2012–2007

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2009

2010

2011

2013

2012

Figure 4: School readiness improvement—literacy indicator, Challis versus state, 2007–13

Source: Telethon Kids Institute 2014, A pathway from early childhood disadvantage for Australian children, unpublished.

Figure 5: Teaching effectiveness indicator, Challis versus state, 2007–13

Source: Telethon Kids Institute 2014, A pathway from early childhood disadvantage for Australian children, unpublished.

The assessment showed that at the end of 2010, for the first time, the gap between

Challis cohort 1 and the rest of the state’s PIPS results had begun closing. By the end of 2011,

Challis cohort 2 students had exceeded the state average, and then in 2012, Challis cohort 3

students were exceeding the state average at the start and end of year. The turnaround in results

has continued into 2013. Moving into 2014, the Challis leadership is now turning its attention

to primary school and ensuring that the achievements of the Challis Early Childhood Centre

continue through a student’s schooling.

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This has all been achieved using existing funded services and $340,000 per year from the Minderoo

Foundation. Based on these outstanding results, the Government of Western Australia has provided

funds over the next two years to integrate services and provide earlier engagement in 30 schools.

Integrated early childhood services, including Challis, delivered on school grounds have

demonstrated some important lessons:

with a case-by-case diagnosis.

essential to ensure an at-risk child is supported through transiency and family chaos.

mindset rather than reliance on what seems to work.

By approaching early service provision from a centralised school site position, significant social and

economic benefits are possible for our most disadvantaged children.

Incentives for expectant mothers to access ante-natal care

Identifying mothers at risk early in their pregnancy is a key factor in supporting a healthy pregnancy.

An incentive should be offered to encourage women who qualify for the maximum rate of Family Tax

Benefit and are on other income support to identify their pregnancy early on (8–20 weeks) to access

antenatal services. The local community nurse or health organisation can then monitor and support

the pregnancy. The following case study from Finland suggests a possible incentive.

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Finland’s ‘baby box’ maternity package

In Finland, the government invests in helping parents to support their children’s development

from an early age. Maternity packages were introduced in Finland in the 1930s in an effort to

reduce high rates of infant mortality and declining birth rates. Initially, they were aimed only

at low-income mothers. The benefits were quickly recognised and within 15 years maternity

grants were made available to all expectant mothers. Maternity grants are available as the

Maternity Package—i.e. ‘Baby Box’—r a one-off tax-free payment of €40. Sensibly, the

majority of mothers choose the Baby Box.

The Baby Box act as a type of starter kit for new parents and contain helpful information,

clothes, sheets, nappies, bath products, picture books, a bath towel and small mattress so that

the box can even be used as the baby’s first bed. It is claimed that these boxes help reduce

infant mortality by promoting healthy sleeping patterns and providing a safe and secure

sleeping environment for the baby. Finland currently has the fifth lowest infant mortality rate

in the world: 3.4 for every 1,000 births. In Australia, the infant mortality rate for Aboriginal and

Torres Straight Islanders is nearly twice as high as other Australians.

To foster a culture of reading, parents of newborn babies receive a gift of three books as part

of the maternity package from their local mothercare centre. Finland produces more children’s

books per capita than any other country. Early childhood education is accessed almost

universally—8% of preschool-aged children attend at least the last year of early childhood

education—ven though it is not mandatory. Children can attend free day care from the

age of eight months to five years. Day care includes both full-day care centres and municipal

playgrounds with adult supervision where parents can accompany the child.

To be eligible, mothers are required to visit a doctor or prenatal health clinic and receive a

medical examination before the fourth month of pregnancy has ended. The health clinic then

issues a pregnancy certificate which is required to claim the grant. In this way, the Baby Box

engages mothers early and provides families with useful tools to care for their new child. By

1979, 100% of new mothers were receiving prenatal care in Finland—p from 20% in 1940.

In Australia, a number of Aboriginal health organisations have already successfully run a similar

approach; including, among others, Alukura in Alice Springs and Apunipima in Cape York. The

intention is that the Baby Box attracts pregnant women to the clinic or centre for prenatal care and

they continue on with postnatal care. This successful model run by experienced Aboriginal health

organisations such as these could be applied more broadly.

There needs to be the capacity for flexibility in the design of the incentive. While a number of

Aboriginal health organisations have implemented the Baby Box initiative, it might not be the right

strategy in some places, and other approaches identified by the health workforce may be more

appropriate to the circumstances. Aboriginal health organisations have been highly successful in

reducing the infant mortality rate over time. The key for this review is that the Baby Box demonstrates

a good take-up of a very simple, incentive-based, effective measure and, most importantly, a means

to engage new and expecting mothers to help ensure that support services are rapidly deployed

where they are most needed.

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That all governments prioritise investment in early childhood, from conception to three years of age.

Governments must work jointly to agree on, and put into effect within 12 months, a new approach

that includes progressive investment to implement integrated early childhood services and

to dramatically improve attendance. This new approach should start with schools in the 200

communities that have the highest level of vulnerability and need (as determined by the Australian

Early Development Index’s results). If implemented successfully along the lines of existing proven

models, governments can consider further roll outs.

In order for young children to be school-ready when they enter formal schooling governments will

need to work jointly to coordinate and deliver intensive prenatal and holistic preventative early

childhood services in target communities.

The implementation steps for delivering integrated services for prenatal and 0- to 3-year-olds must

include:

1.1 co-locating and coordinating health, nutrition and other support services within schools or

community hubs with outreach to schools with a single-point for accountability outcomes.

1.2 providing schools with support to build principal and teacher capacity to collaborate,

engage with parents and external service providers, and to diagnose the needs of the school

community and deliver services that are responsive to local context, culture, priorities and

needs with accountability to a service standard

1.3 providing ready access to specialist services with the sharing of information between

government agencies including health, community, child protection and education services

to enable effective case management of vulnerable children and their families and optimise

electronic health records

1.4 converting the Newborn Supplement into an incentive for women to identify their pregnancy

as early as possible and be connected with a community nurse/case manager to coordinate

prenatal care and access to the services listed above. The community nurse or case manager

should work with a significant Elder to coordinate regular home visits to pregnant mothers,

identify and intervene in behaviours which could harm the unborn child, and link the pregnant

woman into community-based mother–hild support groups. This approach is especially

important for pregnant women in remote communities

1.5 providing comprehensive case management for vulnerable children from 0 to 3 years of age

and their families to allow for early detection of, and intervention in, developmental delays,

and provide a compulsory, structured explicit instruction programmes for three-year-olds led

by an early childhood professional

1.6 extending the School Enrolment and Attendance Measure (SEAM) and Remote School Attendance

Strategy (RSAS) programmes to each of the 200 sites, noting that the proposed case management

approach would replace SEAM social workers (subject to recommendation 1.1 and 1.3)

1.7 driving accountability with compliance against service standards and aggregate data of children’s

development and improvement over time to be published on the CreatingParity website.

* This is one of the few recommendations that cost money, but it is not considerable. My wife Nicola and I have watched a lower socioeconomic

area transform the performance of its children through the local school, which encouraged government services (already

available) to be located within its grounds and to be made available to parents from conception onwards. This initiative worked

and is immediately replicable. The other measures of this report will save much more capital than this recommendation will cost.

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School education

This review has found that our education system is clearly failing those children most in need.

The rights of a child to an education that enables a full, productive and healthy life must take priority

for all our decisions and actions when it comes to eliminating Indigenous disparity in Australia.

The graphs in this chapter show that no state has achieved success in doing so. Western Australia,

Queensland and the Northern Territory have the largest remote first Australian population and have

fallen behind. It’s not a lack of money that is the issue. An attitudinal change is required from parents,

Elders, community leaders and governments. It must be considered intolerable that anything should

stand in the way a child’s education—ot lore, not traditions, not royalty days nor the apathy of

governments. Nothing.

Everyone must take responsibility to protect the rights of first Australian children to have an

education of the same quality as other Australian children to ensure an independent,

self-sustaining future.

Figure 6 shows that educational attainment for first Australians aged 20 to 64 varies sharply by

remoteness area. Nearly two-thirds of first Australian adults in very remote areas have a Year 10 or

below level of education.

Figure 6: Proportion of persons (aged 20 to 64) with highest level of educational

attainment of Year 10 or below, by first Australian status and remoteness, 2011

Across Australia, school attendance and achievement are consistently worse for first Australian

children than any other group in the country. From birth, the statistics show that first Australian

children start from behind and, without concerted and dedicated effort, will stay there for life.

Preventing unemployment is always better than attempting to reverse it.

On average, first Australians have significantly lower education levels than Australians in general.

Consequently, their value to employers can be low and in some cases social security payments are

almost as attractive as wages.

Raising the level of education across the entire first Australian population so that their earning power

far exceeds the dole is the solution to this problem.

Further, many people, both Indigenous and other Australians, believe that training—for example,

training in the ISO standard requirements for safety—is a substitute for education. This is not the

case. Most skilled workers with above-average earning power have both a good education and

training qualifications. This is the normal expectation of employers. First Australian people must

be moved permanently out of the most disadvantaged job seekers category (Job Services

Australia, streams 3 and 4) so that choosing welfare dependency over employment becomes an

irrational choice.

Education is the key to employment. There is employment parity now for first Australians with

Certificate III or IV level training that most apprentices undergo, diploma or university qualifications.

If we get early childhood development and school education right, we don’t need to invest in other

areas. But the measures relating to early childhood and school education are a long-term fix. There is

a generation of Australians, who have not benefited from education and many of the other measures

in this report will be of greater significance in assisting them.

My report tackles improvement to education on three fronts:

instruction—such as explicit and or direct instruction—and accountability for results from state

governments and school principals.

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Key facts

80% for schooling to be effective. In the Northern Territory’s very remote areas (where 57% of

students in the Territory are educated, or 8,253 students), only one in five children is attending

approximately two and a half years of schooling in the tested areas of literacy, science and

across all indicators. The gap is widest for first Australian students in very remote areas where,

Yet even in 2012–13, more than 40% of first Australian 20- to 24-year-olds had not finished

Year 12 or completed a qualification at Certificate II level or above. This compares to less than

At the Certificate III and above level of education there is virtually no employment gap

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What we heard

improved through incentives or sanctions; extra support for parents is needed.

to build the cultural capacity of teachers.

then supported and given professional development opportunities to ensure that they stay there.

make parents send their children to school.

curriculum, engaging with local employers and industry, and work experience opportunities.

Quality education, school attendance and teacher quality

are the keys

A lack of educational achievement has been shown to be one of the single biggest factors affecting

employment outcomes for first Australian Australians—the lower the level of education achieved, the

25- to 29-year-olds, participation in full-time employment is increased by each additional year of

schooling completed. The differences are significant and universal regardless of where students were

educated and whether they then went back to further study after school. First Australians with degrees

Under the Australian Employment Covenant employers have committed to more than 60,000 jobs

for first Australians and over 18,000 of these jobs have been filled. However, these and future job

opportunities will only be realised when first Australian people receive the education they are

entitled to under the Australian system. Employers consistently report that first Australian workers

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Employment service providers told the review team that they cannot provide first Australian job

seekers with the education that the school system has failed to deliver. While providers can deliver

literacy and numeracy training it is a totally inadequate substitute for a decent education.

NAPLAN results confirm that first Australian school students are underperforming on every indicator,

with the gap in performance between first Australian and other students widening with age

impact on students and are likely to be the key reasons for these poor results.

Figure 7: Percentage at or above minimum standard in reading by first Australian status, 2013

Figure 8: Percentage at or above minimum standard in numeracy by first Australian status, 2013

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School attendance

Without regular attendance at school, a child cannot become literate and numerate and learn the

standard curriculum.

We need to be clear about education as the right of every child. Parents who send their children to

school every day accord this fundamental human right to their children. Children who are not sent

to school regularly are denied this right, the right to a normal standard of education and the skills to

become capable citizens. Without these, they will be unable to enjoy the standard of living of other

Australians. To be able to learn at school, they must be school-ready.

Unless a child has enough sleep and nutrition, and arrives clean and properly clothed at school,

the child cannot learn. Illiteracy and innumeracy are disabilities in our society.

The rates of low or no literacy and numeracy in the Indigenous population are primary contributors

to the low levels of employment and employability and the high levels of disparity we discuss in this

report. While teaching standards and schools must be reformed to ensure that Indigenous children

are educated, their parents must also play their part and send their children to school at least nine

out of 10 school days to ensure that they have fulfilling lives.

Only wholesale change of community attitude has sufficient potency to create the change which

will see every Australian child given a fair go in life. Marcia Langton has described the systematic

failure of parents to send their children to school as ‘child abuse’. I agree. It is nonsense to argue that

Indigenous parents who seek to have their children educated in our national curriculum are denying

their children access to Aboriginal and Torres Strait Islander cultures. As so many Indigenous people

have proved, it is possible to have both.

The survival and strength of the cultures of Aboriginal and Torres Strait Islanders, the first Australians,

depend on the health and capability of the people to support their traditions. I urge a radical change

in community attitudes to parity in school attendance and education standards for Indigenous

children. The attitude that second best will do is failing generations of Indigenous people and

denying them a fair go.

The tolerance of a segment of our population falling below accepted standards of education is also

a contributor to the high levels of Indigenous disadvantage. If the community, our leaders—nd

especially parents—emand the right of children to be educated, so too will our school systems

change to provide every opportunity for Indigenous children to reach their fullest potential.

Research shows that school attendance has a significant impact on a child’s achievement in

education, and that the effect is more pronounced for disadvantaged children. A child’s education

is considered at risk if they frequently miss more than half a day of school a week (less than 90%

that as much as one-third of the gap in educational attainment between Indigenous and non-

Indigenous children could be attributed to poorer rates of school attendance for Indigenous

participation is associated with a greater chance of dropping out of school and may lead to a cycle of

disruptive behaviour. These outcomes have later implications for employment, a range of health risk

behaviours (drug and alcohol abuse), homelessness, poverty, welfare dependence, and involvement

in the justice system.

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Nowhere is this more obvious than in remote communities. Elders, families and parents must govern

their communities to ensure their children’s right to a decent education. The Lost Generation who

have missed out on an education need to take action now to become fluent in English and be able

to read and write to ensure an independent future for their children. Parents are first educators and

their children’s educational attainment will greatly depend on their parents’ ability to support them.

This is why I have recommended literacy and numeracy along with driver’s licences as an absolute

minimum for everyone who participates in Work for the Dole. They are the key skills required to get a

job but they are also essential life skills and especially so for parents.

In Australia, the states and territories have primary responsibility for education and provide the

majority of funding for the cost of running government schools. Under the current school funding

model, the Commonwealth provides a base amount rate for each student. For non-government

schools, this base amount is discounted by the capacity of their school community to contribute to

the operating costs of the school. There is additional funding in the form of loadings for students

who need more support, including students with a disability, Aboriginal and Torres Strait Islander

students, students with low socio-economic status and students who have low English language

proficiency. To ensure equity, additional funding is also provided for schools that are not in major

Many schools already have practical and cost-effective mechanisms in place to monitor and improve

school attendance. Some schools I visited have systems in place where text messages or emails are

sent to parents when their child is absent from school without notice; others had student sign-in and

sign-out sheets to mark attendance. There are numerous, innovative methods already happening

in schools to achieve high student attendance outcomes. Schools and teachers need to be further

supported and encouraged to implement their own effective attendance strategies.

Enforcing truancy laws

Before we can address education, we need to support families so that children attend school in the

first place. The average first Australian attendance rate in very remote Northern Territory schools is

about 58%, compared with almost 83% in provincial areas. This is where population-wide attitudinal

change is needed most.

States are not implementing truancy laws. They must do so to overcome the Indigenous education

disparities. The number of fines imposed on parents for cases of truancy by any particular state

or territory government over a 12-month period is very low. In Victoria, for example, it is reported

that there have been no truancy fines at all since 2006. In Queensland in 2011, just two fines were

imposed yet 36,000 students missed 20 days or more of school in the first semester of that year alone.

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Achieving parity in attendance

The racism of low expectations in schools has taken a toll. A large proportion of the worst performing

schools in attendance rates and learning outcomes are located in remote and very remote areas and

have a high number of first Australian students. The majority of first Australian children receive their

education through government schools. These schools must be at the centre of our efforts to change

the destiny of young first Australian people. There should be clear incentives to attend school as

evidence shows that attendance is critical to achieving at school and success in later life.

You can’t manage what you can’t measure. We need personal ministerial accountability for results

to ensure this receives sufficient attention and it needs to be reported through to the CreatingParity

website. Without the rest of the measures in the Forrest wheel, tackling poor attendance could be

pouring water onto sand.

Making timely and accurate school attendance data available is critical. This clearly signals the

importance of school attendance to both schools and parents alike and allows all governments

to track progress and better target interventions to support families and the school to improve

attendance rates. Governments, education departments, schools and parents need to be accountable

to get every child to school at least the 80% of the time required for that education to be effective.

Schools with less than this rate of attendance need to put in place a plan to reach parity that reflects

their community’s needs, strengths and obligations. Principals need to feel they are supported in this

essential leadership role.

Using family tax benefits to improve school attendance

As parents, our most important role is to make sure our children are educated to give them the

ability to provide for their future and their own children. Most parents ensure their children go to

school every day, without the need for any additional incentive to do so. However, many don’t.

The recommendations that follow are aimed at those parents who fail to send their children to

school regularly.

Family Tax Benefit (Part A and B) is provided by the government to support the cost of raising

children. Part A is paid for each child and the amount is income-tested and is based on a family’s

individual circumstances. Part B gives extra help to single parents and families with one main income

and is income-tested. An example of this may be where one parent stays at home to care for a child

full-time or balances some paid work with caring for a child. The only current mutual obligation

requirement is to demonstrate that the child is immunised.

This is despite community expectations that the benefit is paid to parents to help with the expenses

of raising children, and in return for meeting their responsibility to ensure their children attend

school every single healthy day of the school terms in their child’s life.

The Family Tax Benefit (FTB) is not conditional on good school attendance, but it should be. Parents

are paid to do a job in return for the FTB. Governments must make it clear to families applying for

the FTB that the benefit is paid to enable them to raise their children responsibly and make sure they

are at school each day. A simple acknowledgement on the application form and permission to check

education records would make this clear.

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Untied welfare means recalcitrant parents are not held accountable for failing to send their children

to school. This perpetuates the idea of a welfare entitlement without responsibility and sacrifices

the rights of the child to an education. This also imposes long-term costs of welfare reliance, lost

productivity and a larger demand for services such as social housing on taxpayers and state, territory

and Commonwealth governments.

The majority of families on the FTB who send their children to school every day would be happy to

agree to this and it would be no intrusion on their lifestyle if they are responsible, caring parents. This

would be confirmed by the attendance data shared between the state and territory governments

and Centrelink.

Again, making timely and accurate school attendance data available is critical. In this instance it

drives parental responsibility for school attendance by enabling the government to use FTB to

penalise recalcitrant parents who do not send their children to school.

To do this, the government would need to restructure the FTB (currently assessed annually and paid

fortnightly) to a payment received in return for children attending school. School attendance data

for each child would be shared by the states and a simple electronic system established to submit

evidence. For the majority of parents, who understand their responsibility and send their children to

school, and do not fall below the 90% student attendance benchmark, there would be no impact or

imposition on these families.

This measure attracted strong, local support at consultations during the review. Yet the systems

currently in place to monitor school attendance do not provide effective data to also monitor the

proposed parental obligations. Without this there is $20 billion in untied welfare which is not being

directed to improving the capability of our future workforce.

This recommendation will ensure that, as intended by government and the community, this money

is used by families to raise their children responsibly and ensure they attend school every day. This

innovative and ambitious recommendation is expected to be self-funding on full implementation

and makes clear that children must attend school every day.

Together, the Healthy Welfare Card and changes to the FTB have the potential to radically change the

current non-attendance rates of children across Australia. The Healthy Welfare Card will remove the

distractions of alcohol, gambling and drugs that contribute to poor school attendance. At the same

time, changes to the FTB will reinforce community expectations that parents must get their children

to school every day and ensure that every government dollar is directed to building the capability of

our future workforce.

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Accountability for school attendance—paying states on

actual attendance

We all tend to manage efficiently what we are measured on. Governments are no different.

It is inexcusable that a child is denied their right to a healthy future, independent of welfare,

because government officials and schools were not paying attention to school attendance rates.

Paying states and territories for actual attendance would give a clear focus on what is important.

Governments would need to shift their focus and potentially reallocate some of the resources spent

inside departments to on the ground, in school resources.

With the other support measures proposed in this report it reinforces sensible, accountable

management behaviour. In the corporate world, this is the usual process as you are paid on results.

We should accept no less.

Case management to improve school attendance

The first step in addressing the poor educational and employment outcomes of first Australian

students is improving school attendance. Every day counts.

The nature of the relationship between absence from school and achievement, across all

sub-groups of students strongly suggests that every day of attendance in school contributes

towards a child’s learning, and that academic outcomes are enhanced by maximising

Experience has shown that penalties applied without comprehensive case management and

coordinated access to the required services does not appear to give results. The Commonwealth’s

School Enrolment and Attendance Measure was rolled out in a number of communities in the

Northern Territory from 2009 to 2012 and has been largely ineffective due to implementation

Northern Territory yet only 350 referrals were made to the SEAM social workers by Northern Territory

School Attendance and Truancy Officers. The majority of children and their families who could have

benefited from the support were not even referred for help. This is evidence that truancy is not taken

seriously. This must change.

Teaching parents about their obligations, giving them successful strategies to get their kids to school,

making communities safer and enlisting leaders in the strategy is are essential.

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The Commonwealth Government’s recent Remote School Attendance Strategy is achieving good

early results. The strategy highlights the difference that can be made by a concentrated support

effort, built with community support. Within a short time, school attendance in the 40 remote

communities where school attendance officers have been placed rose by 13% compared to the year

before. But communities are now asking for the extra services they need to help the families stabilise

the home environment and provide more intensive support to parents.

This needs to be complemented with firm, immediate action taken through income support

penalties for recalcitrant parents who do not respond to these support measures. Reshaping SEAM,

to support RSAS and the intensive prenatal and early childhood services recommended in this report

would be a better use of government funding based on strong evidence to ensure children go to

school every day.

Better access to boarding schools and adequacy

of ABSTUDY

In the 1960s in my little local town of Onslow, most of the kids who lived in the hostel were local

first Australian kids. Parents would drop them in for the week and take them out on the weekend.

Parents recognised that their kids would flourish without the distractions of home. They were right.

These kids were not just my mates, but in every sense they were my peers and in many cases we

knew each other as brothers and sisters.

Later at Carnarvon Hostel I had a similar experience. Many of the kids were from remote

communities. First Australian kids who boarded with me performed as well, if not better than me,

in the classroom.

Among other strategies there is a clear role for boarding school and hostels. Perhaps we acted in haste

when we shut all these facilities leaving a generation of kids in poor learning environments leading to

reliance on welfare.

In remote Australia, access to quality schooling and the cost of providing infrastructure—particularly

secondary schools in remote communities—continues to challenge all governments. A recent review

into education in the Northern Territory shows only 10% of first Australian Year 9 students in very

remote schools reach minimum NAPLAN standards for reading and writing. Most first Australian

students in very remote schools do not complete Year 12 and a shocking 82% are not fully engaged

As a graduate of a remote boarding school where most other children were first Australian, I know

boarding schools can deliver a good education. While there are genuine attempts to provide the best

education in every school, including those in remote communities, the reality is that better outcomes

can be achieved in schools with a critical mass of students as they can deploy more resources

because of the economies of scale.

Boarding schools need certainty of funding in government subsidies and parental contributions to

take boarders, especially boarders who are first Australian students from remote communities who

may need additional support and assistance.

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There are currently 18 non-government boarding schools that have more than 80 first Australian

students from remote or very remote areas, or where more than 80% of boarders are first Australian

students. These schools receive the Commonwealth Indigenous Supplementary Assistance (ISA)

payment for boarding, which is due to cease at the end of 2014. These schools will struggle to meet

this shortfall unless the adequacy of the ABSTUDY payment is improved to cover the cost

of boarding.

With the imminent removal of the ISA payment, additional assistance for boarding schools over and

above the Commonwealth school funding formula will be provided solely through ABSTUDY. This

is a payment to parents who must agree to pass on all or some of this to the school. Some boarding

schools report that the additional funding from ABSTUDY is not sufficient to cover the boarding,

tuition and out-of-school costs of students from remote communities. In addition, given the lengthy

approval time for ABSTUDY, schools are often taking on young people ahead of the ABSTUDY

approval to ensure the young person is educated.

ABSTUDY needs to be adequate to cover the full cost of boarding, flexible enough to support greater

mobility out of remote communities to attend school, including weekly boarding arrangements and

adequate travel support.

Many boarding schools experience underused places and employ scouts to recruit students directly

from remote communities. This is expensive for the schools and confusing for families who may

inadvertently enrol their children in several schools. Coordinated access to the 18 boarding schools

with significant numbers and concentrations of Indigenous schools could free up these scouting

costs to be redirected to strategies to better retain students.

The ABSTUDY benefit across the year needs to adequately cover students’ costs and recognise that

parents are supporting the young person in school holidays. Parents should be asked to nominate

a boarding school when the application is made and agree to a portion of ABSTUDY being paid to

the boarding school. This would be automatically deducted from their welfare payments.

There are currently no school attendance requirements for ABSTUDY recipients living away from

home at a boarding school or hostel. Funding provided to the school is retained if an enrolled

student drops out. This is in contrast to students living at home who are subject to attendance

requirements. ABSTUDY school attendance requirements should be reviewed to ensure that they

are aligned with the government’s school attendance priority.

Improving access to, and potentially the number of places for remote first Australian students in

boarding schools, with accommodation and mentoring support to help these children connect to

and stay in school, will mean that children get a decent high school education. Successful existing

boarding school models such as the Australian Indigenous Education Foundation and the Cape York

Higher Expectations Program were commended in submissions to the review.

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Accountability for parity in educational outcomes

All Australians expect that our children will be educated at a standard to enable them to participate

in the workforce and community as adults. Sadly, there are many children who are left behind by

the system. The demands of providing for the needs of the top and bottom 10% of children in a

classroom mean that often the 80% in the middle muddle along. The data on results above show

a strong need to improve accountability for results in educational outcomes.

State Governments and school principals must work together to agree to an enforceable plan where

schools that have results falling below the NAPLAN benchmarks are given sufficient attention to get

things back on track. Each year of learning is critical to a child’s development and it is unacceptable

for the system to not have key triggers to deal with poor performance.

Proven methods of instruction in English and maths

While transforming the remote teaching cohort over time is essential, we cannot leave children

to languish with poor educational outcomes that will flow onto to poor employment outcomes.

Proven methods of instruction to lift basic literacy and numeracy must be applied in schools

that show the poorest results. Our workplaces and the economy require strong foundations in

English and maths.

This review supports the Commonwealth Government’s initiative to provide funding towards

the implementation of Direct Instruction or other proven phonics-based models in remote schools

across Australia. Programmes that incorporate direct or explicit instruction are being used in some

of Australia’s highest performing schools and have turned around student achievement in some of

our most disadvantaged schools. The government’s commitment will support a funding pool that

will be open to school communities to apply for funding to implement the Direct

Instruction programme.

Methods such as explicit instruction, a teaching method where skills are broken down into small,

sequenced, scripted units, have shown promising results and can be used by all teachers, regardless

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Incentives for the best teachers

Employers consistently report the lack of job-ready school leavers with basic literacy, numeracy and

employability skills as one of the major impediments to finding first Australian workers. There is a

dire need not only to improve school attendance, but for quality schooling, particularly building

literacy and numeracy skills. First Australian students are on average two and a half years behind

other students. Results in maths, English and science are particularly poor. We need the best

teachers teaching in schools where the need is greatest. Teachers should be carefully selected on

performance, likelihood to succeed in challenging environments and supported through incentives

to make sure first Australian students are given the best chance to succeed.

Within schools, the quality of teaching is the biggest determinant of a child’s educational success,

led by the best principals, teaching in schools where the need is greatest. The schooling system,

primarily a state and territory responsibility, needs to give first Australian children the best possible

chance to succeed.

Evidence shows that high performing schools, regardless of their socio-economic status, have a set

of common characteristics:

each other

All too often, we send the least experienced or poorest performing teachers to work with students

who have the greatest needs. It is not uncommon for teachers fresh from university, with little

experience of working with first Australian communities, to be sent to remote first Australian schools.

More often than not, these new teachers are inadequately prepared for the challenges that they

will face and are given little support to develop the skills and expertise they need to be effective

in these tough school environments. There is little doubt as to why these teachers often leave the

school within the first 12 months. In the Northern Territory, teachers last an average of seven months

in a remote school before leaving. In comparison, in Western Australia, where teachers relocate as

a couple or family unit, they stay for much longer. Regardless of any incentives offered, early career

teachers are likely to continue to be the core of the teaching force in these communities. They need

to be given the support to stay and be effective for a minimum of three to five years to deliver the

best educational outcomes for first Australian students.

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The teachers doing the best work in these schools are graduates or teachers in their first five years and

experienced teachers who remain motivated and continue to learn every year. We need to ensure that

the teachers we send to the most challenging schools are carefully selected on performance and the

likelihood that they will succeed in a difficult environment. The current mindset that teachers go to a

tough school to ‘do their time’ must be changed, so that it is recognised that only the very best, elite

teachers get chosen for the most difficult schools. Incentives should be carefully targeted. Offering

Targeted professional development is critical to ensure teachers have the right qualities and skills to

achieve the best education and learning outcomes for first Australian students.

The role of principals

Principals have great power to create positive change in schools. Strong leadership that creates the

right climate for learning by addressing bullying, increasing school pride and raising expectations

Effective teaching and learning can only flourish in a school environment that supports this. School

principals must feel they are supported to take responsibility for setting new directions for their

schools that lead to better performing teachers and deliver extraordinary improvements in education

outcomes for first Australian students.

Recommendation 2: School attendance

That governments work together to improve school attendance and be measured and

accountable to the public for their success.

To achieve parity, first Australian children must go to school at least nine out of every 10 days.

Governments should use every lever at their disposal to bring school attendance to this level

(as a minimum), including the implementation steps listed below.

2.1 Within 12 months state and territory governments should adopt the following measures to

improve school attendance:

2.1.1 implement existing truancy regulations to improve school attendance levels and achieve

the 80% minimum tolerance required for an effective education. Regularly report and

publicise their truancy record on the My School and CreatingParity websites

2.1.2 ensure schools that fall below the minimum tolerance of 80% attendance (subject to

upward adjustment) have an enforceable plan on how to reach parity in attendance

for first Australians with progress on these plans to be reported on the My School and

CreatingParity websites

2.1.3 provide simple, cost-effective systems to schools that support monitoring attendance

and parental engagement and build attendance to 90%

2.1.4 collect and provide school attendance data that accurately measure the attendance of

each student and provide this to the Commonwealth at the end of each school term

2.1.5 have ministerial executive accountability for results of truancy enforcement and school

attendance reported through to the CreatingParity website.

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2.2 The Commonwealth Government should introduce a new mutual obligation requirement for

parents to ensure that children attend school in return for receiving the Family Tax Benefit. The

target attendance should be initially set at least 80%, with a later target of 90% of the school

year. The Commonwealth must take the following implementation steps:

2.2.1 amend the application form for the FTB to make clear the benefit is paid to enable

parents to raise their children and send them to school every day and to include a

requirement for applicants to acknowledge and give permission to check education

attendance records

2.2.2 change the FTB payment from an annual entitlement (that is currently assessed annually

and paid fortnightly) to a more regular monthly entitlement to enable validation of

school attendance data for each child, with the data shared by states and territories (see

recommendation 1), and evidence submitted through a simple, electronic system

2.2.3 apply financial penalties to those parents whose children fall below the benchmark of 90%

attendance for the school year and report the aggregate data on the CreatingParity website.

2.3 In support of the efforts by states and territories to improve school attendance, the

Commonwealth should pay school education funding to them based on actual attendance

rates, with data published regularly and support case management services provided for

students and families with particular challenges, and revise ABSTUDY and supports to access

boarding schools. This will be achieved by the Commonwealth Government taking the

following implementation steps:

2.3.1 paying schools funding to state and territory governments based on actual attendance

rates measured at the end of each term

2.3.2 publishing updated attendance data on the My School and CreatingParity websites each

month clearly indicating whether attendance levels of over 80% have been achieved and

tracking individual school trends over time

2.3.3 restructuring the School Enrolment and Attendance Measure to be part of the intensive

early childhood approach (see recommendation 1) and enabling the early childhood

case manager to implement a support and attendance plan for prenatal to primary

school age attendance for individual families. This should include enabling the case

manager—rather than Centrelink—to determine if the penalty should be applied. This

determination can only be made by the case manager in the long-term interests of the

client and not by the Centrelink officer

2.3.4 better targeting ABSTUDY by simplifying its administration, rewarding completion and

making it available to first Australian students from remote communities who board on a

weekly basis. Changes need to be made to:

2.3.4.1 ensure ABSTUDY is quick and easy to apply for and that it is sufficient to cover

the full costs of students attending boarding schools from remote communities

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2.3.4.2 give families with children at boarding schools access to base rate FTB payments

during school vacations and ABSTUDY payments for the school term until they

finish Year 12 in recognition of the costs parents incur during the vacation periods

2.3.4.3 establish regionally-based services to provide independent and professional

advice, including placement and retention assistance on education and training

options outside their community to families and students.

Recommendation 3: Improving educational outcomes

That a high quality of school education is ensured, particularly for children in remote and

disadvantaged areas as assessed by achieving parity in National Assessment Program – Literacy

and Numeracy (NAPLAN) results so they have the best chance of employment.

This will be achieved by state and territory governments taking the following implementation steps:

3.1 having an enforceable plan to require these schools to reach parity in educational outcomes

including using proven methods of explicit instruction and enabling other resources such as

the Teach for Australia programme and external advice. Progress on these plans should be

reported on the My School and CreatingParity websites

3.2 having English literacy and numeracy as the priority for all schools, by having an Englishlanguage

explicit instruction domain as the basis of each school day. This can be combined

with all first Australian children learning and becoming literate in ancestral languages,

provided that the priority of English is in place until NAPLAN parity is achieved

3.3 developing a workforce of high performing teachers who are independently assessed

and recruited for excellence on the basis of their likelihood to succeed in tough school

environments; and placing these teachers in priority schools for at least two to three years

3.4 offering professional development scholarships to teachers valued at $20,000 each and paying

teachers at least 5% or more for teaching in schools where school attendance is less than

80%; increasing this to 10% if the school reaches 95% attendance over two years to provide

incentive for the best teachers to work in the worst performing schools

3.5 using the top performing principals from schools that are achieving good results despite their

disadvantage, to mentor principals and teachers

3.6 providing schools with a clear set of proven professional learning programmes that

they can select from to support and improve the impact of the staff on student outcomes

and attendance

3.7 ensuring school principals are given responsibility and information to advise Centrelink

when exceptional circumstances mean access to welfare payments for under-19-year-olds

are necessary.

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Recommendation 4: Stopping distractions to education

That Commonwealth, state and territory governments, business, sporting organisations and

community leaders ensure that school attendance is not unintentionally undermined by

sports carnivals, visiting celebrities or any activities that can give families an incentive to take

students—particularly from remote schools—away from school for lengthy periods of time.

This will be achieved by the following implementation steps:

4.1 business and traditional owners agreeing to make land access and/or royalty payments in

school holidays

4.2 scheduling cultural ceremonies outside school hours or during the school holiday period, and

wherever possible being sensitive to schooling requirements in the timing of ceremonies

4.3 recognising that school attendance is critical, government-funded programmes and visits to

communities need to be scheduled outside school hours or during the school holiday period.

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Chapter 2: The Healthy Welfare Card

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

What success looks like

Just as critical to the reform process is a new foundation for welfare. This would be provided through

a Healthy Welfare Card. The Healthy Welfare Card introduces a new system to support welfare

recipients to:

Australia’s welfare system should be used as it was intended to help people build healthy lifestyles

and make the best choices they can for themselves and their families—articularly their children. It is

a social safety net of last resort and should never be a destination of choice.

First Australians suffer significantly higher rates of exclusion from financial institutions and their

services. The reasons for this are complex but include cultural, geographical and educational factors.

In the National Australia Bank evaluation of their Money Mentoring Pilot, low incomes, lack of basic

literacy and numeracy, language difficulties and the complexity of dealing with financial institutions

were all cited as contributing factors.

The lack of understanding of financial management and budgeting in disadvantaged Indigenous

households is a problem identified by most stakeholders as a key contributor to ongoing poverty

and exclusion from economic participation. The absence of established financial routines mean

that bills are not paid on time, there are unnecessary evictions, use of exorbitant pay-day lenders

and accumulating debt. Individuals, including children, go hungry if welfare is used in the first few

days of the fortnight and there is insufficient to last until the next payment. These directly result in

additional unnecessary stresses and additional supports such as emergency relief payments, often

food vouchers, from government. If welfare funds are used on alcohol or gambling this can further

exacerbate problems and directly result in high morbidity and mortality rates, failure of families and

households to provide safe environments and the collapse of culture and community.

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There have been efforts to innovate and address these issues. The current income management

system, which operates via the government BasicsCard, is providing very valuable support to women,

in particular making sure welfare stretches over the fortnight and that bills are paid and children are

fed. However, it is not part of the mainstream banking system, it is very expensive for the government

to administer and it has some stigma associated with it for the recipient.

Despite the benefit of the financial stability for individuals, expansion of this system is financially

unsustainable, with the existing 23,000 income management recipients making over 46,000 calls a

week to Centrelink to change their arrangements.

Financial stability will help the most vulnerable families manage the routines required to hold

down a job. It will mean that financial stress is minimised, positive decision making is improved

and that rent and other bills are budgeted and paid. A more stable financial structure means that

families in receipt of welfare payments are able to focus on getting their kids to school and finding

jobs for themselves.

It is time to transform the way welfare payments are made in Australia. Some form of cash welfare

(excluding the age and veterans’ pensions) is received by approximately 2.5 million Australians,

including around 195,000 first Australian people of working age. The total value of these payments is

$37 billion. We need to make sure this money is used in a system that supports people to budget for

their costs, pay their regular bills, ensure a roof over their head and put food on the table.

This money is meant as a safety net for families and individuals who need help on a temporary

basis, including, through the Family Tax Benefit, to help parents raise their children and send them

to school every day. Our nation has always seen this as an important part of a robust, caring society,

and that should not change. When hard-working Australians fall on hard times and need a temporary

hand up, the nation helps as we should.

We need a new approach.

The search for a new approach

For far too long Australia has increased the risk to its most vulnerable by paying all welfare benefits

in cash. Those aware of the tragedy that untied welfare cash has on vulnerable individuals, families

and communities have fruitlessly searched for a solution acceptable to the community for decades.

Communities, especially remote first Australian communities, are desperate to stop the incoming

tide of drugs and alcohol (enabled by untied welfare cash). They have exhausted every possible

option in the search for effective methods for restricting the flow of cash to harmful uses and

redirecting it to paying for essentials while in temporary and occasionally difficult circumstances,

such as unemployment.

Community leaders told us how unscrupulous commerce and organised crime have taken advantage

of the cash available to vulnerable welfare recipients by specifically targeting those communities

where people are at the highest risk of making poor, short-term purchase decisions, such as

gambling and buying illicit drugs (like marijuana) and alcohol. This very often has taken precedence

over healthy purchase choices that would otherwise support children, strong lifestyles, and stable

efforts to get and keep work and secure homes.

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We researched and discussed with leaders and Elders other options, including drug testing, alcohol

restrictions and forms of behavioural encouragement. None of these stood up against the criteria of

affordable delivery giving sustained behavioural change and being suitable for a broader rollout.

We wanted to keep the supports for people to manage their income without the unsustainably high

cost of delivering income management. Any new solution needed to make transitioning off welfare

and into work an empowering experience so individuals can manage their financial affairs.

There seemed to be no answers apart from stopping welfare altogether, a solution no Australian

could reasonably support.

First Australian Elders told us they gravely fear for their children as harder drugs such as

methamphetamines with higher cash margins are now entering their communities through

organised crime. These crime syndicates then target the users of marijuana, common in many remote

and urban communities, with even more dangerous illicit drugs. Several leaders have said that

parents could not control their children’s drug intake without prompting a threat of suicide. On many

occasions, these threats have been carried out.

We confirmed that the damage to Australia’s most vulnerable is certainly not limited to first

Australian people or remote communities and is occurring in many Australian communities. Cash

from government quickly converts to illegal drugs and alcohol abuse, particularly widespread

amongst Australia’s youth.

For example, arriving in Surrey Hills in Sydney for the review to meet with the banks to discuss a

cashless welfare system, we encountered the business activities of a man talking loudly on his

mobile to a distressed client. He shouted down the phone that he could supply ‘any amount of heroin

if you’ve got the cash to pay for it’. Undisturbed by our presence, he and his pit bull terrier barely

moved as we walked into the New South Wales State Office of the Department of the Prime Minister

and Cabinet.

This experience replicated similar experiences we had in remote communities where drugs were

prevalent and access obvious. We redoubled our effort to understand the problem better to guide

us in our search to find a technologically possible, sensible mass solution to end this unnecessary

suffering in communities.

Our thinking was influenced by the pioneering experience of the current income management

system and BasicsCard in the Northern Territory and the Family Responsibilities Commission in Cape

York. These initiatives have demonstrated the benefits to welfare recipients of a more stable financial

environment in which rent and other bills are paid and sufficient food is provided. This system is,

however, very expensive to deliver and unaffordable on a large scale.

After exhausting all other options we considered a cashless welfare card system, not just for

vulnerable first Australians but for vulnerable people across Australia. If technologically possible,

it poses a way of providing stability for families and individuals so they can concentrate on finding

employment, providing adequately for their families, and sending their children to school.

Clearly, we needed external expert advice if we were to consider a cashless system and we sought

the assistance of the major retailers and banks. Various leaders of Indigenous communities and civil

society oriented corporations developed this kernel of an idea into one with great potential. Together

we have done the work to give the Healthy Welfare Card sufficient plausibility and credibility, so that

with some further development it can be considered a working and much superior alternative to

cash welfare in the Australian financial, retail and welfare payment system.

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Eftpos, Coles, Woolworths, Metcash’s (IGA), Westpac, ANZ Bank, National Australia Bank and the

Commonwealth Bank of Australia have banded together with initiative and teamwork, at significant

cost to themselves, to help a cause of great benefit to Australia. They have proven that a cashless

welfare system is not only possible, but with refinements to existing technology, completely

practical. We are also grateful to MasterCard who took us through the South African cashless welfare

system, which has provided welfare recipients with financial inclusion in the country’s mainstream

banking system, all but eradicated welfare fraud and saved a fortune in welfare administration.

The South African experience in moving to a cashless welfare system

Valuable lessons can be drawn from a similar cashless card system introduced in South Africa in

2012 for the payment of social security benefits.

The South African Social Services Agency partnered with the private sector to reform the

distribution of social security benefits via an innovative social payments card. The card has

been successful in South Africa, largely due to increased efficiencies, savings and transparency

for government, and has largely eliminated fraud in the social security system. For social

security payment recipients it has provided inclusion in the mainstream financial system and,

through that process, increased financial freedom and economic potential for those citizens.

Collective cost savings have been very large.

Empowering people through the Healthy Welfare Card

If a cashless welfare system is effectively and smoothly introduced, it will render the cash system that

preceded it an irresponsible social experiment.

Every day most Australians manage their spending, and saving using debit or credit cards to

purchase goods and services that are essential to sustaining themselves and their families.

More and more we are becoming a cashless society and this is the way we should manage welfare

payments. Paying welfare via a card issued through a responsible financial institution will treat

people who have to access welfare support as individuals with capabilities and potential, just the

same as other Australians.

The Healthy Welfare Card issued as a debit card through a responsible financial institution of choice,

using the MasterCard or Visa system, would be issued to all people receiving welfare payments. This

would include these Australians in the mainstream financial world of everyday life. The card would

confine welfare and intended spending to essential goods and services to ensure individuals and

families get the full benefit from the welfare provided by government.

It would ensure that people enjoy inclusion in the mainstream financial system and it would assist

individual responsibility by eliminating spending on alcohol, gambling, and instruments that can be

converted to cash like gift cards.

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The Healthy Welfare Card will provide a more transparent system for payment of the country’s

substantial welfare outlay, and through normal and highly efficient bank fraud control procedures,

will assist to reduce fraud in Australia’s welfare system. Big data mining with specialist fraud firms like

Palantir Technologies has proven extremely efficient at identifying fraud in a manner that the cash

system has no hope of replicating. In South Africa, which operates a card without the abilities of the

card contemplated for Australia, fraud has been almost eliminated and efficiency greatly improved.

For those still needing support to get them back on track, other financial counselling services could

be made available that build on different commercial services and pilots currently available as an

alternative to the costly income management system. Culturally relevant financial management

and mentoring could address gaps in the provision of financial and assistance and support to

first Australians. Building on the evidence of existing pilots, locally-employed, independent and

accredited financial advisors could work with local people to deliver tailored advice and training to

make the service relevant and accessible in the community.

A cashless welfare card managed through existing financial services arrangements will generate

significant savings for government because individuals will move to employment more quickly

as they are able to concentrate on their return to work. Fraud would be minimised, and over time,

emergency relief payments and crisis services would be reduced through a longer-term reduction in

welfare reliance. Over the same time period intensive prenatal and early childhood services will be

developing children better able to learn and succeed. Any savings generated should be reinvested

into the preventative prenatal and early childhood development.

Smart payment system technology

The societal shift to smart phone apps and e-payment systems is with us. It is fast becoming the

main means of payments and purchases. There are few cohorts that have picked up breaking

communication technologies like smart phones, Facebook and the others more quickly than our

first Australian youth.

The kids I know often have to have their iPhones prised away from their hands, even when they go

to bed at night. I’m not saying that’s healthy, but I am saying that this generation should be steered

right away from welfare and still stay highly receptive to new technologies like this. We need to

make the most of this enthusiasm to build the financial literacy, inclusion in the banking system and

participation in the new payment technologies.

Another key success factor of using apps, EFTPOS, or smart phone payments systems is that they

could shift development away from the banks. As supportive as they have been, banks have higher

overheads and costs and a slower implementation pace. This is not due to lack of talent—ar from

it—ut rather the legacy environments of their core banking systems.

The development of a welfare benefits app may act as a virtual account on a prepaid basis that could

be adopted into the Healthy Welfare system as easily as the debit card.

This is where ePal and similar technologies designed to making payments convenient could come into

play. We should consider a process of adding this key product and service capability. Rent, for example,

could be host-initiated and routed to a pre-set receiver (government or private) and pre-loaded to issue

on the day of the income support payment.

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For products for purchase, there could be the ability to use the manufacturer’s barcode to hold the

product data in the app, in a process not dissimilar to the current shopping apps of the big retailers.

Products could be scanned in the selection process or confirmed at checkout using near field

communications (NFC) payments capability. This could enable cross-referencing and the exclusion of

particular products which do not add to the health of communities.

This smart payment technology is central to the implementation of the new cashless welfare system

of the future and I would like acknowledge the advice on new technologies from Mr Mark Tibbles

from Westpac.

How the Healthy Welfare Card would work

The Commonwealth Government would partner with the responsible financial institutions, major

retailers and major card issuers to put the new system in place. Discussions with Coles, Woolworths,

IGA, the Commonwealth, National Australia Bank, ANZ and Westpac banks, eftpos Payments Australia

Limited and MasterCard, indicate that the technology to support the card is readily available and

affordable. It will use the technology that most Australians use in everyday life.

Early discussions confirm that the system can deliver superior results at a reasonable cost within a

short timeframe. The major retailers also agree that this can be done economically and efficiently.

They have all agreed in principle to be part of this initiative believing, as we do, that Australia needs

to modernise the welfare system and they are working through its detail.

The technology required to block certain purchases or retail merchants from credit card expenditure

has been available for some time and usage has increased over the last 10 years. For example,

corporate credits cards frequently block gambling outlets. However, the sort of widescale application

and practical contemporary approach of the Healthy Welfare Card will make it a first in Australia.

Specifically, banks can distribute a non‐cash Healthy Welfare Card that prohibits particular retailers

from its use, like bottle shops. We will need to explore if the retailers themselves who sell a mixed

range of goods (like vegetables and alcohol) can also classify and prohibit certain purchases at point

of sale.

In summary, the Healthy Welfare Card would:

rather than the expensive Centrelink income management system

products, illicit services and instruments that can be converted to cash (such as gift cards) and

exclude activities discouraged by government, or illegal in some places, such as pornography

current cash payment of welfare support

EFTPOS terminals through internet and phone banking with the protection of fraud security

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deposit on a home, whitegoods, furniture or rental bond, or unexpected large costs

or purchases, with Centrelink applying on-the-spot penalties on retailers and individuals for

fraudulent use of the card

packages under the new National Disability Insurance Scheme.

Introduction of the Healthy Welfare Card

The advantages of the card are many and communities will enjoy the benefits of significantly

reduced illicit drug and alcohol use and gambling activities. However, the Healthy Welfare Card

would need to be introduced sensitively and government would need to plan for circumstances in

which individuals with existing addictions to alcohol, drugs or gambling would require professional

support as they transition from their addictions to a healthier lifestyle.

Experts in policing have warned that organised crime networks and unscrupulous individuals

will attempt to subvert the new system in order to retain the revenues they get from the current

system. Under this system, such criminals would be faced with a legal framework, enforcement

and technology equal to the challenge they present. This new system presents an opportunity to

potentially remove the hundreds of millions of dollars from the market that provides the lifeblood of

organised crime.

The review team and I strongly recommend that professional counsellors and a heightened police

presence be made available as the card is rolled out across Australia to vulnerable communities,

during the transition period to healthier living. Additional police and support services may be

temporarily needed as the card removes the ability to support long-term alcoholism and drug

addiction through cash purchases.

It will be important to provide adequate support for individuals needing to adjust to the new

arrangements. In the long term individuals and the community will emerge much stronger and

healthier. Not only will it impact on health positively but also lead to a greater participation in the

real economy by welfare recipients as they will have the financial order and stability in their life to

focus on getting a job and their children to school.

Recommendation 5: Healthy Welfare Card

That the Commonwealth Government implement immediately a Healthy Welfare Card scheme in

conjunction with major financial institutions and retailers to support welfare recipients manage

their income and expenses.

I recommend that this scheme be implemented so that an individual’s welfare payments, other than

age or veterans’ pensions, would be paid into a savings account drawn on with a Healthy Welfare

Card. This card directs spending to purchases that sustain and support a healthy lifestyle for the

recipients and any children of those recipients (e.g. essential goods such as food, clothing, utilities,

rent) and to savings for larger expenses.

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This will be achieved by the Commonwealth Government taking the following implementation steps:

5.1 working with major retailers and financial institutions to apply the existing technology that can

already block prohibited goods at the merchant level

5.2 introducing requirements that emphasise that welfare is to support life’s essential costs—hat

the purpose and use of the account and card are to receive welfare payments, and that social

security payments are intended to provide conditional support for vulnerable individuals so

that compliance arrangements are understood by all recipients including all those who use, or

intend to use, social security payments inappropriately

5.3 banks and other financial institutions issuing the Healthy Welfare Card using existing debit

card technology

5.4 programming the card to block the issue of cash and the purchase of alcohol, gambling and

illicit services and gift cards at the point of sale

5.5 making the card fully redeemable at any Australian retail store or online facility that accepts

Visa and MasterCard with electronic and EFTPOS payment facility, with the exception of

alcohol and gaming outlets

5.6 protecting consumers with participating banks and financial institutions by using existing

technology to identify unauthorised or unusual patterns of purchasing on debit and credit

cards to expose potential fraud by retailers and card recipients

5.7 introducing penalties for retailers that accept the welfare card for payment of prohibited goods

or to issue cash— penalty for on-the-spot fines of $2,000 for every $100 of value for business

dealings prohibited by the card

5.8 reporting aggregate data on compliance, delivery costs and savings on the CreatingParity

website

5.9 commissioning the Australian Crime Commission and state and federal police to develop

appropriate strategies to manage any impact on organised crime as a result of the introduction

of the Healthy Welfare Card

5.10 having state police commissioners alerted that, in the short-term, as lifestyles are adjusted,

levels of petty crime may be temporarily elevated, before falling to levels lower than they were

previously due to the elimination of drug and alcohol abuse

5.11 having counsellors available in communities to assist people who come off serious alcohol or

drug addictions.

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Part 2: The wheel spokes and hub

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

Chapter 3:

Implementation and accountability

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

What success looks like

with the policies adopted by government.

achieve parity in education and employment.

and have executed a common agreement.

between governments.

made on the basis of demonstrated performance and are regularly scrutinised.

There is published performance data and information about joint government efforts on the

CreatingParity website. The standards of measurement and performance for government initiatives

for ending the disparity are similar to those used in the project management of top performing

corporations.

Serious projects need serious management. There has been a common thread of success in the many

multibillion dollar projects that I have successfully overseen, or have directly reported to me. Exacting

project management is required to deliver the review’s suite of recommendations. This requires a complex,

multifaceted implementation plan. Each measure must have clear milestones articulated, with delivery dates

and accountable executives. While responsible agencies will plan the detail of their measures, the taskforce

must sign off on the service specification, project management and reporting against milestones and

provide a report on the overall implementation, risks to success and milestones to be celebrated.

This report contains a series of critical implementation steps. Each of these steps and the various

parts of each step are described in this chapter.

Each agency is responsible for its own implementation plan. As I mentioned in the executive

summary, there is a powerful practice from the business world that can be applied here. We call these

implementation plans ‘trees’; others know them as ‘value driver trees’. They break down the challenge

into small, achievable, measurable steps that can be put into a Gantt chart that shows personal

responsibility and timing requirements to enable monitoring and reporting on progress. We need to

adopt the same approach.

In the diagram below, each step or sub-point is a deliverable in itself. Each is capable of being tasked

to a specific executive and allocated, with agreement, a timetable. It is important that the responsible

executive feels that to deliver on the timing is very close to unachievable, so there is both stretch

and challenge in the task and satisfaction when it is achieved.

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Implementation point

Give

employees

clear

information

about training

requirements

Link to VTEC

and other

employment

services

Determine

industries

that need

regular new

employees

Agree

portion

funded by

government

Ensure there

is no soft

bigotry

of low

expectation

in participating

company

Agree

portion

funded by

company

Locate willing, capable employees and communities

Company Government Community

Limit funds to only trainers with employers

committed to employ trainees

Discuss and reach

agreement on expectations

with individual

Initially ensure basic

transport to and from

training for individual

Have

company

wholly

funded

and provide

training

Collect individuals personally from their

homes if they no-show, yet still want

to change their lives

Give support so individuals are punctual.

Get candidates well presented, clean and fed until

they have established a routine themselves

How training providers will operate under the VTEC model

Identify communities

willing to participate

Give individuals and

communities information on

eligible terms and conditions

Job Centres

speak to Elders and

community leaders and

employers to ensure total

community support for

members who wish to climb

out of the welfare trap

Individual steps up to take

personal responsibility

Ensure individual commences

a healthy lifestyle at least

a week before training

Plan B

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How governments can achieve massive change—fast

We should be aware that if government executives perceive difficulties in the implementation of

these initiatives, there will be a natural inclination to abandon them. To assist executives who may

risk recycling existing programmes if they encounter difficulty in implementing the new measures,

this review contains a series of implementation steps that an executive may follow. Done correctly,

these steps will deliver the game-changing result required.

For each of these initiatives there are outcome measures, which are lagging, and tell you when you

have achieved your goals. There will also be leading indicators that drive the outcomes for each of

these initiatives, and in terms of keeping things moving, these indicators are far more valuable.

Each of the implementation points contained in this review is capable of being identified, elaborated

on and mapped in the implementation point chart with timelines allocated to it. With this achieved,

each implementation point should be inserted into a Gantt chart that describes each of the

responsibilities and the timeline for every implementation point. Once this is achieved, a Gantt chart

can be constructed for the entire challenge of the initiative or measure described in this review. In

other words, every single initiative in this review is capable of being mapped in an implementation

tree and ultimately, a time-driven Gantt chart that describes exactly which department and which

executive will achieve the task and the allocated time that the task must be achieved in.

Accountability needs to be specifically defined for each initiative, to the level of department and

individual responsible. We can’t use the usual bureaucratic processes to get the individuals on board

and expect things to be different this time. We will need to use innovative methods to turn the

accountable individuals into owners and joint problem-solvers.

Executives charged with the critical responsibility of change most often need to feel, but also

must feel, that their own skin is in the game. To enact this change, everyone across the system

who is accountable for the parts of the reforms of this review needs to be bought into a room

with facilitators, with no-one leaving until all solutions are defined with measures and outcomes,

and approvals from all the departmental heads. The participants would then come together on a

regular basis—et’s say quarterly—o review progress and problem-solve what’s not working and is

working and how to accelerate progress. This is a very effective approach but to McKinsey’s and my

knowledge has never before been done in the Commonwealth Government.

When we add all this up, getting the accountability really working is a material task and will be vital

to our success. It is like defining a full key performance indicator structure for a company, but with

the added complexity of involving multiple governments!

For success we will need to define the structure and taskforce, define outcomes, leading indicators

Most importantly the CreatingParity website will be essential to ensuring the need to define an

innovative process to get bureaucrats and business leaders on board and committed to a set of

integrated changes—otherwise they will fall back to the comfort of doing their own thing as referred

to above.

* Thanks to McKinsey and Company and FMG Strategy for this input.

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Paying for results and not process

Like other organisations in Australia that survive on merit, governments must hold themselves

accountable to the public for their results. The merit of individual programmes must be assessed

through robust performance measures that have been agreed prior to the first cheque being written.

As discussed elsewhere in this report, as government-funded service providers exist on the public

purse, so like the rest of us must they be prepared to be paid on results. Certainly the practice of

simply funding process, without putting payment at risk and rewarding results, must stop. Publishing

outcomes for public benefit is therefore essential.

To create the balance in interest (avoiding conflicting interests) there must be a major component

of payments that relies on performance being achieved. Vocational students must be confident that

a teacher is being paid on performance, to match the risk of their time (see VTEC as a demanding

example). A remote housing provider has to deliver the house as agreed, or the risk of not being

paid is too high. This would have avoided the multimillion-dollar waste by the Northern Territory

Government before even a house was built in remote communities. Thankfully, Minister Jenny

Macklin introduced performance funding for capital works under the agreement and drove results.

However, other components of the agreement did not achieve results as there was no funding at risk

for states, and they introduced these reforms at their own pace—or in some cases not at all—and the

results matched their failure to balance their interests with their contractor.

We must rely on such self-correcting arrangements and incentives in every contract we write if we

truly wish to end the disparity. This will not only create excellence in results, it will also avoid the

excessive administration and regulation that business, governments and the taxpayer suffer.

Yet this approach is still collaborative because at the end of the day, this is simple common sense

and should be followed easily by all reasonable vendors and purchasers. After all, there is too much

at stake for all Australians if the disparity continues. Relying on a balance in interests between payer

and payee is essential.

We should accept no less than this level of accountability for delivering on results and the bottom

line, as we do in the private sector.

The package of recommendations

The recommendations in this report constitute a powerful package of policy measures aimed

at ending the disparity in employment for first Australians. If implemented they will drive

transformational change through the employment services system, welfare support, tax and social

housing systems over the next decade to ensure that unemployed, working-age Australians have as

much incentive as possible to get off welfare and into work.

These measures are supported by proposed changes to early childhood education and education

more broadly, and the removal of impediments to both by implementing the Healthy Welfare

Card proposal. These changes would ensure our country nurtures resilient, educated, well-trained

employees and entrepreneurs for the future.

However, recommendations for major policy change are only as good as their implementation.

The policies I propose must be effectively implemented over the medium- to long-term.

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Implementation is no smorgasbord

I have been clear in the executive summary to this report that the recommendations cannot be

treated as a smorgasbord, to be picked off one by one—they represent a package of complementary

measures that are linked and reliant on each other. Success will come only if they are implemented

comprehensively, as a whole, and for the long term. My own experience, and my discussions with

first Australian leaders and others on the ground, have convinced me of this. They have seen

firsthand, and repeatedly, the effects cherrypicked, compromised policy implementation has had on

their people.

In light of that, I have included a set of critical implementation steps with each recommendation, and

have identified responsibilities of the different levels of government for delivery of the measures. I

also make clear throughout the report that implementation must be undertaken with first Australian

leaders who have cultural authority, and changes must not be rolled out around, or over the top of,

first Australians.

Finally, throughout this report in the implementation point diagram and, most importantly, in

the roadmap under the heading ‘How governments can achieve massive change—ast’, are clear

strategies that, if followed, will facilitate the changes government is looking for to create parity.

Taking this unique opportunity

My discussions with the Prime Minister, federal ministers, state premiers and ministers, the Northern

Territory Chief Minister, and federal Opposition representatives has convinced me that there is not

one among them who does not understand the need for a comprehensive package of changes,

requiring strong commitment from all levels of government.

The burning question for me is whether they will accept this challenge and take this unique

opportunity to achieve an end to the disparity in employment for first Australians and through that,

all disparity in life outcomes. Will they be committed to make it work? And of course there will be the

temptation to play politics with these measures.

This is the opportunity to leave partisan politics behind and for all members of the Commonwealth,

state and territory parliaments and assemblies to work together to deliver lasting change for first

Australians. Every elected member has walked through streets of Australian communities where the

disparity is so significant, and understands that real change needs to be made. We have a very rare

and critical opportunity at this moment to work cohesively and deliver this change. I believe that this

review provides the basis to bring jurisdictions and different agencies together to end the disparity.

Through programme consolidation, the government must eliminate programmes that are paid the

majority of their funding without any evidence that they could or will meet prior agreed results and,

instead, introduce simple cost-effective service delivery arrangements that will free up funding.

The government must ensure that funding is used wisely to achieve the outcome for which it was

intended and make sure there is always a balance in interests in the awarding of contracts. You would

not let a fox look after the chicken coop! Similarly, allowing a service provider to judge their own

performance and authorise their own payments is not sound business sense. Governments must pay,

like the private sector does—almost or totally on results—and stop paying simply on process.

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Leadership for the implementation and measurement

of successful change

The Prime Minister has assumed the responsibility for the Indigenous portfolio by moving it

into his own department. He is also demonstrating leadership through the Council of Australian

Governments process where Indigenous Affairs is now a standing agenda item.

Past efforts at integrating implementation of first Australians policy across government have failed

for various reasons. I am not proposing to replicate those well-intentioned, but ultimately ineffective

efforts. To succeed, this work will need all of the grunt and authority that only a Prime Minister can

bring to supporting an appropriate change agent.

It will be necessary to have a respected, proven leader with a clear mandate to direct strategic

implementation across government agencies, and the authority over the most senior officials in

those agencies. This will ensure all government departments play their part and are accountable

for delivery. The leader would head a dedicated taskforce, comprising a high-performing team

and, subject to the above, including an experienced very senior bureaucrat, to provide day-to-day

strategic advice and administrative support. These executives will be accountable for implementing

the road map as described under the heading, ‘How governments can achieve massive change—ast’.

It is essential for successful implementation of the changes I propose that delivery be driven within

the Commonwealth Government by such an independent leader and change agent. This leader

must have the experience to manage across government agencies, the capacity to listen and learn

from first Australian leaders and the unflinching support and authority of the Prime Minister and

Cabinet members.

He or she must have a very strong track record of major project delivery and be a proven performer

in communication. The individual must have had experience in successfully meeting very high-profile

and complex challenges. It is unlikely, though not impossible, that at the time of writing,

this individual will be in parliament.

A small research staff and access to the Prime Minister’s Indigenous Advisory Council is recommended.

Much of what I have recommended has mainstream application and will impact positively on all job

seekers and welfare recipients. While large agencies will implement these systems, we need a highly

effective leader to implement these recommendations as a cohesive package and importantly, build

the management capacity in remote Australia.

The Prime Minister’s Indigenous Advisory Council would give critical guidance and support

during implementation. This council has members with experience from government and business,

and includes first Australians and others with critical experience and knowledge to assist

effective implementation.

Delivery of these measures must be driven with a strong, unrelenting hand, but must also be

respectful to first Australian leaders with cultural authority, to state and territory governments, and

to the individuals who will be affected by the recommendations. This will be essential to effective,

sustainable implementation and change.

Progress on implementation should be reported to parliament on an annual basis as part of existing

reporting but reported at least quarterly on the CreatingParity website.

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Eliminating duplication through free access to data

A lack of understanding of need and what services currently exist and the vested interests of service

providers have often resulted in duplication, serious service gaps and treating the symptoms rather

than preventing them. Many communities, particularly remote ones, complained often about

ridiculous duplication, fly-in fly-out providers that had little understanding of the needs of the

community and serious problems that were not being addressed. This review recommends a system

successfully trialled in New South Wales where all service providers register their activity and purpose

before entering a community so that duplication and mismanagement is avoided.

New South Wales data hub

The Minister for Aboriginal Affairs in the New South Wales Government, the Hon.

Victor Dominello, has informed the review that the early stage of rolling out a management

information and funding coordination system, a data hub, has been very successful. The data

hub establishes a register of human services funding agreements and datasets across state

government agencies and NGOs for each local government area. The information can be

accessed by the public and will identify the purpose and amount of existing funding giving

transparency to assess need, identify service gaps, reduce the duplication of funding and

services, and ensure improved service coordination.

The exercise has also helped highlight some unnecessarily complex funding arrangements

in smaller communities and for NGOs. Some NGOs have over 100 different state contracts

to manage. Some of the smallest communities are overburdened with multiple funding

agreements for basic services and spend a disproportionate amount of time on administration.

Simplified funding arrangements and a consolidation of data so that all stakeholders can more

accurately determine need and impact is a lesson which could be applied across Australia.

Access to data help governments in communities ensure that funding is allocated to the areas of

greatest need and reduces possible duplication, but access to data also increases GDP. It has recently

been reported in an unpublished study on G20 countries that the doubling of access to data kept by

The data hub and the CreatingParity website will provide transparency, accountability and link

people to opportunity—for example, Indigenous businesses could be listed.

An agreement between the Commonwealth, states

and territories

The integrated measures for change set out in this report will only be achieved if all Australian

governments play their part. In my recommendations I have made clear the responsibilities of the

Commonwealth, state and territory governments. I have done this so there can be no blame shifting

or finger pointing between jurisdictions, and all Australians who want to see social and economic

parity achieved for first Australians will know who to hold to account and what governments have

committed to deliver.

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Implementation of the recommendations in this report requires collaborative effort between

governments at the highest level. The authority of the nation’s most senior government leaders is

essential to guarantee that the wide-ranging reforms are implemented across government. To that

end, I propose a new agreement be established between the Commonwealth, state and territory

governments to reinforce their commitment to implement the changes needed to end the disparity

in employment for first Australians, and to clearly define their roles and responsibilities for delivering

that change.

The agreement should be pitched at a high-level commitment to deliver a set of threshold measures

which capture the key recommendations in the report. It should be signed by the Prime Minister

and each premier and chief minister, and include agreement to annual reporting. It is expected that

the agreement will identify high-level principles to end the disparity and act as a call to arms across

jurisdictions. It could be the case that bilateral agreements be negotiated for specific targets and

their arrangements.

This is not a funding agreement between governments. All governments agree that the current

level of expenditure is sufficient. It is not about more money, but rather about how to use the

existing amount of money more effectively to create the parity governments wish to achieve for

first Australians. It is on this basis that I have drafted my report. Transformational change is possible

within existing resources.

I suggest the agreement commit governments to the following measures:

1. Employment is the key to ending the disparity for first Australians.

where training is provided for a guaranteed job and where services respond both to the

needs of employers, and ultimately the market, as well as the needs of job seekers.

chance of getting and retaining employment, such as driver’s licences and literacy and

numeracy competency.

arrangements that allow for work-based, locked licences where employment depends

on this.

public sector department and agency heads should be held responsible for achievement

of specific first Australian employment and procurement targets.

2. Tax-free status must be available to first Australian businesses that employ large numbers of

the most disadvantaged job seekers as an additional incentive to continue to employ those job

seekers, and increase their intake.

3. Welfare must include every incentive to get and keep a job and to encourage school

attendance, and be used to pay for life’s essentials delivered through the new Healthy

Welfare Card.

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4. To restore accepted social norms and get adults into work in remote first Australian

communities and children attending school, a new governance model (Local Responsibilities

Boards) must be implemented, led by leaders with cultural authority including 50% women.

5. Implementation must be undertaken with first Australian leaders with cultural authority,

and changes must not be rolled out around, or over the top of, first Australians.

6. All governments must work together to reduce duplication and rationalise delivery of

programmes and services.

7. The long view must be taken, with full cooperation by all governments from early childhood

to adulthood to grow the capable, educated and trained workers of the future.

preventative measures must be addressed.

activities must be implemented.

for individual students, and underperformance managed with clear and timely action to

achieve parity.

support better educational outcomes.

using proven methods of instruction where performance falls below NAPLAN benchmarks.

8. Changes must be introduced to tenure on remote Indigenous land that enable home

ownership and economic development, and this should be reinforced with public housing and

infrastructure investment only in these locations.

9. The perverse incentives in social housing that stop first Australians leaving their low-rent

homes for a job must be removed and home ownership encouraged.

The agreement will provide the mechanism for these threshold issues to be addressed between

jurisdictions. It will provide visibility and transparency both in relation to commitment and followthrough

from all governments.

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What we heard

and policies are scrapped with every change of government and no-one is accountable for

delivering long-term outcomes.

inability to adjust to different circumstances.

or real solutions that affect lasting change.

streamline effort, reduce red tape and avoid duplication. Stronger accountability measures are

critical to on-the-ground success.

What does success look like in urban areas?

Some 79% of first Australians live in non-remote areas, with 57% under 24 years of age. While

Western Australia, Queensland and the Northern Territory have large remote populations, in most

jurisdictions first Australians are concentrated in the major cities and regional areas. Across the

country, without exception, they are over-represented in the lowest socio-economic suburbs.

Even in areas of high labour market demand such as Sydney and Perth, too many first Australians

are still unemployed.

The recommendations in this report propose a comprehensive approach. In urban and regional

areas this means services that are accessible, well-targeted, affordable and connected to needs

and opportunities. It is about making the system work as a whole and not just as the sum of

misaligned parts. For first Australians living in our cities and towns this will rely on a number of

integrated factors.

support in the one place, usually on school grounds. From prenatal care to counselling, health

services and early childhood education, issues will be resolved in an integrated way without

endless referrals between services that only focus on one element of care. The importance of

schooling and engagement of parents will be established from day one.

poor school attendance or tolerate lower academic results for its first Australian students. The

worst performing schools will be supported with the best teachers and proven methods of

instruction to make sure children are literate and numerate when they finish school. Truancy

will be managed effectively.

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an independent life. They will help first Australian students to reach their potential and ensure

those at risk make a smooth transition into study or work.

providing support wherever it is needed to get and keep people in work. Demand-driven

services will keep individuals motivated and engaged by seeing a clear path to a real job and

the dignity of work. Providers will become the ‘recruiter of choice’ for employers looking for

first Australian workers.

placed in pointless training that leads nowhere.

Australian social enterprises and burgeoning businesses will be rewarded for providing a

stable training ground for the long-term unemployed to get into work.

to getting a job. The risk of losing your home if you take up work will no longer be a threat. The

option of owning your home will not be a pipedream, but an achievable reality.

to work and make sure that welfare payments are used, as intended, for food, shelter, clothing

and the essentials of life.

as governments and contractors realise diversity in their supply chains makes good

business sense.

What does success look like in remote areas?

Only 21% of first Australians live in remote Australia but this is where the highest needs have been

identified in relation to every socio-economic indicator.

Change that rids remote communities of crippling disadvantage is possible. While there may not

be jobs for all adults within a particular community, there are a variety of jobs available locally

and within the region. For remote Australia, the recommendations in this report would lead to the

following situation.

their education or take up work in better labour markets for a stronger career. They will be

encouraged and supported to do so and ‘orbit’ back to their community and contribute to it as

active members.

services and training for guaranteed jobs, family support and other services.

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will take on the most disadvantaged job seekers in a training ground for a strong first

Australian workforce.

get priority housing if they move to an active labour market. The option of owning their home

in their remote community or in town will be in reach.

get back to work and use welfare for caring for kids, food, shelter, clothing and the essentials

of life.

businesses.

born healthy.

provide support and education from the very first years.

instruction for English and mathematics.

local level.

set the expectations and oversight services that get children into school, adults into work and

make their communities safe.

presence, the services match community needs and provide local jobs. Indigenous land will be

able to be used for security and development as planning issues and tenure are resolved and

social housing will be built in areas where home ownership is possible.

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Recommendation 6: Implementation and accountability

That the implementation of recommendations be prioritised across all governments, closely

monitored and reported along the lines that are described by the value driver trees.

This will be achieved by the Commonwealth Government taking the following implementation steps:

6.1 establishing a taskforce to drive implementation of the recommendations across government,

led by a respected person with the authority, experience and independence to drive progress,

resolve all blockages and hold agencies to account, as described clearly in the section under

the heading ‘How governments can achieve massive change—ast’

6.2 using the Indigenous Advisory Committee to provide advice to the head of the taskforce and

to the Commonwealth Government

6.3 reporting annually on implementation of this review’s recommendations to parliament as part

of existing reporting arrangements

6.4 replicating and being compatible with the New South Wales Government’s Human

Services Data Hub, which provides a consolidated view of human services delivered across

New South Wales, on a national level (subject to further development). A data hub with

information from all state, territory and Commonwealth-funded human services programmes

should capture information such as the location, target cohort, funding and cost, as well as

the programme’s outcomes

6.5 making the national human services data hub accessible by the public and using it to identify

existing funding to assess need, identify service gaps, reduce the duplication of funding and

services, and ensure improved service coordination and transparency.

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Recommendation 7: Implementation

This would involve ensuring there is a balance in interest to avoid conflict or disappointment in

outcomes, in all funding agreements. This must extend to between governments, and between

governments and providers, no matter whether the funding agreement is for provision of a service

or capital works. These arrangement must ensure that we only pay for results and not process, and

ensure the results have been agreed prior contract settlement.

This will be achieved by governments taking the following implementation steps:

7.1 agreeing on accountability milestones within pre-agreed performance schedules

7.2 ensuring that the accountability milestones are capable of clear measurement

7.3 taking immediate corrective action if contract performance is found lacking

7.4 publishing outcomes in the requisite detail on the CreatingParity website.

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Recommendation 8: Agreement to implement the recommendations of

this report

That the Commonwealth, state and territory governments agree to sign a new multilateral

agreement to affirm their commitment to implement the recommendations of this report and

be held accountable for delivery, through regular public reporting on the CreatingParity website

as detailed in each recommendation.

This will be achieved by governments taking the following implementation steps:

8.1 cooperating with all necessary information-sharing in order to allow self-correcting

mechanisms like the Family Tax Benefit to provide incentives and encourage parents to send

their children to school

8.2 making a commitment that they will not use funding or any external issues to subvert the

executive outcomes recommended in the Creating Parity report

8.3 ensuring that the multilateral agreement pays careful attention to points 1–9 (outlined at

pages 118–19) in Chapter 3.

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Chapter 4:

Breaking the welfare cycle

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

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What success looks like

individual’s Healthy Welfare Card.

and keep a job.

The second spoke in the wheel is a package of measures to break the cycle of welfare reliance. The

measures in this chapter represent a new way forward for disadvantaged Australians. For too many

first Australians, particularly in remote and very remote areas, the welfare system has become a trap.

Instead of a temporary hand-up it has become a life-long destination of choice, with many workingage

first Australian adults unlikely to ever experience employment, let alone a career. For far too

many, welfare has become the norm.

Figure 9 shows that welfare reliance increases by remoteness area. At the national level 48% of first

Australian adults aged 18 to 64 are welfare reliant (that is, their main source of income is government

income support payments or CDEP). This proportion increases to 56% in remote areas and to 63.5%

in very remote areas. In contrast, only 17.5% of all Australians aged 18 to 64 had a government

pension or allowance as their main source of income in 2010.

Figure 9: Proportion of first Australians (aged 18 to 64) for whom income support or CDEP

is the main source of personal income by remoteness area, 2008

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For capable people of working age the Australian welfare system provides an important safety net

should they need assistance on a temporary basis if their circumstances change. The system also

requires that people who are capable of work should do so except where disability, age or caring

available to working age Australians—the misnamed Newstart Allowance, Youth Allowance (Other)

and the Family Tax Benefit—and how to improve employment and participation through the welfare

system. Recommendations do not include in their scope the age or veterans’ pensions.

In many cases, staying on welfare is currently the easiest approach for job seekers to understand—

more comfortable and economically rational option than working. The current system is

complex, provides little motivation for people to find work and is expensive to administer with

over 30 different payments and a myriad of supplements and concessions applying in different

disincentive to moving into work is challenging for individuals, providers and government itself.

Bizarrely, the range of different payments, supplements and taper rates can mean people with similar

In remote first Australian communities where unemployment and relative poverty are the norm,

welfare with poorly enforced mutual obligations and heavily subsidised public housing gives greater

incentives for individuals to remain unemployed than to get meaningful employment or move to

take up work. Welfare income in these communities is often sufficient for most to secure a minimum

standard of living.

Consider a man with a spouse and three young kids who wants to take a job in a town. In the

remote community, that family would have, after paying all housing costs, about $41,600

disposal [sic] income a year from two dole payments ($24,300), family tax benefits (about

$19,000) plus some smaller welfare allowances. Housing costs are likely to be $70 to $100 a

week (say $4,000 a year). In exchange, the father might have to do some part-time make-work

activity. More likely, effectively there would be no mutual obligations.

If this family moved for work, the breadwinner would likely receive the minimum wage or just

above because of low skills. Family benefits would be about the same. However, rental costs

would likely be higher (say, $350-plus a week including bills), assuming a property was even

available. All up, their disposable income after housing would be about $44,800.

Economically the family would be just above break-even, but the downside would be loss of

leisure time, disconnection from homelands and culture, and the risk of losing the job, in which

case disposable household income would fall considerably until a new job was found. Further,

the family’s low-rent social housing in their home community—hich they might have had for

For too many Australians the temporary safety net of welfare has become a trap. Australians who

should and could be working are not, because the money they receive through welfare payments

provides enough for them to live on, and in many cases supports addictive and damaging habits that

remove the incentive and often even the ability to learn, train or work.

The important mutual obligation requirements that are designed to make our welfare system work

as it should and ensure individuals actively seek work in return for their welfare payments, are often

not applied to the people who most need an extra hand, or a push to get back into mainstream

Australian life.

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Over time, many people stay on welfare for too long and come to passively accept their lot. This

happens far too often to capable working-age Australians. The way the welfare system is currently

administered only compounds the problem.

To receive welfare, people must first engage with Australia’s welfare agency, Centrelink. This is a giant

government bureaucracy with shop fronts across the country. Once you are in ‘the system’ you enter

a period, or a life, of ongoing engagement with Centrelink. It is ironic that unemployment support is

called Newstart, meant to convey, no doubt, a positive feeling; however, going on welfare is rarely an

empowering experience.

I recommend the misnomer Newstart be replaced with the name ‘Unemployment Support’ and the

Youth Allowance be renamed the ‘Transition to Work Allowance’.

Centrelink, with the best of intentions and working under government-approved guidelines, tends to

focus on people’s disadvantages rather than on their potential. It will often waive mutual obligation

responsibilities on the basis of this deficits‐based approach. Equally, well-intentioned job service

providers often act in the same way and instead of helping people to move off welfare, they are

helping to entrap them in a welfare cycle.

We need a recalibration to orient all the elements toward the single focus to get able-bodied adults

off welfare and into work.

Key facts

(including CDEP payments) as their main source of income in 2008 compared to only 17.5%

of the general population in that age group. In very remote areas the proportion of first

Australian 18- to 64-year-olds reporting government benefits as their main source of income is

proportion of first Australian 17- to 24-year-olds not attending school and not fully engaged in

either work or further education is even higher at 82%.

to only with 3% of non-first Australian women.

the likelihood of behavioural change.

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What we heard

employers to develop and sustain employment outcomes.

enforcement of obligations can be inconsistent and slow.

welfare lifestyle.

‘entitlement’ model to one of ‘opportunity’.

of work behaviours in remote areas.

make parents send their children to school.

their income.

Young Australians on welfare: earn or learn

The best result is for a young person to complete Year 12 and move from school to work or study

without ever coming into contact with the welfare system. The education, employment or training a

young person takes up in their teens and early 20s sets the course for the rest of their working lives.

Youth unemployment and disengagement is a growing problem in Australia. It comes at a cost, both

now and into the future. In 2006, Access Economics estimated that the loss of GDP from only 10% of

have compounded many times by now. The term ‘Lost Generation’ is now being commonly heard

across Australia as entire communities and generations fall prey to the insidious aspects of a cashbased

welfare system.

Young first Australians are most at risk of disengaging from the labour market. About 45,000 young

first Australians aged 15 to 24 are currently on some form of income support not related to study

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Figure 10 shows the high proportions of first Australian 17- to 24-year-olds who, after having left

school, are not fully engaged in work or further study or training. The proportion increases with

remoteness, rising from 50% in major cities to 82% in very remote areas.

Figure 10: Proportion of 17- to 24-year-olds not in school and not fully engaged in work or

study, by remoteness, 2011

The Commonwealth Government must ensure that the lure of unconditional welfare cash is removed

by introducing a Healthy Welfare Card and that all efforts are focused on supporting young people to

finish school and make a successful transition into work.

The ‘learn or earn’ approach introduced by the Commonwealth, state and territory governments

in 2009 in response to the global financial crisis and a growing population of unemployed young

people, has been foiled by exemptions. The policy was designed primarily to encourage young

people to finish high school or connect directly to work. While it shows real promise, it includes a

range of exemptions that excuse some 30% of young people from participation requirements.

Services should not just aim to deal with disadvantage. They must nurture talent to help these

young people to reach their full potential. Evidence confirms what we saw in programmes that work

effectively with young people.

To be effective programmes must:

• identify and engage with the young person early in their schooling, well before

problems manifest

• work with families, schools, employers and the community to ensure there are strong

connections between school, support services and workplaces

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engaged, complete Year 12 and pursue post-school education or vocational pathways. Mentors

need to be respected and build a basis of trust

linked to a guaranteed job

Ganbina—supporting Indigenous young people

Ganbina provides a collection of unique school-to-work transition programmes (for example,

Jobs4U2) that support first Australian students from as early as primary school to post-school

age to enable them to explore their career options, build workplace and leadership skills and

develop the personal skills they need to succeed in the workplace.

Since 2004, Ganbina has assisted over 800 young first Australians to finish school, undertake

tertiary or vocational training or secure full time jobs. Ganbina consistently achieves in excess

of 80% completion and retention rates for first Australian students across all its programmes.

Ganbina uses early intervention and high expectations to build the capacity of first Australian

students to take responsibility for achieving their own career goals. Participation in Ganbina

programmes is voluntary and usually by self-referral, but students are expected to maintain

agreed school attendance and achievement rates to continue in the programme.

Each student develops their own individual plan and career and study goals and receives

regular mentoring support, life skills training and early exposure to the workplace through

industry ‘taster’ activities and work experience so that they gain part-time or casual

employment while they

are still studying.

Mutual obligation and job seeker compliance

Australia’s income support payments are based on the notion of reciprocity: in return for welfare

payments, job seekers are required to look for work. Involving job seekers in meaningful activities

reduces their stay on welfare, develops current work skills and is a valuable component in returning

Australia’s safety net should not be a guaranteed handout, but rather a guaranteed

Much of the issue is the complex and conflicting range of exemptions that can be applied with

discretion. So the ‘push’ required to help people off the dole queue is circumvented, and the welfare

habit becomes a life wasted. Exemptions, while needed in limited circumstances, should be very rare.

Exemptions cause good policy to fail.

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Well-intentioned providers and government staff use these exemptions to severely reduce the impact

of change on an individual job seeker and therefore inadvertently encourage the individual along the

path of long-term welfare.

Financial penalties and the suspension of payments are rarely applied, despite the fact that for most

people a quick, small ‘hit to the wallet’ can be the most effective incentive to change behaviour. Those

who object and say that special circumstances apply to first Australians are in fact applying their own

soft bigotry of low expectations. In 2012–3, less than 25% of penalties raised with Centrelink were

upheld and applied to first Australian job seekers; in remote areas this was less than 27%.

Even when they are applied, penalties and suspensions are not timely and do not drive behavioural

change. For those currently on activity-tested income-support payments, there is often a delay of

several weeks before the impact of the non-compliant behaviour is felt through a consequential loss

of payments. Any cause and effect connection designed to change behaviour is lost. In contrast, there

was resounding support for the next payday impact of CDEP workers not turning up to work as a

result of the ‘No work, no pay’ policy where properly applied.

All the tools are already available to make it compliance effective in changing behaviour: active

participation requirements, capacity to suspend payments and impose financial penalties, job seeker

supports and income management. But the current system lacks the simplicity and clarity of logic.

Actions are taken by one agency—.g. Centrelink—n isolation of the other—.g. the employment

provider. The consequences of the current disincentives, loopholes and contradictions are policy

confusion, enforcement slippage and fragmented implementation.

The compliance system needs to be simple, ensuring that ‘no show’ results in immediate ‘no pay’

decision to impose penalties should be made by those who are best placed to understand the job

seeker’s circumstances, the employment services providers.

Complexity of the income support system

Current income support payments are complex. There are about 75 welfare payments and

supplementary payments. Some are activity-tested, while others are not. Participation requirements

vary according to payment type, work capacity, age and cohort. There is also a wide range of

exemptions to participation requirements that are not uniformly applied.

The Pension Review in 2009 provided a comprehensive analysis of the income support system and

proposed sensible recommendations to simplify and streamline the system. Matters of adequacy and

architecture of the income support system are outside my terms of reference but will be considered

by the McClure Review, due later in the year.

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CDEP wages

There are about 35,000 job seekers registered in the Remote Jobs and Communities Programme

(RJCP) with about 3,000 of those registered receiving income through the CDEP wages arrangement.

The remaining job seekers are in receipt of other forms of income support (e.g. Newstart Allowance

and Youth Allowance).

There are significant differences between CDEP participants and people on Newstart Allowance and

Youth Allowance.

The CDEP payment is more like a wage—in that participants can even accrue leave and their

payments can be topped up from other sources of income—even though it doesn’t prepare people

for the normal working week by only requiring 30 hours per week.

The Government provides funding to RJCP providers so that they can pay CDEP wages to participants

whereas in the case of income support the Government pays the job seeker directly.

The basic fortnightly payment a CDEP recipient receives is about $575 and the participation

requirements depend on state and territory industrial awards and the type of activity being

undertaken. RJCP providers more closely align the participants’ day-to-day activities to the working

environment. The financial penalty for a CDEP participant who does not attend an activity is applied

in the next payday and reduces the participant’s wages for each day they do not show up.

The basic fortnightly payment a Newstart Allowance recipient receives is about $510 and the

participation requirements are about 30 hours per fortnight, depending on age and work capacity.

If the job seeker does not meet these requirements, employment providers must recommend to

Centrelink that a penalty be applied, and Centrelink will then determine if they will apply all, some or

none of the penalty.

The application of these penalties is complex and time consuming to administer with limited local

decision making about non-compliance issues. The timeframe between non-attendance and a

financial penalty is relatively long, meaning that job seekers are less likely or don’t link the two, and

therefore are less likely to modify future behaviour.

It is recommended that CDEP wages be abolished and that all job seekers be able to access a

consistent income support arrangement with the same rules applying across the board. At the

moment, in many remote communities there are activities where participants are doing the same

type of work for the same number of hours, yet one group of participants is being remunerated at a

different level and faces a different compliance regime to another group. Moreover, the payment of

CDEP as a wage sends the wrong message to the community. CDEP activities are not real jobs and

individuals should be encouraged to aspire to something more than a welfare activity.

Once the welfare settings are right and give people strong incentives and compliance arrangements

to get into work, individuals will be more ready to build their employment capability. This is the

subject of the next chapter.

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Recommendation 9: Young people

Young people identified at risk of leaving school are to be provided with additional support to

continue to study or connect to work. As principals have a key pastoral care role, they should

coordinate the support to ensure the young person has the best chance of completing their

education.

This will be achieved by the Commonwealth Government by taking the following implementation

steps:

9.1 requiring access to the Youth Allowance to be on the endorsement of the school principal,

and be available only through the Healthy Welfare Card, to help remove the incentive for

young people to leave school to get an independent cash income on welfare. They can only

receive this credit on their Healthy Welfare Card if they register or enrol at a Vocational Training

and Employment Centre (VTEC) or other employment service and train for a future trade or

guaranteed job, or return to complete their education

9.2 only funding programmes and services that demonstrate proven success in keeping young

first Australians at school (on a value for money basis) and assisting them to make a smooth

transition to work or tertiary study, with the bulk of funding paid on results

9.3 guaranteeing that young people at Year 12 equivalent or below, who cannot be encouraged

to complete their education, have immediate access to demand-driven employment services

such as a VTEC

9.4 working with state and territory governments so that principals and teachers identify ‘at risk’

young people early in their school careers; and working with the Commonwealth to provide

mentoring and support services to keep them connected to study or work

9.5 reporting aggregate (not individual) data to schools and alternative education providers via

the CreatingParity website. This is designed to ensure that the extent of disengagement by

young people with the education system can be measured and managed.

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Recommendation 10: Job seeker obligations

That all discretion of Centrelink and job service providers to waive job seekers’ obligations and

grant exemptions and transfers to non-activity tested payments such as the Disability Support

Pension to excuse working age, capable welfare recipients from efforts to get meaningful

employment be removed.

This will be achieved by the Commonwealth Government taking the following implementation steps:

10.1 applying mutual obligation requirements to all payments for those who are of working age

and capable of work (i.e. all payments except the age and veterans’ pension)

10.2 reducing Centrelink’s role in job seeker compliance to spot checking of employment providers’

performance in job seeker compliance

10.3 reporting on the CreatingParity website the aggregate number of exemptions to job seeker

obligations for first Australians as provided by Centrelink and job service providers.

Recommendation 11: Breaking the welfare cycle

That the welfare system be simplified by reducing the number of different working age payments

available to a single unemployment benefit (with only a very limited number of supplements

available) along the lines of the 2009 Pension Review by Jeff Harmer.

This will be achieved by the Commonwealth making changes so there can only be one

unemployment benefit. It will be achieved with the following policy components:

11.1 ensuring people in similar circumstances with similar capabilities are treated in the same way

11.2 eliminating the discretionary waivers and exemptions to remove excuses not to work

11.3 reducing the unemployment benefit for under-21-year-olds to less than the full-time student

allowance to avoid creating incentives to leave study

11.4 renaming the youth unemployment benefit by removing the misnomer of Newstart Allowance

and replacing it with a more accurately titled ‘Unemployment Support’, and renaming the

Youth Allowance to ‘Transition to Work Allowance’

11.5 transferring recipients of wages through the Community Development and Employment

Projects (CDEP) to the Newstart Allowance (or the proposed new Unemployment Support)

and into the Remote Jobs and Communities Programme where it is replacing the CDEP

in communities. This is designed to ensure all job seekers have the same incentives and

obligations in return for income support.

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Andrew Forrest

Chapter 5:

Building capability, dismantling the cash barbeque and eliminating disincentives

• Local decision making

• C ultural authority to set and enforce norms

• Enabling individual ownership of land

• Changes to remote housing

• Governments working together

• Funding on results

• Robust implementation

• Engaging the corporate sector

• More private and public sector jobs

• Procurement opportunities

• Tax incentives for business

• Employment services

• VET and training

• Mobility support

• Home ownership

• Job seeker compliance

• Simpler welfare

• Young people

What success looks like

employees.

chairpersons and chief executive officers of non-Indigenous businesses.