Heroes and villains of budgets past

Originally published in Tracker Magazine, May 2011 edition. 

 

When you’re in Opposition, sometimes you have to say silly things to get a headline. Hence, in 2003 the Howard government introduced a tax cut worth about $4 a week to average families. The then Federal Opposition Leader, Simon Crean, thought he could smell some political blood in the water, so he called a news conference, writes CHRIS GRAHAM. 

“$4. I’ve got it here, let me get it out,” he told journalists, as he extracted some gold coins from his pocket.

“….The highest taxing Government in Australia’s history has just delivered the lowest tax cut in Australia’s history,” Crean declared.

Technically, of course, he was right. The Howard government was the highest taxing government in history at the time. But prior to that, the highest taxing government of all time was the Keating government.

And before that it was the Hawke government. And Fraser before that. And Whitlam. And McMahon, and so on.

Today, the mantle is held by the Gillard government, in which Crean is Minister for Regional Development.

There is a simple explanation. Every new government will be the highest taxing in history because economies grow, so tax revenue naturally increases. Crean’s claims were nonsensical but, politically, not surprising. The Coalition spins the same line when they’re in opposition.

Which brings us to Aboriginal affairs budgets, and a comparable half-truth that governments like to advance every year – the annual claim of ‘record Indigenous affairs expenditure’ which inevitably finds its way into ministerial media releases.

The claim is, more often than not, false.

A research paper out of the Parliamentary Library in Canberra has shed new light on the issue. Its authors, Dr John Gardiner-Garden, and Joanne Simon-Davies, have analysed Indigenous specific expenditure by Commonwealth governments across a 40-year period. The background note, Commonwealth Indigenous specific expenditure 1968–2010, was completed late last year. Its findings are startling.

While cash expenditure on Aboriginal affairs has trended upwards, the percentage of available government revenue directed towards Aboriginal programs has steadily declined over the past decade.

In other words, more cash has gone into black affairs, but that’s because there’s more cash available. But when it comes to dividing up what’s there, Aboriginal people are increasingly getting a smaller share.

Dr Gardiner-Garden and Ms Simon-Davies don’t weigh into the politics of budgets – they simply collate the raw data and provide some pointed analysis. Still, it makes for some enlightening reading.

Black budgets – referred to formally as ‘Indigenous specific expenditure’ – began in Australia shortly after the 1967 referendum, which empowered the federal government to not only make laws concerning Aboriginal people, but also to allocate money specifically to alleviate Aboriginal disadvantage.

“Identifiable Commonwealth expenditure in the area of Indigenous affairs began with the establishment of the Office of Aboriginal Affairs soon after the landmark referendum in 1967,” the authors note. “The expenditure was relatively low in the first few years but increased significantly with the creation of the Department of Aboriginal Affairs soon after the Whitlam Government came to office in December 1972.”

Funding continued to grow through the 1980s.

Of all the Prime Ministers since the 1967 referendum, the only one to have never delivered a cut in funding to black spending in percentage terms has been William McMahon (although as treasurer he delivered a cut in 1969).

In his 1972 budget – announced just months before he was swept from office by Gough Whitlam – McMahon oversaw a doubling of the Aboriginal affairs allocation from $29 million to $58.4 million. By today’s standards, it may seem modest (the Indigenous affairs budget was more than $3 billion in 2009), but the total federal budget in 1972 was only just over $9 billion. Today it stands at around $350 billion.

In percentage terms, McMahon and his treasurer, Billy Snedden, delivered 0.64 percent of the total government budget to Aboriginal people.

Enter Whitlam, in December 1972.

The following year the first Labor government in decades delivered a similarly strong funding boost, with an increase of one quarter of a percent. It remains the second highest percentage jump in history, behind McMahon. In just three years – from 1971 to 73 – the black budget had more than tripled.

Whitlam delivered another strong increase in 1974. In the process, he reached an important milestone; the Aboriginal affairs budget had cracked the one percent mark of the total federal government spend. But in his final years as Prime Minister (1975) Whitlam, with Bill Hayden as Treasurer, delivered a 0.1 percent cut, at the time the largest in almost a decade of Aboriginal affairs funding. A percentage cut that size might not sound much, but when you’re talking in tens of millions of dollars, it is substantial.

In today’s terms, he shaved over $20 million off a budget that only delivered $186 million. Whitlam’s betrayal came despite the fact that the total Commonwealth budget for 1975 had increased by more than 25 percent that year. While Australia was entering a boom, Whitlam was cutting funding to the nation’s most disadvantaged.

Even worse, after delivering a massive cut, a few weeks later Whitlam flew to northern Australia and famously poured a handful of sand through the hands of Vincent Lingiari amid grand promises of land rights. Whitlam has to some extent dined out on that symbolic act ever since.

But admittedly, he was more generous than his successor. Upon entering office in 1975, Malcolm Fraser delivered three successive cuts to the black budget, including a record 0.23 percent cut in his first year as Prime Minister.

It remains the largest single cut in the 40-plus year history of black budgets, and in today’s terms represents a loss of more than $51 million.

Fraser delivered very modest increases for the next three years, and then a cut in his final year as Prime Minister.

John Howard was Fraser’s treasurer in the latter half of his term, giving Howard the dubious distinction of a greater percentage of cuts than boosts to black budgets.

By the time Fraser left office in 1983, the black budget was still one-third of a percent lower than when he entered seven years earlier.

Bob Hawke – and his treasurer Paul Keating – took almost all of the next decade to return it to the levels reached by Whitlam. Hawke delivered increases to the Aboriginal affairs budget throughout most of his time as PM, although they were very small. But the nett effect of his malaise – and Fraser’s cuts – was that growth in Aboriginal affairs spending stalled under the Liberals, and then under Labor, for almost a generation.

At the same time, Australia marked 200 years since colonisation, and Aboriginal people continued to die of third world diseases in a first world nation.

Keating successfully challenged Hawke for the leadership in December 1991, and in his first year as Prime Minister delivered a healthy 0.09 percent boost to the black budget, taking it to 1.29 percent of the total government spend. At the time, it was the highest percentage in history.

The boost coincided not only with the Year of the World’s Indigenous Peoples, but with the historic Redfern speech (December 1992), an oration regarded to this day as one of the most memorable ever delivered by an Australian Prime Minister. And then, immediately after winning international praise, Keating presided over one of the biggest cuts to the black budget on record.

With John Dawkins as his treasurer, Keating slashed black spending by 0.13 percent, the fourth largest cut in history. It represented a reduction in real terms of more than $150 million.

In his final budget (1995), Keating restored Aboriginal affairs spending to record levels (to 1.31 percent), but it didn’t last long. The first Liberal budget with John Howard as Prime Minister caused widespread angst in Aboriginal affairs. Having campaigned on a promise to end the ‘Aboriginal industry’, a phrase popularised by Pauline Hanson, black leaders expected the worst.

Howard and Costello didn’t disappoint, delivering a cut in their first budget of 0.07 percent. But what followed surprised many. In 1997, Howard and Costello delivered a boost of 0.14 percent, one of the highest on record. Ironically, a few weeks later, Howard appeared as a guest speaker at the 1997 Reconciliation Convention in Melbourne. He infamously lost it on stage, thumping the lectern and yelling at an Aboriginal crowd which stood and turned its back on him.

The following year, Howard delivered a cut, but he followed that in 1999 with another boost, taking the Aboriginal affairs budget to 1.43 percent of available government revenue.

That figure remains the high watermark today. It’s around 50 percent higher than anything Whitlam ever delivered, and almost three times greater than Fraser.

Unfortunately, Howard and Costello remained in office for another eight years, and they delivered percentage cuts to the black budget in six of them. What is so offensive about the Howard-Costello years is that the cuts came at a time when the country was enjoying unprecedented prosperity.

In the final few years of their leadership, Howard and Costello delivered almost $100 billion in budget surpluses – it was a period when Australia could most afford to not only boost the Aboriginal affairs budget, but to make up ground after decades of sanctioned government neglect.

Instead, Howard and Costello reduced the black budget as a percentage of government expenditure to levels not seen since Bob Hawke’s days, taking black funding back almost two decades by the time they left office. However, they look like humanitarians compared to the next lot.

Kevin Rudd was swept to power in 2007. The Gardiner-Garden/Simon-Davies research paper only looks at his first two budgets – 2008 and 2009 (final 2010-11 expenditure weren’t known at the time of press, althoughTracker will provide an analysis of the 2011-12 budget in the June edition). But Rudd’s Labor has already secured itself a place in the history books, and for all the wrong reasons.

Rudd and his treasurer Wayne Swan have not only presided over cuts in percentage terms, but they’ve delivered cuts in actual cash terms as well. And like Keating and Whitlam before him, Rudd used Aboriginal people to win global renown, only to immediately slash black spending.

Two months after delivering the National Apology to members of the Stolen Generations, Rudd’s first budget as Prime Minister delivered the second largest in the history of Aboriginal affairs. In dollar terms, he shaved off more than half a billion dollars.

The following year, Rudd and Swan delivered another cut, giving them the largest combined cut over two years in history. The cut was so dramatic, in fact, that Rudd and Swan have managed to reduce black funding to less than one percent of the total federal budget for the first time in more than two decades.

The 2009 budget actually delivered less in percentage than the 1974 budget three decades earlier.

Liberal governments may stand condemned for squandering massive surpluses while ignoring historical neglect. But so far, they’ve done a heck of a lot better than their successors. Watch this space for 2010 figures.

 

* Chris Graham is the Managing Editor of Tracker Magazine. His last feature for Tracker was called Going National, about the push for land rights around Australia.

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