The three key challenges

Tony Berg was the first CEO of Macquarie Group. During his eight years at the top he and chairman David Clarke created Australia’s most successful financial services company and a globally recognised investment bank. He has spent the last 16 years working with indigenous organisations across Australia. So he knows a lot about starting businesses and indigenous issues.

“Since Malcolm Turnbull released the 10th annual Closing the Gap report, the gaps are not only obstinately immovable, they are worse than they appear. The employment rate for indigenous Australians aged 15 to 64 between 2006 and 2016 has hardly changed at 46.6 per cent. Non-indigenous employment sits about 72 per cent. But the gaps for indigenous people who are disadvantaged are about double what is published,” Berg says.

“There are three key challenges to indigenous business. The first is the lack of experience and a lack of understanding about what business is about. The second is developing a business in a remote location where the feasibility and economy are not good. Finally, there is the hope and aspiration that the business will work. Often aspiration trumps reality.

“Often, having an experienced partner versus a wholly owned business is more likely to be successful. Having a mentor or adviser like a retired executive from that industry works. But alcohol addiction, drugs and gambling undermine families and communities. Unless we deal with the addictions and issues like foetal alcohol syndrome, nothing will change.

“There are more than 1000 programs addressing indigenous disadvantage. In many communities there is one service for every five residents. Seven years ago, Wilcannia in NSW had 102 funded services with an indigenous population of 474. We need to know why this enormous investment and effort has not shifted the dial, but a central cause is intergenerational passive welfare and the scourge of alcohol, drugs and gambling.

“Passive welfare and the drug, alcohol and gambling addiction that goes with it results in the proliferation of services to deal with the effect of these addictions. But if these resources were put into education and jobs training, we might get somewhere.

“If we are not prepared to take drastic action to deal with the alcohol, drug and gambling problems, we can forget about closing the gaps. It is not an option to eliminate welfare; there must be a safety net for those in need.”

Berg’s concern was put into shocking headlines in February this year when coroner Rosalinda Fogliani, conducting an inquest into 13 deaths of children and young people in the Kimberley region, wrote: “To focus only upon the individual events that occurred shortly before their deaths would not adequately address the circumstances attending the deaths. The tragic individual events were shaped by the crushing effects of intergenerational trauma and poverty upon entire communities. That community-wide trauma generated multiple and prolonged exposures to individual traumatic events for these children and young persons.

“A number of the young persons (including four of the children) had abused alcohol or other drugs from a young age. In seven of the cases there was significant alcohol use in the lead up to the deaths, and at least two of the young persons had very high blood-alcohol levels when they died.

“Regrettably they were able to buy large quantities of ‘take away’ alcohol during the day and night of their deaths. In three cases, cannabis derivatives were detected in the blood after death.”

Berg says the most likely solution is providing welfare by a cashless debit card. He says this should apply to all working-age welfare recipients, other than pensioners and veterans, with 20 per cent of a person’s benefit paid into their bank account, and 80 per cent accessed only via the card, with restrictions on buying alcohol, drugs or gambling products.

Berg realises the cards are controversial. Many indigenous people say they undermine their human rights, although others, especially women, see them as a positive.

The federal government operates the cards in Ceduna and the East Kimberley, the West Australian Goldfields, and Bundaberg and Hervey Bay in Queensland.

In 2014, indigenous Coolgardie councillor Betty Logan challenged opponents of the card to look into the eyes of the children suffering Foetal Alcohol Spectrum Disorder, neglect and domestic violence. The card was “an act of love”, she said.

Berg tells me: “I have looked some of these children in the eyes and I think it is time we moved beyond trials. My act of love is to propose an Australia-wide cashless debit card to be rolled out to all welfare recipients, indigenous and non-indigenous, except pensioners or veterans.”

This article by John Connolly appeared in the May 2019 issue of The Deal

Julie Connolly