Already a subscriber?Indigenous Australians have been short-changed by up to $1 billion over 15 years by the poor management of government funds designed to advance their economic and social interests.of decades of financial returns of two major funds set up to benefit Indigenous people without native title rights show both were shackled by the investment equivalent of stuffing money under a mattress.
As Paul Keating said when introducing native title legislation in 1993 “despite its historic significance, the Mabo decision gives little more than a sense of justice to those Aboriginal communities whose native title has been extinguished or lost without consultation, negotiation or compensation”.But as early as 1996 the government was being warned restrictions on the Land Fund’s investments risked lower returns and potentially depleting the now $2 billion capital base over the long term.
If the Land Fund had been allowed to pursue a more balanced investment strategy targeting a return of CPI plus 2.5 per cent from 2007, it might have returned $210 million more by 2019 and a further $132 million by 2023 . “Australia has grappled with the impacts of inflation over the past couple of years,” Morrison said. “The has not been immune to the changing economic environment and how this impacts the way we deliver for our stakeholders and meet their expectations.”Cape York leader Noel Pearson said the Land Fund had lost out on years of better returns, labelling the outcome “a disgrace”.
If the Aboriginals Benefit Account had been allowed to pursue a more balanced investment strategy targeting a return of inflation plus 2.5 per cent between 2013-14 and 2018-19 and then made the same returns as the Land Fund under the Future Fund’s management, it could have made $173 million more by June 30 last year.
“The low real rate of return available from investments allowed under has been subject of considerable concern to members of the consultative forum since the first meeting in 1994-95,” the 1996 annual report of the Aboriginal and Torres Strait Islander Commission says. Before being transferred to the Future Fund in 2019, the government estimated the fund’s investment constraints were set to erode its base capital by $600 million over 10 years, while the decision to change the investment mandate could make it $1.5 billion better off over 20 years.Seeded with $211 million in the Keating government’s 1995 budget, the goal was to build up the Land Fund with annual payments of $121 million indexed to inflation.