The allocation and management of royalties under the Aboriginal Land Rights (Northern Territory) Act: Options for reform

Author/editor: Altman, JC, Levitus, RI
Year published: 1999
Issue no.: 191


In response to post-war mining developments on Northern Territory Aboriginal reserves, policy innovations established the principles that a special rate of royalties could be levied on those developments and applied to the benefit of Northern Territory Aborigines, and that a proportion of those royalties should be reserved for the people of the area where mining was taking place. The Woodward Land Rights Commission accepted these two principles and also created Aboriginal land councils as a third class of beneficiary. The Commission thus proposed the 40/30/30 formula to govern the distribution of mining royalty equivalents (MREs) among these Aboriginal interests.

From the inception of the Land Rights Act, the application of this formula has been beset by problems of logic, fairness and practicality. While changes to the financial provisions of the Act have been minor, only one element of this formula, the 30 per cent directed to areas affected by mining, has remained unchanged. Provision for supplementary funding of land councils has operated at the expense of general grants to Territory Aborigines. There is now, in the wake of the Reeves Review, an opportunity to re-think and amend the financial framework of the Land Rights Act. With respect to each class of beneficiary of MREs, this paper argues:

Payments to land councils should be fixed at 50 per cent of MREs, in order to provide for an expansion of regionalisation and land management activities in the post-land claims era. That percentage should be calculated on a rolling average of the previous ten years of MREs received by the Aboriginals Benefit Reserve (ABR) in order to make land council income more stable and predictable, and preserve its political independence. Supplementary funding should be allowed only under exceptional circumstances.

Ensuring accountability of royalty associations raises several issues that require critical review. The instrument of negotiated agreements should be more fully exploited to ensure both that associations' expenditures serve community purposes, and that those services do not substitute for government programs. Financial policies need re-thinking, especially with respect to individual cash distributions and long-term investments. Land councils need to justify any claim, as against other possible agencies, to exercise greater oversight of association affairs. At the same time, the terms and application of s.35(2)(b) require reform in order to provide royalty associations with a more secure niche in the land rights scheme.

The level of grants to Territory Aborigines is too low to justify a separate administrative process and share of MREs. The accumulated capital fund of the ABR will soon be large enough to provide a substitute source of grants, if it is thought necessary to retain a limited pool of funds for general access.

ISBN: 0 7315 2626 0

ISSN:1036 1774

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