A case study of the Bungala CDEP: Economic and social impacts

Author/editor: Gray, MC, Thacker, E
Year published: 2000
Issue no.: 208


The economic and social context of Port Augusta

This section focuses on the economic and social context in which Bungala Aboriginal Corporation operates. A description of the social and historical context of Indigenous people in Port Augusta is provided with particular attention paid to the local economy and the labour force status of Indigenous people.

The Port Augusta economy has been in decline for a number of years with major job losses occurring. The decline in employment in Port Augusta is primarily due to cutbacks in public sector employment and a stagnant private sector. While Port Augusta's rate of unemployment is relatively high, Indigenous people fare much worse with an unemployment rate of 33 per cent.

The Bungala Aboriginal Corporation

Bungala, the largest Community Development Employment Project (CDEP) in South Australia, is based in Port Augusta and has satellite work sites over a range of 450 kilometres. As of July 2000 Bungala had 310 participants working in a diverse range of activities.

Bungala is a corporate CDEP. As well as serving the local community, Bungala also services a number of satellite schemes. Each of these satellite schemes is a pre-existing Aboriginal organisation responsible for providing a variety of services to its respective Indigenous communities.

Bungala has a number of work activities that have been organised into three main programs-the Construction Program, the Works Program and the Expansion Schemes. Participants are provided with employment for two and a half days per week or five days per week depending on the program in which they are employed. Bungala has a 'no work, no-pay' rule that, in principle, applies to all participants in the scheme.

Commercial activities and finances

The Aboriginal and Torres Strait Islander Commission (ATSIC) has refocused the objectives of CDEP towards business development and commercialisation. This section explores the question of the viability of this policy objective and its benefits using a case study of Bungala CDEP. Bungala is considered to be successful because it developed a commercial model of operation that generates income from business enterprises and for assisting participants in finding unsubsidised employment.

In 1999/2000, Bungala generated $1.1m in income, however it also incurred at least this amount of debt in doing so. Therefore, Bungala is not profitable according to standard commercial criteria.

In the absence of ATSIC and Department of Employment, Workplace Relations and Small Business (DEWRSB) funding, Bungala's Construction Program could not operate satisfactorily in its current capacity. A very different approach to funding may be required in future.

Movement of participants to non-CDEP employment

One of the current objectives of CDEP is to assist participants to acquire skills that lead to unsubsidised employment. Bungala has been successful in having a considerable number of participants leave the scheme for unsubsidised employment each year. They have found employment in a diverse range of industries in Port Augusta.

As well as participants finding unsubsidised employment, a large number of participants have also found subsidised employment with non-CDEP employers, resulting in Bungala subsidising their wages for two days per week with the employer paying their wages for the remaining three days.

Evaluating Bungala's business enterprises

This section evaluates Bungala's business enterprises against a broader set of criteria than that of commercial viability.

Bungala's Construction Program, which is considered to be successful, does not make a profit. This raises the question as to whether it is possible for a CDEP organisation to run profitable business enterprises whilst providing employment to unemployed Indigenous job seekers and at the same time assisting them to find unsubsidised employment.

There are a number of constraints upon the ability of CDEPs to develop commercially viable businesses. For CDEPs in remote locations business development is likely to be severely restricted by the lack of economic activity, and limitations in the number of business opportunities. While there may be a depressed local economy in many regional centres, such as Port Augusta, with constraints to some business opportunities, in general opportunities do exist.

Lessons for CDEP enterprise and employment success

There are now a number of case studies of CDEP schemes in regional centres and urban areas. Studies have been conducted in Port Lincoln (1994) Redfern in Sydney (1995), Yarnteen in Newcastle (1996) Worn Gundidj in Warrnambool (2000) as well as the study of Bungala presented in this paper.

These case studies identify factors that are related to CDEP schemes' developing successful business enterprises, having participants find unsubsidised employment, and building communities. One of the most important factors for the successful operation of CDEPs is a high level of managerial competence and professionalism.

The case studies of Bungala and Yarnteen also illustrate the delicate balance that CDEP organisations in regional centres and urban areas must make when developing business enterprises-between maintaining the Aboriginalisation of work and providing work activities which make people employable.

CDEP enterprise issues for ATSIC

A number of questions have yet to be systematically addressed by ATSIC. These include whether ATSIC can adequately deal with the enterprise stage of a CDEP scheme and the extent to which ATSIC's policy emphasis on funding equity between communities, across populations, and between States is essentially incompatible with the competition-orientated model that directs mainstream business. With the refocusing of CDEP objectives on business development there are increasing numbers of schemes being placed in regional centres where there are commercial and employment opportunities.

ATSIC also needs to consider whether a formula based funding system is needed in order to reduce uncertainty in the level of funding received by CDEP schemes. The allocation of on-cost funding on basis of need appears to penalise schemes that are relatively successful.

ATSIC should also consider increasing funding to CDEPs that have the types of work programs Bungala provides, to allow them to employ quality supervisors.


This paper uses Bungala CDEP as a case study of how CDEP schemes in regional centres and urban areas can meet their multiple objectives of assisting participants to acquire skills which result in unsubsidised employment, developing business enterprises and providing employment in a community development setting. The focus is on the economic and social impacts of the scheme.

Bungala has been successful in meeting the needs of all its groups of participants. Significant numbers of participants are leaving the scheme for employment or are being placed in subsidised employment with non-CDEP employers. Meaningful employment has been provided to local participants wishing to remain on the scheme. Finally, in the remote satellite work sites, work activities that have been defined by the community as socially or economically useful, have been developed.

Several factors have been critical to Bungala's success. First, it is able to provide participants with the opportunity for promotion to full-time employment. Second, high quality supervisors and tradesmen are employed to educate participants. Third, professional and highly competent managers are employed.


In order for CDEPs to continue to operate successfully several changes to the way in which the scheme is funded and administered are needed. These changes include increasing funding to compensate for the loss of wage surpluses, and a movement toward triennial funding on a rolling basis contingent on the production of satisfactory business plans.

ISBN: 0 7315 2643 0

ISSN:1036 1774

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