In July 1997 the Minister for Aboriginal and Torres Strait Islander Affairs, Senator The Hon John Herron, announced that the Aboriginal Land Rights (Northern Territory) Act 1976 would be reviewed. Senator Herron appointed Mr John Reeves QC to undertake the review. Mr Reeves submitted his report Building on Land Rights for the Next Generation: Report of the Review of the Aboriginal Land Rights (Northern Territory) Act 1976 to the Minister in August 1998. This Discussion Paper focuses on financial aspects of the legislation.

Since commencement of the legislation in 1977, approximately $400 million in mining royalty equivalents (MREs) have been transferred from the Commonwealth's Consolidated Revenue Fund to the Aboriginals Benefit Reserve (ABR) (previously the Aboriginals Benefit Trust Account). In accordance with the legislation this amount has been disbursed to other institutions, including land councils and royalty associations, and to incorporated bodies to be used for the benefit of Aboriginal people in the Northern Territory. In the 20 years of the operations of the legislation the apportionment of these funds has never been substantially reviewed nor rigorously contested. The review provided an opportunity to resolve a number of long-standing issues which have historical legacies and have proven to be ambiguous and contestable in their application. These include the proportional division of ABR receipts, the public or private nature of MREs, the usage of those moneys and the imposition of Mining Withholding Tax (MWT).

This Discussion Paper argues that many of the institutions created by the legislation are operating suboptimally and that the review provided the potential to clearly define the role and objectives of the financial institutions created in the Land Rights Act. Current developments such as the prospect of statehood for the Northern Territory become important issues for examination particularly in the context of Commonwealth/Territory relations and the governance of the ABR in the 21st century.

This paper also discusses the heterogeneous evolution of royalty associations noting that blanket recommendations are difficult to apply given that royalty associations have operated variably both over the life cycle of individual organisations, compared to other Indigenous organisations, and in the context of wider political and economic forces. Notwithstanding the comments of this paper, and the recommendations of the review, there remains an urgent need for further research and assessment of performance of these associations in order to evaluate past performance and future viability. Nevertheless, it is apparent that some immediate amendments to the legislation are required particularly in the area of accountability measures, clarification in respect of the purpose of mining royalty equivalents and the provision of mentoring services for the future development of royalty associations.

The policy implications of reviewing the financial aspects of the Land Rights Act that has been in place for over 20 years is very complex. A selection of our recommendations with significant policy implications follow.

In respect to the ABR, a unique institution in its own right, we contend that it is operating suboptimally owing primarily to a lack of an institutional vision and mission. It is important that this issue is addressed, and that a clear role or amalgam of roles is created. Options we envisage include:

• maintaining the status quo—the ABR as a clearing house with a minor role as a reserve;
• an Investment House-set an investment goal (eg. self-sufficiency) and identify the purpose and type of assistance to, or for, the benefit of Aboriginal people in the Northern Territory (economic development);
• a Development Corporation—set a vision with a focus on the development of Aboriginal land with a commercial orientation; and
• a Sociocultural Corporation-set a vision with the primary objective as the maintenance of Indigenous culture and society and a complimentary focus on employment creation.

All these options cannot, in our view, be addressed immediately, partly because of the need to reach consensus among all affected parties. This paper recommends the establishment of a working party with representatives from the land councils, ABR, Northern Territory Government, and commerce to address this particular issue. Conceivably the Aboriginal and Torres Strait Islander Commission (ATSIC) would establish the working party.

It is apparent that there are a number of other issues which need to be addressed immediately. Therefore as a first step to reform we make the following recommendations:

• that a rigorous assessment of the implications of the new Commonwealth auditing regime be undertaken in order to gauge its full impact upon the institutions created by the Land Rights Act;
• that the point at which MREs change from public moneys to become private moneys is investigated;
• that mechanisms are instituted to ensure MREs are not used solely as substitution funding;
• that the equity and efficiency implications of the MWT are again investigated (if individual cash payments made by some royalty associations cease then MWT logic is defeated);
• that royalty associations are consulted widely in respect to any recommendations which might affect their commercial and service operations;
• that amendments to the Land Rights Act be made to enhance the accountability of royalty associations and to establish a 'mentoring' regime within the Act;
• that royalty associations identify clear missions for themselves which are interrelated with that of the ABR;
• that appropriate structures are put in place that differentiate commercial activities from social activities, commercial from charitable and encourage some alliance building with mainstream business (on a commercial front) and other agencies, especially ATSIC regional councils but also the Northern Territory Government, on community development functions; and that a regime be instituted that discourages individual payments and encourages investment.

ISBN: 0 7315 2603 1

ISSN:1036 1774