We should work with Indigenous businesses, not against them

Graham Clarke of Harry Nanya Tours demonstrates Indigenous art motifs

According to a recent article in the Sydney Morning Herald, a number of Indigenous businesses are having success in the open market. Research with 120 Indigenous businesses leaders found that on average their businesses had an annual revenue of $2.7 million, and employed about 23 workers, of which approximately 60% were Indigenous.

Nationally, there has been a threefold increase in the number of Indigenous businesses in Australia in the last twenty years – from 4,600 in 1991 to 12,500 in 2011.

This is a promising sign and something you would imagine governments would be keen to support more of.  However, although government policies claim to support Indigenous entrepreneurship their actions do not always match their rhetoric.

This is demonstrated by some of the recent actions of the NSW government. One of their goals is to support Aboriginal economic development by growing local Aboriginal people’s capacity to drive their own solutions and by establishing partnerships between Aboriginal communities and industry.

Yet, evidence suggests the NSW government is not always practicing what it preaches. For example, after four years of discussions with the Darkinjung Local Aboriginal Land Council about building a $300 million rail project on their land, the government recently decided to build it elsewhere. Not surprisingly, members of the Darkinjung Local Aboriginal Land Council are bitterly disappointed as they hoped the project would lead to more job opportunities for their people.

In other cases, government-run businesses are competing with Indigenous privately run businesses. For instance, the Indigenous-owned business Harry Nanya Tours ¾ operating for more than 20 years in Mungo National Park in south-western NSW ¾ has suffered financially since the NSW National Parks and Wildlife Service starting running their own ‘Aboriginal Discovery Tours’ led by Aboriginal rangers four years ago.

Until then, Harry Nanya Tours employed seven Aboriginal workers and was in the process of expanding the business into other areas. Yet, Harry Nanya Tours and other private tour operators say that because ‘Aboriginal Discovery Tours’ has received government assistance  under the Cultural Tourism Development Program and do not have to pay licensing fees to use the National Park and other operating costs such as public liability insurance,  their tours are undercutting them. Aboriginal Discovery Tours charge $35 an adult for a two hour tour, while Harry Nanya Tours charges $90 for a tour that includes morning tea and lunch.

Not able to compete on price or the marketing power of the NSW National Parks and Wildlife Service, Harry Nanya Tours has experienced a significant drop in customers and had to scale back to just two principal employees and relocate the business to a home-based premises. While another private tour companying operating in Mungo National Park, Sunraysia Tours, has already folded.

This example is not the first time that government-run businesses have muscled-in on privately run businesses. I have previously published research on how the Commonwealth Government’s Outback Stores was crowding out the competition.

Government-run businesses do not tend to be as profit-orientated as privately-run businesses ¾ as there is always the expectation the government can step in and prop up the business if it fails. For example, because of federal funding and healthy food targets, Outback Stores stocked more fruit and vegetables than they could reasonably be expected to sell, without having to worry about the costs to the business when the produce had to be thrown away.

A report by the Empowered Communities highlights the problems that arise when governments overstep their boundaries and fail to take into account the needs of Indigenous people and communities. In some cases, governments and non-government organisations (NGOs) have even taken over responsibility for community leadership, while Indigenous leaders and communities trying to take responsibility for improving their lives are prevented from doing so because of the arbitrary decision-making of government and red tape. Empowered Communities is seeking to shift away from the top-down government-controlled way in which Indigenous affairs has been conducted to a new approach that empowers Indigenous communities and sees Indigenous leaders, governments and corporate leaders all working together to bring about change.

There is clear evidence of the important role Indigenous businesses and partnerships between Indigenous and non-Indigenous businesses can play in improving the lives of Indigenous people. Research has found that Indigenous businesses are about a 100 times more likely to employ Indigenous workers than non-Indigenous businesses.

If governments are serious about improving the economic outcomes of Indigenous Australians then they need to work in partnership with Indigenous businesses rather than in competition with them — and ensure their actions support, rather than hinder, Indigenous entrepreneurship.

Sara Hudson is a Research Fellow at the Centre for Independent Studies