Australian governments spent an estimated $30.3bn on Indigenous services in 2012-13, the Productivity Commission has shown in a new report.
But the commission said there was a “missing link” in its examinations of the Indigenous services sector because it had not been asked to evaluate whether the spending was effective or not.
In the four years to 2012-13 real spending on the services increased by $5bn, or almost 20%, but this included a 26% rise in spending on “mainstream services” – such as public hospitals – which were aimed at the broader community and made up the bulk of national expenditure.
The $5.6bn in expenditure on Indigenous specific-targeted services was a decrease of 1.2% over the four years to 2012-13.
The 2014 Indigenous expenditure report examines the levels and patterns – but not the effectiveness – of spending on Indigenous services across 159 categories within the Council of Australian Governments’ (Coag) Indigenous reform agreements.
Combined with November’s Overcoming Indigenous Disadvantage (OID) report, which was also done for the council of Australian governments, the estimates “can contribute to a better understanding of the adequacy, effectiveness and efficiency of government expenditure on services to Aboriginal and Torres Strait Islander Australians”, the Productivity Commission said.
Governments spent 6.1% of their total expenditure on Indigenous service provision in 2012-13, with more than half of it coming from states and territories.
Statewise, the Northern Territory allocated more than 55.7% of total government expenditure on the 29.5% of its population that is Indigenous. It was by far the highest proportional outlay, with all other states and territories spending less than 10%.
Aboriginal and Torres Strait Islander people make up less than 1% of the population in Victoria, which had the lowest proportional spend of 1.7%.
Per person, the governments spent more than twice as much on Indigenous Australians as non-Indigenous – a rise on 2008-9 levels. They spent an average of $43,449 for Aboriginal and Torres Strait Islander Australians, up by 10.3%, compared with $20,900 for non-Indigenous, a 2.2% increase.
The figures are averaged across the whole relevant population, not the users of services.
A younger population among Indigenous people and greater need for services meant higher usage, the report said, which was partly behind the higher spending. More expensive service delivery – for example to remote areas, was also a factor.
The Productivity Commission found “significant variations in levels and patterns of expenditure” on the Coag closing the gap categories.
The ratio of Indigenous to non-Indigenous expenditure in the “safe and supportive communities” category was more than four to one, while spending on “economic participation” – which includes labour and employment services and social security support – was 1.66 times more than on non-Indigenous.
The expenditure report, which is the third in a series of biannual examinations of government spending in the sector, makes no analysis of the effectiveness or adequacy of spending on Indigenous services, including the programs assessed in the OID report.
The head of the Productivity Commission, Patricia Scott, told Guardian Australia the two studies were like two “robust” legs to a stool, but a third was needed to fully know if programs were working.
“The principal thing is no one with confidence can say across the board what is effective and what is not,” she said.
“There is an interest, from the community, from service delivery people, from policy makers, and I think some interest from governments, and this is a missing link.”
Scott said in the commission’s experience there was very little done on evaluation, and Aboriginal and Torres Strait Islander communities might look at increased spending and wonder where it was going.
“We know what the outcomes are and what we’re spending, but what we don’t know is what is working on the ground,” she said. “Governments announce something then start on a program and then move on.”
Scott said the “extraordinary” amount of data presented by the expenditure reports and the OID reports was important because it was endorsed by the governments which supplied the information, and so could be quoted back at them in the future.
The OID report found patchy progress in closing the gap goals. It said the child mortality rate among Indigenous Australians had significantly improved, but efforts to improve mental health and reduce instances of suicide and incarceration had gone backwards.
