Deloitte Access Economics report: huge economic benefits from increased Aboriginal employment

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Billions of extra dollars will be added to the Australian economy if Aboriginal and Torres Strait Islander employment levels reach those of other Australians by 2031 according to a new Access Economics Report.

The report, commissioned by Reconciliation Australia, finds that by 2031 the Australian economy (GDP) would be more than 1.15% larger in real terms than would otherwise be the case—a gain of approximately $24 billion in 2012/13 dollars. It also found that the larger tax base would increase Government revenues across the country by $7.2 billion and increased affluence amongst Indigenous workers would cause a substantial $4.7 billion reduction in necessary expenditure.

Reconciliation Australia Co-Chair, Dr Tom Calma, said the report made a strong economic case for current national efforts to improve outcomes in Aboriginal and Torres Strait Islander employment, health and education. “This report provides rigorous evidence for sustained investment in Aboriginal and Torres Strait Islander education and training, and health, both of which are key to improved employment outcomes,” said Dr Calma. “The report estimates that closing the education gap would see an additional 26,000 jobs and that raising Aboriginal and islander health outcomes would see a 9% increase or 13,000 additional jobs.”

The report investigates employment outcomes across urban, regional and remote areas and includes an analysis by industry and occupation and factors which disadvantage Aboriginal and Torres Strait Islander job-seekers in the labour market.

It finds three quarters of the economic benefits would accrue from regional and urban Indigenous populations. NSW, with the largest Aboriginal population, would receive the greatest economic benefit with an estimated increase of $7.4 billion although the benefits of closing the employment gap in remote populations such as the Northern Territory, the Kimberly and Cape York would be disproportionally large.

“This finding strongly reinforces arguments by Indigenous leaders and others against a one size fits all approach and for tailored efforts across all regions. It provides evidence to counter the argument that governments should concentrate solely on employment in remote areas,” said Dr Calma. “The Report’s three case studies—Blacktown in Western Sydney, the Fitzroy region, including Rockhampton and Gladstone, in Queensland, and Alice Springs and the remote southern parts of the Northern Territory—find that industry specific and locally tailored strategies will be required.

“In Western Sydney great opportunities exist for additional Indigenous jobs in financial and professional services and the retail sector while in Alice Springs there is great potential to provide employment to local Aboriginal people in construction, food services and accommodation.”

Reconciliation Australia Co-Chair Melinda Cilento said achieving employment equity was not as onerous as many believed. “For example the retail industry in the Fitzroy region would need only an additional 75 Aboriginal and Torres Strait Islander people to be employed out of a total retail workforce of 9,800 to close the gap.

“The lesson here is that the aspiration of putting tens of thousands of Aboriginal and Torres Strait Islander people into secure, sustainable jobs in urban, regional and remote Australia is attainable and will bring enormous benefits to the entire country, notwithstanding the complex factors that contribute to low Indigenous employment rates, including remoteness, racism, incarceration rates, low educational attainment, health issues and a lack of understanding about effective recruitment strategies..

“Reconciliation Australia’s own RAP program, with its more than 25,000 Indigenous jobs, mentoring programs and traineeships, and tertiary scholarships shows that when Governments, employers, unions and Aboriginal communities work together we can achieve profound results.”

Deloitte Access Economics Partner and report author Dr Ric Simes said analysis highlighted how improving the circumstances of Indigenous Australians was not only a major social challenge, but also a significant issue for Australia being best positioned to maximise its economic fortunes.

“The potential economic gains, in terms of greater national wealth and stronger government budgets illustrate the benefits which the country would achieve as a result of improvements to Indigenous life-expectancy, employment and productivity,” he said.

“These gains complement the primary benefits of addressing Indigenous disadvantage, namely enhancing the wellbeing and life experiences of Indigenous Australians.”

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