The Aboriginal Welfare Fund
The Aboriginal Welfare Fund (AWF) operated as a Treasury Trust fund between 1943-1993. It has been characterised by such habitual improper expenditure and negligent account-keeping that its present status – $9million – may well be understated by many times that amount. There can be no legitimate acquittal of the residue until a full independent inquiry is undertaken to ascertain its rightful value.
The Aboriginal Welfare Fund was established after internal inquiries and audits over several years continually condemned departmental misuse of existing Trust funds for items which ‘are definitely charges against consolidated revenue’. The parameters of the AWF were wide enough to legitimise these previously unauthorised transactions; no regulations were ever formulated to define its proper operations.
AWF income derived from sale of produce and enterprises on reserves, levies from Aboriginal wages (in addition to taxes), child endowment and deceased estates deemed unclaimed. It was to be dispensed ‘for the benefit of Aboriginals generally’. In 1960 the director stated that the AWF was originally established to encourage industrial development mainly on government settlements and to receive revenue derived from them, generally retail stores, cattle and produce, and later bakeries, potteries and artefacts. Often over 40 per cent of department costs were carried by the Fund, and an estimated $300-$500 million was processed through it before trading was frozen in the early 1990s after concerted indigenous lobbying.
Although levies were taken for the AWF from the wages of pastoral workers based on missions the department refused missions access to AWF funds for development projects, declaring it was only for ‘the payment of wages and material, plant etc involved in the industrial undertakings on government settlements.’ Records show costs of blankets, clothing and rations for the destitute were frequently and improperly charged against the AWF, as were costs of compulsory relocations, which were generally listed as ‘recoverable expenses’ but rarely repaid in full, if at all.
Costs for developing and running two cattle properties purchased by the department in 1945 and 1946 were wrongly charged against the AWF despite protests from the director that the Fund was ‘neither competent nor eligible’ to meet costs. With the AWF bankrupt by mid-1946, the director complained it was carrying items ‘rightfully charged against the Vote’, such as wages and ‘legitimate Vote expenditure’ such as cost for ‘the cost of removal of Aboriginals, indigent, sick and refractory.’ So excessive was expenditure charged against the AWF that it was in debt six of its first ten years of operation. Yet the Fund continued to be used for government liabilities: in the mid-50s for wages of white overseers and $48,000 for land for a hostel near Townsville (later constructed with $150,000 of Palm Island child endowment funds).
In 1959 the chief accountant blamed a drop of almost $612,000 (today’s value) in the AWF on the diversion of the Fund’s holdings to cover what was otherwise Vote expenditure, which the director again deplored. During the 1960/61 credit squeeze the AWF balance dropped by 56% as greater amounts of community wages were charged against the AWF, as were, for the first time, several vehicles. This blatant misuse was described by the director as ‘a financial benefit to Contingencies Vote and a drain on Welfare Fund to such extent that the latter is unable to meet similar commitments in future.’ In 1963, after expenditure for reafforestation at Hopevale mission, sewerage at the Aitkenvale hostel and a new store on Palm Island, the Fund was again in debt.
The department’s vast cattle enterprises led the director to boast in 1970 it was the biggest ‘cattle baron’ in Queensland. These were financed and stocked from AWF funds yet the department at that time had no working accounts by which to measure its operating results. In 1978/79 auditors complained lack of musters precluded proper assessment of stock numbers. In the mid-1980s auditors again criticised livestock controls which comprised ‘the handwritten sheet attached to the inside cover of the relevant file’, with quarterly returns were prepared from the same handwritten sheet. In 1990 the auditors again complained of ‘significant problems with the department’s livestock operations’. Cost of these basic business failures and negligence can be identified in balance sheets of the AWF which carried cattle trading losses every year after 1975, losing the equivalent of $2.4 million to 1980 and a further $11 million to 1990.
From 1980 commonwealth housing money was handled through the Welfare Fund as was any income from sales of houses and rental income. Direct commonwealth inflow through the AWF rose from $6.3 million ($16 million) in 1980 to $10.35 million ($17.6 million) in 1985 to $25.2 million ($29.2 million) in 1990, yet auditors continually criticised incomplete control registers and massive longstanding rental debts. Despite massive entrenched overcrowding the department ran ‘surpluses’ on commonwealth housing funds totalling $7.5 million ($15.6 million) between 1980/84 and a further $11.25 million ($17.5 million) between 1985/90. Much of this was invested on the short-term market, the interest being a bonus to Treasury.
In 1983, forty years after its establishment, there were still no procedures to evaluate ‘profitability or otherwise’ of the various Welfare Fund activities, there being ‘little or no controls’ to evaluate farming, pastoral viability, piggeries, fishing and oyster projects. In late 1983, the executive officer warned the director the cash liquidity of the Welfare Fund was ‘alarming’, because of a $1.25 million ($2.4 million) blow out of expenditure over receipts. In a ‘strictly confidential’ letter the director notified the department’s manager at Yarrabah that the financial position of the Fund ‘is occasioning grave concern’; balance for the year fell by nearly 50% to only $1.9 million ($3.6 million).
In 1988 Cabinet agreed to the sale of the Comalco shares, purchased by the Welfare Fund between 1970 and 1985 with proceeds ‘to provide funds for a bank so that funds could be provided for individuals who have been refused finance from other sources.’ The sale realised $570,353 ($764,275) but no bank was ever set up for Aboriginal benefit; instead the proceeds were absorbed into the Welfare Fund.
Estimated Welfare Fund income dropped sharply from the mid-1980s as beer canteens were transferred to council control during the mid-1980s. In 1986/87 the deficit was almost $2.75 million in store sales alone, as councils went elsewhere for bulk alcohol, and several retail stores were transferred to private enterprise. Livestock sales generated only half anticipated profits.
In 1988 minister Bob Katter sought half the expected $4.5 million from the intended sale of the department’s Cairns office to fund community projects such as upgrade of runways, wharfs, roads, bridges, pasture development and water supplies, arguing: ‘The Aborigines Welfare Fund cannot continue to support the expense of this type of initiative’ due to its shrinking income pool.’
Public agitation over the Fund prompted an internal inquiry in 1991. Conclusions were that many projects bankrolled by the Fund were probably economically unviable, that no register existed of the ‘considerable asset base’ and that ‘unwise decisions may have been made’ by the executive officer. It was suggested that ‘illegality would be extremely difficult to establish’ unless there was evidence of ‘abuse of trust’. It is a basic duty of trustees to keep full and detailed accounts; and the basic premise of a fiduciary relationship is that the trustee must at all times act in the interests of the beneficiaries, and is not entitled to profit from the fiduciary relationship.
The AWF was set up ‘for the benefit of Aborigines generally’ and comprised monies from wages, child endowments, deceased estates, and profits from their labour on community reserves. There is a strong case to be made that decades of official mismanagement has drastically depleted the balance remaining in the fund.