Breach of Trust


Tonight I want to look at the relationship between the Queensland government and the Aboriginal population – how it was established in law, and what historical evidence reveals about how official powers were utilised during the twentieth century. Because of the context in which this forum arises, I will concentrate particularly on financial matters (and figures are given in today’s value).  Obviously this is a work in progress, and tonight’s time is brief, but it will give you a feel for how the system operated.

First, the matter of relationship and executive powers.  The intent of the Queensland government is clearly stated in the preamble to the Act passed in 1897: ‘to make provision for the better protection and care of the Aboriginal and half-caste inhabitants of the colony’.  In parliamentary speeches at that time the home secretary stated: ‘It is owing to our presence here as colonists that they are reduced to their present straits’.  He conceded a duty ‘to compensate for the injuries’ inflicted in the process of driving Aborigines ‘from their native hunting grounds’, saying: ‘We recognise that duty, we are willing to perform it, and we are now providing the necessary machinery for that purpose’.  It is clear that the 1897 Act established a legal relationship between the government and the Aboriginal population, and that relationship was of a fiduciary nature – that is, the government established in law a role for itself as protector and carer of Aboriginal people.

Under this law the government could define as a ward of state every Aboriginal inhabitant of Queensland, a category which was soon widened to include those of part-Aboriginal descent.  Rural police sergeants were delegated to operate as protectors to enforce the Aboriginal Acts and regulations, and areas were defined as Aboriginal reserves upon which a range of restrictions operated.  Although it devolved some of the financing and most of the management of missions to church authorities, the government was totally responsible for conditions on all reserve communities and for the lives of every person confined thereon.

Aborigines could now be forcibly transported and interned on reserves, or sent out to employment. The government controlled where and how you lived, right to marry, care and custody of children, the food you ate, the clothes you wore, the amount of schooling and medical attention available to you.  There was no explanation of this regime to the people trapped in it, no legal process, no right of appeal.  From 1901 officials were empowered to care, protect and manage the property of all Aborigines, to take possession, retain, sell or dispose of this property; in short, ‘to exercise in the name of an Aboriginal any power which the Aboriginal might exercise for his own benefit.’

Around 1904 a Trust fund was established to receive savings of missing or deceased Aborigines; files show only a small portion was regularly distributed.   At this time also the government started taking money from the accounts of settlement residents towards the costs of running these institutions – 5% from those with dependents and 10% from those without.  In 1919, by which time all Aboriginal wages were paid directly to police protectors,  rural workers also had money taken from their savings, at the rate of 2.5% from those with dependents and 5% from those without.  This money went into a new Trust fund intended as unemployment insurance.

What was the outcome of this regime of ‘care and protection’ for those removed to Aboriginal reserves until the 1970s? Evidence shows that under official guardianship these communities have always been so grossly underfunded as to endanger life, that these children were denied the education mandated to all Queensland children, that these families lived in appalling overcrowded squalor in huts frequently condemned as unfit for human habitation, were provided with food known to be insufficient for health and nutritionally inadequate, were frequently, even into the 1970s, dependent on water which was known to be unfit for human consumption, were habitually without the medical treatment standard for the rest of the state.  On these government institutions labour was mandatory but mostly unpaid until the late 1960s, when a wage of only one quarter the basic wage was introduced, pitching these families well below the poverty line, a penalty not reimbursed by housing and amenities as was publicly claimed, but confidentially refuted.  The government knew people sickened and died because of these entrenched pernicious conditions, as innumerable officials’ reports attest over almost eight decades, yet the system was maintained.

What of the children?  The government took guardianship of every Aboriginal child under 16 years – extended to 21 years in 1939 – whether or not the parents were living, and this power included authorisation of marriages ad adoptions.  How did it execute this duty?  We know from decades of evidence that children were underfed, lacked clothing and basic shelter, suffered scandalous rates of parasitic infestation, died unnecessarily of easily preventable diseases, received little schooling and were worked from an early age.  And that was just children in government ‘care and protection’ on missions and settlements.  We know that from 1919 children under 12 could not be contracted to outside employment…unless the protector endorsed it.  In 1957, the director, their legal guardian, commented that child labour was still common in the pastoral industry and many suffered broken limbs.  We know he condoned this, suggesting merely that ‘undersized and weedy’ children not be put to hard labour.  He said: ‘We try to look on these people as human beings.’  Such cruel exploitation would, in a parent, have attracted charges of criminal negligence.

Throughout the twentieth century the linchpin to administrative controls was the enforced labour regime upon which profitability of the developing pastoral industry depended.  How did the government secure the best interests of this labour force?  In 1919 the Native Affairs department set rural wages at only two-thirds the white rate, despite evidence from frequent surveys identifying Aboriginal labour as often better skilled and more stable.  We know the department failed to enforce even this discounted rate, being frequently several years in arrears with adjustments to white wage increases; in 1950, for instance, Aboriginal workers were getting two-thirds of the 1938 rate, effectively only 25% of the white wage.  We know the department was complicit in the exploitation of men hired as trackers to police at scandalously low pay; evidence of the 1960s confirms official knowledge that ‘most of them have suffered financially’, with several men listed as using over $8000 of their savings just to survive.  As recently as 1970 the agreed rate was $110, less than half the basic wage; in 1974 that wage ratio continued unchanged.

Regulations in 1919 had set minimum conditions for pastoral workers, but the department never implemented systematic inspections to enforce them despite accumulating evidence of gross breaches.  Regulations also dictated amounts of pocket money to be paid to workers during the work period, yet for all of its 70-year duration it was known that the pocket money system was a sham.  We know protectors rarely inspected books on site, we know there was no guarantee money entered in books was actually received by workers.  In the 1940s the system was described by officials as ‘a farce’; in 1958 it was said books were routinely filled in at the close of  the contract period.  Six years later, and after 60 years’ operation, auditors confirmed the system remained fatally flawed, reporting: ‘the department appears to exercise no direct supervision over the keeping of these books or of the payment of pocket money by employers.’  Because the pocket money component was often between half and three-quarters of the wage, failure to stamp out fraud on pocket money meant failure to safeguard workers’ wages.

The department was responsible for the management of Aboriginal property, but,  notwithstanding a 1901 regulation directing protectors to keep ‘proper accounts of all moneys’ and designating them as ‘public accountants’ under the Audit Acts, it created a system whereby around 90 of these untrained men ran rural savings accounts.  The results, predictably, were disastrous.  In the 1920s auditors declared almost half the deductions were wrong; in the early 1930s they said there was still no internal system to check transactions; in the 1940s it was said there was no way to verify withdrawals on Aboriginal accounts.  In 1958 the director admitted his department had been ‘held culpable for failing to ultimately collect wages owing’, adding: ‘it is futile raising excuses…we have accepted the responsibility of protecting these people by controlling their employment and collecting their wages.’ In the 1960s auditors again slated the ‘fair margin of error’ in postings which ‘remain undetected’ at head office.

Systemic defects facilitated not only negligence but also fraud by protectors on the savings from which – at their discretion – they allowed workers to make small withdrawals.  Thumbprints were introduced as early as 1904 to counter doctored receipts, yet 30 years later fraud was still described as both common and entrenched.  In 1933 savings were centralised at head office specifically to reduce police fraud, yet over subsequent decades auditors noted that thumb printed and witnessed dockets continued to surface, even when no transaction had taken place.  Although an internal inspection had warned in 1932 that Aboriginal savings remained more vulnerable to fraud than any other government accounts, the department refused then, and refused ever, to allow workers to see what was happening to their money.  Despite this litany of damning evidence, never once were protectors charged under the Audit Acts.

Only in 1965 was there a possibility of appeal to a magistrate against seizure by the director of control over personal assets; and only in 1966 were Aborigines issued with bank books and could finally see a record of dealings on their accounts, although ‘this was just for information of individuals…all accounting systems will operate as usual’.  It was several years later before people were allowed free access to their own money; many found almost nothing remained in their accounts.  By 1968, after almost 50 years, the government finally stopped taking money from private savings, and when equal wages were mandated nationally, the days of discounted labour were almost over.  Aboriginal workers, although not those living on reserves, finally enjoyed autonomy of employment.

As legal trustee for both private savings and Trust funds, there is no doubt the government demonstrated negligence, and possibly collusion, in maintaining a system so detrimental to Aboriginal savings.  Indeed habitual misuse by government itself is revealed in successive audit reports and internal inquiries. An inquiry in 1922  showed that both Trust funds were being used as operational accounts and expended for development and capital works on settlements, grants to missions, loans and compulsory relocations.  Inspectors described this range of outlays as ‘unsound’ and urged ‘rules be formulated to control expenditure’ from both funds.

But no such rules were made.  And, during the ten years from 1925/35, covering government by both political parties, these Trust funds were raided for over $3.5 million (today) to relieve consolidated revenue.  Fifty per cent of the deceased estates Trust was simply siphoned into the operating account, as was an amount equivalent to over $900,000 from private accounts; yet against this evidence the minister denied in parliament that Aboriginal savings were used for departmental liabilities.  During this period the department also seized bank interest, taxed settlement inmates an extra 5 per cent, and charged patients at Fantome Island at twice the calculated costs of medical care.  No Aboriginal was advised of any of these raids on private monies.

The auditor in 1941 condemned the multiple appropriations from workers’ savings citing unemployment fund deductions, seizure of bank interest, and so-called ‘contributions’ to buildings, fencing and amenities on rural reserves, which he said should have been charges on the state.  The director conceded that ‘much of the taxation is an injustice’, and was maintained only to cover budget shortfalls of almost a million dollars annually. Indeed between 1939 and 1945 successive auditors argued no deductions from savings were valid because regulations had been cancelled and not then regazetted.

In view of the abject poverty of the Aboriginal population, it is incredible that the government, as trustee for their interests – and their property – should have siphoned off vast sums of Trust monies and savings for its own benefit.  Since 1926, by simply defining bulk amounts as either ‘idle’ or ‘surplus to needs’ the government pursued an investment agenda into the late 1960s to create revenue for ‘the reduction of expenditure on Aboriginals throughout the state’.  No regulations had allowed for this profiteering.  In 1933 when all private savings were centralised in Brisbane, over $12 million, effectively over 85 per cent of private savings, was immediately invested.  Year by year escalating amounts frozen in investments incisively quantify Aboriginal deprivation.  From 1957, by amending its regulations, the department was able to offer these savings for regional hospitals’ development, at a time when reserve hospitals were appallingly underfunded.  In the late 1960s the government was still playing investment broker with over $20 million of Aboriginal money.

The generation of investment interest and the ‘contributions’ from Aboriginal savings were major income sources, along with child endowment, to the Aboriginal Welfare Fund, which was started in 1943.  By absorbing all Trust funds and income from Aboriginal enterprises on reserves, and by validating expenditure loosely as ‘for the benefit of Aborigines generally’, this Fund legitimised government dealings which had for years attracted censure from auditors.  Yet evidence shows the government continued to charge against it items described as ‘legitimate vote expenditure’ such as development costs and farm wages on two pastoral properties in the 1940s, in the 1950s for wages – including for white overseers, for land for a hostel near Townsville, trucks and launches, and in the 1960s for reforestation at Hopevale mission, sewerage at the hostel and a new store on Palm Island.  From the first years, the Welfare Fund often covered up to one-third the cost of Aboriginal administration.  Brought to insolvency on many occasions, the Welfare Fund often could not meet legitimate calls on its resources.

An internal inquiry in 1991 suggested many investments were probably economically unviable, and that ‘unwise decisions may have been made’ by the executive officer.  Certainly we know that the cattle properties ran at a loss every year after 1975, losing $2.4 million to 1980 and a further $11 million to 1990.  Money was clawed back by raising rents on welfare housing, attracting harsh criticism from federal officers.  We know that increasing numbers of workers were transferred against Welfare Fund enterprises, including federal housing projects, after the state government refused to fund wage increases in 1982.

We know the state ignored commonwealth directives and ultimately streamed around $200 million of federal housing money through the Welfare Fund in the decade 1980/90, yet no register was kept of its allocation, indeed several reports merely note building of ‘sundry town houses’.  We know ‘surpluses’ of unspent housing funds were achieved of $7.5 million 1980/84 and a further $11.25 million from 1985/90, no doubt benefiting the state by around 16% on the short-term money market; such interest being a bonus for treasury.  We know investments were cashed in to maintain operations of the Welfare Fund, and the deteriorating position was also camouflaged by over $800,000 from the sale of Comalco shares in 1987, notwithstanding that that money had been earmarked for private lending to Aboriginal families.

It has been estimated that perhaps $400-$500 million has been passed through the Fund in its 50-year operation until it was frozen in 1993; around $8 million remains today.  Yet it is admitted that no proper accounts were kept, there are no registers of  assets, files and records are hopelessly muddled.  There should be deep concerns as to the probity of transactions of this Fund, which was operated on behalf of, and supposedly ‘for the benefit of, Aborigines generally.’

The 1991 inquiry into the Welfare Fund suggested that because of incompetent account-keeping and consequent lack of material evidence, ‘illegality would be impossible to establish.’  But there was an important caveat to that opinion, and that was the phrase ‘in the absence of evidence of abuse of trust.’  Since the government was trustee for the Welfare Fund it had a statutory requirement to keep full and detailed accounts: surely absence of those records is a breach of trustee’s duties.  The government had a statutory duty always to act in the interests of it beneficiaries – the Aboriginal people whose money and enterprise fuelled the Fund; there is no doubt it is open to challenge on this score.  The blatant conflict of interest and the unquestionable failure to secure the best interests of those whose property it controlled, breach the basic requirements of fiduciary duty.  Time after time, in its administration of the Aboriginal population, the Queensland government has demonstrated callous disregard for the duty of ‘care and protection’ so ambitiously undertaken, in 1897.  Today’s government must be held accountable for the failures and malfeasance of its predecessors.

Copyright Dr. Rosalind Kidd. Website development by: Ryan-Thomas Robinson