The Accountability Interface
When the Queensland government brought in special laws in 1897 it started a century of suffocating controls over indigenous lives. Aboriginal families could be banished to reserves, separated from their children, forced to work for basic rations or sent out as cheap labour on pastoral properties. Permission was needed for marriages, for movement even within reserve communities, for visiting rights to relatives. Under Queensland law there was no court hearing, and no right of appeal. To be declared a ward of state was to be given a life sentence which endured over generations.
Aboriginal reserves have always been places of sickness and death during a century of underfunding. Decade after decade governments accumulated evidence of inadequate food supplies, unsafe water and sanitation, derelict and overcrowded housing, poor medical attention and partial schooling. There is no doubt the government failed every aspect of its duty of care, knew it was failing, and continued its failed policies, into the 1980s.
Aboriginal men, women, and children were contracted out to work, under threat of punishment, until the late 1960s. Their labour has been essential to the development of rural and remote Queensland, which profited under a ‘gentleman’s agreement’ by which governments virtually sold Aboriginal labour to the pastoral industry at a discount of 33 per cent. Workers acquired many skills and worked long hours but have been denied the fruits of their labour, denied recognition of their successes, from generation to generation.
Aboriginal workers were dispossessed of their earnings, including those who built and maintained the Aboriginal communities of today and were largely unpaid until the late 1960s and deliberately underpaid thereafter. There is no doubt that possession of their own wealth would have dramatically lifted the standard of living and the levels of health, of thousands of Aboriginal families. Denied their own money, these families were condemned to struggle and die in poverty, and then, because the public was never told the truth, they were blamed for their desperate circumstances.
In compulsorily assuming control over Aboriginal lives the government placed itself in a fiduciary position to those wards of state. The most fundamental premiss of such duty is to act for the benefit of those whose lives are entrusted. There is absolutely no question that this duty was abused, abused knowingly, and abused continuously for most of the twentieth century. There is not time here to chronicle these abuses, but I have written in detail of them in other works.
Today I want to speak of the second fundamental of the fiduciary relationship: namely that a trustee shall have no conflict of interest in, nor profit from, any dealings in the interests of its beneficiaries. With those requirements in mind, I will now discuss the control of wages and savings, and the control of accumulated Trust monies; two primary, but interlinked, strategies of the control of Aboriginal wealth. For better understanding, all amounts will be approximated to today’s value.
From 1919 the wages of all Aboriginal workers were paid directly to police protectors to reduce fraud and trickery by employers; yet the government had known that for over 15 years protectors themselves were habitually defrauding Aboriginal savings accounts. And this was despite the introduction of thumb-printing in 1904, a measure which had to be re-activated in 1921. In the 1930s police fraud on over 4500 Aboriginal accounts was described as ‘frequent’ and supervision negligible. Neither were there controls over the portion paid to workers, called ‘pocket money’; surveys during the 1950s and 1960s elicited scornful responses from protectors that any increase in pocket money would merely swell the bonus pocketed by employers. In the mid-1960s, shortly before employment controls ceased, auditors asserted there had never been any system to ensure workers were properly paid.
In 1933 the private savings pool of nearly $15 million was centralised in Brisbane. Although publicly touted as a procedure to minimise police fraud, this tactic was in fact executed for revenue-raising purposes. Records show almost $12 million, that is, over 85 per cent, was immediately frozen for investment. And for the next 40 years, incredible as it is, the government regularly defined amounts of $1-$2 million of Aboriginal savings as ‘idle’ or ‘surplus’, so the investment hoard could be increased to offset state expenditure. In the late 1950s, with over $13 million of private savings diverted to investments, The Local Government Act was amended so this hoard could be offered to develop white regional hospitals.
Auditors warned Aboriginal savings accounts were more prone to fraud than any other government accounts, and recommended personal access to transaction records. The government refused, no doubt aware of the outcry if it became known that, from the earliest days, it was simply taking money from these private accounts, without notification or consent of account holders. From 1905 levies were extracted from savings to cover maintenance costs of reserve residents, and from 1919 levies were taken from all other workers for the Aboriginal Provident Fund. This was to be insurance against unemployment, yet frequently under ten per cent was actually committed to welfare. The government took money from private savings accounts for shelter and fencing on rural reserves, it took money from invalid’s accounts for medical treatment when white Queenslanders enjoyed free hospitalisation. From the 1940s through to the 1970s it took child endowment and then pensions, allowing endowees only a fraction for themselves. In the 1950s, when infant mortality on the Palm Island settlement was 15 times the state’s average, the government took over $140,000 from mother’s child endowment funds for capital works on the mainland. Hundreds of account holders found little or nothing left when they finally got control of their savings in the 1970s.
An earlier trust fund, started in 1902 to secure the savings of dead or missing workers, also allocated only a fraction of its holdings to beneficiaries. Both these trust funds were habitually raided to cover departmental expenses such as costs of compulsory deportations of families onto government reserves, for capital works, medical expenses, rations and loans to missions. During the depression the government simply took over $5 million from the trusts to cover budget deficits, and never repaid it. By their own calculations this range of improper and unauthorised transactions profited the government by around $1 million annually, and was condemned by public service inquiries in 1922, 1932 and 1941. Meanwhile people with substantial savings were dying in poverty.
The government’s response to auditors’ criticism was to create a new trust fund in 1943 with a mandate to operate ‘for the benefit of Aboriginals generally’, so legitimising most of these habitual misuses. The Aboriginal Welfare Fund absorbed all ‘contributions’ from Aboriginal savings, as well as profits raised from Aboriginal enterprises on reserves, house rentals and investment interest; it was to be used for running and developing community enterprises. But records show that official misuse of trust monies continued: the Welfare Fund was looted for wages on reserves – including for white overseers, for purchase of trucks, tractors and launches, for sewerage and capital works, all items which were officially described – although not in public – as government liabilities. Indeed outlays from the Welfare Fund often covered over 40 per cent of department spending, and it was frequently run into deficit. While the department boasted it was the biggest ‘cattle baron’ in Queensland, it is now known that the two major cattle properties ran at a loss in every year after 1975, draining over $11 million from the Welfare Fund between 1980-1990.
In this context of failing ventures and misused funds it is of grave concern that massive federal funds specified for Aboriginal housing were streamed through the Welfare Fund, contrary to specific directives for separate accounting. It beggars belief that no expenditure register was kept of housing funds totalling over $200 million in the decade to 1990. In fact the state routinely ran ‘surpluses’ totalling almost $19 million in unspent housing funds during that decade, creaming around 15 per cent on the short term money market directly into Treasury’s coffers. Community housing, meanwhile, was characteristically grossly overcrowded and derelict.
An estimated $400-$500 million passed through the Welfare Fund during the 50 years to 1993 when the Queensland government was forced to cease trading on it. Yet the government has kept no accurate records of these dealings. Property and business expenditure frequently brought the Fund into debt, yet there is no asset register to verify transactions. Investments were cashed in to maintain operations during the 1970s and 1980s, yet the deteriorating position was masked by the massive input of federal housing funds. The probity of executive decisions was questioned in an internal inquiry in 1991, but it was suggested negligent record-keeping mitigated against successful legal action. Keen to clean up this running sore, today’s government wants to distribute the $8 million remaining in the Fund, and has also been negotiating on a purported $200 million sum demanded as reparations for missing savings, unpaid and underpaid labour, and misused Trust monies.
I argue there must be no settlement without full disclosure of government dealings as banker and investment guru on money generated by the most impoverished members of our community. There must be full accountability regarding the fiduciary duties of the state as guardian. Whose interest was best served in maintaining secrecy over a flawed banking system? Was there not a conflict of interest in developing and servicing rural Queensland through a regime of compulsory contracted labour at discounted prices? Who profited from decades of unpaid and underpaid labour on the missions and settlements, the townships of today which remain Crown property? Who profited from tying up over 80% of the private savings as a revenue-producing nest-egg? From the improper dealings on Trust funds? From the incompetent record-keeping now said to be the government’s best defence against legal accountability? The onus is now on the government to demonstrate transparency – as guardian and as financier – before there can be closure on this shameful chapter of our history.
Paper delivered to the UQ conference ‘Re-Thinking Indigenous Self-Determination; 24-28 September, 2001