Sarah Dingle reported this story on Tuesday, September 16, 2014 12:10:00

ELEANOR HALL: As the Prime Minister conducts government from northeast Arnhem Land this week, an Indigenous policy expert is calling for a dramatic change in the system of Commonwealth grants that he says is actually worsening poverty for Indigenous Australians in remote communities.



Professor Rolf Gerritsen says the conditions in remote communities are getting worse, in part because the funds available to help Indigenous Australians there are being diverted to the hundreds of thousands more people in major cities who are identifying as Aboriginal.



The Charles Darwin University professor says almost a quarter of young men in remote communities are now completely disengaged from any government service and that the Commonwealth grant system should be based on disadvantage rather than race.



Sarah Dingle has our report.



SARAH DINGLE: Professor Rolf Gerritsen is based in Alice Springs.



He's worked in Indigenous policy and economic development of remote areas as an academic and as a ministerial advisor to the NT Government.



What he sees now in the bush is a complete disengagement from Australian Government systems.



ROLF GERRITSEN: Since the intervention, Aboriginal people have become very grumpy with government and they're sick of being pushed around.



There's a large cohort of young men who are just not part of the system. They're driving vehicles without drivers' licenses, the vehicle after its used car lot rego runs out, is unregistered.



They're not engaging with Centrelink, so they're not subject to the basic card.



I mean, my guess would be that upwards of 15-20 per cent of young men are completely disengaged from the governmental system.



SARAH DINGLE: How do you recover those 15-20 per cent of young men if they've completely disengaged?



ROLF GERRITSEN: Well, you won't. I mean, they have engaged in exit.



They just want nothing to do with white fellas or the system. And of course they engage in behaviours like they don't go to the clinic if they're sick, so they get well, but long-term it has health implications.



The improvements in Aboriginal health, as for the improvements in Aboriginal employment status, has basically concentrated amongst identifying Aborigines on the east coast.



The Aboriginal population of Australia is increasing dramatically; it's more than doubled since 1981 at a rate far greater than natural increase, and it's because people in the eastern states are basically identifying as Aboriginal.



SARAH DINGLE: Is the increase of people identifying as Aboriginal in metropolitan cities, for instance, exacerbating the flow of resources away from poor Indigenous communities?



ROLF GERRITSEN: It is.



Because of the way the Commonwealth Grants Commission calculates disadvantage, Indigeneity is an indicator of disadvantage.



So if lawyers and public servants and et cetera and workers in cities identify as Aboriginal, then that benefits their state.



So it's, in the last round of GST allocations, it probably cost the Northern Territory Government $100 million.



SARAH DINGLE: That they lost?



ROLF GERRITSEN: That they lost, because their relative disadvantage disappeared in the system.



The system works so it allocates a fixed pool of money - which is the GST revenue - to the states proportionate to the disadvantage each suffers.



And as a result of the population of Aborigines in the Northern Territory becoming much smaller in the national population of Aborigines, the disbursements in the Northern Territory decrease, and we estimate it's costing the Northern Territory about $100 million.



SARAH DINGLE: So you've got a disengaged population in remote areas who are getting less Commonwealth money overall because more people in bigger cities are identifying as Aboriginal?



ROLF GERRITSEN: It gets worse. Historically, the Northern Territory Government has taken the general purpose grants and not spent them in the way, if you like, that Aboriginal disadvantage has earned that grant.



And, a lot of expenditure is directed in Darwin because Darwin is where elections are won and lost.



SARAH DINGLE: What you're calling for is an ATSIC (Aboriginal and Torres Strait Islander Commission) for northern and central Australia.



ROLF GERRITSEN: Yeah, not the national ATSIC. I mean there's serious problems in other parts of Australia with Aboriginal people, but the real problem is that if we had a national forum for Aboriginal people, then the remote Aboriginal people, the neo-traditional Aboriginal people of central and northern Australia would be swamped.



SARAH DINGLE: And the same divide would be entrenched?



ROLF GERRITSEN: Yeah. I mean, there's a divide that occurs now, but we're just not sort of aware of it.



Because, I mean, let's be honest, there's a political correctness. That sort of race stuff, all we should do is identify people according to need, and the Aboriginal people of remote Australia, so central and northern Australia, are the neediest Aboriginal people in Australia and they have the fewest opportunities and they have been treated as badly as anybody else and they are just very grumpy.



ELEANOR HALL: And that's Professor Rolf Gerritsen, speaking there to Sarah Dingle.