Aboriginal Welfare Fund
A summary by Dr Ros Kidd
The Aboriginal Welfare Fund (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.
The 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 acquittal of
the
residue until a full independent inquiry is undertaken to ascertain
its
rightful value.
It 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 Aboriginal Welfare Fund 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.