Friday, November 03, 2006

The impressive Doctor Henry

At the Melbourne Institute Economic and Social Outlook conference last night the head of the Treasury Ken Henry delived yet another typically impressive speech.

My favourite is one of his first as Secretary to the Treasury, delivered in 2001, focusing on the environment, Ken's first curiosity about economics and his father.

Dedicated to my father John Henry, timber worker

It'll bring a tear to your eye.

Last nights was entitled Managing Prosperity. Much of it dealt with what we still have to do, for the first Australains who have been left behind.

This is how I described it in the Canberra Times:

The head of Australia’s Treasury has nominated indigenous deprivation as one of Australia’s most important remaining economic challenges.

Delivering an address entitled “Managing Prosperity” to a conference organized by the Melbourne Institute and the Australian newspaper last night Dr Ken Henry said Australia would not have managed prosperity well until it corrected for past mistakes, some stretching back for generations.

He said that Australia’s overall standard of living had climbed to the point where it was higher than that of every G7 country other than the United States. But he said that measure masked the “severe capability deprivation suffered by most indigenous Australians”.

Australia’s top economic bureaucrat told the audience of business leaders that he feared the solutions needed might be “simply too confronting to command wide-spread community support.”

“Most Australians know there is something wrong because they see images of substance abuse and domestic violence in indigenous communities,” said Dr Henry.

“But that is about all they see. And it might be all they want to see; for the most part preferring the mental image of the indigenous community as a sheltered workshop for the permanently handicapped".....

Dr Henry said indigenous communities were in fact a part of mainstream Australia, but one with a dramatically lower life expectancy — 17 years less than the Australian average, dramatically lower rates of schooling and employment, and substantially higher rates of imprisonment.

“Indigenous disadvantage diminishes all of Australia, not only the dysfunctional and disintegrating communities in which it is most apparent. Its persistence has not been for want of policy action. Yet it has to be admitted that decades of policy action have failed.”

The Treasury Secretary praised the indigenous development initiatives undertaken by mining companies such as Argyle Diamonds in Australia’s West. He said those initiatives created real jobs because they brought into employment Australians who would otherwise face a life of welfare dependency.

He said by contrast “…almost every day I hear somebody arguing that some activity should be accorded a special taxpayer-funded hand-out, either because it will ‘create’ some impressive number of new jobs or because, if it doesn’t receive taxpayer-funded support, an equally impressive number of jobs will be ‘destroyed’.”

Doctor Henry said that in an economy approaching full employment most so-called job creation measures only shifted jobs around. But he said measures that gave jobs to indigenous Australians or to others who would otherwise be out of the workforce could create real jobs.

The Treasury Secretary said there were grounds for hope. He said when he attended Chatham High School at Taree on the NSW mid north coast three decades ago the aboriginal student population was only three-tenths of one per cent. He said he was invited back to speak at the school last month and discovered that 17 per cent of the students were indigenous.

He said he was surprised to discover on a visit to Cape York last year that the main concern of aboriginal community leaders was the amount of red tape they had to work through in order to deal with competing government programmes and agencies. “Compliance with red tape was absorbing all of the administrative capacity of the community,” he said.

Dr Henry nominated reducing the red tape burden on indigenous communities as a national reform priority.