Australian Financial Review, 2nd April 1998
by David Barnett
Regardless of what happens to the Native Title legislation, the Indigenous Land Corporation has the capacity over time to transfer the ownership of Australia’s pastoral leaseholds to Aborigines.
There are only two points at issue: how long will this take, and how long will Australian tolerance of Aboriginal land claims last.
The corporation was formed to compensate Aborigines for the extinguishment of any right to claim land held by Australians as freehold or leasehold. The arrangement was always phoney, and within 18 months, the Wik decision revealed the ALP Government’s assurances of extinguishment to be worthless.
The implications for the future of Australian agriculture and social cohesion were not questioned when the corporation was set up, nor when the Wik decision removed its justification, but they are highly significant.
By 2004, the Indigenous Land Fund will have received Au$1,289 million from the revenues, and will be self-perpetuating. The annual transfer of Au$45 million to the Indigenous land Corporation (ILC) will continue indefinitely.
The corporation is already in the position to buy in a single year all the pastoral leases in Cape York, which have a total value of Au$50 million. Buying up all of Queensland’s farmland, totalling 130.7 million hectares, would take 35 years.
The corporation commands the funds to buy in 15 years all 1,700 properties in the Western Division of NSW, which have a value about Au$710 million.
Buying up all of the pastoral leases in South Australia, which totals 40.7 million hectares with a value of Au$115 million, would take just over two years. Western Australia’s 94.8 million hectares of pastoral leases, valued at Au$204 million, could be bought up in less than five years.
Pastoral leases total 318 million hectares, out of a total farming area of 465 million hectares. The values of these pastoral zones leaseholds is roughly Au$3.5 billion. The corporation could buy it all within 75 years.
But that valuation doesn’t take into account the impact of restrictions on land clearing, drought, market downturns, recessions and credit squeezes. Nor does it take into account the impact on land values of land claims and other forms of Aboriginal harassment.
About 60% of Australia’s 112,000 farms are freehold. Leasehold or freehold, there are 12,700 specialist sheep producers on properties valued at Au$8.1 million, 20,700 beef producers on property valued at Au$16.9 billion, and 7,300 sheep and beef producers on property valued at Au$8.1 billion.
Buying up freehold is a bigger exercise. But this is actually what the corporation is doing, despite the spiritual bonds which Aborigines claim to have with pastoral leaseholds. Only three of the corporation’s first 29 purchases are pastoral leases. Why buy leasehold when the High Court gives it to you for the asking?
The third factor which will eventually operate to accelerate these processes is the loss of economic viability, as productivity declines and services and markets erode. Land values will slide , and then plummet.
Rural exports currently earn Australia Au$22 billion a year, roughly half from livestock and half from crops. It is difficult to estimate the impact of transferring land to Aborigines on these earnings. But in 35 years Kenya has moved from being an exporter of wheat to becoming a useful Australian market.
There must be an impact on living standards, even without the impact on mineral exports of Aboriginal obstructionism in that sector.
Australians who hope one day to own a farm will have to compete with the unique buying power which their taxes have given to the Aborigines to add to the 15% of the country’s land area which they have already received.
The corporation already has the financial strength to destroy the Australian livestock industry in less than half the time required to create it, as the result of decisions made and institutions set up three years ago which are now coming on stream.
There is no moral basis for it, even by the bizarre logic which the High Court employs when it considers issues involving the demands of Aborigines. It promises to be an economic disaster.
There are, moreover, obvious dangers to social cohesion, as the implications become apparent to vast areas of the countryside held under inalienable title by a hereditary black aristocracy, which has been fostered by the ALP and their Senate allies, and by a handful of journalists. The corporation should be shut down and its funds returned to the revenues.