Reinventing the Governance of Public Finances in Remote Indigenous Australia

Abstract

The economies of remote Indigenous settlements are dominated by public finances. The current system of governing public finance is highly saturated, fragmented and centralised, and this has a corrosive effect on local governance capability. The political accountability of leaders to their constituents is weakened in favour of an administrative accountability ‘upwards’ to higher authorities. New Public Management reforms have promoted administrative deconcentration, over political devolution, and this has been accompanied by an influx of public servants, Non‐Government Organisations (NGOs) and private contractors, and a decline in Indigenous organisations and local government. The end result in many settlements is a marked disengagement of Indigenous people in their own governance. There is evidence of considerable political capabilities existing within local government electorates. Decentralised financing arrangements can be used to catalyse these capabilities and then address deficits in administrative and technical performance.