1                This working paper describes the Land Rights assessment and the results.  The development of the 2004 Review method for assessing land rights is discussed in Volume 7 of the Working Papers for the 2004 Review.

2                The Land Rights assessment recognises the additional and unique costs of providing services in the Northern Territory because of the operation of the Commonwealth's Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA).  Under the provisions of the Act, the Aboriginal Land Commissioner is required to report on the financial impact on the Northern Territory of successful land claims.  The Northern Territory incurs costs in preparing submissions to the Commissioner and in challenging claims through the Federal and High Courts.  Although there is a sunset clause in the legislation, it is expected that claims will proceed for many years.

Assessment method

3                The Commission assessed the Northern Territory's needs due to land rights expenses in the following categories:

·                Services to Indigenous Communities;

·                Administration of Justice;

·                National Parks and Wildlife Services;

·                Water, Sanitation and Protection of the Environment;

·                Roads;

·                Mining Fuel and Energy; and

·                General Public Services.

4                The Land Rights assessment was based on the actual per capita expense incurred by the Northern Territory for each category.  For the Administration of Justice category, the Commission decided to discount the land rights expenses by 20 per cent.  The Commission considered that, the Northern Territory's obligation to protect the interests of the Territory from claims with the potential to influence income, land use policy or the economy, was policy choice.  Therefore the Commission judged that the Northern Territory's assessed expenses in this category should be 80 per cent of its actual expenses.

5                The factors and component weights are updated annually.

6                Table 1 shows land rights expenses, total category expenses and component weights for the years 2000‑01 to 2005-06.  The component weights were calculated for each year by dividing land rights expenses by category total expenses. 

Table 1                        Land rights expenses, category expenses and component weights, 2000-01 to                                                      2005-06

(a)        Land rights expenses in this category were discounted by 20 per cent

Results

7                The land rights factors were calculated by dividing the Northern Territory per capita amount of land rights expense by the Australian per capita amount of land rights expense.  Table 2 below shows the land rights factors for the 2007 Update. 

Table 2            Land rights factors for all relevant categories, 2007 Update

Note:    The land rights factors for all relevant categories are the same.

Changes since 2006 Update and contribution of the 2007 Update to GST revenue distribution

8                Table 3 shows the change in GST revenue and Health Care Grants (hereafter described as GST revenue) distributions caused by changes in the Land Rights assessments between the 2006 Update and the 2007 Update.

Table 3            Effect of the Land Rights assessment on GST revenue distribution, 2006 Update and 2007 Update

(a)             Assuming the same pool and a constant population.

(b)           This figure shows the change in the amount redistributed among the States between the 2005 Update and 2006 Update.  It does not necessarily equal the difference in the total redistribution from EPC between the two inquires.

9                Compared with an equal per capita (EPC) assessment, the 2007 Update redistributed $8.3 million away from New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania and the ACT to the Northern Territory.  This is similar to the 2006 Update where $8.5 million was redistributed.  The 2007 Update assessment resulted in a $0.2 million change in the pattern of redistribution between the States.

10             

11            This change was due to:

·                Revising actual expenses.  The Northern Territory made minor revisions to the 2004-05 expense data in the following categories: National Parks and Wildlife; Mining, Fuel and Energy; and General Public Services.  This resulted in a decrease in 2004-05 total land rights expenses of $0.9 million.  There were also minor revisions by the Australian Bureau of Statistics to Mean Resident Population data for 2004‑05; 

·                Replacing actual expenses.  Northern Territory expenses have increased over the 2000‑01 to 2005-06 period by 33.7 per cent. This is less than the increase in the GST pool of 43.3 per cent.  This category has become less important resulting in a decreased redistribution to the Northern Territory.

12            Compared with 2004-05, 2005-06 land rights expenses showed the following:

-        $0.3 million increase in expenses attributed to the Services to Indigenous Communities category due to the inclusion of expenses from the Department of Planning and Infrastructure for land surveys and historic land tenure reports not included in previous updates.

-        $0.3 million increase in expenses attributed to the General Public Services category due to increased costs associated with local government reform, review of permit system and township leasing arrangements.

-        Minor increases/decreases were noted in other categories.

13            Table 4 shows the change in actual land rights expenses from 2000‑01 to 2005-06 and percentage changes from previous years and from 2000‑01 to 2005-06.  

Table 4            Land rights total actual expenses, percentage change from previous years and from 2000-01 to 2005‑06

 

This working paper was prepared by the Expense — Health and Welfare section of the Commonwealth Grants Commission.  If you have any questions about its content please contact Anthony Nichols on (02) 6229 8858 or Anthony.Nichols@cgc.gov.au

 

   

Date: 23/2/07