Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Hansard source

I thank senators for their contributions to the debate on the Aboriginal and Torres Strait Islander Land and Sea Future Fund Bill 2018 and the Aboriginal and Torres Strait Islander Land and Sea Future Fund (Consequential Amendments) Bill 2018. These bills represent an historic moment in Australia's land rights journey. The legislation gives effect to the government's decision to establish a dedicated financial asset fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund, to support the making of annual and discretionary additional payments to the Indigenous Land Corporation. The government wishes to invest in financial assets with the aim of achieving investment returns to support the Indigenous Land Corporation financially.

The Indigenous Land Corporation was established as part of the government's response to the High Court's decision in Mabo No. 2. The Indigenous Land Corporation was established to assist Aboriginal and Torres Strait Islander organisations to acquire and manage Indigenous-held land, to provide economic, environmental, social and cultural benefits for Aboriginal and Torres Strait Islander people. This is in recognition that many people would be unable to benefit under the Native Title Act 1993.

The Aboriginal and Torres Strait Islander Land and Sea Future Fund will replace the Aboriginal and Torres Strait Islander Land Account. The legislation provides for the transfer of moneys and financial assets currently allocated to the land account to the new fund, managed by the Future Fund Board of Guardians. The Future Fund board is an experienced, specialised and trusted sovereign investor, responsible for investing over $180 billion—as at 30 September this year—across five sovereign wealth funds with different purposes and different investment mandates. As at 31 October 2018 the land account held a capital balance of $2 billion. However, a combination of the current investment environment, payment arrangements and investment restrictions means that the land account is not financially sustainable. Those arrangements make it all but impossible for the land account to sustain annual indexed payments to the Indigenous Land Corporation. These bills propose landmark changes to address this. Annual payments will be channelled to the Indigenous Land Corporation from the Aboriginal and Torres Strait Islander Land and Sea Future Fund. The finance minister and the Indigenous affairs minister may determine, once in a financial year, that an additional payment be made to the Indigenous Land Corporation, after considering the advice of the Future Fund board about the impact of such payments on the sustainability of annual payments.

The legislation requires the responsible ministers to issue an investment mandate to the Future Fund board regarding the investment of the Aboriginal and Torres Strait Islander Land and Sea Future Fund. The purpose of the investment mandate is to provide a mechanism for the government to provide strategic guidance to the Future Fund board on its expectations for the investment of these funds. The legislation mandates consultation with the Indigenous Land Corporation, through the Indigenous affairs minister, on the actual setting of the investment mandate. This requirement acknowledges the interest of the Indigenous Land Corporation in the performance of the fund.

The Future Fund Board of Guardians is required to prepare an annual report about the performance of the Aboriginal and Torres Strait Islander Land and Sea Future Fund. The finance minister may also request additional information from the Future Fund board about the management of the fund. These reporting arrangements are consistent with arrangements for other funds currently managed by the Future Fund board. In addition, the Future Fund Board of Guardians publishes a quarterly report on each of the funds under management. The legislation gives the Indigenous Land Corporation board the opportunity to discuss the performance of the Aboriginal and Torres Strait Islander Land and Sea Future Fund with Commonwealth officials if it so desires and following the publishing of a quarterly update for the fund. This recognises that the fund is the primary source of funding for the Indigenous Land Corporation.

Sustainability of annual payments to the Indigenous Land Corporation is a key concept underpinning the establishment of the Aboriginal and Torres Strait Islander Land and Sea Future Fund. This is reflected in provisions dealing with the channelling of discretionary additional payments to the Indigenous Land Corporation and setting of the investment mandate for the fund. The concept of sustainability of annual payments captures the intention of government that the fund is established to provide a source of funding to the Indigenous Land Corporation over the longer term.

In response to Senator Siewert's concern about the tabling of any reviews: the legislation requires, as the senator indicated, a review of the operation of these arrangements to be undertaken after 10 years. It is the government's intention that the report of the review will be tabled in parliament.

Stakeholders have expressed overwhelming support for these reforms. From July to September 2017 the ILC conducted public consultations on the financial sustainability of the land account. Multiple meetings were held, in 11 locations across Australia, involving 75 Indigenous organisations. The Indigenous Land Corporation also invited written submissions from stakeholder groups and individuals. A clear majority of stakeholders supported changes to improve the sustainability of the land account by allowing land account funds to be invested in a wider range of investment products and to be managed by the Future Fund Board of Guardians.

The government has listened and acted by introducing these groundbreaking reforms. Securing sustainable funding arrangements for the Indigenous Land Corporation will allow the Indigenous Land Corporation to continue to assist Aboriginal and Torres Strait Islander Australians to achieve their economic, environmental, social and cultural goals into the future. This government is giving practical effect to its commitment to improving the lives of Aboriginal and Torres Strait Islander Australians. I thank the Senate and parliament for their input and the amendments that have been discussed already in a multipartisan way around the parliament, and I commend the bills.

Question agreed to.

Bills read a second time.