The opportunity costs of future Indigenous labour force status

Abstract

The analysis of economic policy impacts in the context of Indigenous affairs suffers from a paucity of data and a mismatch between political and statistical cycles. Rather than waiting for the effects of policy and free market forces to show up as changes in social indicators, this paper adopts a proactive approach in the face of a looming information gap to forecast outcomes in Indigenous labour force status over the next decade. Related to the current and future labour force status of Indigenous Australians is the economic cost to government of supporting individuals who are unemployed or not in the labour force. This may be set against economic returns from gainful employment. These relativities are estimated using a balance sheet of financial costs drawn from data on fiscal flows. The findings reveal an underlying demographic trend underway that could see the economic situation of Indigenous Australians continue to worsen given current levels of government intervention. In purely financial terms, the opportunity cost of this to government is potentially huge with the welfare bill almost doubling in real terms. Show more