Indigenous business owners are claiming data in a University of Melbourne study on the Indigenous business sector has been misrepresented to make the sector appear stronger than it is, and that it lumps government funded and independent private businesses together.
The University of Melbourne released their first Indigenous Business Snapshot study in April, the first-of-its-kind report outlines the contribution of Indigenous businesses to the Australian economy.
Whilst presented as a snapshot that “clearly and empirically establishes the economic power of Indigenous business”, the report has objections from Indigenous business owners regarding the misrepresentation of data.
The University has estimated the Indigenous business sector to contribute at least $4.88 billion to the Australian economy.
The report states that from the 2006 financial year to the 2018 financial year, the sector’s population grew 74 per cent. In that time, the sector’s gross income increased 115 per cent and created 22,000 more jobs.
The average income for Indigenous businesses was recorded at $1.6 million in 2018 compared to non-Indigenous businesses at $400,000.
Despite the recorded success, Indigenous business owners Dwayne Good and Shane Kennelly say that the report does not truly represent the sector.
Good, a Bundjalung man and owner of InTravel Group — a 100 per cent Aboriginal-owned corporate travel business, says the report funnels both Office of the Registrar of Indigenous Corporations (ORIC) organisations with entrepreneurial for-profit businesses.
“ORIC businesses receive billions in government funding and other Native Title payouts, so bundling the two types of businesses together has blown the total averages out,” Good told NIT.
“The average is then therefore $1.6 million in income per Indigenous business — that average does not truly represent the goods and services, for-profit segment [of the sector].
“We exist and operate differently to ORIC registered companies, it’s not apples for apples.”
The report also noted that whilst non-Indigenous businesses reported an average of two employees in 2018, Indigenous businesses recorded 14.
Kennelly, a Bundjalung man and co-founder of Kennelly Constructions, also shared his concerns regarding ORIC registered businesses being included in the statistics.
“In ORIC reports you can clearly see that most of the revenue … is provided by government. For our mob on Country, a lot of revenue comes from royalties or land access agreements. That is fantastic but that has nothing to do with running a business,” he said.
The pair have major concerns for what the report means for policy decision-making and how it could affect supplier diversity and inclusion policies.
“In our opinion, we are not saying the report is incorrect, we are saying it is incomplete and it has a damaging impact on our sector.”
“What this incomplete reporting has the risk of doing is making corporate and government think the Indigenous entrepreneurial sector is an astounding success. ORIC businesses may be a success, though the entrepreneurial sector is still fighting hard for growth,” said Good.
“Corporate and government may see this and scratch their heads and ask what was this supplier-diversity stuff about? We don’t need to support Indigenous businesses anymore, they are up and running, the job is done.”
Kennelly also raised concerns regarding an article by the University publicising the report, titled ‘New report shows Indigenous business sector is bigger than the beer industry’.
“Beyond the numbers the other huge disappointment, and I thought it was incredibly disgraceful, that they wanted to compare the Indigenous business sector to the beer sector,” said Kennelly.
“Considering the alcohol and health issues our mob are having, for them to use that as a comparison is just tasteless and disgraceful.”
The University of Melbourne Business School said in a statement to NIT that they did have discussions around comparing the industries and decided that it would be “helpful because beer is an industry many Australians can easily relate to in terms of its size and importance in the Australian economy”.
“Our use of this figure in no way implied any link to negative stereotypes about Indigenous Australians and alcohol, in just the same way our research around Indigenous business will help counter negative stereotypes,” said Associate Professor Michelle Evans.
Associate Professor Evans also addressed concerns regarding the inclusion of ORIC registered organisations, saying that in the report the University worked to secure a “diverse cross-section of businesses”.
“We choose to include ORIC corporations because: they are winning IPP contracts and government service agreements for critical services in our Indigenous communities; they are generating income; and they are trading goods and services,” she said.
“The research is intended to capture information on revenue and growth, not how that revenue is sourced or ultimately used.”
“As the data develops, we plan to provide separate analysis on different parts of the Indigenous business sector, including analysis that will quantify the role of ORIC corporations as ‘economic multipliers’.”
Regarding the impact of the report on policy-making, she noted the National Indigenous Australians Agency partnered with the University in their research.
“Glowing statistics have raised concerns that procurers of Indigenous goods and services might think ‘the job is done’, but corporate and government have signalled the opposite,” she said.
“The Federal Government’s three per cent value target is still a work-in-progress with plans to achieve it by 2027 at the earliest, and there are no plans to change policy at all.”
Both Kennelly and Good have noted their wishes for the report to be peer-reviewed.
By Rachael Knowles