The Aboriginals Benefit Account (ABA) is legislated under the Aboriginal Land Rights (Northern Territory) Act 1976 (Land Rights Act). It is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
The ABA receives and distributes moneys generated from mining on Aboriginal land in the Northern Territory. Payments into the ABA are based on royalty equivalents that are determined by the estimated value of the statutory royalty payments.
The Minister for Indigenous Affairs allocates funds from the ABA to the four Northern Territory Land Councils (Northern Land Council, Central Land Council, Anindilyakwa Land Council and Tiwi Land Council) for administrative purposes.
The Minister also approves grants for the benefit of Aboriginal people living in the Northern Territory, taking into consideration advice provided by the ABA Advisory Committee. The Committee is established under subsection 65(1) of the Land Rights Act to advise the Minister on beneficial payments under subsection 64(4). In 2018–19 the Committee consisted of 14 members elected by the four Land Councils and Donna Ah Chee, whose three-year term ended on 30 June 2019. The Committee provided advice in relation to beneficial payments on 172 applications.
At 30 June 2019, the net assets of the ABA were $1062.3 million (excluding future commitments). This represents a 30.4 per cent increase from $814.2 million at 30 June 2018. The variation largely reflects positive market conditions such as commodity prices, exchange rates and world demand.
Funds from the ABA are distributed to Royalty Associations in areas affected by mining. In addition, the Land Rights Act provides for lease administration costs of approved Commonwealth entities and other leases administered by the Executive Director of Township Leasing.
The Department of the Prime Minister and Cabinet is responsible for advising the Minister on the overall policy and financial management of the ABA. The Department also provides secretariat support to the Committee and manages the ABA subsection 64(4) grants.
The Department administers the ABA in accordance with the requirements of the Land Rights Act and the PGPA Act.
The Department is responsible for ensuring the ABA complies with the Land Rights Act and relevant financial legislation. Section 64B of the Land Rights Act requires the Department to keep accounts and prepare financial statements in respect of the ABA, as determined by the Minister for Finance. Section 64B also requires the Auditor-General to report on the financial statements to the relevant Minister.
Aboriginals Benefit Account performance 2018–19
Mining royalty equivalent receipts of $426 million were credited to the ABA in 2018–19. This represents a 25.8 per cent increase on the level of 2017–18 receipts. The significant increase in royalty receipts largely reflects positive market conditions such as commodity prices, exchange rates and world demand. Tables 5.1 and 5.2 summarise the ABA income and expenditure.
Table 1.2.1: Table 5.1: Summary of Aboriginals Benefit Account income, 2017–18 and 2018–19
Resources received free of charge
Lease rental income
Total ABA income
Table 1.2.2: Table 5.2: Summary of Aboriginals Benefit Account expenditure (inclusive of mining withholding tax) 2017–18 and 2018–19
Payments to Land Councils for administrative purposes— Land Rights Act, subsection 64(1)
Payments to Land Councils for distribution to Royalty Associations— Land Rights Act, subsection 64(3)
Grant payments to or for the benefit of Aboriginal people in the Northern Territory—Land Rights Act, subsection 64(4)
Payments in relation to township leases and subleases— Land Rights Act, subsection 64(4A)
Administration (suppliers and employees including resources received free of charge)—Land Rights Act, subsection 64(6)
Credits into the Aboriginals Benefit Account
The ABA is credited with moneys that are equivalent to the royalties received by the Commonwealth or the Northern Territory for mining on Aboriginal land in the Northern Territory (royalty equivalent receipts).
Interest received from the investment of ABA funds is credited directly into the ABA’s bank account. Table 5.1 details interest earned for the year, as well as royalty equivalent income, resources received free of charge and lease rental income.
The Department provides staff support free of charge to manage the ABA. These costs are included as revenue in Table 5.1 and expenses in Table 5.2.
ABA royalty equivalent income is volatile, as it is subject to profits recorded by individual mines that are influenced by global commodity markets and other factors.
Graph 5.1 shows royalty equivalent receipts transferred to the ABA since 2012–13.
Debits out of the Aboriginals Benefit Account
A summary of total ABA expenditure in 2017–18 and 2018–19 is provided at Table 5.2.
Payments to Land Councils for administrative expenses
Table 1.5.1: Table 5.3: ABA moneys paid in 2017–18 and 2018–19 to the four Northern Territory Land Councils (net of mining withholding tax)
Northern Land Council
Central Land Council
Tiwi Land Council
Anindilyakwa Land Council
Note: Further details can be found in Part 4, financial statements.
Office of township leasing and ABA administrative payments
Administration costs of township leases and other leases administered by the Executive Director Township Leasing are captured under subsection 64(4A) of the Land Rights Act. Costs associated with the administration of the ABA are captured under subsections 64(6) of the Land Rights Act. Table 5.5 provides a breakdown of township leasing administration expenses for 2017–18 and 2018–19, including services provided free of charge.
Payments to Royalty Associations
Under the Land Rights Act, 30 per cent of the royalty equivalent moneys must be paid to each land council in the area in which a mining operation is situated. These moneys are distributed to Aboriginal organisations (Royalty Associations) in those areas affected by mining operations. Table 5.4 lists payments made in 2017–18 and 2018–19 to Land Councils for distribution to Royalty Associations (net of mining withholding tax). Further detail can be found in Part 4.
Under subsection 64(4) of the Land Rights Act, payments totalling $10.1 million were provided for the benefit of Aboriginal and Torres Strait Islander people living in the Northern Territory during 2018–19. This compared to $20.2 million provided in 2017–18 (inclusive of mining withholding tax).
ABA beneficial grant funding in 2018–19 went to projects supporting employment, training and cultural activities in the Northern Territory. For example:
Anindilyakwa Services Aboriginal Corporation was provided with $153,188 to develop a covered outdoor area and storage container at the Bush Medijina site at Angurugu on Groote Eylandt. The area will provide a space to host cultural and capability-building initiatives for Warningakalina Women. It will also be an area to work with employment program participants and hold community meetings.
Jilamara Arts and Crafts Association in Milikapiti on the Tiwi Islands was provided with $67,303 to purchase a vehicle to enable excursions to country to collect materials and undertake cultural activities. The new vehicle will also support the continuation of cultural programs provided to local schoolchildren by art centre elders, and be used to transport visitors and tourists from the airport to the art centre and to visit surrounding sites.
The Department manages the ABA Homelands Project, which is a one-off investment of $40 million to improve infrastructure in homelands/outstations across the Northern Territory. The project is funded from subsection 64(4) of the Land Rights Act. It commenced in early 2018 and all funding is expected to be allocated by the end of 2020. The four Northern Territory Land Councils have selected homelands for the project and are assisting residents to develop proposals for works. As at 30 June 2019, proposals from 62 homelands have been recommended by the ABA Advisory Committee and approved by the Minister. It is anticipated that proposals will be received from approximately another 140 homelands. The Department is working with local Indigenous provider organisations on the delivery of successful proposals.
Mining withholding tax
Under the Income Tax Assessment Act 1936, payments made from royalty equivalents credited to the ABA are subject to mining withholding tax at a rate specified in the Income Tax (Mining Withholding Tax) Act 1979. In accordance with the Taxation Laws Amendment Act (No. 3) 1994, the current rate of tax applied to payments of mining withholding tax is 4 per cent.
From 1 July 2003, the Australian Taxation Office determined the ABA to be a large pay-as-you-go (PAYG) withholder. Mining withholding tax liabilities on payments made are paid on or before due dates in accordance with the Taxation Office PAYG withholding requirements. The total mining withholding tax for 2018–19 was $7.6 million, compared with $6.5 million in 2017–18.
Table 1.9.1: Table 5.4: Payments to Land Councils for distribution to Royalty Associations
Northern Land Council
Central Land Council
Anindilyakwa Land Council
Tiwi Land Council
Table 1.9.2: Table 5.5: Departmental administration and expenditure (exclusive of GST)
Departmental administration expenditure
Resources provided free of charge
Subsection 64(6) payments
Committee members sitting fees/superannuation
Travel and other administrative costs
Subsection 64(4A) payments
Office of township leasing administrative expenses
Payments for township leases
Township rent returned to owners under Head Lease agreement
Community entity administrative expenses
Total administrative costs of the ABA
Management of the Aboriginals Benefit Account and its investment portfolio
The ABA investment strategy is focused on cash-flow requirements, preservation of the fund and management of risk. Moneys that are surplus to immediate requirements are invested under section 58 of the PGPA Act. To minimise the risk of loss, section 58 restricts the investment of public money to a limited number of specific low-risk investments such as government bonds, state and territory bonds, term deposits and negotiable cash deposits with a bank.
At 30 June 2019 the ABA held $1,042.5 million in term deposits with Australian banks. This compares with $793.7 million at 30 June 2018.