Error in The Project star Hamish Macdonald’s slap-down of Kamahl on $40bn Indigenous spend

A fiery exchange between The Project star Hamish Macdonald and beloved entertainer Kamahl has shone a fresh light on the billions of dollars spent on Aboriginal and Torres Strait Islander people each year.

A central argument of many opponents of the Voice to Parliament is that a huge amount of money goes to Indigenous programs already, hinting at wastage that might only get worse.

That argument contributed to Kamahl changing his voting intentions for a third time, now planning to vote No at the referendum.

In his interview with The Project about his flip-flopping views, Kamahl repeatedly claimed the government spends $40 billion a year on Indigenous Australians.

It saw him butt heads with Macdonald, who asked where he was “getting that figure from”, saying it was incorrect, to which the iconic singer insisted “somebody told me”.

“All I know is that they’re spending $40 billion,” he repeated. “What is the money going to?”

Macdonald shot back: “That’s been fact checked as false. The government agency says it’s never administered funding of $30 billion a year on Indigenous programs, its total budget for 2022-23 was $4.5 billion.”

The next day in an interview with news.com.au, a furious Kamahl lashed the Channel 10 program, describing its hosts as “all Yes voters”, while calling Macdonald “biased” and unwilling to “hear about the truth”.

Analysis of budgetary papers shows that Macdonald’s claim is incorrect – but so too is Kamahl’s assertion.

What’s going on?

Kamahl likely encountered the $40 billion figure in No campaign material and online, where it is endlessly quoted by opponents to the Voice, but also sometimes said to be $30 billion.

High-profile figures have fuelled the spread of the claim, the most recent example being former Prime Minister Tony Abbott in an interview with 2GB host Ben Fordham in July.

In it, Mr Abbott claimed “hundreds of people” working for the government’s National Indigenous Australians Agency “disburse something like $30 billion a year”.

David Campbell, a senior researcher with RMIT’s FactLab, said the NIAA has “become a lightning rod for misinformation” in the lead-up to the referendum.

“Tony Abbott is wrong,” Mr Campbell said.

“The interview [with Fordham in August] has been shared by supporters of the no campaign on public Facebook groups opposing the proposed Voice. Mr Abbott’s comments echo similar claims on social media.”

No supporters rally around the claim

During her Sky News program on Monday night, Peta Credlin – former chief of staff to Mr Abbott during his time as PM – said the $40 billion figure was “spot on”.

However, Credlin insisted Kamahl was not referring to NIAA expenditure but a “macro … budget number”.

“The truth is that Kamahl was right,” she said. “Taxpayers do spend around $40 billion a year on Aboriginal Australians.”

Credlin referenced a 2017 report from the Productivity Commission that highlighted “total direct government expenditure” on First Nations people was $33.4 billion in 2015-16.

“Then there’s all the specific Indigenous programs run by state and federal governments, such as the $4.5 billion spent by the National Indigenous Australians Agency,” she said.

“Adjusting the 2016 figure in the Productivity Commission’s report for inflation, well, that gives us now a figure of $39.5 billion in Aboriginal spending today.

“So, Kamahl last night on The Project was actually spot on with his $40 billion figure.”

But independent fact-checking and an official breakdown of government expenditure shows Kamahl wasn’t “spot on”.

Neither was Credlin, nor her former boss and friend Mr Abbott. And technically, neither was Macdonald.

What’s true and what’s not?

In a statement to RMIT FactLab, a spokesman for the NIAA said it “has never administered funding of $30 billion per annum”.

Treasury statements for the agency – which has existed for barely four years – show it had a total budget of $4.5 billion in 2022-23.

Where does the $30 billion (or $40 billion) figure come from?

As Credlin indicated, the Productivity Commission’s 2017 report provides a clear breakdown on how much money is spent on First Nations peoples.

It reports “direct expenditure” by state, territory and federal governments on Aboriginal and Torres Strait Islander Australians, was $33.4 billion in 2015-16.

In stark contrast, direct expenditure on all Australians, Indigenous and not, was $556.1 billion in the same period. The First Nations component accounts for about six per cent.

And the vast majority of the Indigenous spend – about $27.4 billion worth of it – was “simply for the share of mainstream expenditure”, Mr Campbell said.

That is, schools, hospitals, the defence force, public order and safety, welfare and other essential services that every Australian receives.

Using Credlin’s argument, one could assert that the government spends $285.5 billion on women annually.

Or, that $44 million was spent annually on the total number of new baby boys named Oliver who were born in 2016.

Indigenous-specific expenditure accounts for 1.1 per cent of the total direct expenditure on all Australians, Mr Campbell pointed out.

What’s an accurate figure?

In its 2017 report, the Productivity Commission noted that per-person direct expenditure was about twice as much for Indigenous people as non-Indigenous Australians.

But Mr Campbell pointed out that this is not a black-and-white comparison.

The main driver of the higher expenditure is a greater use of all government programs – not because of Indigenous-specific spending, a Parliamentary Library report said.

The difference is “largely due to higher levels of disadvantage among First Nations people”, Mr Campbell said.

“Other reasons included that the population was more likely to use government services due to its younger age profile.”

Census data shows one-third of Indigenous people are aged under 15 years and the median age of the total First Nations population is 24. To put it in context, the median age of all Australians is 38.5.

“Demographic differences [also] lead to higher per capita spending on school, university and childcare services … while disadvantage leads to more spending on, for example, hospitals, prisons and social housing,” Mr Campbell said.

For example, one-in-five Indigenous Australians live in remote areas where the cost of providing services is much higher.

Ascribing a dollar value to the government spend on Aboriginal and Torres Strait Islander peoples is therefore fraught.

What is the NIAA?

The NIAA was established in May 2019 by order of then-Prime Minister Scott Morrison, designed to lead and co-ordinate Commonwealth policy development, program design and implementation, and service deliver for Aboriginal and Torres Strait Islander peoples.

It sits within the Prime Minister and Cabinet portfolio. Those working for the NIAA and public servant employees accountable to the government.

By contrast, the proposed Voice would sit outside the executive government and parliament as an independent advisory body, supporters point out.

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