Monetary settings cannot address the critical issues facing Indigenous Australians, the RBA has admitted in recent remarks, but it aims to help improve employment and wealth outcomes.
Speaking at a panel with counterparts from the Federal Reserve, Bank of Canada and Reserve Bank of New Zealand on Tuesday, deputy governor of the RBA Guy Debelle said there were opportunities to deepen our understanding of the First Nations people in the Australian economy.
“In our own operations — that is, our employment, procurement and role in the community — we have the opportunity to do more.”
Debelle pointed out that Indigenous Australians face lower life expectancy and worse health outcomes than the rest of the country.
The mortality rate from cardiac conditions for Indigenous Australians is 1.6 times that for non-Indigenous Australians, for example.
As a result, he said, they also see weaker labour force participation, higher unemployment and lower wealth.
Indigenous Australians aged 18-64 received a government cash pension or allowance as their main source of income in 2018-19.
Almost 37% of Indigenous adults were living in households with the lowest gross weekly household income, almost twice the proportion of non-Indigenous adults, according to the 2016 Census.
Debelle’s comments underscore how economic wellbeing and inclusion are becoming increasingly important for central banks globally as they push beyond their traditional remits of inflation and employment. Policy makers increasingly view quality of life across the population as a significant factor in the economy.
The federal government is also working on improving the quality of life of Indigenous Australians, with a plan to close the gap in health, education, justice and employment by 2031.
The deputy governor, who heads the RBA’s Diversity and Inclusion Council, said banking and access to finance should be areas where central banks could be doing more to help communities.
Successful initiatives in this space should be shared between different countries, Debelle said, pointing to New Zealand’s work in strengthening engagement with Indigenous communities.
In April, the RBA announced it had joined with the Reserve Bank of New Zealand (RBNZ) and the Bank of Canada (BoC), along with Indigenous partners spanning all three nations, to form a voluntary network that aims to “foster ongoing dialogue and raise awareness of Indigenous economic and financial issues”.
The network will focus on conducting research for and with Indigenous peoples on economic issues, strengthening engagement practices with Indigenous groups and communities, and supporting economic and financial education for Indigenous peoples.
“Participation in this network will allow us to increase our knowledge and understanding of Indigenous communities both locally and globally,” RBA governor Philip Lowe said.
Additionally, the RBA has established a Reconciliation Action Plan and is putting together a scholarship program for First Nations high school students to study economics and finance.
It is also working with First Nations businesses and Indigenous Chambers of Commerce, and will host business round tables to gain further understanding of the problems they face in obtaining capital.
Debelle said there was also a need for better economic data to help inform policy makers on where they can have an impact in Indigenous communities.
“The challenges that they are facing are pretty varied depending on which part of the country they are in. The only way we get a full appreciation of that is by going out and meeting those people,” Debelle said, underlining the importance of the RBA’s engagement program.