Towards an index of relative Indigenous socioeconomic disadvantage

Abstract

Understanding geographic variations in the socioeconomic status of Indigenous peoples is of importance when developing policies aimed at reducing the level of Indigenous disadvantage. Knowledge of geographic variations in socioeconomic status provides an understanding of some of the underlying structural reasons and impediments to improving the socioeconomic status of Indigenous Australians. This paper explores how a variety of indicators of socioeconomic status that can be combined to form a composite index of relative socioeconomic disadvantage for Aboriginal and Torres Strait Islander Commission (ATSIC) regional council areas. Data from the 1991 and 1996 Censuses, augmented with administrative data from ATSIC are used to construct an index of relative socioeconomic disadvantage for the 36 ATSIC regional council areas. The changes in relative socioeconomic disadvantage between 1991 and 1996 are also analysed. The estimates in this paper are the first for Indigenous Australians using 1996 Census data. The limitations of relative indexes of socioeconomic disadvantage, particularly with respect to Indigenous Australians, are discussed. Particular attention is paid to data limitations which are exacerbated when comparing relative socioeconomic disadvantage over time. However, in spite of the many limitations, carefully selected variables can be used to estimate a ranking of socioeconomic disadvantage of ATSIC regional council areas. This research paper is timely as the Commonwealth Grants Commission (CGC) is conducting the Indigenous Funding Inquiry, measuring the relative need of Indigenous people in different geographic regions. In this context, an important contribution of this paper is an assessment of the usefulness of a composite index of relative socioeconomic disadvantage for the calculation of funding relativities. The conclusion reached is that relative indexes of socioeconomic disadvantage, such as the one documented in this paper, are of very limited use in calculating funding relativities