The economic cost of poverty in an Aboriginal community

Stanley, Owen , and Taylor, John (2005) The economic cost of poverty in an Aboriginal community. In: Proceedings of ABBSA Conference 2005. pp. 1109-1121. From: ABBSA Conference 2005, 5 - 7 August 2005, Cairns, QLD, Australia.

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This paper builds on a previous study which documented the poor socio-economic conditions of people living in the remote Northern Territory Aboriginal community of Thamarrurr. This paper asks the question "what is the opportunity cost to the nation of not improving the socio-economic conditions so that they reach acceptable standard". The research method chosen was an adaptation of that used by the Canadian Royal Commission on Aboriginal Peoples. Using this approach, the measure of costs of poverty was limited to the value of output foregone and the extra government expenditures incurred because of the low socio-economic status of Thamarrurr people. The study found that the value of output forgone in 2003 was about $44 million per year and that overall little or nothing extra was spent at Thamarrurr to account for that community's disadvantage. The total opportunity cost therefore was about $44 million per year, but since the population at Thamarrurr was growing at 3.3 per cent per year, these costs are growing at about that rate. An analysis of the pattern of government spending reveals that in terms of the theory of economic development, not enough government funds are spent on job creation, education and training, health, housing and the development of the community's infrastructure and consequently too much was absorbed by income support and justice. There is clearly a need to increase the total level of government support for Thamarrurr and to direct most of that to job creation and capacity building.

Item ID: 7552
Item Type: Conference Item (Research - E1)
ISBN: 978-0-646-45032-2
Keywords: Aboriginal community; economic development; opportunity cost
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Date Deposited: 09 Feb 2010 03:59
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140202 Economic Development and Growth @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified @ 100%
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