Noel Pearson has called for an overhaul of the systems Native Title groups use to manage funding to better ensure transparency and beneficial outcomes for communities.
Mr Pearson said Native Title groups would be better off financially if the hundreds of millions of dollars they held in trusts were transferred to the $2.1 billion Aboriginal and Torres Strait Islander Land and Sea Future Fund, which has been managed by the Future Fund since 2019.
Mr Pearson, a lawyer who co-founded the Cape York Land Council and was a legal advisor for the Aboriginal and Torres Strait Islander Commission, believed existing structures led to funding being squandered, when it could be leveraged to the greater benefit of Indigenous communities.
He told the Australian Financial Review this week that existing structures of managing native title money often involved opaque trusts that either locked up money too tightly, or suffered from funds being invested poorly.
Several Native Title trusts have hundreds of millions dollars in assets from mining payments, with six of the wealthiest groups in Western Australia's resource-rich Pilbara region collectively holding more than $800 million in net assets in charitable trusts, on behalf of about 2500 members.
According to the AFR analysis, as at June 30 last year, only 40 per cent of that income had been distributed during the past decade.
The comments from Mr Pearson, who advises several Indigenous organisations in Cape York and advocates self-determination and land rights for Indigenous people, come after former WA treasurer and current Woodside and Rio Tinto director Ben Wyatt called for trust beneficiaries to receive more direct control over how their money was managed.
Mr Wyatt said economic growth across Indigenous communities had stagnated due to Native Title groups building income in trusts rather than distributing it or using the base funds for other investments.
Mr Pearson said funds in Native Title groups could be partly pooled and distributed each year to benefit Indigenous communities, with the remainder invested in a capital base.
"A scheme like that would enable a formula-based distribution rather than a discretion-based one," he told the AFR.
"This would limit the capacity of trustees to make self-interested decisions."
He said the change would lead to more transparency and "less disputation".
"If you don't have rules like that established from the beginning, then there is a likelihood that the stream is spent, as the money comes in and nothing is built, it's just used on budget and consumption," he said.
Mr Wyatt said existing trusts were "paternalistic" and a new approach would give Indigenous people easier access and management over their own money.
Mr Pearson first pitched his proposal for Native Title groups to transfer their money to Future Fund during the Turnbull government tenure, which didn't garner support from the Liberals or with other Indigenous groups, such as the Indigenous Land and Sea Corporation.
On Thursday, ILSC group chief executive officer Joe Morrison said he welcomed anything reform that championed Indigenous economic empowerment.
"We welcome any discussion around funding sources which ultimately deliver benefits to Indigenous Australians," he said.
More to come.
