Dr Ros Kidd
Historian - Consultant - Writer
The Aboriginal Welfare Fund was set up in 1943 enabling the government
to continue previously unauthorised usage of Aboriginal earnings and
enterprise to fund administration and development. Often over 40 per
cent of department costs were carried by the Fund, and an estimated
$300-$500 million was processed through it before trading was frozen in
the early 1990s. Today the Queensland government is pressuring
Aboriginal people to accept the $8 million remaining, plus a rumoured
$180 million as a final settlement of present and future claims against
all aspects of the financial regime. To assess the equity of such an
offer requires background knowledge also of the massive financial
experiment in which it was embedded.
Between 1897 and the 1970s almost half the state’s indigenous population
lost all control over where they could live, their housing, health,
children, education, labour and personal savings. Financial deprivation
of Aboriginal families was engineered through two separate, although
interlinked, strategies. The government appropriated Aboriginal earnings
and also diverted them into Trust funds without the consent or knowledge
of account holders. Then by sidelining the bulk of private savings and
Trust funds into investments, the government generated income to
minimise input from consolidated revenue. The Trust funds were
routinely misused by governments to meet departmental expenditure, a
fact clearly stated in a range of highly critical internal inquiries and
The government controlled employment, wages and savings in a system rife
with frauds, embezzlements and duplicity by employers and police
protectors. Government policy of keeping all dealings secret from
account holders led to an official warning in 1932 that ‘the opportunity
for fraud existed to a greater extent than with any other Government
Yet the system was never changed. A subsequent auditor remonstrated
that in 60 years of operation, no procedures ever ensured workers
received their full pay.2
When people finally got their bank books in the early 1970s many found
little left in their accounts
Deprivation occurred not only through negligent oversight of wages and
savings but also by expropriation of Trust monies. The Aboriginal
Protection of Property Account (APP) collected outstanding wages of
deceased or missing workers from 1902, but often only 25 per cent was
distributed to beneficiaries. Meanwhile this Fund was routinely misused
for wages, grants to missions and improvements on government
settlements. The Aboriginals Provident Fund (APF) was started in 1919
simply by taking levies from workers’ wages. But it was used to
subsidise existing ration programs, in breach of its intended use to
provide additional relief during hardship or drought; outlays also
covered departmental costs such as removal expenses. In some years
under 10 per cent was expended on relief to destitute contributors.
In addition to improper payments, and without authorisation,3
the government had, since the early 1920s, claimed large amounts of
Trust funds were ‘idle’, and diverted them into revenue-raising
investments. This strategy saved consolidated revenue almost $750,000*
annually ‘towards the cost of maintaining the Aboriginal community as a
whole’ during the depression years, when a further $3.5 million and
almost $1 million from private savings was simply taken ‘for
None of this money was ever repaid. Those whose money it was,
meanwhile, lived in abject poverty.
The easy conversion of Aboriginal monies to revenue generation prompted
the centralising, in 1933, of all savings balances into the Queensland
Aboriginal Account, a change publicly lauded as a tactic ‘to mimimise
fraud by members of the Police Force who are Protectors’.5
Paying of wages directly to protectors and severe limitations on
withdrawals had generated a huge pool of private savings of around $14.5
million. Now under head office control, over $12 million was
immediately committed to investments, bringing revenue from Aboriginal
monies to over $900,000 a year.6
Successive internal inquiries and audits slammed habitual improper
outlays on items which ‘are definitely charges against consolidated
revenue’ such as over half a million dollars from private funds – APF
levies and investment interest – diverted through the department’s
operating account to cover an ‘insufficiency of departmental votes’ in
The head of the department protested that ‘much of this taxation is an
injustice’; the minister was informed cessation of unauthorised
outgoings would require an increase of almost one million dollars in the
annual vote; yet Cabinet decided to ‘adhere to present procedures.’8
In this context the Aboriginal Welfare Fund was created in 1943 to
legitimise any dealings which could be claimed as ‘for the benefit of
Aboriginals generally’. Started with an injection of around $2.5
million and a small ‘welfare’ balance from the Standing Account, this
Fund was controlled by Treasury, rather than the department. It
absorbed the APF deductions, any ‘surplus’ in the APP, profits from
investments and from departmental enterprises such as cattle, produce
and settlement stores, and child endowment of children under five on the
settlements. Settlement enterprises were henceforth bankrolled through
the Welfare Fund, although grants to missions, removals costs and
capital works remained government responsibilities.
Clearly the government saw the Welfare Fund as a key to self-funding
Aboriginal administration and minimising revenue input. Expenditure
from the Fund soon equated to 48 per cent of the total department Vote
(or 81 per cent exclusive of administrative wages),9
but was so crudely compounded between 1943/63 as to mask identification.10
To maximise revenue, private savings stockpiled for investment soared
from $10.9 million in 1946 to $13.3 million in 1962; figures which
incisively quantify Aboriginal deprivation.11
Operation of the Welfare Fund was characterised by unauthorised
expenditure and frequent insolvency. Forced to meet development costs
and farm wages - described by the director as ‘legitimate Vote
expenditure’ - on two cattle farms acquired in the 1940s (partly with
‘surplus’ private savings), the Fund was in deficit by 1948.12
Yet the Fund continued to be used for government liabilities: in the
mid-50s wages for white overseers and $48,000 for land for a hostel near
Townsville (later constructed with $150,000 of Palm Island child
endowment funds), in 1959 for trucks and launches, and in 1963, after
covering reafforestation at Hopevale mission, sewerage at the Aitkenvale
hostel and a new store on Palm Island, the Fund was again in debt,13
thereby proscribing legitimate Welfare Fund needs.
The level of private subsidisation of this government Fund is measurable
by the revenue slump (down almost 78 per cent from $613,345 in 1965 to
$135,270 in 1968) after the department ceased levies on Aboriginal wages
and gave individuals control of their own bank accounts. Retail stores
then became the main focus, revenue jumping almost 70 per cent from
$1.85 million in 1965 to $3.13 million in 196814
when cash economies were initiated on all reserves, replacing the
70-year ration system. Set at 20 per cent below the dole, the ‘wage’
for compulsory work was retrieved through the stores courtesy of a 40
per cent profit margin. For many years during the 1970s beer canteen
takings were also absorbed into the Welfare Fund.
Outlays from the Fund during the 1970s were skewed towards development:
enterprises such as bakeries, piggeries, potteries and artefacts were
established on the settlements, and the director boasted in 1971 that
his department was the biggest ‘cattle baron’ in Queensland, with over
$13.5 million of stock generating $1.7 million in sales.15
Yet housing and amenities remained deplorable. Under the 1972
regulations child endowment, unclaimed estates, profits and rents went
to the Welfare Fund; Queensland was frequently castigated for charging
excessive rents on federally-funded welfare housing.
The Welfare Fund wage bill quadrupled in 1971-72 after the department
was ordered to pay full wages to workers on federal housing (CSHA)
projects, then rose almost seven-fold between 1972 and 198116
as the state buckled to federal pressure to increase remaining illegally
low wages. Separate Welfare Fund wage figures are not available after
1982 when Cabinet refused to directly fund further wage increases,#
but large sums commence to be listed under housing repairs and
maintenance at a time when such programs were severely curtailed due, in
part, to mass sackings. Managers were instructed to ‘forget about
welfare’ and aggressively pursue unpaid rents, even where, as they
protested, there was a five-year backlog for major repairs.
Overcrowding and social upheaval increased.
Several Welfare Fund enterprises were running losses by the early 1980s;
the ‘cattle baron’s’ venture was in the red every year after 1975,
losing $2.4 million to 1980 and a further $11 million to 1990.
Investments were cashed in to maintain operations, and the deteriorating
position was also camouflaged by over $800,000 garnered from sale of
Comalco shares in 1987 (which had been earmarked as a lending pool for
private initiatives) and deployment through the Fund of over $200
million of CSHA grants in the decade to 1990. Lack of basic
accountability for these massive sums, (annual expenditure often entered
only as ‘sundry town houses’), raises deep concerns as to probity of
transactions. Analysis reveals a ‘surplus’ in unspent CSHA funds of
$7.5 million between 1980/84 and a further ‘surplus’ of $11.25 million
no doubt attracting high interest on the short term market – a bonus
retained by Treasury. When communities finally became self-controlling
in the later 1980s, the department dismantled and removed existing
enterprises, except the stores and canteens.
Public agitation over the Fund prompted an internal inquiry in 1991.
Conclusions were that many projects bankrolled by the Fund were probably
economically unviable, that no register existed of the ‘considerable
asset base’ and that ‘unwise decisions may have been made’ by the
executive officer. Establishing illegality was said to be problematic
given incompetent account keeping and consequent lack of evidence.
Aboriginal Queenslanders have been condemned to poverty while the
government played banker and investment guru with money raised from
their earnings and enterprise. Flawed accountability and negligent
record keeping is the government’s main line of defence against
litigation for redress. However it is a basic duty of trustees to keep
full and detailed accounts; indeed, in countless Annual Reports
the director stated he was doing just that. Surely the onus is on the
government to provide evidence that it has fulfilled this requirement?
And surely the state, having usurped powers over these designated wards
of state, had a fiduciary duty toward them? The basic premise of a
fiduciary relationship is that the trustee must at all times act in the
interests of the beneficiaries, and is not entitled to profit from the
fiduciary relationship. This last point should certainly be challenged:
for decades Queensland governments have clearly profited by massively
withholding private savings from those in desperate need.
Settlement means silence. It would enable today’s government to clamp
an air-tight lid on a century of engineered financial deprivation.
Aboriginal destitution would remain, in most eyes, an Aboriginal
problem. The vast extent to which Aboriginal labour has subsidised
department operations, rather than vice versa, would remain a shameful
9.11.32, Report on the Inspector of the Office of the Chief
Protector of Aboriginals.
*All amounts are approximated to present day
6 QSA TR254
7 QSA TR254
1B/12, Audit Report 1940, 30.6.41.
23.3.42 and 18.8.42.
9 Trust and
Special Funds, 1945/46.
Bureau, Final Report on Welfare Fund, March 1991:21.
12 QSA TR254
Bureau, Final Report on Welfare Fund, March 1991.
Bureau, Final Report on Welfare Fund, March 1991.
In contrast, wage parity for nurses in the few settlement
hospitals run by the Health, rather than the Aboriginal,
department was funded direct from Treasury.
Bureau, Final Report on Welfare Fund, March 1991.