The McClure Report (2000) has reinvigorated the debate about mutual obligation, both of the unemployed and of the state, encouraging a re-examination of relationships between labour force participation, unemployment outcomes and the social security system. In the Indigenous employment context, the CGC’s ongoing Indigenous Funding Inquiry provides one important impetus for re-evaluation of such relationships and consequent implications for future Indigenous employment requirements (Hunter 2000). The need for employment can be defined in two ways: in terms of the utility it brings to individuals in giving them command over resources (money income), or through the non-pecuniary benefits that flow from work, including psychological connection to the community and wider society.

Notwithstanding that CDEP scheme employment meets the ILO definition of employment, a perennial problem for defining Indigenous labour force status is whether to treat CDEP scheme jobs as work or welfare. In reality, the scheme contains elements of both (Sanders 1997). In terms of employment need, the CDEP scheme fulfils both aspects of the defining features of need: it provides a psychological link to society and also provides some discretionary financial income in addition to social security entitlements (although the amount involved may be quite small, see Altman & Gray 2000; ATSICOEA 1997). Therefore, if one gives precedence to non-pecuniary aspects of CDEP work, then it should be considered as employment.^[13] In many non-urban areas, the scheme is the only source of employment and, in the absence of mass migration to more developed labour markets, there is little alternative for increasing the economic activity of local Indigenous residents (see Scott, Ch. 24, this volume). Frequently, CDEP schemes are also development programs delivering goods and services to local communities which, in many cases, would not be provided by the mainstream economy (see Kean, Ch. 21 and Nalliah, Ch. 28, this volume).

The CGC’s Indigenous Funding Inquiry highlights the importance of taking into account demographic factors, employment demand, the treatment of the CDEP scheme and the large numbers of Indigenous people not included in the Indigenous workforce (i.e. discouraged workers) in establishing employment requirements. Indeed, the CGC’s preliminary indicator of Indigenous employment need in the 36 ATSIC regions (the proportion of the labour force receiving income support) would be substantially revised if CDEP scheme were classified as employment, as it is by the ABS.^[14] There would be further revisions if discouraged job seekers were included in the Indigenous labour force. Such revisions tend to increase the measured level of employment need in urban areas where there are few CDEP places. For example, Hunter (2000) shows that official participation rates are highest in remote areas with large numbers of CDEP scheme places, presumably because more of the potential labour force (i.e. discouraged job seekers and the official labour force) are included in statistics. The larger labour force in such areas means, all else being equal, that Indigenous employment need is greater there than in other (usually urban) areas.

A previous analysis of the relationship of Indigenous population growth and employment outcomes concluded that to prevent Indigenous labour force status from slipping further behind it would be necessary to maintain a commitment to special employment programs as well as ensuring that Indigenous people continued to find jobs in the mainstream labour market (Taylor & Hunter 1998). The estimates that were put forward indicated that just maintaining the status quo was going to be difficult, given the policy settings of the day. The idea of moving beyond this and achieving an improvement in labour force statistics was seen to require, in the face of demographic pressure, a quantum leap in the scale of policy intervention.

It appears that the recent adjustments to CDEP administration and the announcement of additional CDEP places have created such a shift. The revised estimates presented in this paper show that inroads can be made into changing official levels of employment and unemployment. However, they also demonstrate that if such interventions are not sustained then the situation can very quickly deteriorate once more.