Bungala's business enterprises are an integral component of its interaction with mainstream economic institutions, but they must first be set in the wider financial context. In the financial year 1999–2000 Bungala had a total income of nearly $5 million (Table 15.1). The source of most of its funding is ATSIC, which provides for participant wages and on-cost funding. The level of participant wages funding is based on the number of participants.^[31] On-cost funding includes recurrent funding, which is used for the administration of the scheme, and capital funding for the purchase of capital items. ATSIC participant wages, the largest funding item, contributed $2.6 million in 1999–2000. ATSIC on-cost funding is also important: recurrent funding in the same financial year was $500 000 and capital funding was $295 000. Overall, ATSIC funding in 1999–2000 was $3.4 million, around 68 per cent of Bungala's total income.

Additional funding of $500 000 was obtained from other organisations, including DEWRSB and the South Australian Department of Employment, Education and Training. The remaining income is project-generated, through commercial activities. In 1999–2000 project generated income amounted to $1.1 million.

Table 15.1. Sources of income, Bungala, 1995–96 to 1999–2000

	1995–96	1996–97	1997–98	1998–99	1999–2000
Source	Amount ($)
Funding: ATSIC recurrent	373 493	329 206	376 894	511 723	496 959
Funding: ATSIC capital	213 936	202 088	91 638	438 391	294 868
Funding: ATSIC participant wages	1 223 663	1 160 765	1 493 441	2 112 385	2 585 943
Funding: Other	398 225	310 893	75 142	339 543	469 274
Project generated income	60 524	96 728	234 624	685 884	1 069 457
Interest received	12 921	13 211	10 375	20 033	50 848
Total income	2 282 762	2 112 891	2 282 114	4 107 959	4 967 349
Source: Adapted from Compilation Report to Bungala Aboriginal Corporation, 19 July 2000, Inglis & Rowe, Certified Practising Accountants.

Over the period 1995–96 to 1999–2000 there has been an increase in income from $2.23 million to $4.9 million (Table 15.1), largely due to increases in ATSIC wages funding, from $1.2 million to $2.6 million. This reflects the growing number of participants and increases in their rates of pay. Project-generated income has increased dramatically, from $60 524 in 1995–96 to $1 069 457 in 1999–2000.

Almost all of the project-generated income is produced by the Construction Program through competitively tendered projects. Initially there was doubt among the local non-Indigenous population about Bungala's ability to successfully undertake construction projects. As a result, almost all of the successful tenders were obtained from Indigenous organisations, or the South Australian Housing Trust, for the construction and maintenance of housing for Indigenous people. The successful completion of a number of projects appears to have changed industry perceptions to the extent that Bungala has now successfully completed several very visible jobs for non-Indigenous clients.

Although there was project-generated income of $1.1 million in 1999–2000, the costs of generating this income, excluding CDEP participant wages and administrative support funded by ATSIC and funding received from DEWRSB, was at least as much. When the CDEP participant wages and funding from DEWRSB is added, the amount of money spent in earning this income is greater than the amount of income received. In other words Bungala's commercial activities do not make an accounting profit.

This lack of commercial viability is attributable to the fact that most of the participants come from the ranks of the long-term unemployed, and have never had previous employment. They need intensive graduated training, focusing on basic work skills and routines. This sort of training is very expensive and raises cost structures significantly above that of Bungala's competitors: the Construction Program has 1.6 apprentices for every tradesman, a much higher ratio than that found in the construction industry generally.

One of the continuing objectives of Bungala is to assist participants to acquire skills that lead to unsubsidised employment. Between 30 and 40 participants leave Bungala each year for such employment (Table 15.2). The number of CDEP participants finding unsubsidised employment any given year is impressive given the extremely low levels of employability of most participants when they enter the scheme and the very low rates of employment of Indigenous people in Port Augusta and surrounding regions. It must be remembered also that around 50 per cent of participants do not wish to leave CDEP for other employment.

Table 15.2. Movements to unsubsidised employment, Bungala, 1996–2000

Year	Participant ceiling	Move to unsubsidised employment
1996–97		33
1997–98	129	68
1998–99	253	39
1999–2000	310	40
Source: Bungala Annual Report (various years), Bungala Aboriginal Corporation, Port Augusta.

The exceptionally large number of participants moving to unsubsidised employment in 1997–98 was primarily due to the Roxby mine expansion, which increased the demand for labour in the region. This shows that when there is strong labour demand in the region, suitably qualified Indigenous people are successful in finding employment.

For participants to find employment two barriers have to be surmounted. First, their work skills need to be developed so that it is profitable to employ them. Second, they need to be able to find an employer who considers them to be employable and is willing to employ them. Bungala is able to address both of these issues directly.

Bungala provides a considerable amount of training to participants in the Construction Program. Much of this is informal, and involves participants gaining basic work skills and routines. In addition, Bungala provides a considerable amount of formal training through traineeships, apprenticeships, and short courses undertaken through TAFE.

The administrative rules of ABSTUDY and CDEP allow participants undertaking CDEP employment two days per week to enrol as part-time students in accredited courses and receive ABSTUDY payments as well as CDEP participant wages. This enables those participants to receive close to a full-time income. A large number of Bungala's participants take advantage of this arrangement.

Bungala has developed an internal labour market that allows participants to be promoted within the scheme. The possibility of promotion is a critical component of the scheme, providing participants with the incentive to work well and enhancing their chances of finding employment outside of CDEP.

There is a clear relationship between the commercial activities of Bungala and assisting participants to find unsubsidised employment. There are four main benefits to Bungala and its participants from its business enterprises. First, they allow Bungala to employ skilled tradesmen and supervisors which is essential to the scheme operating well. Second, they enable Bungala to provide a number of participants with full-time, relatively well paid work. This is critical in allowing the scheme to develop an internal labour market and to generate the incentives to motivate participants.

Third, they provide excellent training for participants in the form of traineeships and apprenticeships in areas for which there are employment opportunities in the region. The training environment created by having apprentices and trainees working on real construction sites and with other Indigenous people is one in which they are socially comfortable and likely to succeed. Spicer (1997) in his review of the CDEP scheme arrived at a similar conclusion. The system provides an alternative to the usual classroom-based training environment in which many Indigenous people feel uncomfortable. Yet it still results in a recognised qualification (Schwab 1997, 1998; see also Campbell & Schwab, Ch. 12, this volume).

Finally, the construction work results in a quality finished product which is highly visible. Anecdotal evidence from the local business community suggests that this has improved the public perception of Bungala, and altered the wider community's perceptions of Indigenous people. Public perception of the quality of work is important in helping participants find unsubsidised employment because employers are likely to value and view favourably their work experience with Bungala. The visible success of Bungala's Construction Program gives participants and the wider Indigenous community a sense of pride.