The important distinction between demand and supply and their impact on recent policy developments can be illustrated by considering proposed changes in welfare policy. Consider, for example, policy changes for lone parents. Lone parents, by and large, receive most of their income from the welfare state in much the same way as Indigenous people. Virtually no lone parent has a full-time mainstream job. Although we do not know the exact proportion, it is probably something of the order of 10 to 15 per cent. About 40 per cent of lone parents—a higher proportion than in the Aboriginal community—work part-time. Recent policy developments for this group might mean future changes for Indigenous people.

In broad terms the policy judgment has been made that the reason why lone parents have low employment rates is that they are choosing not to work in the mainstream economy because the welfare system is too generous. The policy judgment has been made that there is a need to change the financial balance between work and welfare.

Mr Kevin Andrews, the Minster for Employment and Workplace Relations, has said recently:

We now live in an economy where we don’t so much have a shortage of jobs as a shortage of workers. In fact, it has never been a better time in Australia for those who want to work … We believe that if you can work you should work. (Andrews 2005)

In response to this view, the government has recently decided to change welfare policy for lone parents so that once the youngest child turns seven, lone parent income support will be reduced from a lone parent pension payment to an unemployment allowance payment. For lone mothers who do not work, and do not qualify for a pension, their weekly income will be reduced by $29 and, in the future, indexed only for price increases and not for the larger increase of wages. Furthermore, if the lone parent combines work and welfare, the loss of income will probably be of the order of $100 per week. At the same time, the lone parent will be subject to all the work-for-the-dole requirements. The object of the new policy is clear. Life should be less financially comfortable for welfare-reliant lone parents with a youngest child over seven years of age.

Consider, as another example, recent policy changes for those who may receive invalid pensions. Here government policy is following a similar path to that followed by the lone parent initiatives. There is a clear presumption that it is the supply side that is responsible for the lack of employment among those with a disability and that a significant proportion of those on invalid pensions are choosing not to work. From June 2006, it will be much harder for individuals to be placed on invalid pensions.

These examples matter for Indigenous people. They matter because they are illustrative of a significant shift in prevailing policy attitudes. There is an increasing conviction that the large number of individuals receiving welfare support is a reflection of individuals being unwilling to work because welfare payments are too high. It seems inevitable that these attitudes will increasingly begin to impact on Indigenous economic and social policy. These examples also matter because Indigenous people, with their heavy reliance on government income support, will be directly and severely affected by the current changes.

It is fairly obvious that we need better data to throw light on the extent to which Indigenous people want to be employed in the mainstream economy but cannot find jobs (the demand side) and the degree to which the low employment level is the result of the impact of traditional values and/or financial incentives (the supply side). This is a crucial issue, in that any change in financial incentives directed towards supply responses will make Indigenous people financially worse off if there is an insufficient positive employment response.