The CDEP scheme provides a permanent source of income at the level of unemployment benefits, plus an infrastructure loading that reduces poverty in remote areas. In my view, the CDEP scheme is currently the most important policy instrument available for affecting employment outcomes in remote communities in the short run. CDEP has been the major employment growth industry for Indigenous people, and it is now extremely large, accounting for most of the employment growth of the last two decades (the difference between row 2 and row 3 in Table 11.1). We all need a clear view of what we think about CDEP and the incentive structure it embodies.

In financial terms, and in the short run at least, the CDEP scheme puts in place incentives that encourage people not to be employed in the mainstream economy and not to move from traditional locations. But the existence of incentives to remain in remote communities does not necessarily mean that large numbers of Indigenous people respond. We do not know how many Indigenous people are making the financial judgment that life in a remote area on CDEP is much better than moving and trying to find a job somewhere else. If there is a significant long-run rejection rate of mainstream jobs because of CDEP, this must be against the long-run economic interests of the Indigenous community. On the other hand, if CDEP is a scheme where community life is made better for people who really have no employment alternatives, then we should be less willing to restrict its further growth.

To adequately discriminate between these two views of the impact of CDEP on long-run employment opportunities and income growth, we need more data that relates to individual CDEP projects, their participants and the linkages between CDEP growth and mainstream jobs.