The Economic Case for Indigenous Inclusion in Australia's Growth Story

Australia stands at a critical economic crossroads. As we pivot toward net-zero emissions, mining wealth and secure critical minerals supply chains, a significant untapped economic resource isn't buried in the ground, it's walking on it! (as they have for +60,000 years).

Indigenous Australians hold legal interests and rights in approximately 54% of the Australian continent, including some of our most resource rich territories and strategically important corridors for renewable energy infrastructure. Yet our economic participation remains largely confined to regulatory consultation and minimal contracting opportunities. This represents more than a social policy issue, it's a fundamental misallocation of national resources that's constraining our economic potential.

In February 2025 the Australian Parliament updated IBA’s legislative powers. A concerted effort by Minister Malarndirri McCarthy and Treasurer Jim Chalmers expands the role and remit of IBA to enable the agency to access the capital markets for investment. This lays a path to boost Indigenous economic self-sufficiency.

The Numbers Don't Lie

54% of Australia has some form of Indigenous legal standing - here's why that matters for our economic future

ABS Census data reveals the economic cost of exclusion. While Indigenous employment rates have improved from 51% to 56% between 2016 and 2021, persistent social policy and economic gaps remain. When populations are systematically excluded from economic participation, we don't just lose their individual contributions; we lose the multiplier effects that drive regional economies.

Research from the #ANU centre for aboriginal economic policy research demonstrates that Indigenous-controlled enterprises generate multiplier effects 2.3 times higher than equivalent non-Indigenous businesses in remote areas. In regions where Indigenous communities represent the majority demographic, this exclusion creates a cascade of missed opportunities that constrains entire regional economies.

Beyond Traditional Economics

The economic case for Indigenous inclusion extends far beyond simple workforce participation metrics. Endogenous growth theory emphasises how institutional quality and human capital development drive long-term economic performance. When we exclude productive populations from capital markets and major economic projects, we create a drag on national productivity that affects everyone.

Consider the financial exclusion dimension. Indigenous Australians often possess land, natural resources, and specialised Indigenous knowledges from 60,000 of ownership and management, yet remain disconnected from financial systems that could unlock this potential. From an economics perspective, this represents a systematic market failure: resources aren't flowing to their most productive uses because entire populations are locked out of the system.

International Evidence Paints a Different Picture

The global evidence is compelling. Canada's First Nations Finance Authority has facilitated over $AUD2.2 billion in infrastructure investment while maintaining AAA credit ratings. New Zealand's Māori economic participation has become a cornerstone of their development strategy. The Inter-American Development Bank's Indigenous territorial development programs demonstrate how inclusion requirements can enhance rather than compromise project viability. APEC - Asia-Pacific Economic Cooperation member economies such as Peru and Chile are each considering greater means for driving Indigenous participation. At recent meetings of the #WorldBank, the countries of Columbia and Mexico detailed institutional supports for Indigenous investment and finance.

These international examples share common elements: they treat Indigenous economic participation as a strategic economic priority, not a social policy afterthought. They have created institutional mechanisms that channel capital efficiently while respecting Indigenous governance structures and rights. Most importantly, they deliver measurable economic returns that, in turn, advance social outcomes.

It’s the Economy…

Economist Mariana Mazzucato concept of the "mission economy" provides a framework for understanding how governments can shape markets to meet strategic and inclusive goals. Indigenous Economic Inclusion aligns perfectly with this thinking. It requires deliberate policy architecture to correct market failures and ensure historically excluded populations can participate in economic transformation.

This isn't about creating dependency or redistributing existing wealth. It's about unlocking productive capacity that strengthens the entire economy. When we design economic systems that enable Indigenous communities to pursue prosperity on their own terms, we create new sources of growth that benefit everyone.

The Path Forward

Australia's clean energy transition, critical minerals development, defence sustainment investments and regional infrastructure projects increasingly intersect with Indigenous interests. We can continue treating this as a regulatory hurdle to be managed, or we can recognise it as a great economic opportunity.

The choice is clear: we can maintain systems that exclude Indigenous Australians from economic participation and accept sub-optimal national outcomes, or we can build inclusive frameworks that unlock their productive potential and drive shared prosperity.

The economic case for Indigenous inclusion isn't just compelling: it's an essential contribution to Australia's competitive future.