Wik decision courts trouble

By inventing the new notion of native title, the High Court introduced inflexibility into the Australian economic arrangements.  We now have a class of property that cannot be sold to the party valuing it most highly.

Instead, the court has raised the costs of doing business by introducing a new form of tax on real estate -- the native title -- which is especially noxious because determining its rate requires considerable negotiation.

Sadly, the High Court's new tax creates a new rentier class of people and a new set of energetic rent-seekers representing them.  For all the talk of dispossession and the use of the land for ceremonial purposes, foraging and so on, the true value of native title is mainly as a hold-out bargaining chip.

Just examine events shortly after the Wik decision.  CRA made a commercial decision to sell its interest in the Century mine to Pasminco.  The Aboriginal representatives' reaction was to call for renewed talks, using the starting point of the $60 million previously offered to allow development to proceed.

At its projected cashflow of $700 million a year, the cost of a four-year delay for commissioning the Century mine is more than $2 billion.  Much of that is lost to the nation forever.  On top of that is the cost of lost income for the workers, contractors and others at the mine.

Century is only the most high-profile of the costs brought about by Mabo and Wik.  There are thousands of examples of pipelines being delayed, boating clubs not proceeding and agricultural improvements being stalled.  Those incurring the costs do not know whether they will need to pay compensation, which may even exceed the value of the property, to a party which previously had no rights to the property.

Aboriginal groups and their advisers are no different from others when they see an opportunity for gain.  Unfortunately, those Aborigines who gain financial advantage from native title will do so not by their own exertions, but by the paternalism of the High Court.

People who suddenly acquire windfalls seldom secure the sort of lasting benefits that usually accrue to those who have worked for similar gains.  Indeed, as Thomas Sowell and Charles Murray have demonstrated, showering blacks in the United States with unearned benefits has created a mendicant culture and undermined a generation's ability to be self-reliant.

All this has arisen from judicial activism whereby judges take on a law-making role when they think legislators are remiss.  Yet judges do not have any obvious skills and training in these directions, but are drawn from a narrow and insular class of professionals.

They are, moreover, political appointees.  The composition of the High Court is not the cream of the profession ideally required in the separation of executive, legislative and judicial powers.  The court is appointed by the executive arm of government on the basis of the appointees' likely reliability for giving judgements consistent with the appointing government's politics.  Five of the seven members of the present High Court were appointed by the Hawke-Keating Governments.

ADVERTISEMENT