Appendix A: Aboriginals Benefit Account Annual Report 2016–17

Aboriginals Benefit Account overview

The ABA is legislated under the Aboriginal Land Rights (Northern Territory) Act 1976 (Land Rights Act) and is a special account for the purposes of the PGPA Act. The ABA receives and distributes monies generated from mining on Aboriginal land in the Northern Territory. Payments into the ABA are based on royalty equivalents that are determined by the estimated value of the statutory royalty payments.

The Minister for Indigenous Affairs allocates funds from the ABA to the four Northern Territory land councils (Northern Land Council, Central Land Council, Anindilyakwa Land Council and Tiwi Land Council) for operational purposes. The minister also approves grants for the benefit of Aboriginal people living in the Northern Territory, taking into consideration advice provided by the ABA Advisory Committee. The committee is established under subsection 65(1) of the Land Rights Act to advise the minister on beneficial payments under subsection 64(4). As at 30 June 2017, the committee was chaired by Ms Donna Ah Chee and consisted of 14 members elected by the four land councils. In 2016–17, the committee formulated advice in relation to beneficial payments on 259 applications.

Funds from the ABA are also distributed to Royalty Associations in areas affected by mining. In addition, the Land Rights Act provides for lease administration costs of approved Commonwealth entities and other leases administered by the Executive Director of Township Leasing.

The Department's national office is responsible for advising the minister on the overall policy and financial management of the ABA. The Regional Network in the Northern Territory is responsible for providing secretariat support to the committee, managing the ABA Community Stores Infrastructure Project, ABA Homelands Project, assessing ABA subsection 64(4) grant applications and managing the ABA subsection 64(4) grants.

During 2016–17, the Department commenced discussions on improvements to the sustainability of the ABA given a likely downturn in royalty equivalent income at the end of the next decade. This is informed by a Mining Trend Analysis commissioned by the Department, based on known deposits of resource and lease expiries.

ABA sustainability was discussed at the Northern Territory Biannual Strategic Forum in May 2017. Representatives from the Australian Government, Northern Territory Government and Northern Territory land councils attended the forum. Consultations are taking place with stakeholders including the committee and feedback will inform future policy development.

The ABA is administered by the Department in accordance with the requirements of the Land Rights Act and the PGPA Act. The ABA is part of Outcome 2: Indigenous within the Department's 2016–17 outcome and program reporting structure.

The Department is responsible for ensuring the ABA complies with the Land Rights Act and relevant financial legislation. Section 64B of the Land Rights Act requires PM&C to keep accounts and prepare financial statements in respect of the ABA, as determined by the Minister for Finance. Section 64B also requires the Auditor-General to report on the financial statements to the Minister for Indigenous Affairs.

Aboriginals Benefit Account performance 2016–17

Mining royalty equivalent receipts of $176.651 million were credited to the ABA in 2016–17. This represents a 14.6 per cent decrease on the level of 2015–16 receipts. Figures 5.1 and 5.2 summarises the ABA income and expenditure.

Figure 5.1: Summary of Aboriginals Benefit Account income, 2015–16 and 2016–17



Royalty equivalents






Resources received free-of-charge



Lease rental income



Other income



Total ABA income



Figure 5.2: Summary of Aboriginals Benefit Account expenditure (inclusive of Mining Withholding Tax) 2015–16 and 2016–17



Payments to land councils for administrative purposes – Land Rights Act, subsection 64(1)



Payments to land councils for distribution to Royalty Associations – Land Rights Act, subsection 64(3)



Grant payments to or for the benefit of Aboriginal people in the Northern Territory – Land Rights Act, subsection 64(4)



Payments in relation to township leases and subleases – Land Rights Act, subsection 64(4A)



Administration (suppliers and employees including resources received free-of-charge) – Land Rights Act, subsection 64(6)



Total expenditure



Expenditure on beneficial payments under subsection 64(4) was $33.742 million in 2016–17 (inclusive of Mining Withholding Tax).

ABA beneficial grant funding in 2016–17 went to projects supporting employment, training and cultural activities in the Northern Territory. Examples include:

  • Top End Aboriginal Bush Broadcasting Association was provided $160,900 to purchase and fit out a mobile multimedia unit. The unit will be used by staff to conduct training and to support top end remote communities during cultural festivals and other multimedia initiatives.
  • Yapa-Kurlangu Ngurrara Aboriginal Corporation was provided grant funding of $100,000 to purchase a truck. This will support the Yuendumu-based organisation to pursue business opportunities and improve employment outcomes.

Two projects funded from subsection 64(4) of the Land Rights Act are managed by the Department:

  • The Community Stores Infrastructure Project neared completion, with 16 stores completed. The project improves storage capacity and the supply of healthy, fresh foods and provides additional business and local employment opportunities.
  • The ABA Homelands Project will provide a one-off investment of $40 million to improve the capacity of homelands residents across the Northern Territory to self-manage basic living requirements and maintain and develop meaningful activities on country, including participating in economic enterprise, education and training.

Credits into the Aboriginals Benefit Account

The ABA is credited with equivalent monies to the royalties received by the Commonwealth or the Northern Territory for mining on Aboriginal land in the Northern Territory (royalty equivalent receipts).

Interest received from the investment of ABA funds is credited directly into the ABA's bank account. Figure 5.1 details interest earned for the year, as well as royalty equivalent income, resources received free-of-charge and lease rental income.

The Department provides staff support free-of-charge to manage the ABA. These costs are included as revenue in Figure 5.1 and expenses in Figure 5.6.

ABA royalty equivalent income is volatile as it is subject to profits recorded by individual mines that are influenced by global commodity markets and other factors.

Figure 5.3 shows receipts from royalty equivalents transferred to the ABA since 2009.

Debits out of the Aboriginals Benefit Account

A summary of total ABA expenditure in 2015–16 and 2016–17 is provided at Figure 5.2.

Figure 5.3: Royalty equivalent receipts transferred to the Aboriginals Benefit Account 2009–10 to 2016–17

Graph showing royalty equivalent receipts transferred to the Aboriginals Benefit Account since 2009

Payments to land councils for administrative expenses

Figure 5.4: lists ABA monies paid in 2015–16 and 2016–17 to the four Northern Territory land councils (net of Mining Withholding Tax)

Land Council



Northern Land Council



Central Land Council



Tiwi Land Council



Anindilyakwa Land Council







Further details can be found in Part 4, financial statements.

Payments to Royalty Associations

Under the Land Rights Act, 30 per cent of the royalty equivalent monies must be paid to each land council in the area in which a mining operation is situated. These monies are distributed to Aboriginal organisations (Royalty Associations) in those areas affected by mining operations. Figure 5.5 lists payments made in 2015–16 and 2016–17 to land councils for distribution to Royalty Associations (net of Mining Withholding Tax). Further detail can be found in Part 4.

Beneficial payments

Under subsection 64(4) of the Land Rights Act, payments totalling $33.742 million were provided for the benefit of Aboriginal and Torres Strait Islander people living in the Northern Territory. This compared to $43.908 million made in 2015–16 (inclusive of Mining Withholding Tax).

Office of township leasing and ABA administrative payments

Administration costs of township leases and other leases administered by the Executive Director Township Leasing are captured under ABA 64(4A) of the Land Rights Act. Costs associated with the administration of the ABA are captured under subsections 64(6) of the Land Rights Act. Figure 5.6 provides a breakdown of administration of township leasing expenses for 2015–16 and 2016–17, including services provided free-of-charge.

Mining Withholding Tax

Under the Income Tax Assessment Act 1936, payments made from royalty equivalents credited to the ABA are subject to Mining Withholding Tax at a rate specified in the Income Tax (Mining Withholding Tax) Act 1979. In accordance with the Taxation Laws Amendment Act (No. 3) 1994, the current rate of tax applied to payments of Mining Withholding Tax is four per cent.

From 1 July 2003, the Australian Taxation Office determined the ABA to be a large Pay-As-You-Go (PAYG) withholder. Mining Withholding Tax liabilities on payments made are paid on or before due dates in accordance with the Taxation Office PAYG withholding requirements. The total Mining Withholding Tax for 2016–17 was $4.572 million compared with $5.525 million in 2015–16.

Figure 5.5: Payments to land councils for distribution to Royalty Associations

Land Council



Northern Land Council



Central Land Council



Anindilyakwa Land Council



Tiwi Land Council






Figure 5.6: Departmental administration and expenditure (exclusive of GST)

Administration expenditure



Departmental administration expenditure

Resources provided free-of-charge



Subsection 64(6) payments

Committee members sitting fees/superannuation



Consultancy services



Committee meeting expenses



Travel and other administrative costs



ABA Stores Infrastructure Project



Subsection 64(4A) payments

Office of township leasing administrative expenses



Payments for township leases






Total administrative costs of the ABA



Total equity

The ABA's closing balance on 30 June 2017, as disclosed in the financial statements, excluding future commitments was $634.083 million. This compares with $580.036 million at 30 June 2016.

Management of the Aboriginals Benefit Account and its investment portfolio

The ABA investment strategy is focused on cash-flow requirements, preservation of the fund and management of risk. Monies that are surplus to immediate requirements are invested under section 58 of the PGPA Act. To minimise the risk of loss, section 58 restricts the investment of public money to a limited number of specific, low-risk investments such as government bonds, state and territory bonds, term deposits and negotiable cash deposits with a bank.

The ABA held $607.500 million in term deposits with Australian banks at 30 June 2017. This compares with $551.500 million at 30 June 2016.