The Australian Bureau of Statistics (ABS), estimated that around 7,000 indigenous. Australians were self-employ and own a small business in 2006. This represented 6% of all indigenous Australians. It compares with the 17% who own small businesses in the non-indigenous population. According to reports, the number of Aboriginal people. Who are self-employ has increase to approximately 12,500 over the past seven year. This suggests that there is a growing spirit of entrepreneurship within the Aboriginal community.
The ABS estimates only the number of Australian indigenous entrepreneurs. It is hard to define who or what constitutes an indigenous business. This issue was address by Professor Dennis Foley, University of Newcastle, in an article published in the Indigenous Law Bulletin. Foley’s article, Jus Sanguinis The root contention in determining the Australian Aboriginal Business examines how indigenous businesses are defined. It also explains why this definition is so important. It is actually inextricably link to the whole issue of Aboriginal identity.
Current Definitions Of Aboriginal Businesses?
Foley says that the current focus in Australia is to define Aboriginal businesses as those with at least 51% of the share capital held by Aboriginal people. Foley notes that this definition was create to prevent non-Aboriginal businesses from claiming indigenous heritage to fraudulently gain commercial benefits. This is especially true in the areas of Aboriginal artistic products and tourism.
This definition is use by the Australian Government’s Indigenous Business Australia (IBA), to determine which applicants are eligible for assistance and business development. The Office of the Registrar of Indigenous Corporations reports that there are approximately 2,500 Aboriginal and Torres Strait Islander companies registered in Australia. They estimate that there may be twice as many indigenous corporations than have been officially register.
Foley says that the current definition of Aboriginal businesses is not adequate. Foley says that there may be cases where Aboriginal owners own a large portion of the shares in a company. This prevents them from being recognize as indigenous businesses. He gives several examples of notable Aboriginal businesses that are not eligible for the official definition because of the distribution of share capital.
The ABS came up with two operational definitions of an business in response to these concerns. First, an Aboriginal or Torres Strait Islander-owned business is one where at least one owner identifies themselves as having indigenous heritage. This second definition refers to a business that has a majority of its capital owned by people of Aboriginal or Torres Strait Islander heritage.
Foley also notes that these firms must be privately-own small to medium enterprises (SMEs), with fewer 200 employees. This is due to the complexity of ownership that will likely emerge when a company grows in size and moves towards public listing. He also mentions the Australian Taxation Office’s (ATO) and Business Council of Australia’s (IBCA) use of at least 50% ownership to define Aboriginal businesses.
Definition of the Indigenous Business. This is because there is no clear definition of what constitutes majority ownership and it is not mandatory for all Aboriginal and Torres Strait Islander owned businesses to be recognize. Foley believes this underrepresents the true number of businesses. Foley identifies the problems this creates for Aboriginal business owners. Who could become ineligible to access opportunities under Reconciliation Action Plan (RAPs) if their shareholding is too small.