Imagine opening a letter from the Australian Taxation Office, and finding a demand for more than $700,000 dollars.
“I felt my whole world had really fallen apart when I read it. I was in shock. It was just instant stress," said Melbourne electrician Koolyn Briggs.
Mr Briggs endured six months of stress because he had been registered as a director of the Indigenous arm of an electrical contracting business.
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Corrupting Blak Business
episode • Living Black • Current Affairs • 30m
episode • Living Black • Current Affairs • 30m
That business collapsed and he was being held liable for unpaid company tax, GST, and superannuation.
Mr Briggs told Living Black’s Karla Grant, “I never thought that I would ever be a victim of black cladding.
The business was sold to me in the best way. A not-for-profit, Indigenous operated electrical organisation that would create platforms for Aboriginal and Torres Strait Islander people to embark on a career that helps change lives.”
What is black cladding?
Koolyn Briggs speaking with Living Black's Karla Grant Source: NITV / Living Black
The goal of the Federal Government’s Indigenous Procurement Policy (IPP) is that three per cent of government contracts and nearly two per cent of the total $75-billion-dollar annual spend should go to businesses owned and controlled by Aboriginal or Torres Strait Islanders. Most state and territory governments have their own IPP’s.
Koolyn Briggs, who said he was never invited to company board meetings, let alone paid, sought good legal advice, fought the tax office – and very recently won. However other Indigenous former directors of the company, which is in liquidation, still face massive tax bills.
Blax Capital's Katja Henaway speaking with Living Black Source: NITV / Living Black
Adam Williams who runs Bunji Enterprises in Brisbane and heads the Murri Chamber of Commerce says he is frequently approached to be the Indigenous face of a joint venture.
While he rejects such approaches outright, despite the money on offer, he worries that people are being caught up in situations for which they are not prepared.
Adam Williams of Bunji Enterprises speaks on Living Black Source: NITV / Living Black
Kieran Hynes a professor of cyber security at the University of Canberra says, ‘black cladding’ is nothing more than “fraud”. Hynes heads up Willyama Services, a 100% Aboriginal owned technology company which gets much of its work through government contracts.
“I'm an ex-army officer. The Commonwealth Procurement rules are rules, they're not guidelines, they're not good ideas, they're rules that you should be bound by,” Mr Hynes said.
“And I think once a few people get prosecuted for fraud, I think a lot of the general narrative around black cladding would go away.”
Supply Nation CEO, Kate Russell speaking with Living Black Source: NITV / Living Black
“We know it's a real problem,” she told Living Black.
We know it is a stain on the sector. We've been working to combat black cladding in many ways. But I will say that I do not think it's as widespread as we’re led to believe.
“We've had 30 complaints of black cladding in five years, all of which have been investigated, and none which have been substantiated,” she said.
“That's not to say that it doesn't exist, but it does say that I think Supply Nation has a very good process, including our auditing system, to make sure that it doesn't happen.”
Adam Williams has a different view.
“I would say it's a lot deeper than people want to give it credit for. I would put the line through probably a third of the Aboriginal businesses that are certified today.”
The National Indigenous Australians Agency (NIAA), has been reviewing the Federal Government’s Indigenous Procurement Policy.
Supply Nation wants the definition of an Indigenous business to be at least 51 per cent owned, operated, and controlled by a First Nations person or people.
But who is the real owner?
Kieran Hynes of Willyama Indigenous ICT Services speaking to Living Black Source: NITV / Living Black
“Now, if you're a multi-million-dollar business and the owner gets swapped out on a regular basis, that wouldn't happen in any other circumstances. So is that person really an owner? And it goes back to that definition of an owner.”
It’s clear that the state and territory Indigenous business chambers believe they should have a role in assessing whether businesses claiming to be Indigenous are genuine.
“The individual chambers have come together to form the National Indigenous Business Chambers Alliance,” Mr Hynes said.
“And our key mandate on that is, that if a business that represents themself as Indigenous, one of the chambers should know the Indigenous owner, know their background, but also know their association with the business.”
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