Aboriginal Businesses Face Challenges With Securing Capital and Infrastructure

80 percent of small businesses started by Aboriginals collapse within a few years due to lack on intergenerational wealth and a robust financial network.

A general view of the Aboriginal light festival titled Grounded presented by Parrtjima at Federation Square in Melbourne, Australia, on March 10, 2023. Asanka Ratnayake/Getty Images

Entrepreneurs from the Aboriginal community face significant challenges in scaling their operations, mainly due to a lack of intergenerational wealth, which makes securing loans for essential infrastructure difficult.

Representatives highlighted this during the Joint Standing Committee on Aboriginal and Torres Strait Islander Affairs session held in Perth on Sept. 2.

Robert Taylor, CEO of the Western Australian Indigenous Tourism Operators Council (WAITOC), emphasised that 98 percent of Aboriginal businesses are small operators without the financial networks necessary to overcome barriers to growth.

He stated, “It’s very difficult to get a loan because they don’t have that [wealth] behind them. Getting a grant for something as small as a 58-seat bus is a lot of money.”

Taylor presented a report compiled over 22 years detailing challenges and opportunities in the Aboriginal cultural tourism sector.

It revealed significant gaps from business and government perspectives, identifying key areas that require improvement, such as business development, succession planning, and secure cultural authenticity.

“One significant challenge is ensuring a smooth transition for cultural successors when a business grows or is sold. This includes maintaining the cultural integrity of the business while navigating these transitions,” Taylor said.

Tim Milsom, CEO of the Noongar Chamber of Commerce, noted that 80 percent of small businesses started by Aboriginals collapse within a few years. However, he added that this does not deter them.

“The resilience and entrepreneurial spirit of Aboriginal people make them well-suited for long-term success. This was evident at the recent Supply Nation Connect Trade Show, where hundreds of Aboriginal businesses showcased their achievements,” he said.

Milsom also pointed out that access to capital remains a significant challenge. He mentioned efforts to establish a digital tech innovation hub, but securing space in Perth has been difficult due to high leasing costs.

“We’ve been trying to get this hub up and running for the last four years, but the cost of leasing and other expenses in Perth has made it challenging,” he said.

National Aboriginal Tourism Body and Cultural Integrity

Representatives also underscored the importance of establishing a National Aboriginal Tourism Body to replicate successful models like that of Western Australia (WA), which leads globally in Aboriginal tourism initiatives.

The latest Visitor Experiences and Expectations Report for 2023-24 reveals that interest in Aboriginal tourism has risen from 81 percent to 86 percent among visitors to WA. Participation has also increased dramatically, from 17 percent to 36 percent.

This growth is attributed to the $20 million Aboriginal Tourism Action Plan currently in place in WA, which Taylor believes should be a model for other states.

Representatives emphasised that the lack of funding in other states hinders the broader adoption of such frameworks.

“The success we’ve seen in WA can and should be replicated at a national level. The current lack of funding in other states is a significant barrier to this.”

Taylor is also part of a committee with Austrade and Nia, working on establishing a National Aboriginal Tourism Body.

“We’re really supported strongly by the state government and Tourism Western Australia’s partnership with us,” he said. “It’s something I think that we need to look at federally, as well as on a national level.”

However, the session also touched on the challenges posed by tourism’s seasonality, which often forces young Aboriginal people to leave their communities in search of work during off-peak seasons.

A proposed solution includes a funding model to keep youth engaged in tourism businesses year-round, supplemented by training programs.

Representatives also discussed the need for more training programs to enhance Aboriginal participation in the hospitality sector.

While some hotel chains offer successful programs, there is a call for increased government involvement to boost continuity and growth in Indigenous tourism businesses. The representatives argued that the current level of support is insufficient to sustain these businesses in the long term.

Protecting Cultural Assets and Addressing Ad Hoc Support

Another significant concern raised during the session was the misuse of Aboriginal place names and cultural terms by non-Indigenous businesses. This highlights the need for better intellectual property protection to ensure that Aboriginal cultural assets are not exploited.

Representatives called for stronger legal frameworks to protect these assets and ensure that they are used appropriately and respectfully.

The Committee also acknowledged Aboriginal businesses’ unique hurdles, including the need for community permission to operate and the significance of cultural knowledge in their offerings.

“Historically and currently, support for the development of Aboriginal entrepreneurs has been quite ad hoc, especially at a national level, so it’d be great to see this change because it’s really linked to the short-term political cycles that we sort of experience,” Taylor added.

Reflecting on the 1967 referendum that gave Aboriginal people access to the economy, Milsom noted that belief in their ability to succeed in business is crucial.

“Once people have the belief, then what we’re seeing is the sustainability of our business sector. The resilience of our people makes them perfect entrepreneurs and business people to sustain the effort and the collective mindset of our people in business,” he said.