Before the 2013 election, both the Gillard Labor government and the Tony Abbott-led opposition committed to supporting the development of a new reform agenda for indigenous affairs, to be trialled in eight regions across the country, called Empowered Communities.

Following the Coalition’s victory, policy work began in earnest between indigenous leaders and public servants from commonwealth, state and territory governments. Private sector experts contributed to the policy development through the Jawun partnership. The Business Council of Australia supported our innovative agenda.

In March 2015, the Empowered Communities report was provided to respective governments. By year’s end, there was no response other than correspondence from Prime Minister Malcolm Turnbull and Indigenous Affairs Minister Nigel Scullion. Given the investment of time and money, and the commitment to cabinet government, it is strange the policy was never taken to cabinet.

Whether we treat the received correspondence as a response is not clear to me or my fellow indigenous leaders championing this reform agenda. That the relevant ministers are also unclear is evident in the different responses of Scullion and parliamentary secretary Alan Tudge this week.

Rosie Lewis reported Tudge in this paper yesterday as saying the government would respond “very shortly” to the report (“ATSIC is gone for good: Scullion”, 29/1). He told Sky News: “I think that in some communities the government engagement has actually led to a proliferation of services which don’t talk to each other and, at the end of the day, don’t get much progress on the ground.”

However, it appears Scullion thinks the correspondence late last year constituted the response. He told The Australian: “I welcomed the report and believe that the proposed new form of engagement and focus on indigenous responsibility has the potential to achieve real, lasting change in communities across Australia, particularly in critical areas such as school attendance and attainment, economic development and community safety.”

Tudge’s view must be the correct one. Perfunctory correspondence replete with typographical errors evidencing the haste and care with which it was written, cannot be a proper response. The report needs to be put in front of cabinet, and advice obtained from relevant departments, as is the proper practice. What use is the minister defending the retention of indigenous affairs in cabinet when he does not take an important reform proposal to it for proper deliberation? I don’t know of any major policy sponsored by Scullion that has benefited from full cabinet consideration.

Let me provide an analysis of what is going on here.

One of the enduring insights of Liberal thought in respect of markets is that no one, not least governments, can be all-seeing and all-knowing enough to pick winners in a marketplace. Allowing individuals and corporations to choose according to their own lights, in pursuit of their own interests, is much more productive than governments picking winners.

This applies just as powerfully to the work of governments in supporting citizens and communities. Governments can best develop enabling policies and establish systems that allow players in the marketplace to best determine what needs to be done, and how to do it.

The proper role of ministers and departments in their executive functions is a subtle one to enable maximum choice in the marketplace.

Alas, they think executive power must mean they choose, rather than putting actors in the marketplace to the fore. This executive planning and control is a mistake made by conservative governments and Labor alike. Both sides of the aisle interpret the prerogative of government as the right to agglomerate all choice-making, as if they have all knowledge and all wisdom.

This is most apparent in indigenous affairs. Instead of working towards a system that decentralises power and shifts choice-making from the centre to those actors who must enact reforms, indigenous affairs under Scullion has never been more centralised. No past minister has had more power over what should and shouldn’t happen The imprimatur that comes with its location in the prime minister’s department and the accumulation of funding programs into a single Indigenous Advancement Strategy, means ministerial prerogative rather than public service advice is the way choices are made.

This week at the Press Club I said that if a minister were needed in a new system it would be to establish the parameters of national policy and ensure government played an enabling support role to foster empowerment.

Scullion’s response was twofold. First, he said there would be no return to ATSIC. Neither I nor anyone else is proposing a return to ATSIC, and certainly the Empowered Communities proposal is completely different to that defunct structure. But it is an indication of how parlous things are when people like me can maintain there was more empowerment back then than today.

Second, he said I was of only one voice. Well, actually, there are eight regions involved in Empowered Communities, from Shepparton in Victoria to North East Arnhem Land, from Redfern to Cape York, and the Central Desert to the Kimberley. There are many voices seeking these reforms, as Scullion well knows.

The most significant part of our policy innovation is an institutional umpire, modelled on the Productivity Commission, to ensure governments and indigenous communities abide by agreed reforms.

We called it the Indigenous Policy and Productivity Council, and it would be supervised by the equivalent of Gary Banks or Allan Fels. It would play a role in ensuring governmental and indigenous compliance with reform.

Scullion does not understand how crucial such an institution is for reform. For it would oblige him to comply with the reform principles as much as other actors. Instead, he prefers an old system that leaves him to choose which — to use that 50-year-old insight from Bill Stanner — “one-eyed hobby horse” to put a saddle on.

This resistance to institutional innovation is contrary to the Coalition’s policy platform from the 2013 election. The policy pledged to set up an Empowered Communities taskforce, to give “more authority to local indigenous leaders with a view to achieving Closing the Gap targets more quickly”.

This taskforce has reported and it includes a thorough case for the establishment of a productivity council. An explicit policy commitment was made at the election and like anyone we expect the government to follow through on its promises.

There are good things happening on the ground. Where people are able to choose good opportunities to better their lives, we see progress. Indigenous people, their organisations and corporate and philanthropic partners are doing good work. The same cannot be said of governments stuck in an indigenous affairs system that just doesn’t work.

READ: The Australian