In the 26 years since the Native Title Act came into effect the focus has largely been on the resolution of native title claims.  Nonetheless, during this time there have been numerous agreements negotiated with native title groups, and more recently with their Prescribed Bodies Corporate (PBCs), to facilitate development proposals around the country.

With the first High Court judgment on native title compensation in 2019 it is likely that further native title claims for just terms compensation will be resolved through litigation and settlement agreements with state and territory governments over the next few years. Treaty negotiations may also provide native title groups with compensation settlements.

For many native title groups these negotiations and the compensation they receive may provide their one significant opportunity to undertake economic development opportunities to establish an economic base for their communities.

Current structures for managing native title monies

Many of the corporate structures established for native title groups and their PBCs have limited them to using their native title monies for charitable purposes.  Where structures have been designed so that native title holders can pursue economic development and commercial activities, they are often complex and poorly understood as they are formulated to comply with overlapping areas of native title, trust, corporate, and taxation law.

It has been recognised for many years that a simpler, fit-for-purpose structure is required so that native title holders can make informed decisions about managing their native title monies in more flexible and appropriate ways to realise their aspirations and determine their own future.

Proposal for Economic Vehicle Status for PBCs

The NNTC in conjunction with the Minerals Council of Australia has developed a proposal to provide a more appropriate structure for managing native title monies.

This model proposes an ‘economic vehicle status’ for PBCs through amendments to the Corporations (Aboriginal and Torres Strait Islander) Act.

As the NNTC has noted in its submissions on this issue, PBC – Economic Vehicle Status (PBC-EVS) would enable a PBC to undertake a broader range of economic development activities than is currently available, while at the same time accessing tax concessions that currently only apply where an organisation is seeking to address disadvantage rather than economic development.

The EVS proposal focuses on facilitating economic development, including providing finance to native title holders to establish private businesses.

This model could also enable existing complex trust structures established for the management of native title monies to be incorporated within a PBC-EVS, so that more appropriate reporting and governance requirements could facilitate transparency and accountability for native title holders.