A nice little example of a figurative use of the term "scorched earth". Literally it means:
A military strategy of burning or destroying crops or other resources that might be of use to an invading enemy force. (ODE)
In the context of this Crikey article, it is a Weasel Word:
Just before the axing of ATSIC by the Howard government, and as part of its dissolution, the Yeperenye shopping centre was passed on to the local native title group, Lhere Athepe, and a body called Centrecorp, established back in the mid 1980s by the Central Land Council and other Aboriginal bodies as a charitable investment vehicle for Aboriginal traditional owner groups through central Australia.
Centrecorp, and its assets, is now in the sights of Brough as he adopts a scorched earth policy towards Aboriginal organisations in the Territory leading up to the next elections.
Note the implied (by reference to the looming election) Motive Impugning as well.
HT to Ben for pointing this out.