Living in the Sunburnt Country 

Housing

Housing tenure and where Indigenous people live

Of the 115,278 Indigenous households recorded in the 2001 Census

• 14,485 owned their own home
• 22,417 households were purchasing with a mortgage and
• 27,533 households were in the private rental market

In summary in 2001 more than half of Indigenous Australian households (mainly in metropolitan and regional centres) had attained a degree of independence in their housing arrangements and did not rely upon government/community housing.

One third of all Indigenous people live in Sydney, Brisbane, Perth, Coffs Harbour and Wagga Wagga where there is greater access to mainstream accommodation and services. This contrasts markedly with the lack of services provided in outlying areas where those who are among the most disadvantaged live.

Table 5 Estimated resident Indigenous population distributed by remoteness (ARIA) category, 2001

Aria	Indigenous
Major city	138,494
Inner regional	92,988
Outer regional	105,875
Remote	40,161
Very remote	81,002
Total	458,520

Source: Australian Bureau of Statistics (ABS) 2003a.22

Figure 16 shows the percentage of Indigenous Australians in each state and territory who require housing assistance (above the line), and those who are more self sufficient (below the line)

Figure 16 Housing Tenure of Indigenous Households

Table 6 and Figures 17 and 18 provide more detail and break down of the data used in this analysis of Indigenous households.

Table 6 Occupancy Status of Indigenous Dwellings in 2001

	NSW	Qld	WA	NT	SA	VIC	TAS	ACT	Total
Owned	6, 021	3,437	1,083	379	684	1,407	1,358	116	14,485
Purchasing	7,492	5,473	2,747	953	1,266	2,142	1,972	374	22,417
Priv/rent	9,828	9,638	2,445	847	1,178	2,068	1,209	322	27,533
Public	8,146	5,058	4,288	1,414	2,156	1,665	921	295	23,943
Community	2,725	4,271	2,069	4,434	738	276	43	18	14,574
Other	1,341	1,421	669	351	300	279	96	33	4,490
	35,551	29,298	13,301	8,378	6,322	7,837	5,599	1,158	107.442

These figures have been compiled from Cat. No ABS 2002.1 Census 2001. The figures for dwellings rental and public housing types are derived from AIHW data on Aboriginal Housing. The table deals with dwellings (physical structures) as distinct from the tables in appendix 2 that deal with households. (one or more persons who usually reside in a dwelling and who define themselves as a household). Some policymakers would focus on physical structures, others will focus on the occupants of those structures.

Figure 17 Relative Proportions Private vs. Public Housing by Type and State

Figure 18 Indigenous Households in Rented Housing

Table 6 and figures 17- 18 indicate that:

• Rates of ownership and home purchase amongst Indigenous households relatively are higher in the eastern states because of the relatively larger regional and urban population to which private rental and home ownership are more accessible.
• Indigenous households are more reliant on public and community housing in WA and especially NT. This is a reflection of their relatively larger remote Indigenous populations. In very remote areas, public housing is limited and the main type of tenancy is community housing. NOTE "Other" denotes temporary and mobile accommodation.

(See Appendix 3 for details of tenure by rental by state for Indigenous households).

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Indigenous Housing Outcomes

Homelessness

Homelessness amongst Indigenous Australians is estimated at 7,526 people at 2001 with the highest proportion in the Northern Territory. However, the Australian Institute of Health and Welfare (AIHW) estimate that the number of Indigenous people who are homeless could range from 7,526 to 10,471 depending which estimates are used; and that, if, in addition, those residents in caravan parks are also included in the estimates, the number of Indigenous people who are homeless could range from 9,313 to 12,258²¹.

Overcrowding in Remote Areas

The Productivity Commission reported in 2002 that 72,600 Indigenous people aged 15 years and over lived in overcrowded housing and that of that number 44.9% were living in overcrowded housing in very remote areas²².

Further, the proportion of Indigenous people 15 years and over living in overcrowded housing varied from 61.7% in very remote areas to 12.6% in inner regional areas and 14.9% in major cities. Overcrowded housing also varied significantly by housing tenure ranging from 52.4% in community rental housing to 10.1% in houses fully owned or being purchased.

The Health and Housing link

In the 2006 Australian Institute of Health and Welfare report into Australian health²³ the impact of adequate housing as a major factor affecting health is noted:

... "many Indigenous people live in housing conditions that are overcrowded and that are unacceptable by general Australian standards because they do not satisfy the basic requirements of shelter, safe drinking water and adequate waste disposal."

Overcrowding can put excessive demand on bathroom, kitchen and laundry facilities as well as on sewerage systems such as septic tanks. It can lead to the spread of infectious diseases such as meningococcal meningitis or septicaemia, tuberculosis, rheumatic fever and respiratory diseases and skin infections (Bailie & Runcie 2001²⁴). It has also been associated with poorer self-reported physical and mental health, and higher rates of smoking and hazardous drinking (Waters 2001)²⁵.

While the achievements of programmes such as CHIP are significant, there are still high levels of overcrowding, poor standard housing and infrastructure and homelessness in remote and very remote areas of Australia to be addressed.

In addition, there are the emerging issues of an increasing younger population in those remote communities, an ageing population nationally and the impact of health issues such as diabetes, where those being treated (and family members) need accommodation in larger centres.

Growth in Indigenous Population

ABS has projected an annual growth rate of Australia's Indigenous population over 2001-2009 of 1.8 per cent (low series)²⁶ and 3.4 per cent (high series). By comparison, since the early 1990s Australia's population has grown by around 1.2 per cent and 1.3 per cent per year, with just over half of this growth resulting from natural increase (the excess of births over deaths) and just under half from net overseas migration (ABS²⁷).

Projections to 2016 of the Indigenous population in select regions across much of remote Australia indicate a rapidly growing Indigenous population in Cape York Peninsula, west Arnhem Land and the Gulf country of the Northern Territory, and more moderate, but nonetheless sustained growth in the East Kimberley region and across the arid zone²⁸.

Figure 19 Indigenous Population Growth to 2009

Source - ABS data

These figures indicate that Indigenous population growth will place further pressure on community and public housing and private rental in some remote areas as well as other parts of Australia in the years to come.

Indigenous Housing Outcomes and CHIP Funding

The following graph compares each state profile for Indigenous household tenure at 2001 with average shares of CHIP funding 1998-99 to 2005-06.

This graph represents the proportional housing outcomes by state. The approach was to show above the line public housing outcomes and unmet needs and below the line (0%) the degree to which Indigenous Australians in each state and territory participate in the private sector.

Figure 20 States share of CHIP spending compared with proportional needs

*SAAP – Supported Accommodation Assistance Programme.
See Table 7 for source data

Figure 20 indicates that overcrowding and homelessness are relatively bigger problems in the NT in particular but also in WA, Qld and SA than in the south east states.

As discussed earlier overcrowding is more severe in remote areas where the private housing market and public housing are limited or absent. These are reasons for focusing available Indigenous housing funds on remote areas.

Table 7 Dwellings and Households for each State and Territory

State	NT	QLD	WA	SA	NSW	Vic	Tas	ACT
Owned Dwellings	379	3437	1083	684	6021	1407	1358	116
Purchasing Dwellings	953	5473	2747	1266	7492	2142	1972	374
Private Rental	847	9638	2445	1178	9828	2068	1209	322
Public Housing	1414	5058	4288	2156	8146	1665	921	295
Community Housing	4434	4271	2069	738	2725	276	43	18
Other	351	1421	669	300	1341	279	96	33
Overcrowded	3160	3740	2110	690	2810	580	220	0
SAAP *	97	395	210	158	391	260	27	28
Homeless*	1864	1918	1054	544	1376	564	151	55
Percentage of total CHIP Funds provided	37	19	24	6	10	3	1	0

* Source AIHW and Census 2001(ABS 2003.0)

Homeless is the ABS and AIHW estimate of individuals who define themselves as homeless. All figures are quoted as dwellings other than SAAP and Homeless which are counted as persons and assumed as potential single households.

Aboriginal Rental Housing Programme (ARHP)

To address the need for additional public housing in remote and rural communities, the Australian Government funds the Aboriginal Rental Housing Programme (ARHP) as part of the Commonwealth State Housing Agreement (CSHA) arrangements.

FaCSIA advised that the policy rationale for ARHP is "Indigenous people have a significantly greater need for housing assistance than non-Indigenous people, with 21% of Indigenous people experiencing homelessness or overcrowding. This compares with a figure of 3.6% for non-Indigenous Australians.

Whilst there is significant housing need in both urban and rural and remote regions, ARHP funds are directed to rural and remote areas where there are no public or private housing markets. The need for more housing and better quality housing and infrastructure is highest, and there tends to be high levels of overcrowding and homelessness, in these areas²⁹.

Indigenous housing need in rural and remote areas remains critical despite the level of funding. There are still insufficient funds to provide adequate on-going management and maintenance to protect capital investment in Indigenous housing in rural and remote areas³⁰."

Figure 21 ARHP Funding Allocation

Sources FaCSIA ARHP funding data

Figure 22 Changes in ARHP Annual Funding proportional to Remote Population

This figure indicates that NT and WA are proportionately under-funded based on remote population

In matching ARHP funding to ABS Census 2001 figures for Remote and Very Remote Indigenous population, by State and Territory, it would appear there is a misalignment between identified need, as measured by Indigenous population, and available funding. This may reflect the historical basis of the CSHA arrangements. Even by the Commonwealth's own criteria money has not gone to areas of greatest need in remote and very remote areas.

If funding matched remote need there would be a shift in priorities as to where ARHP money is spent as displayed in Figure 22 (above). It is clear that the current approach to Indigenous housing will not adequately address the needs for housing and related infrastructure identified in reports such as the 2005 Productivity Commission's economic indicators³¹ and in extensive reports and research on the need for housing for Indigenous Australians.

A cross-section of stakeholders identified the administrative burden of accounting separately and differently for ARHP funds and mainstream CSHA funds – particularly in relation to the comparatively small payments.

Given the increasing move towards single service administration of public housing by State Governments, (eg. Queensland), it is consistent with those initiatives to have a single stream of public housing funding based on an overall assessment of public housing need. The more general issue of the overall adequacy of public housing funding is outside the scope of this review.

While reform in this area may meet some initial resistance, there is a clear need for better outcomes and a transition period that eventually delivers better services in remote areas. Clearly if there is to be funding specifically for Indigenous housing in remote communities it will need to be based on a precise definition of remoteness.

To better focus effort on remote need, it is recommended that public housing services for Indigenous Australians be provided in urban and regional communities through mainstream Commonwealth State Housing Agreement (CSHA) funded services in NSW; Victoria; Tasmania; ACT and urban WA; Qld; and, SA from 1 July 2008.

By way of background to the above discussion on ARHP, the review notes the relevance of similar analysis undertaken by the Grants Commission in its Indigenous Funding Inquiry in 2001, and raised by OIPC in its submission to this Review.

OIPC noted that:

A significant proportion of the Commonwealth's $310 million Indigenous housing and infrastructure budget is spent in cities and towns where the residents already have access to mainstream public rental housing (and to Commonwealth Rental Assistance for private rental). For example:

1. NSW and Victoria, which have few remote communities, account for 23.5% of ARHP funds and for 21.1% of CHIP housing funds (Source: .CGC p. 154).
2. Substantial funds continue to be spent in metropolitan areas: for example, between 96-97 and 98-99 ATSIC's Sydney Region accounted for over 10% of the Commission's community housing budget for (NSW), and the South East Queensland (Brisbane) Region accounted for almost 20% of (Queensland's community housing) budget (Source: CGC Vol 2 p. 123).
3. By way of comparison, over this same period the Sydney Region received more ATSIC housing funds than the Alice Springs Region, the Many Rivers (Coffs Harbour) Region more money than the Malarabah (Derby) Region, and the Kamilaroi (Tamworth) Region almost as much as the Papunya (Apatula) Region (Source: CGC Vol 2 p. 127).
4. The States' apportionment of Commonwealth Indigenous housing funds (and their own) is similar. For example, of the $28.8 million being spent on new capital stock on the mainland [excluding the Cape and Torres Strait Islands] in 2001 by Queensland under its ATSI Housing Plan, 12% is planned for the Brisbane area. Similarly, the NSW Aboriginal Housing Office earmarked half of its 130 unit capital works programme for its Sydney (27), south coast (15) and north coast (21) regions including towns like Ulladulla, Goulburn, Queanbeyan, Nowra, Newcastle, Port Macquarie, Coffs Harbour etc.

This in effect means that CHIP money which could have been used to provide accommodation to Indigenous Australians in remote and regional areas has instead been spent in metropolitan areas which have access to mainstream public housing arrangements. The current CHIP strategic framework does not ensure adequate priority is given to remote communities experiencing significant overcrowding. Access to Mainstream Public Housing In looking to increase Indigenous peoples' utilization of mainstream public housing in urban centres and increase the opportunity to fund housing in remote communities, the following research from the Australian Housing and Urban Research Institute (2005) is encouraging³².

The AHURI research findings included:

• access by Indigenous people to mainstream public housing has increased in the past four years with the number of newly assisted Indigenous tenants growing by 11.6% over the period 2000-01 to 2003-04. There is a need to further boost the stock of larger dwellings to reduce overcrowding for Indigenous households in mainstream public housing, and to continue to improve the sustainability of tenancies.
• the proportion of Indigenous households in public housing administered by States and Territories, but excluding public housing funded under the Aboriginal Rental Housing Programme (ARHP), has increased from 3.4% of households in 2001 to 5.2% of households in 2004 (estimates exclude NSW where data on the Indigenous status of existing tenants are incomplete).
• there is an urgent need to arrest recent declines in the overall supply of mainstream public housing dwellings if levels of housing need among Indigenous people are to be further reduced. In particular, State and Territory Housing Authorities could boost the stock of dwellings, especially larger dwellings, through the ongoing sale of smaller units and the purchase or building of larger dwellings, to overcome overcrowding. Supported tenancy programmes to improve the sustainability of tenancies must be high on the agendas of State Housing Authorities.
• an important factor contributing to the increasing number of Indigenous people in mainstream public housing is the growth in newly assisted tenants.
• indigenous households are more likely to enter mainstream public housing as 'greatest need' tenant households than non-Indigenous households and experience lower income levels while in public housing. This outcome is probably a reflection of the higher levels of severe housing need among Indigenous applicants compared with non-Indigenous applicants.
• the case studies reveal histories of discrimination in housing experienced by Indigenous people in need. Discrimination experienced by Indigenous people in housing leads to its own negative outcomes including a lack of dignity, self-worth and feelings of shame.
• the case studies provide evidence that a lack of permanent long-term housing and the high use of emergency accommodation helps to perpetuate the social circumstances which conspire against good housing outcomes for Indigenous people in housing need. The high levels of use of emergency accommodation illustrate the 'stop gap' housing history of unstable accommodation and homelessness. The case studies also point to concerns regarding the quality of public housing available to tenants and to its suitability for Indigenous households.
• once in public housing Indigenous households face particular problems. The rate of moderate overcrowding is twice that for non-Indigenous households and remains of critical policy concern. The 'moderate overcrowding' rate (where one additional bedroom is required to satisfy the proxy occupancy standard used by the AIHW) is also twice that for non Indigenous households.

Given the increasing move into mainstream public housing by Indigenous tenants in urban areas, and the support that is now available, the opportunity exists to better direct CHIP funding to remote and regional areas where there is a greater need for accommodation to address overcrowding.

There also needs to be a reassessment in the future about the availability of funding for public housing given the movement of Indigenous tenants towards urban areas where families can have access to schools, healthcare, law and order and job opportunities.

As well there is a need to assist individuals and families with home living skills; financial management skills; and tenancy management skills to achieve the planned objectives of improved rates of home ownership and private and public housing tenancy³³.

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Home Ownership – International Initiatives and Australian Trends

A significant amount of information was provided to FaCSIA as part of this review relating to Indigenous people in Canada and New Zealand³⁴.

International Initiatives

Canada In Canada, effective initiatives include Homeownership Assistance and initiatives for community land, i.e. On-Reserve. A Direct Lending Programme provides financing and renewals for eligible social housing projects and offers the lowest average financing available. Other initiatives for On-Reserve homeownership include loan insurance programmes through ministerial loan guarantees and financial assistance to repair sub-standard homes to a minimum level of health and safety and to improve accessibility to housing for disabled persons.

There are also practical homeownership assistance initiatives for Off-Reserve purchase including Residential Rehabilitation Assistance for conversion of commercial or industrial buildings into affordable housing and financial assistance to repair sub-standard homes; these programmes are in addition to direct lending programmes.

Other initiatives are worthy of consideration. For example: The Bank of Montreal established a commercial approach to Aboriginal banking within its existing structure. In 1992 the value of its commercial loan business with Aboriginal communities amounted to $10 million dollars. Some eight years later, that same commercial loan business had grown to $1 billion, with the bank holding a further $1 billion in trust for First Nations communities.

Figure 23 Bank of Montreal Aboriginal Banking Service

The Bank of Montreal has 11 full service branches, 4 community banking outlets and 1 in-store facility servicing Aboriginal communities across Canada. It employs Indigenous people in these banks and throughout its organisation.

Importantly for these remote communities the Bank of Montreal provided an "On-Reserve" housing loan programme that allowed Indigenous families to borrow funds for the construction, renovation and purchase of owner occupied housing.

New Zealand

Similarly, in New Zealand there are a range of general lending programmes, low deposit rural lending arrangements and 'Papakainga' loans to assist Maori people who are building or buying a house on multiple-owned Maori land.

United Kingdom

The United Kingdom has recently, in April 2006, also launched a range of Social Homebuy and other home ownership schemes for the purchase of social housing including schemes that allow tenants to buy their council homes at a price that is lower than its full market value.

In August 2006, the consulting firm SGS Economics and Planning provided FaCSIA with their draft report A Framework for Assessing Alternative Models for Housing Provision on Indigenous Communal Title Land. The report summarises the range of Canadian, American and New Zealand initiatives for homeownership as well as options for reducing the costs of labour and materials and collective delivery and adaptive collaborative management initiatives which might be applied on Indigenous land.

While these models may not be exactly suited to Australian conditions it can and should be used as an example to Australian financial institutions and businesses on how commercially viable ventures can be conducted with Indigenous communities and people on community title land.

Australian Trends

A number of stakeholders raised homeownership as relevant to a strategic framework for Indigenous housing policy. This is consistent with international trends.

Local options include initiatives such as:

• Indigenous Business Australia within DEWR
• the Homeownership on Indigenous Land Programme (HOIL) to provide affordable homeownership borrowings for Indigenous people on Indigenous land
• home purchase Incentive Scheme on Community Title Land.

It is noted that while the take up of homeownership loans for freehold etc has been encouraging, the take up of loans through IBA for homeownership on Indigenous land has been low to date. It is understood that a number of loans are about to be taken up based on the initiatives of IBA.

"Access to capital, on proper and equitable terms, is paramount for Indigenous economic development. It is time to allow communities to adopt normal risk and for governments to stop sheltering communities and wrapping them up in cotton wool for "their own good". It is also time for the private sector and in particular the financial sector, to pursue investments involving Australia's first peoples. The overseas models clearly reinforce the importance of non-government interventions."³⁵

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Indigenous Community Housing Organisations

The current community housing arrangements funded through CHIP rely heavily on Indigenous Community Housing Organisations (ICHOs) for tenancy management and asset maintenance. There has been past criticism about the capacity of ICHOs to meet the expectations of the tenants and deliver the outcomes sought by governments. Yet there was little criticism of ICHOs amongst most stakeholders interviewed as part of this Review. There was concern however about the capacity and viability of ICHOs.

The 1998 report by Spiller Gibbins & Swan³⁶ indicates that studies concluded at that time that 'no ICHO on current income generation and expenditure requirements was sustainable and that most to forestall insolvency, had to defer maintenance; under insure; not pay rates and charges (where they are applied), under-administer and/or seek additional financial assistance from outside funding agencies.'

This Review found that a vast majority of ICHOs are still operating on or below viability.

The Viability, Governance and Service Delivery Capacity of ICHOs

Any examination of CHIP needed to include an examination of ICHOs to determine whether they are sustainable and whether or not they could meet modern governance and service delivery standards. We have analysed the current mix and funding arrangements for ICHOs as input to the recommendations.

What are ICHOs?

ICHOs own, manage and provide support for Indigenous community housing including tenancy, community and asset management services.

There are approximately 600 ICHOs managing approximately 21,000 dwellings. However, more than 80% of ICHOs manage fewer than 50 dwellings [see following table of ICHO managed dwellings]

Table 8 - ICHO Housing Management breakdown

ICHOs Managing	Dwellings under Management	Percent of total ICHO dwellings	Number of ICHOs	% of Total ICHOs
50 Dwellings or fewer	9,663	45.39	504	81.82
51-100	5,361	25.18	77	12.50
Over 100	6,263	29.42	35	5.68
Total	21,287	100	616	100

This is a profile of dwellings under ICHO management

Figure 24 High level view of ICHO sizes

Source: PricewaterhouseCoopers analysis of AIHW and ABS data

How do they operate?

ICHOs receive grants for capital works and repairs and maintenance. They also receive rentals from the tenants of community housing at an average of $40 per week. Expenses relate to management activities, repairs and maintenance and administration.

Are they financially viable?

Table 9 The following analysis summarises the per dwelling income and expenditure of an average ICHO

	Capital	Recurring
Income
Capital grant for dwelling		Nil
Rental at $40 per week	$80,00037	$2,080
Repairs and maintenance grants (average per dwelling)		$45438
Expenses
Maintenance	$80,000	$1,92639
Administration		$1,20040
House purchase
Surplus/(deficit)	Nil	($592)

Based on this analysis, we would expect that the average ICHO would not be financially viable. This analysis is also supported by AHURI⁴¹ which estimated a deficit of $3,800 per dwelling. The AHURI estimate is greater than that developed above for the reasons that (i) the above analysis assumes efficiency levels comparable with private sector property managers and (ii) many of the ICHOs operate at sub-scale levels.

To achieve even the average level of deficit shown above, an ICHO employing one person at the Australian average wage of $35,000 per annum (plus overheads of approximately $10,000) would need to manage in excess of 35 properties. This suggests that the overwhelming number of ICHOs operate at well below viable scale.

With the information available at the current time, it is not possible to estimate the financial condition of individual ICHOs; however, it could be reasonably assumed that the financial viability of regional and remote area ICHOs would be under considerably more financial stress.

This lack of viability has lead to delays in repairs and a requirement to fund administrative expenditure at the expense of repairs. This has, in turn, created a backlog of repairs and maintenance estimated in excess of $700 million⁴². This part of our report deals with the ongoing expenditure shortfall rather than addressing this backlog.

What are the viability improvement options?

Revenue improvements

• Rental revenue could be increased to sustainable funding levels on average. Average rentals revenue required to cover maintenance and tenancy management would be between $50 and $100 per week. This is still significantly less than the average full cost of community housing which we estimate at in excess of $200 per week⁴³.
• Alternatively, incremental funding could be provided through government subsidy at an incremental cost of between $12 million and $68 million: such a subsidy scheme would need to have appropriate performance conditions attached.
• It is likely that the most appropriate revenue improvement would be some combination of these two alternatives.

Cost efficiency

• Reduce levels of repair required
• Our observations, (confirmed by FHBH data supplied by an experienced on site maintenance firm, Healthabitat) indicate that 25% of repairs are due to faulty construction and materials specification (see Figure 6).
• FACSIA has an excellent handbook on design of appropriate housing that provides a basis for evaluating design and specification of inclusions and materials⁴⁴. A significant part of the operating deficit of the average ICHO can be eliminated by restructuring purchasing arrangements for the houses constructed, so that recovery could be made against the builders of these houses.
• Furthermore, incentives to reduce vandalism could be introduced to reduce repair costs by around 10%. Such incentives may take the form of community bonuses for low or nil damage levels; these bonuses may take the form of clearance of the repair backlog in the respective community.
• Improved procurement of repair works may be achieved by three strategies relevant to the location of the ICHOs. These are:
• (i) for urban ICHOs leverage the procurement of larger mainstream community housing institutions,
  (ii) for regional ICHOs combine the procurement activity with either local council or regional mainstream community housing and
  (iii) for remote ICHOs, set up cooperative procurement between a number of ICHOs in similar geographic regions
  
• Increase community self-sufficiency for repair works

For remote area ICHOs, a significant barrier to economic repair works is the disproportionate impact of travel and transportation costs. Where repair work is able to be conducted by the local community, more economic and rapid repair works can take place.

However, in many cases, this would require either significant re-skilling of the local population and/or changes in design and construction of delivered housing to make repair work less frequent or more straightforward.

Tenancy Management

Tenancy management involves tenancy allocation, preparing lease agreements, managing the rental roll and coordinating repairs. Administrative activities include payroll and accounts payable as well as grant application and acquittal. Each of these activities are readily standardised and therefore scale economies can be derived.

Figure 25 Tenancy management and administrative expenditure

Source: FaCSIA CHIP Funding Data

Figure 25 reflects the need for NT to spend more on administration because of the larger number of small ICHOs.

However, in the small ICHOs it is likely that not only are these scale economies forfeited but the skills to adequately discharge these responsibility are spread thinly. Furthermore, these activities divert scarce resources from the conduct of repair work in the local community.

Accordingly, it is recommended that to reduce this administrative burden activities of this nature should be conducted on a larger scale. Strategies to achieve this outcome are as follows:

• (i) for urban ICHOs the cost of management and administration could be lowered by having these services provided by larger mainstream community housing institutions
• (ii) for regional ICHOs the services could be combined with either local council or regional mainstream community housing and
• (iii) for remote ICHOs, tenancy management and administrative activities could be established on a cooperative basis across a number of ICHOs in similar geographic regions

To best provide tenancy services and asset maintenance through ICHOs, it is recommended that:

• an assessment be undertaken of the ongoing viability of existing ICHOs against agreed standards for tenancy management and asset maintenance
• where ICHOs are not viable, arrangements for amalgamation, outsourced management, or contracted public housing management be put in place
• CHOs better utilise 'mainstream' consumer protection regulation to ensure that proper landlord and tenant arrangements are enforced to benefit both parties. Standard tenancy agreements would better assist with rental collection, property management and mutual accountability
• Greater use of regular payment methods such as Centrelink's 'Centrepay', direct debit etc⁴⁵

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The condition of community housing

The 2001 Community Housing and Infrastructure Needs Survey (CHINS) collected detailed data on dwelling conditions for permanent dwellings on discrete Indigenous communities that were managed by Indigenous housing organisations. The survey identified 21,287 permanent dwellings managed by Indigenous housing organisations.

The majority of these dwellings (70%) were located in areas classified as Remote or Very Remote areas. Of these, 2,914 (19%) required major repairs and 1,461 (10%) required replacement (ABS& AIHW 2005)⁴⁶.

There are four main categories of housing repair and maintenance needs to be addressed urgently:

• the backlog of repairs and maintenance
• major renovation of existing housing to better meet the needs of the Indigenous families
• demolition and/or replacement of housing no longer safe to live in
• infrastructure.

Several sources were consulted to arrive at reasonable estimates of costs for housing repair and maintenance. AHURI has estimated that it would require $705 million of new funding to address the maintenance backlog in the current housing stock. This figure is reinforced by estimates gained from Fixing Houses for Better Health of between $3,000 and $12,000 per dwelling for repairs and maintenance. To fix health hardware alone eg. fixing drains, toilets, taps, showers, kitchens and electrical; FHBH estimate an average cost of $7,000 per dwelling. By contrast the AHURI estimate is based on the need for major repairs and replacement.

A maintenance focus such as described above is the fastest and most practical way to increase the available housing stock and reduce overcrowding. The maintenance blitz can also have the added benefits of developing skills and capabilities and creating lasting jobs.

Other Elements Of Chip

National Aboriginal Health Strategy (NAHS)

The National Aboriginal Health Strategy (NAHS) is a capital works programme involving large integrated projects, mainly in rural and remote areas. The objectives of NAHS are to:

• improve environmental health by upgrading or providing new sustainable infrastructure and priority housing
• target funding to those communities in greatest need as demonstrated by housing needs surveys, housing organisations' waiting lists, Census data, Project Impact Assessments and reports from NAHS Programme Managers
• gain increased commitments from State, Territory and local governments
• properly plan and deliver large-scale projects to ensure future sustainability.⁴⁷

In 1994-95, the Health Infrastructure Priority Projects (HIPP) Scheme was established under CHIP to provide better programme and project delivery of large scale housing and infrastructure projects to achieve the NAHS objectives⁴⁸.

NAHS was initially launched by the Commonwealth Government in 1990. The Strategy was intended to supplement State and Territory Government funding by providing essential services and community infrastructure and priority housing to improve primary health care services and environmental health conditions in Indigenous communities⁴⁹.

An evaluation of NAHS in 1994 criticised the limited coordination of NAHS funding and the extent to which ATSIC's funds had made any significant impact on Indigenous environmental health needs. As a result of the evaluation, the primary health care component of NAHS was passed to the Office for Aboriginal and Torres Strait Islander Health (OATSIH) to deliver. ATSIS retained delivery of the housing and infrastructure component for delivery of environmental health benefits but made several changes to the delivery of the programme⁵⁰.

The HIPP Scheme encompassed several key features upon which the NAHS programme delivery arrangements are based. These included: identifying environmental health impacts in the project identification stage; triennial funding of projects; outsourced programme and project management to provide project monitoring and assessment of project design and construction; and inclusion of employment and training as an element of programme funding⁵¹.

A key feature of the NAHS programme is the use of private-sector programme and project managers to ensure professional project identification, monitoring and implementation of all aspects of planning, design, construction and maintenance of facilities. A number of reviews in the mid 1990s determined that ATSIC and its client organisations did not have the necessary project management and other professional skills to successfully manage and deliver large-scale complex housing and infrastructure projects. The use of programme management services was initially trialled in the Health Infrastructure Priority Projects (HIPP) Programme and extended to each subsequent round of NAHS⁵².

Contracted Programme Manager (CPM) services are provided by Arup⁵³ in New South Wales, Queensland and the Northern Territory; and Parsons Brinckerhoff⁵⁴ in Victoria, South Australia and Western Australia: and Gutteridge, Haskins and Davey⁵⁵ provided CPM services for Round 1 NAHS in New South Wales⁵⁶.

As NAHS projects are sizeable capital projects, they are usually implemented and funded over a number of financial years. The current average allocation for NAHS projects is approximately $2 million. The total value of NAHS projects approved since 1995 is $694.4 million. This includes projects started under HIPP and projects approved as a result of extending the current NAHS round through to 2003-04⁵⁷.

Projects are selected using the Project Impact Assessment (PIA) methodology, previously known as the Health Impact Assessment. The NAHS PIA Methodology aims to target communities with the greatest environmental health needs in an objective manner⁵⁸.

A total of 286 projects have been approved under NAHS since 1995, including those started under HIPP. Of these projects, 211 have been completed (including 25 completed during 2003-04) and 75 are currently in the planning or construction stages. Completion of the ongoing projects is expected by June 2005⁵⁹.

Under HIPP and NAHS, a total of $453.52 million has been provided for housing and $241.88 million for infrastructure. A total of 1642 new houses have been constructed, 2514 houses have been renovated and 245 sites will have been serviced from 1995 to 2005. There has been a steady increase in housing provided from 1995 to 2005 and a steady decrease in infrastructure funding from 1995 to 2005, reflecting the focus on meeting infrastructure needs in the earlier years of NAHS funding. A high concentration of housing constructions in the earlier years of NAHS has been replaced with a steady increase in the number of housing renovations⁶⁰. Infrastructure work carried out on NAHS and HIPP projects includes the provision of power, water, roads and drainage, sewerage, flood mitigation, town planning, community facilities, landscaping and dust control and waste disposal⁶¹.

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Table 10 NAHS project approvals between 1995-96 and 2003-04⁶²

NAHS Round	Number of Projects	Amount ($Million)	Infrastructure ($Million)	Housing ($Million)	Project Mgmt ($Million)
HIPP Round 1 1995-96 to 1998-99)	29	69.8	35.2	27.7	6.9
HIPP Round 2 and NAHS Round 1 (1996-97 to 1999-00)	120	291.7	102.4	162.2	27.1
NAHS Round 2 (2000-01 to 2003-04)	132	327.5	78.9	212.6	36.0
Total	281	689.0	216.5	402.5	70.0

Table 9 shows the expenditure on NAHS 1995-96 and 2003-04

In 1999 and 2004 the Australian National Audit Office (ANAO) reviewed NAHS and made a number of recommendations. These appear still valid based on stakeholder feedback of their experience with the NAHS programme.

In summary, the recommendations made by the ANAO in its 1999 report that would assist with better needs-based planning, coordination of service delivery and development of training and skills are as follows:

• further develop the criteria for assessing, monitoring and reporting state/territory and local government support for Indigenous housing and infrastructure
• summarise and analyse relevant data on the support for NAHS projects at the state/territory and national levels to assist in reviewing its performance in increasing commitments from state and territory governments to those projects
• benchmark NAHS programme management arrangements, including project planning and project management costs, for the delivery of housing and infrastructure to Aboriginal and Torres Strait Islander communities to assist in the achievement of better performance
• in its negotiations with other Commonwealth and state/territory agencies (FaCSIA) for future NAHS projects identify and agree with those agencies, at the national level, a sound basis for funding and cooperative effort for Indigenous employment and training.

In the ANAO's follow-up report of 2003-04 it noted that:

• ATSIS does not report to stakeholders against the stated programme objective to increase commitment and support for infrastructure projects
• ATSIS partially implemented the recommendation that the agency should report using more detailed output and cost information to make certain that NAHS reporting complies with the Government's accrual budgeting expectations and more broadly the ANAO considers that the current level of aggregation of NAHS programme reporting makes it difficult to identify the particular contribution that the NAHS programme makes in improving services to Indigenous communities
• elements of CHIP contribute across several Outputs and the performance measures are not specific to measuring NAHS programme outcomes and ATSIS should report on the aggregated performance of activities/sub-programmes under the CHIP. The current level of aggregation of performance reporting of the contribution of CHIP elements does not easily allow external stakeholders to identify the contribution of sub-programmes such as the NAHS programme to the
  performance of outputs and
• ATSIS should develop its performance indicators for assessing, monitoring and reporting on NAHS performance to improve stakeholders' ability to understand ATSIC's role in the delivery of housing and infrastructure for environmental health purposes.

The ANAO found that the current level of reporting of financial performance information, such as output costs, provided a broad assessment of the efficiency and cost effectiveness of the NAHS programme. The ANAO suggests that the provision of additional financial information on the NAHS programme, including cost effectiveness and operational efficiency against the NAHS programme objectives (for example, the cost of providing housing and infrastructure for environmental health benefits) would be beneficial for stakeholders wishing to form a detailed view of the NAHS programme.

That the ANAO recommendations warrant revisiting is clear after reviewing the documentation provided by Programme Manager, Arup:

• the ATSIC National Aboriginal Health Strategy Environmental Health Programme Project Management Contract of 5 November 2002
• current FaCSIA Programme Management Services Contract for the National Aboriginal Health Strategy (provided by FaCSIA to this review) and
• the FaCSIA Industry Briefing for NAHS 3 held on 16 January 2006.

In considering future options for cost effective design and construction, as well as project management, the current fee arrangements provide a useful benchmark against which competitive tenders could be evaluated.

The following extracts (shown in table 12) from the current NAHS 3 contract provide a basis for assessing the cost effectiveness of the programme and project management arrangements.

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Table 11 Fees payable to Contracted Program Manager (CPM) for Grant Projects (excluding the Establishment Services and the Overarching Services) for average project of $2.5M⁶³

Project Description	Total capital value of CPM Grant Projects	Fee (expressed as percentage of capital value of CPM Grant Project)
Small programme (5 projects)	$11M	4.08%
Medium programme (10 projects)	$25M	3.88%
Large programme (30 projects)	$80M	3.48%

A major problem observed was the focus on smaller projects by the contract programme manager with an average programme of $2.5 million. This is well below the negotiated range of programmes to $80million as shown in the above table.

The practical implication is that there is an inbuilt incentive for contractors to 'cherry pick' small projects in a range of communities and not address the real community need in a cost effective and integrated way.

To gain better cost efficiencies it is recommended that the future contractual arrangements for programme management, project and construction management and the associated fees, for the design, construction and maintenance of Indigenous housing and infrastructure be regularly benchmarked against accepted industry standards in regional and remote areas⁶⁴.

It is recommended that regional level construction management arrangements be established on a competitive tendering basis, to co-ordinate planning and delivery of housing and infrastructure to meet current needs.

Table 12 Programme Management Fee Basis Payment Timeframes Milestones – Project Planning Phase

Key CPM Grant Project Milestones	Percentage of Fee per Project Payable
Upon Execution of an Official Order	10%
Recommendation to Grantee Community of Project Manager appointment	20%
Delivery of Design Report	20%

Source current NAHS agreement

Payments in Delivery Phase

Subsequent to Departmental approval of the Design Report for each CPM Grant Project, unless the department specifies otherwise in the Official Order the Department will pay up to a maximum of 50% of the Fee for Project for the CPM Grant Project to the CPM in monthly instalments.

Table 12 is an extract from the Current NAHS Agreement and shows that some 50% of the contract fee is paid before work even commences on the project. While it is acknowledged that some design work and preliminary planning is needed, functioning and liveable housing is the objective.

As part of this review we observed houses that were built without the necessary services (water, power and sewerage). There was also evidence of housing delivered with major faults.

To address these issues it is recommended that a review be carried out of existing designs and materials with attention being paid to the local climatic conditions. A 'best of' selection should be placed on a website for all relevant parties to draw on thus improving the structures, avoiding duplication and better directing available funds to construction.

It is recommended that regional level construction management arrangements be established on a competitive tendering basis, to co-ordinate planning and delivery of housing and infrastructure to meet current needs; benefit from economies of scale; and, 'complete' the construction work in a single, integrated program including through options such as prefabricated housing and utilizing the resources of other residential housing providers, eg. mining companies etc. State and Territory government agencies, as well as private sector contractors, should be able to compete for RIAS contracts.

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The Army Aboriginal Community Assistance Programme (AACAP)

Another element of the CHIP programme is AACAP – The Army Aboriginal Community Assistance Programme.

AACAP is a cooperative initiative between FaCSIA, the Department of Health and Ageing and Army to improve environmental health conditions within remote Aboriginal communities. This initiative was announced in November 1996 after members of the Council for Aboriginal Reconciliation met with the Prime Minister earlier that year to raise concerns about the poor primary health of Indigenous Australians. The most current MOU was signed on 27 March 2006.

A Steering Committee with representation from all key organisations runs the programme, identifying appropriate locations for project delivery. Each project has a construction component, a health component and a training component. The construction component focuses on the provision of environmental health infrastructure such as housing, water, sewerage and electrical services as well as improving access to primary health care facilities by constructing or upgrading roads and airfields. The health component focuses on augmenting existing community, medical, dental and veterinary programmes. The training component focuses on specific skills required within the community and includes courses on construction and building maintenance, vehicle and small engine maintenance, welding, concreting and cooking.

It is noted that this provides a range of training for the Armed Services that has delivered real benefits in peacekeeping and reconstruction missions throughout the world, and has strong support throughout the senior ranks. As well, it delivers housing and infrastructure that may otherwise not be available. However, due to its unique characteristics, it is not a cost model that can be applied to any other delivery method.

Fixing Houses for Better Health Programme (FHBH)

Fixing Houses for Better Health (FHBH) projects use the Housing for Health approach to assess and fix health hardware. The approach has a safety and health focus and is underpinned by a philosophy of "no survey without service". The first rounds of projects were known as FHBH1 and were funded in 1999-2000 through the Aboriginal and Torres Strait Islander Commission. These projects surveyed and fixed health hardware in 969 houses in 29 communities for a total of $3.5 million⁶⁵.

In the 2001 Federal budget, the Department of Family and Community Services (FaCSIA) was allocated $9 million over four years to continue funding FHBH projects. In 2001-02 and 2002-03, FHBH2 projects assessed and fixed health hardware in 434 houses in 11 communities for a total of $3 million. In 2003-04, FHBH3 projects assessed and fixed health hardware in 446 houses in 12 communities for $3 million. In 2004-05, FHBH4 projects assessed and fixed health hardware in 545 houses in 19 communities for $3 million⁶⁶.

In January 2005 independent consultants (SGS Economics and Planning Pty Ltd and Tallegalla Consultants Pty Ltd) were commissioned by FACSIA, to complete an evaluation of the FHBH projects 2, 3 and 4. The results of the evaluation and recommendations were published 2006⁶⁷.

While FHBH projects have been funded under CHIP, it is not within the scope of this review to comment on other consultants' reviews of components of CHIP. However, to provide a complete and consistent set of recommendations to the Department, this review has noted the findings and recommendations of that report. Particularly significant to the CHIP Review are:

• the FHBH approach is a conceptually straightforward methodology which accords with best practice asset management principles and has been shown to be appropriate and adaptable to its circumstances. (FHBH Evaluation Review Recommendation 2)
• the demonstration role of the FHBH projects in capacity and partnership building is built upon with explicit regard for the limits to what this role can achieve. (FHBH Evaluation Review Recommendation 3)
• changes to the FHBH information system be implemented so as to enable project by project financial information to be incorporated and that all available financial information previously gathered be integrated into this system, is strongly supported as consistent with improving the national understanding of the condition of Indigenous housing and better targeting funding to meet current need including for asset maintenance. (FHBF Evaluation Review Recommendation 10).

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Infrastructure And Municipal Services

The current CHIP funding for community infrastructure and municipal services is provided "to enable the provision of essential municipal services by supplementing the efforts of State, Territory and local governments to ensure Aboriginal and Torres Strait Islander people are able to live in a location of their choice and have access to essential services that are consistent with and appropriate to their needs"⁶⁸.

In considering the strategic objectives for providing Indigenous Australians with access to essential service infrastructure such as water, power, sewerage and local government services such as waste management, it is proposed that funding for these services be moved to 'mainstream' providers best able to provide these services.

Some of the current arrangements such as providing diesel powered fuel and a series of stand-alone solar generators received mixed reports from stakeholders. In addition, there is the administrative burden for each community managing and maintaining their own supply of power and access to water and sewerage services to meet basic public health standards.

Other items of infrastructure such as roads and airstrips, passed to communities as assets, have not been maintained. Recent initiatives by the Department of Transport and Regional Services (DOTARS) to provide additional assistance with the maintenance of these infrastructure assets provide a useful initiative in looking at options to provide the capacity to maintain these assets. The funding for municipal services through untied Financial Assistance Grants is unlikely to deliver improved outcomes for Indigenous communities. Other funding options, including direct Specific Purpose Payments (SPP) will be required to deal with the Indigenous infrastructure and municipal service needs. The rural assistance and regional planning frameworks (covering roads, airstrips, barge landings and jetties and other municipal services) of DOTARS offer possible options.

The other major issue raised in this review relating to infrastructure and municipal services was the impact of CDEP funded positions in cross-subsidising these services while at the same time not fostering the level of full-time, real wage employment and the development of skills and the maintenance of assets that could have been achieved.

Appendix 3 shows data for each State/Territory's CHIP funding for Municipal Services.

Recommendations from this review include

• linking all future housing with access to sustainable essential services including water, power and sewerage
• case manage those communities in remote locations which need a high level of assistance to increase the standard and availability of housing, related infrastructure and municipal services
• provide essential services infrastructure eg. water, power, sewer, transport access and municipal services through "mainstream" service delivery arrangements
• regional level construction management arrangements to be established on a competitive tendering basis, to co-ordinate planning and delivery of housing and infrastructure to meet current needs
• develop arrangements for the delivery of essential services infrastructure eg. water, power, sewer, transport access and municipal services that are consistent with other Australian, State and Local government arrangements. This may require additional financial assistance being provided or other options such as Special Purpose Payments through the Grants Commission.

Measuring CHIP against current whole of government strategic approach to Indigenous affairs

In the broader social policy context, CHIP does not appear to contribute significantly to achieving the objectives of economic development or access to employment and training which are currently the strategic priorities of other policy agendas. But a housing programme such as this could, and in the future, should. The following figure 26 draws the comparison between CHIP and the high level COAG strategic framework for all Indigenous service delivery; the Building a Better Future framework; and, the other relevant programme specific policies.

Table 13 Delivery Against Whole of Government Objectives

Australian Government Role: Indigenous Housing and Infrastructure

Current Arrangements
CHIP Policy Alignment with	Medium	Level of Alignment	Marginal N/A
		Low
BBF 2001
Identify and address unmet housing needs of indigenous people	√
Improve the capacity of indigenous community housing organisations& involve indigenous people in planning and delivery		√
Achieve safe, healthy sustainable housing		√
Coordinate program administration			√
COAG Better Service Delivery 2004
Sharing Responsibility		√
Harnessing the mainstream			√
Streamlining service delivery			√
Establishing transparency and accountability		√
Developing a learning framework			√
Focussing on priority areas	√
Other Government policies for indigenous people
Training and skills development			√
Employment		√
Improved health outcomes		√
Economic development and wealth creation			√
Home ownership			√
Assisting with transient homeless indigenous people			√
Reducing red tape			√

Source: PricewaterhouseCoopers analysis

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The review found that there is a strong misalignment of policy and delivery.

Measuring CHIP against recent Red Tape Reviews of Service Delivery by FaCSIA

The current administrative arrangements in place for CHIP reflect the nature of the programme, i.e. it provides a very broad range of housing, municipal services, construction, maintenance and other essential services in urban, regional and remote Indigenous communities through Indigenous organisations, State and Local Government and contractors.

The Departmental resources reflect recent machinery of government changes and historical arrangements splitting policy and programme management. The Office of Indigenous Policy Coordination (OIPC), which has policy co-ordination responsibility for Indigenous affairs, was transferred from the Department of Immigration and Multicultural Affairs to the Department of Families, Community Services and Indigenous Affairs (FaCSIA) in January 2006. The Community Housing and Infrastructure Programme, as part of the Indigenous Housing and Infrastructure Branch, has been located within FaCSIA since machinery of government changes of 2004.

The funding approval process for CHIP is split between:

• providing three year untied funding to State and Territory governments
• direct funding to Indigenous Community Housing Organisations
• indirect funding to ICHOs through NAHS contractual arrangements.

Other specific programmes such as:

• Fixing Houses for Better Health (FBHB)
• the Army Aboriginal Community Assistance Programme (AACAP)
• the Bushlight Centre for Appropriate Technology (CAT) Renewable Energy programme are also funded under CHIP to provide housing and infrastructure.

Recent reviews of 'red tape' at the Departmental level for delivering its programmes and services and at the recipient organisation level show starkly the complexity and high volume processing arrangements that are in place for Indigenous programmes and services⁶⁹.

Both reports comment on the fragmented nature and divergent approaches to the administration of Indigenous housing. A significant summary finding of the Deloitte report is that "there is significant confusion within IHIB around where responsibilities li.e. across the funding agreement life-cycle; these responsibilities are not always clearly communicated or understood in other programmes; and, this confusion affects every process in the funding agreement life-cycle bar none".⁷⁰

A similar level of confusion and complexity was reported in the Morgan Disney Report, particularly around the numbers of contracts in place for services; and the amount of paperwork and duplication by each department⁷¹ providing services.

To address these issues, fundamental reform to, and simplification of, the operational framework is recommended as a result of this Review.

Proposed Framework

In proposing a strategic and operational framework for providing housing and accommodation, the priorities are seen as increasing access to public housing, private rental and homeownership nationally.

The recommendations and proposed framework are based upon analysis of issues and data covered in this report.

Recommendations for a new Strategic Framework

To address the remaining need for housing and related infrastructure, it is recommended:

• that the Community Housing and Infrastructure Programme (CHIP) be replaced by a Remote Indigenous Accommodation Service (RIAS) from 1 July 2007 for a period of six years.
• that RIAS focus solely on regional and remote Indigenous communities and 'emerging towns' with a significant Indigenous population, in Western Australia, South Australia, Queensland and the Northern Territory.
• link all future housing and infrastructure provided for Indigenous Australians to access to sustainable essential services such as water, power and sewerage; transport; and basic support systems such as law and order, education, training, employment and health.

The following three diagrams illustrate the current proposed and strategic operational framework together with a suggested approach to implementation.

Diagram 1 Current Operational and Strategic Framework

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Diagram 2 Proposed Operational Framework for Indigenous Housing and Infrastructure – developed by PricewaterhouseCoopers

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Diagram 3 Proposed New Indigenous Strategy Implementation

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The Operational Framework

The role of RIAS

The purpose of the new operational framework is to focus Australian Government funding on to specific needs-based projects to provide the housing and infrastructure necessary to alleviate overcrowding – particularly in remote communities. It is proposed this be done by a specific purpose entity within FaCSIA. This is part of the solution to improving efficiency in delivering housing to targeted areas. The current system is and has been failing.

It is proposed the new entity be called RIAS – the Remote Indigenous Accommodation Service. There are numbers of options available to create RIAS within FaCSIA: resources from within the Indigenous Housing and Infrastructure Branch (IHIB) could be utilised; resources from within the Office of Indigenous Policy Co-ordination(OIPC) could be allocated; or the role of Aboriginal Hostels Ltd (AHL) could be expanded. An expansion of AHL's current role and resources would align with AHL's existing Charter. AHL has a company structure and it is a long standing, practical Indigenous organisation already providing accommodation services on the ground, to Aboriginal and Torres Strait Islander people.

We recommend some flexibility in the final details of the operational framework for RIAS until the condition and ownership stock-take of housing is undertaken and a clear picture of the size and scope of the work to be undertaken by RIAS is established.

At present the provision of housing in remote areas is through a mix of NAHS housing and infrastructure under programme and project management contracts, ARHP funding through state and territory governments and via direct funding of Indigenous Community Housing Organisations.

It is acknowledged that the recommended approach is outside the scope of the current pooled funding approach and could replace the current outsourced NAHS arrangements and untied funding provided to the state and territory governments to provide housing and infrastructure. However, it is considered the most efficient and workable means available to actively target remote Indigenous communities; to ensure co-ordination of housing and infrastructure delivery; to identify and prioritise future need; and bring about better consultation at the community level.

It is also considered to be a time efficient way to establish RIAS given the proposed 6 year role envisaged for RIAS.

For NAHS, a contractor's assessment of need recommended seven years ago has been the basis of funding. As a result, consistent feedback to this Review was that housing provided this way:

• did not involve adequate current needs assessment
• was often inappropriate to current conditions of the communities
• was extremely costly
• diluted funding by not achieving economies of scale and therefore incurred much higher overheads.

For ARHP funding, the expenditure is not tied or targeted to specific remote communities and as a consequence, there has not been a clear outcome in terms of providing adequate housing in remote communities.

That means that more money was spent for less housing.

In addition, under the various arrangements in place through NAHS, ARHP pooled funding provided to state and territory governments and direct funding of ICHOs, the provision of housing is not always co-ordinated with the essential services providers. As a result, there continues to be examples of houses being built with no water or power and often in areas where the provision of these services could not be guaranteed in a reasonable timeframe. Further, there was feedback to this review that NAHS, ARHP, State and Local Government initiatives are not effectively coordinated.

In many cases there is evidence that the specification of inclusions and the workmanship in the delivery of them leaves much to be desired. FaCSIA has over a long period of time developed a guide for the types of housing that are appropriate, their design and the specification of inclusions that meet the target of sustainability and appropriateness that is often missing in houses. This guide should be the basis of RIAS specifications for housing and related services.

For these reasons the Australian Government should, through FaCSIA, set priorities and ensure transparent accounting and outcome based accountability from the providers of housing. By using RIAS to target needs of these communities and assess and define the outcomes necessary to achieve safe, sustainable housing then, the Australian Government can manage the assignment of priorities and the allocation of funds.

What will Remote Indigenous Accommodation Services (RIAS) do and how?

RIAS in direct consultation with each community should:

• define the needs for housing and related services and infrastructure
• set the target outcomes
• contract directly to provide housing and infrastructure such that houses are liveable on completion
• have an enforceable warranty on fittings and workmanship
• have sustainable municipal services and infrastructure that is operational.

Where the states and territories are able to provide such facilities they will be tasked and funded by specific contracts with RIAS, to deliver specific housing and related services and infrastructure.

RIAS should also assess the locations of potential housing based on the services (health, education and law and order) that can be delivered to that location. It is recommended that RIAS continue the move away from focusing on building new housing on "on country" outstations where there is no certainty of access to education, health and law and order services. As well, examine the benefits of providing "mobility incentives" to assist families or individuals to move to housing in locations with better access to health, education and law and order services.

By adopting such an approach, the combined inputs can also be directed to building and maintaining skills in the local and area-based communities and develop over time local economic activity much as local governments have in other areas. Such a plan would initially augment Government funding and over time provide (for some) an increasing degree of autonomy from welfare programmes and developing economic independence through business based on services provision and other activities.

RIAS should be staffed and managed in such a way that FaCSIA can track the funding provided to the remote areas and relate it directly to the houses built and community needs met. This will require contracts with providers and communities to achieve the stated objectives of the Minister and Secretary of FaCSIA.

A governance framework will need to be developed to support this approach including reporting and comparative measurements to ensure that quality and costs are measured against not just the objectives for each project but compared in ways that show inefficiencies and anomalies.

In this way RIAS will deliver less costly housing both form the point of view of building costs and operational and supporting services. Most importantly though, RIAS will be able to directly influence the price of housing and achieve economies of scale that are not present in the current approach.

21. Indigenous Housing Needs, A Multi-measure Needs Model, October 2005, AIHW
22. Overcoming Indigenous disadvantage – Key indicators 2005
23. Australia's health 2006 –Australian Institute of Health and Welfare Cat no (Aus) 73
24. Bailie & Runcie 2001
25. Ibid
26. Two main projections of the Indigenous population have been generated and reflect either no unexplained increase in population (low series) or unexplained growth continuing at the rate observed between 1996 and 2001 (high series).
27. ABS, Experimental Estimates and Projections 30 June 1991 to 30 June 2009, Australian Bureau of Statistics Paper no. 3238.0 27/9/2004.
28. J Taylor, Population and Diversity: Policy Implications of Emerging Indigenous Demographic Trends, Centre for Aboriginal Economic Policy Research, Discussion Paper 283/2006.
29. FACSIA website
30. FACSIA 2003, Review of Aboriginal Rental Housing Programme internal document
31. SCRGSP (Steering Committee for the Review of Government Service Provision) Overcoming Indigenous Disadvantage: Key Indicators 2005
32. October 2005 Australian Housing and Urban Research Institute (AHURI) Bulletin Indigenous Access to Mainstream Public and Community Housing
33. Stakeholder feedback particularly WA and NT. Refer page 103-122 of this report
34. See to Appendix 5 for a summary of international initiatives
35. Indigenous Economic Empowerment: Fact or Fiction Joseph Elu Chairman, Menzies Research Centre Lecture Series Brisbane, March 2001
36. Spiller, Gibbins & Swan, 1998 Financial Viability of Aboriginal and Torres Strait Islander Housing
37. According to CHINS 1999, cost of Medium cost area dwelling. We understand that the cost of dwellings in remote areas particularly has increased tremendously since 1999 approaching $400,000 in 2006.
38. Annual grants of $11,000,000 divided by 22,000 dwellings
39. According to CHINS 1999
40. Based on real estate property management charges of 10% reduced by real estate industry profit margins of 16%
    (ATO Statistics 2004-05, corporations data) multiplied by implied rental charge on property with 20 year life and 5% interest plus maintenance expenditure.
41. AHURI Research and Policy Bulletin, Issue 72 May 2006, The Cost of housing in diverse Indigenous communities in Australia
42. AHURI, op cit, pg. 4
43. Based on an $80,000 dwelling with a 20 year life, 5% interest rates and an expense profile as set out in 3.1 above
44. Department of Family and Community Services 2003 National Indigenous Housing Guide 2nd edition
45. Victoria FaCSIA state office submission to this review, QLD "One Social Housing Strategy"; Stakeholder interview Mita Koodi ICHO Qld. 3 Aug 2006; Yilli Rreung ICHO Darwin 10 Aug 2006; AHL Interview Canberra 19 Jun 2006; AHL Port Augusta 24 July 2006.
46. AIHW 2006, Australia's Health 2006, cat no. AUS73, p. 232
47. ibid
48. ibid
49. ANAO National Aboriginal Health Strategy Delivery of Housing and Infrastructure to Aboriginal and Torres Strait Islander Communities Follow-up Audit Report no. 44, 2003-04, ANAO
50. ibid
51. ibid
52. ibid
53. Arup in Australasia provides engineering, design, planning and corporate advisory services. www.arup.com/australasia/
54. Parsons Brinckerhoff Australia provides operational design and project management www.pb.com.au
55. Gutteridge, Haskins and Davey Infrastructure, Mining & Industry, Defence, Property & Buildings and the Environment www.ghd.com.au
56. op cit ANAO 2003/04
57. ibid
58. ibid
59. ibid
60. ibid
61. ibid
62. 2003-04, ANAO National Aboriginal Health Strategy Delivery of Housing and Infrastructure to Aboriginal and Torres Strait Islander Communities Follow-up Audit Report no. 44, pp 7-8
63. NAHS 3 contract provided by FaCSIA to this review, pg. 23
64. ANAO National Aboriginal Health Strategy Delivery of Housing and Infrastructure to Aboriginal and Torres Strait Islander Communities, 1999: ANAO National Aboriginal Health Strategy Delivery of Housing and Infrastructure to Aboriginal and Torres Strait Islander Communities Follow Up ANAO Audit Report No 44, 2003, 2004
65. National Housing Conference 2005 FHBH, Fixing Houses for Better Health in Remote Communities, Tess McPeake, Indigenous and Infrastructure Branch FaCS, Paul Pholeros, Director, Healthabitat, pg. 2, 2005
66. ibid
67. FACSIA 2006 Occasional Paper Number 14 Evaluation of Fixing Houses for Better Health Projects 2, 3 and 4.
68. October 27, 2009 FaCSIA Agency Budget Statements – Agency Outcomes – Outcome 2, 2005-06
69. A Red Tape Evaluation in selected Indigenous Communities Draft Report, Morgan Disney and Associates Pty Ltd, February 2006 and Deloitte, Peter Bycroft 17 June 2005, Business Transition Team Review Report to IHIB, FaCS Re-engineering Project, As-Is Assessment – BPR Working Group Presentation, 17 January 2006
70. ibid
71. ibid

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