How else to cut it: ruminations on remote housing and Senate Estimates March 2018

O, what may man within him hide,
Though angel on the outward side!

Measure For Measure, Act 3, scene 2

Last week the Finance and Public Administration Estimates Committee of the Senate convened for a day to address cross-portfolio Indigenous issues. The link to the transcript is here.  

I don’t propose to attempt to comprehensively summarise the hearing, rather I focus on a select number of policy issues of particular relevance to remote Australia.

In particular, I wish to focus on the issue of remote housing which has been the subject of previous attention in this blog (link here).

The discussion in Estimates was limited and partial, insofar as the bulk of discussion involved Senator Ketter from Queensland and he was focussed almost entirely on the implications of the Commonwealth’s approach for his own state.

Some basic facts.

The current National Partnership was initiated in 2008 and was for a period of ten years. It was innovative insofar as it took funding certainty beyond the normal four year forward estimate period. There was no discussion or understanding at the time that funding would cease at its expiry, merely that arrangements would need to be renegotiated.

Second, it involved $5.5bn in funding to the states over the ten years, all contributed by the Commonwealth. This was subsequently reduced to $5.4bn after the current Government cut $95m in 2015. In other words, the Commonwealth is currently contributing around $540m per annum on average to remote housing.

Third the current Minister initiated a review in late 2016 presumably as a precursor to renegotiating the current arrangements. The review which was finalised in early 2017 and made public in October 2017 makes a number of recommendations. The review was, in my view, seriously deficient in many key respects; see my previous post on this issue here. Most notably in the context of the current debate (see pages 51/52 of the Estimates transcript), there is no comprehensive information included on expenditure on the remote housing program year by year and state by state. Nor is there detailed information which justifies the Minister’s current allegations about states not allocating Commonwealth funding to housing purposes. In the absence of any serious reporting from his Department on these issues, my assessment is that they have virtually no basis nor justification.

Fourth, over the course of the ten years, arrangements were negotiated with NSW, Victoria and Tasmania for funding under the program to cease. This was essentially in acknowledgment that their ‘remote regions’ were minimal and outstanding housing needs had been largely met. It was not (contra Minister Scullion’s assertions at page 51) merely that they ‘had taken on their own responsibilities’. Moreover, the exit of those jurisdictions was the result of joint and methodical negotiation, not a ‘take it or leave it’ ultimatum from the Commonwealth as appears to be the approach adopted by Minister Scullion with Qld, SA and WA.

And fifth, the Minister appears to have allocated insufficient time for negotiation of new arrangements and has failed to put basic information on the table outlining the Commonwealth’s parameters and policy directions. Indeed, as previously argued (link here), it seems as if the Minister deliberately delayed negotiations so as to avoid having to include future funding in the Commonwealth’s budget estimates released in the December 2017 MYEFO.

The Minister’s arguments (insofar as they can be ascertained) appear to be as follows:

First, the Minister has alleged that the states (but not the NT) have mis-allocated current remote housing funding. As he stated in Estimates (at page 51):

Not only am I a minister but also I am a champion for Aboriginal and Torres Strait Islander people. When they put to me that in the state you're talking about someone has taken from them $600 million that should have gone to them, yes, I'm going to stand up. I'm not walking away from negotiations. I'm also not walking away from the bloody truth. And if you tell me the only money you're not giving out is to Aboriginal and Torres Strait Islander people, it's a bloody racist policy, mate. I don't care how else you want to cut it. So, no, I'm not walking away from this. We will negotiate on proper terms, but they will also be held to account for their actions.

As noted above, the Minister’s own review did not suggest that Queensland had shifted $600m, and his figure appears to have been conjured out of this air. Bluster might make effective politics, but it is extremely poor public policy. Unfortunately Senator Ketter failed to pursue this particular issue with the result that the Minister appears to have bludgeoned his way through.

Second, the Minister is basing his argument for not committing continued Commonwealth funding on the proposition that the states and territories have responsibility for social housing, and that the current National Partnership was a one-off arrangement or surge designed to remove the deficit in housing provision in remote regions.

The response to this rather complex argument is itself complex. The Commonwealth has historically been and continues to be the major player in funding social housing, and provides the bulk of social housing funding nationally – around $1.5bn pa - through the National Affordable Housing Agreement. In addition, the Commonwealth allocates some $4.5bn pa to low income individuals via the Commonwealth Rent Assistance program. Unfortunately, the absence of a private sector rental market in most remote communities means very little of this funding reaches Indigenous communities. So it is disingenuous if not dishonest to argue that the states have primary responsibility for funding social housing. And it is also disingenuous if not dishonest for the Commonwealth to do nothing to fix the ‘misallocation’ of Rent Assistance away from remote communities.

The states do have primary responsibility for delivering and managing social housing, but the funding responsibility is shared and historically in remote it has been with the Commonwealth. The Minister’s aspiration for the states to pull more weight in remote housing is legitimate as far as it goes, but for the Minister to use this argument as a fig leaf to cover further Commonwealth funding cuts is extremely poor public policy.

As to the ‘one-off arrangement’ argument, the Commonwealth has a long history of funding remote housing at least back to 1972. There was never an expectation that the current remote housing program would cease, or could cease upon the expiry of the ten years. Moreover, as the Ministers own review makes clear, the gap in social housing provision between remote and non-remote regions has been substantially reduced, but is still significant and thus there is no policy rationale for ceasing the ‘funding surge’ at this point.

So what did we learn from the recent Estimates Committee hearing?

First, with only three pages out of some sixty pages dedicated to discussion of remote housing issues in the transcript, the Labor Opposition and Greens appear to place remote housing issues a long way down their Indigenous policy priority list. This does not bode well for remote communities.

Second, the Minister in his opening statement to the committee made a point of confirming that he is not walking away entirely from remote housing:

In terms of the remote housing strategy, I am pleased to once again confirm that, despite the many fictitious and irresponsible claims to the contrary made by various state Labor housing ministers, the Commonwealth is not walking away from remote housing. We are, however, still waiting for those Labor states to come to the table and to put a clear and unequivocal financial commitment on the table. So far, the only jurisdiction out of the remote housing strategy jurisdictions to put any funds on the table is the Northern Territory, and I commend them. I'm looking forward to hearing from Mr de Brenni, Mr Tinley and Minister Zoe Bettison in South Australia on what their commitment to remote Indigenous housing would be.

Third, the Minister confirmed that the Commonwealth would not be providing a formal response to the recommendations of the review of Remote Housing which he commissioned, arguing with a classic non-sequitur that it is ‘an independent review. It informs where we go’ (page 50). While not unprecedented, it is highly unusual for a Government not to respond to a formal review, and leaves the public at large and Indigenous interests in particular in the dark as to the Government’s policy intentions.

Fourth, the Minister gave no indication of the quantum of funding the Commonwealth would be providing nationally for remote housing. As I have previously speculated, if the NT is to get $110m pa from the Commonwealth, and the NT has around half the outstanding remote housing need nationally, this suggests that the best allocation will be around $220m pa from the Commonwealth. This would represent a cut in Commonwealth funding of around $300m pa. and if fully matched by states and territories, a net cut of $100m pa on current funding levels. As an aside, as I have previously noted (link here) the outstanding need over the next decade for housing in remote Australia is probably around $9bn pa or $900m pa. The Turnbull Government is laying the foundations for a serious deepening of the major slow motion social disaster already underway in remote Australia.

Fifth, the Minister did indicate that the Commonwealth would be prepared to match the NT up to a figure of $110m pa. for as long as there was an outstanding need or housing deficit, via a bilateral agreement with the NT (refer pages 52/53 of the transcript). He has however given no indication of the proposed length of the bilateral agreements he is proposing.

Sixth, there was a rather extraordinary interchange between Senators McCarthy and Dodson and Department of Health officials regarding the worsening epidemic (to use Senator Dodson’s term) of syphilis and congenital syphilis in northern Australia, and the limited role and commitment of the Commonwealth in addressing this epidemic. Minister Scullion applied some soothing balm to the injury and agreed to ‘take a larger personal interest in this matter and report back to the committee’. The discussion was extraordinary because it was focussed largely on responses rather than prevention, and totally disconnected from the demographic realities of remote communities, and the huge outstanding housing needs.

Seventh, this discussion was followed by an insightful exchange between Senator Ketter and officials including Dr Hobbs, the Commonwealth Deputy Chief Medical Officer, on the Commonwealth’s Rheumatic Fever Strategy:

Senator KETTER: What causes that in the first place?

Dr Hobbs: Streptococcal infection is very common in the community, either in Indigenous people or indeed in non-indigenous people. But it's more common in circumstances where there is overcrowding, poor access to hygiene infrastructure and intercurrent illness. The response then is of the immune system, and that may target the heart or other organs, but particularly the heart, and then lead to the development of an anatomical defect, usually on the valve of the heart, which then progresses to rheumatic heart disease over a period of time.

Senator KETTER: If there was investment in overcrowding and housing conditions, would you say that would lead to an improvement of outcomes here?

Dr Hobbs: Certainly. The overcrowding and the access to hygiene infrastructure are a very important part of prevention. There has also been a lot of work done internationally and in Australia in collaboration with colleagues in New Zealand on a vaccine, but that's been very, very difficult to develop to date.

Senator KETTER: Minister, you can see here that housing is very important in relation to this particular issue. The government is increasing funding for this national partnership agreement. What I'm concerned about is, on the one hand, we're seeing developments there, but when you have housing as a driver, you've got the government moving in two different directions. If we don't fund housing properly then we're not going to see improvements in the area of rheumatic fever.

Senator SCULLION: I can't disagree with you. As I've indicated, I'm trying to hold those states accountable to ensure that they continue to fund housing.

Notwithstanding the Minister’s double negative response – a second resort to soothing balm - he gave no hint or acknowledgment that it is the Commonwealth Government’s policies which will, on the evidence of the Commonwealth’s own Deputy Chief Medical Officer, have further deleterious impacts on the health of remote communities.

Conclusion

The recent Senate Estimates Hearings served to reinforce that the Commonwealth is actively pursuing a political agenda to pressure the four Labor run jurisdictions who are beneficiaries of the current remote national partnership agreement to contribute greater funding.

Greater state investment in remote housing provision is a legitimate aspiration for the Commonwealth to pursue through genuine and serious negotiation, but it is entirely hypocritical to adopt a political strategy which advocates greater state contributions merely so as to sow confusion and divert attention from the Commonwealth’s apparent intentions to cut funding further than they have already.

The Minister and indeed the Prime Minister would do well to reflect very carefully on Minister Scullion’s advice to the Estimates Committee:

I'm also not walking away from the bloody truth. And if you tell me the only money you're not giving out is to Aboriginal and Torres Strait Islander people, it's a bloody racist policy, mate. I don't care how else you want to cut it.