The 2019 Infrastructure Australia Audit: the spectre of remote housing

Oft have I seen a timely-parted ghost,
Of ashy semblance, meagre, pale and bloodless,…

King Henry VI, part 2, Act 3 scene 2

The graves stood tenantless and the sheeted dead

Did squeak and gibber in the … streets

Hamlet Act 1, scene 1

I previously posted about the 2017 Infrastructure Australia (IA) audit and the earlier 2015 audit of  Northern Australia infrastructure needs (link here, here and here) where I was critical of a range of shortcomings related to Indigenous related infrastructure.

In February 2019, IA released its 2019 Priority List (link here) which included a number of positive developments for remote Indigenous interests. The associated media release from IA (link here) notes:

With a record 121 nationally significant proposals and a $58 billion project pipeline, the Priority List will guide the next 15 years of Australian infrastructure investment,” said Infrastructure Australia Chair, Julieanne Alroe.

“The 2019 Priority List provides a credible pipeline of nationally significant proposals for governments at all levels to choose from. As an evidence-based list of opportunities to improve both our living standards and productivity, the Priority List reflects the diversity of Australia’s future infrastructure needs across transport, energy, water, communications, housing and education.”

It goes on to make the undoubtedly correct and welcome (if overdue) statement:

“An important challenge faced across the country, and requiring coordinated action by all levels of government, is the provision of quality housing for Australians living in remote areas. Overcrowding and poor-quality housing in remote communities impacts on health and safety, education and employment outcomes, and has been identified by Infrastructure Australia as an investment priority that should be progressed by governments in the near term.[1]

In recognition of the complexity and cross-sectional issues involved in virtually all major infrastructure priorities, IA make a further recommendation to governments relating to progressing infrastructure priorities:

“With the release of the 2019 Priority List, and our Infrastructure Decision-making Principles last year, Infrastructure Australia is urging decision-makers to commit to solving any emerging or growing problem by embarking on a feasibility study to identify potential options, rather than a pre-defined project that may not be the most effective solution.

The 2018  principles include strong backing for greater transparency, assessment of alternative approaches, and commitment to post-completion reviews. These principles deserve support not least because they have been largely absent in the remote infrastructure policy domain for the past decade.

The Priority List includes remote housing as an initiative, not a project, which essentially means that it has not undergone a full business case assessment by IA, but requires further development and assessment (see page 8 of the Report for a fuller description of the distinction). Importantly, the remote housing initiative, which is described more fully at page 49, has been included as ‘an Infrastructure Australia identified initiative’ and the next steps listed are to identify an actual proponent. In other words, neither the federal Government nor the states and territories have identified this as an initiative of national significance.

In describing the opportunity represented by the remote housing initiative, IA note that relieving overcrowding will significantly improve health, safety, education and employment outcomes. After citing relevant data, they state:

ongoing investment is necessary to ensure the gap continues to close, thereby reducing the high associated social and economic costs.

The 2019 Priority List was followed in August 2019 by the massive 640 page 2019 Infrastructure Audit, titled An Assessment of Australia’s Infrastructure Needs

This new assessment (link here), notwithstanding some persuasive criticism regarding the limitations of its metropolitan analyses (link here), has made a number of significant changes which go some way to addressing my earlier criticism. For the first time, social infrastructure, including social housing, was included in the audit.

In its media release accompanying the 2019 Infrastructure audit, IA commented:

Poorer access to infrastructure services in our remote communities is reinforcing disadvantage. In many parts of the country, service provision falls below what is acceptable for a highly developed nation, including remote communities experiencing social housing overcrowding, limited access to drinking water, inadequate transport and poor telecommunications, which in turn translates to poorer health standards and quality of life for their residents.

In just four years, IA has shifted from completely ignoring these issues to acknowledging their existence and salience. This is a major step forward, and deserves congratulations. That said, a number of issues remain in terms of the adequacy of the IA analysis.

The section on social housing included a revealing table/graph (refer page 455). Headed ‘Homelessness is increasing in major cities and decreasing in outer regional and remote areas’, the table presented graphic data indicating that homelessness[2] in very remote Australia had decreased by 225 per 10,000 between 2006 and 2016. In contrast, the rate in major cities had increased by 11 per 10,000 over the same period. On closer examination, the data disclose huge discrepancies in overcrowding between urban and very remote Australia, with major city rates increasing from 35.4 to 45.5 per 10,000, while very remote rates declined from 819 to 594 per 10,000.

The framing of this analysis emphasises the significant progress made over the past decade, but fails to focus on the extremely low base that it is coming off, and the continuing extreme levels of overcrowding that persist. Reinforcing this framing, the report noted (IA 2019: 455) that the high rates of homelessness in remote areas ‘can be linked to challenges in providing adequate housing for these communities’.

The report proceeds to specify the extent of the outstanding social infrastructure housing need in the following terms:

The 2019 Infrastructure Priority List estimates that the combined economic and social cost of overcrowding for remote Aboriginal and Torres Strait Islander populations is expected to exceed $100 million per annum over the next 15 years based on existing overcrowding rates. However, after accounting for population growth, an additional 5,500 homes are still expected to be required by 2028 to reduce levels of overcrowding in remote areas.

This is the key paragraph, but it is extremely problematic for two reasons. First, I could not track down the reference to the $100m per annum economic and social cost in the 2019 Priority List estimates. It is not clear how this figure was calculated and what it represents. How does one place a dollar value on the constrained life opportunities of a young person subjected to the adverse implications of overcrowding?

Second, the quantum of outstanding need used (5500 houses) was sourced from the 2017 PMC Remote Housing Review. That review made clear that the figure was only partial, as it was based on 2011 census figures and not 2016 figures, did not include replacement of expiring stock, and more importantly, was designed to meet an ‘acceptable’ level of need some 10 percent in excess of overcrowding levels in mainstream Australia. See Remote Housing Review (link here) pages 2 and 24-5. I have previously provided more comprehensive critiques of this figure here and here.

The bottom line is that in relation to this topic, the IA Infrastructure Audit’s reliance on the headline figure in the Government’s Remote Housing Review is extremely unfortunate. It promulgates an inaccurate and policy relevant under-estimation of outstanding need, and demonstrates how poor and inaccurate  analysis can continue to live on and influence policymakers, ghost like, notwithstanding demonstrable and egregious flaws.

For these reasons, it is beyond time that the Commonwealth and the states undertook a forward looking policy review aimed at assessing the true extent of remote housing need (both current and expected), and identifying potential alternative funding models that might begin the process of addressing the very significant needs which exist and that will only grow larger over time. I mentioned four innovative opportunities in my Inside Story article (linkhere).

Notwithstanding the shortcomings in the 2019 Infrastructure Audit, IA have done a substantial service in resurrecting the issue of remote housing from its recent burial chamber. Despite ongoing attempts by the Federal Government to avert its policy gaze, this policy ghost will continue to haunt and increasingly torment policymakers. Indeed, the longer it is left unattended, the more difficult and expensive it will be for both the nation and First Nations citizens.

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[1] These words also appear in the Chair’s Foreword to the report.

[2] A person is defined as being Homeless by the Australian Institute of Health and Welfare (the source for the IA data) if she is living in either non-conventional accommodation or ‘sleeping rough’, or in short term or emergency accommodation due to the absence of other options (AIHW 2019). In very remote Australia, it is closely related to overcrowding in social housing.

Policy neglect and the Indigenous estate

        …policy, that heretic,
Which works on leases of short-number'd hours…

                                                                             Sonnet 124

One of the advantages of spending time on a university campus is the opportunity to attend seminars on interesting topics that are beyond my direct or current work focus and knowledge. In particular, it is almost always the case that while the speaker is focussed on delivering a specific message or insight, invariably I go away stimulated to think about issues and implications that were not necessarily the primary focus of the presentation.

On Wednesday last week, I attended two events: a seminar on Indigenous involvement in carbon farming presented by Rowan Foley, the CEO of the Aboriginal Carbon Foundation (link here), and a panel discussion on the economic issues faced by Indigenous Australians (link here). The panel comprised four ANU academics, Indigenous social scientists Professor Tony Dreise and PhD scholar Bhiamie Williamson, and economists Dr Boyd Hunter and Professor Bruce Chapman.

In thinking about the day afterwards, I was struck by the fact that notwithstanding a wide array of different topics, each of these five experts had given substantial attention to various issues related to the Indigenous estate. I don’t propose to attempt to summarise their presentations. Instead, I will selectively mine them for my own purposes, namely, to point to and emphasise the ongoing, and increasing, policy significance of the Indigenous estate for the nation and the parallel and to date short-sighted policy responses of governments.

Bhiamie Williamson made the point that the Indigenous estate is currently at around 60 percent of the Australian land mass and presented a map downloaded from the National Native Title Tribunal website which showed that taking into account current claims, the Indigenous estate is on track to comprise up to 80 percent of the Australian landmass (although not all of this will be exclusive possession). Here is a link to a selection of such maps. The policy import of these data driven visual tools is indisputable: our institutional and regulatory frameworks for non-urban land ownership have undergone extraordinary change over the past thirty years, and the efficiency and effectiveness of these new frameworks in meeting both Indigenous aspirations and national policy objectives are of crucial and growing significance.

Rowan Foley presented a set of statistics about carbon farming across Australia that included the following points: Indigenous carbon trading comprises around ten percent of the nation’s carbon farming trades, and across the northern savannah, Indigenous carbon farming comprises around 50% of the total activity. The point that came to my mind during Foley’s presentation was that there is a huge potential for growth in Indigenous carbon farming across the Indigenous estate. While he provided no statistics, my own speculative estimate is that less than ten percent of the Indigenous estate is being actively carbon farmed. If I am anywhere near correct, then there is huge potential for productive economic use of the Indigenous estate going begging. The existence of market based financial incentives to landowners is clearly not working. While it is possible that Indigenous landowners may be choosing not to engage in carbon farming (a choice that is theirs to make), it seems more likely that some combination of market and government failure is operating to inhibit what is widely acknowledged to be an economic activity strongly aligned with traditional Indigenous land management practices. This is an issue that policymakers ought to be concerned about.

Turning to the economics panel discussion, Professor Bruce Chapman, best known as a world expert in the theory of income contingent financing, and the architect of the Australian HECS scheme, spoke to the potential to explore a revenue contingent loan scheme across the Indigenous estate targeted at commercial opportunities generally. Coincidentally, he based much of his talk on papers I had co-authored with Jon Altman in 2004/2005. [For those interested, check out Altman & Dillon 2005 ‘Commercial development and natural resource management on the Indigenous estate: a profit related investment proposal’,  Economic Papers 24(3): 249-262. (link here)]. Chapman highlighted both the existence of market failure (including the existence of high transaction costs) and government failure in contributing to sub-optimal economic activity on Indigenous owned land across the nation. While his focus was primarily to encourage a stronger take up by the economics profession in focussing on these issues, the obvious take out from his argument is that policymakers should also be giving these issues greater attention.

Professor Tony Dreise pointed to the implications of the historical and geographic development of the Indigenous estate. In particular, he noted that the majority of Indigenous citizens reside in ‘settled’ south-eastern Australia, yet the lands returned to Indigenous ownership are primarily in remote Australia. This paradox feeds into a host of issues, not least the increasingly strident calls from within the Indigenous community for mainstream institutions to listen and hear their ‘voice’.

Dr Boyd Hunter pointed to the economics literature on institutions and common property resources and explicitly linked these to the institutional arrangements which underpin the Indigenous estate. He was pointing to a longstanding tool box developed by economists for policy and economic analysis with potential applicability to understanding the challenges and opportunities facing both Indigenous land owners and national policy policymakers in relation to the management and protection of the Indigenous estate. While economists do not have all the answers to complex policy challenges, they have a significant contribution to make. Yet, notwithstanding the ubiquity of economists within the higher echelons of the public service and the policy advisory consulting industry, the tools and perspectives identified by Hunter are almost entirely absent from the policy discussions on the Indigenous estate.

That perhaps overlong introduction was aimed at establishing that there are a set of policy challenges to be addressed in relation to the remote land management and the Indigenous estate.

The next step is to quickly review the record of governments and policymakers in documenting and assessing these policy challenges. I don’t propose to get bogged down in too much detail, so it will suffice to point to just two of the major reviews, as well as a very recent OECD publication.

In 2013, then Attorney General Mark Dreyfus QC gave the Australian Law Reform Commission terms of reference (link here) for an inquiry into the Native Title Act, in particular the connection requirements relating to the recognition and scope and of native title rights. One of the matters he explicitly asked them to have regard to was ‘the capacity of native title to support Indigenous economic development and generate sustainable long-term benefits for Indigenous Australians.’ The Commission reported in 2105 (link here). On the web page for the Report, the Commission states:

This Report marks the first major review of the law governing ‘connection’ in native title claims since the introduction of the Native Title Act 1993 (Cth). It also examines authorisation of persons bringing claims and joinder of parties to a native title claim.

ALRC Report 126 makes 30 recommendations for the reform. In formulating these recommendations, the ALRC has had regard to the development of the law, procedure and practice over the 20 years since the Native Title Act was introduced, as well as the significant policy and economic arena in which native title is implemented.

In the four years since the report was handed down, there has been no comprehensive response to the report apart from a single set of amendments designed to facilitate agreement making (for example in relation to the Adani coal mine) by removing a requirement for unanimity in establishing ILUAs. These amendments arose as a result of a Federal Court decision dealing with the Noongar native title agreement across the south west of WA rather than from any consideration of the ALRC report.

A second major initiative emerged from COAG when on 10 October 2014, First Ministers initiated ‘an urgent investigation into Indigenous land administration and use’ involving a high profile Expert Panel of Indigenous leaders and a working group of state and federal bureaucrats (Senior Officers Working Group report 2015; link here). The Working Group recommendations were considered by COAG on 11 December 2015.

In my blog post assessing the COAG outcomes dated 15 December 2015 titled ‘COAG and Indigenous Affairs policy’ (link here), I commented, inter alia:

To cut to the chase, the actual outcome agreed by First Ministers amounts to a classic cop out. They announced:

To better enable Indigenous land owners and native title holders to use rights in land for economic development, jurisdictions will implement the recommendations of this report subject to their unique circumstances and resource constraints.

The announcement is drafted to sound positive and to suggest support for Indigenous economic development, but involves absolutely no commitment, no timeframes for action, and provides no information on the part of the states, the territories nor the Commonwealth as to actual intentions.

It is worth noting that many of the report’s recommendations relate to the Native Title Act which could be unilaterally advanced by the Commonwealth given that it is Commonwealth legislation.

In both cases, despite initiating high profile reviews, governments have failed to follow through, and thus have failed to substantively respond to the recommendations and implement change.

Recently, the OECD published a report titled Linking Indigenous Communities with Regional Development (link here). The report adopts a comparative perspective and includes a series of direct and sensible recommendations. As the Executive Summary notes, inter alia:

Vibrant Indigenous economies are achievable through leadership and innovation of Indigenous communities with governments supporting them to deliver on their objectives for development. Activating these opportunities depends on four interconnected elements: (i) good data; (ii) enabling policies for entrepreneurship; (iii) instruments to mobilise land for development; and (iv) effective and inclusive governance.

Given the record of (non)reform in relation to the Indigenous estate over the past decade, the likelihood that the current Morrison Government will seek to substantively and comprehensively advance such a policy agenda (notwithstanding its potential economic and social benefits for both Indigenous interests and the wider community) appears slim.

As I have reflected about this pessimistic outlook, it has occurred to me that there are at least two significant structural impediments working against positive and constructive reform in relation to the Indigenous estate.

Both are functions of the way policy issues are framed and thus dealt with.

The first impediment is the locus of policy responsibility for the Indigenous estate within the Commonwealth Government. The administration of the Native Title Act is allocated to the Attorney Generals portfolio, presumably on the assumption that the financial and legal risks arising from native title litigation outweigh the benefits flowing from having the new National Indigenous Australians Agency (NIAA) take policy responsibility. The NIAA does have policy responsibility for the Northern Territory Land Rights legislation, plus a number of more minor pieces of land related legislation. My own view, for what it is worth, is that there are substantial potential benefits from having the NIAA and its new Minister Ken Wyatt take responsibility for Native Title, and indeed, considerable risks in allowing narrow legal perspectives to dominate the policy reform agenda.

The second impediment to better policy may well be that the issue is usually framed as a primarily Indigenous related issue. While the land owners of the Indigenous estate are primarily Indigenous (though in the case of non-exclusive native title, non-Indigenous owners are involved too), the policy and regulatory challenges facing governments might better be framed as being about the stewardship and management of remote and regional Australia, with Indigenous landowners being the predominant but not the only stakeholder interest.

For example, one of the consequences of the success of native title claims over the past thirty years has been a transfer of both land assets from the Crown to Indigenous ownership, but it has also involved the transfer of contingent liabilities from the Crown to Indigenous land owners in the form of legal obligations to control weeds and feral pests, and to manage land responsibly so as to minimise costs on neighbours, and so on. Yet the Commonwealth has allocated only pathetically paltry funding to PBCs which administer native title lands. Whether the more generous funding provided by the NIAA for ranger groups across the Indigenous estate is adequate is not clear to me.

The Commonwealth Government has an overarching regulatory responsibility for each and every policy domain, and in particular for managing and addressing potential risks. The bottom line is that in an era of increasing global warming, the potential for sub-optimal levels of environmental, economic and social land management across remote and regional Australia is a national policy risk that spans a number of Commonwealth portfolios as well as key state and territory portfolios. The low levels of economic activity on the Indigenous estate is arguably a contributor to the deep-seated inattention of governments and policymakers to the broader national land management risks

I have previously written a number of blog posts about the policy challenges for the Indigenous Estate. I mention three of the more important here:

·       ‘Transforming Rangeland Policies: Indigenous opportunities’ dated 15 December 2015 (link here);

·       ‘Native Title Amendment Bill: update and some more generic commentary’ dated 20 March 2017 (link here);

·       ‘Policy issues arising from communal and inalienable land tenure’ dated 23 March 2017 (link here);

Re-reading these posts, I am struck both by the policy complexity involved, and the paucity of informed and constructive policy dialogue and discussion in the media and the public domain regarding these issues. Perhaps as a consequence, the overarching message from any attempt to comprehensively assess the state of play in relation to these areas of public policy is one of deep-seated policy inertia. Upon detailed examination, in relation to policy for the Indigenous estate, all roads lead not to a lack of policy proposals or innovation, nor to an absence of policy ideas. Instead, all roads lead to a fundamental lack of political will by policymakers.