Politics drives policy: the slow motion remote housing disaster

Your bait of falsehood takes this carp of truth;

And thus do we of wisdom and of reach,…

By indirections find directions out.

Hamlet Act 2, scene 1.

It is a common aphorism in political and policy circles that good policy is good politics (link here). It’s a rather novel approach, usually honoured in the breach rather than in practice. For those keen to look below the surface, events more often appear to raise the interesting question of whether bad policy is bad politics. The answer appears to be it depends what you can get away with.

Consider the Government’s approach to remote housing, an issue which informed and objective commentators would unanimously agree is an important issue in addressing the extreme disadvantage which permeates the hundreds of remote Indigenous communities across the outback.

I have previously dealt with the policy issues in a number of posts (link here, here and here). This post will simultaneously attempt to do two things: to provide an update of more recent developments since 20 December 2017, and to place them into the political context which best explains what is happening.

Just to recap, in 2008, the Rudd Government persuaded COAG to agree to a National Partnership on Remote Indigenous Housing (NPARIH), which involved the allocation of Commonwealth funding of $5.5bn over ten years to states with remote populations for the construction and refurbishment of housing in remote communities. This was a continuation of Commonwealth funding for remote housing which had been in place since the Commonwealth obtained its concurrent responsibility for Indigenous affairs in the 1967 referendum.

The National Partnership represented a major increase in previous funding for remote housing, but did not and would not meet the totality of outstanding need. The intention in adopting a ten year timeframe was to provide certainty for state and territory capital investment programs, to drive a reform program on land tenure to ensure investments were underpinned by the negotiation of leases which would make clear the responsibility of government housing authorities for ongoing landlord responsibilities, and to facilitate a new model of concentrated capital investment to upgrade housing infrastructure in whole communities (rather than randomly house by house as was formerly the case) and to facilitate Indigenous employment. The program largely met or exceeded its overall targets, and notwithstanding substantial criticism from the then Opposition (led by the current Minister) must be assessed as having made a major positive difference to at least 50,000 remote citizens.

Going forward, there are two obvious potential broad policy criteria we might use to assess the adequacy of the nation’s investment in remote housing. The first, and in my view best, is to assess what is proposed against the outstanding need. A second, and less satisfactory, but more pragmatic approach would be to assess what is proposed against the quantum of previous investment.

Taking the first criterion, my conservative estimate of the outstanding need is that an investment of around $9bn over ten years is required. I laid out the rationale for this figure in my November post The next phase of funding for remote indigenous housing  (link here).

Taking the second criterion, the previous program involved a Commonwealth investment of $5.5bn over ten years, or an average of $550m per annum nationally. Last year the new Labor Government in the NT unilaterally committed an extra $1.1bn over ten years to 2026.

It seems clear however that the Commonwealth has decided on a policy to substantially reduce its funding for remote housing, and along the way upend the national partnership agreement approach which locked in long term funding. Rather than announcing its new policy, and outlining its justification in a transparent and open way, the Government appears to have decided upon a politically driven strategy to avoid responsibility for its policy decisions. The tactics are focussed on creating conflict with the states, and manipulation of media messaging in the hope that by the time what has transpired becomes apparent, the media will decide its old news and adverse publicity will be limited.

A key part of Minister Scullion’s strategy appears to have been to release limited and partial information via informal media interviews rather than in formal correspondence to his state and territory counterparts, or formal policy announcements of the Government’s total investment allocations. This allows him to incrementally move forward without divulging the Government’s overall plan or intentions. This confuses most of the people most of the time (and I have not been immune). So I need to add a caveat that my analysis runs the risk of being incomplete due to the lack of comprehensive information in the public domain.

So let’s look at each of the key steps since around 20 December.

In the week before Christmas, and importantly in the week after MYEFO (which meant the Government was not required to include future funding allocations in its forward estimates projections), the Department’s officers contacted officials in each of the four jurisdictions still part of the National Partnership.  Officials in SA, Qld and WA were told that there would be no further funding for the program on the basis that they should take over responsibility for remote housing. The NT officials were apparently told that the Commonwealth was prepared to contribute funding (though the terms of those discussions are not in the public domain).

The WA Minister for Housing immediately went public (‘Commonwealth abandons remote Australia: axes remote housing deal’) criticising the Commonwealth’s apparent decision to cease all funding (link here). Radio comments by the SA Minister backed up the WA critique, and a subsequent media release dated 21 December criticising the Commonwealth’s decision was released jointly by the three jurisdictions housing ministers (link here). They criticised Minister Scullion for continuing to fund the NT while cutting funding elsewhere. Federal Labor shadow ministers Doug Cameron and Patrick Dodson also released a statement (‘Cutting remote housing funding unfair and unjustified’ – link here).

Minister Scullion responded the same day (21 December) with a media release titled “More Labor lies on remote housing’, which he has not placed on his website, but did circulate it to some parties. It is available on the NACCHO website (link here). The media release criticises the state ministers for making ‘misleading and outrageous statements’ and for ‘undermining good faith negotiations between the Commonwealth and state governments about the future of remote housing’.  It goes on to admit that the Commonwealth commenced discussions with [state] officials only yesterday about a future funding contribution to remote Indigenous housing’. The release went on to erroneously suggest that the National Partnership was a ‘one-off’, and to claim (rather bizarrely in my view) that the states had been paid to reduce overcrowding ‘yet they abjectly failed to achieve this – this is why we are once again in negotiations with the states’. If the states had failed to reduce overcrowding, then so too had the Commonwealth. The release goes on to justify the ‘offer of longer term funding’ to the NT on the basis of their funding commitment of $1.1bn over ten years and ‘the severe overcrowding’. The states failed to reduce overcrowding, so their funding is cut. The NT fails to reduce overcrowding, so its funding is continued!

Following Minister Scullion’s release, WA Minister Tinley issued a further media release welcoming the Ministers apparent backflip on the cessation fo Commonwealth funding, but also expressing scepticism regarding its accuracy (‘Scullion ‘phone home’ for Christmas update on remote communities’ - link here)

On 22 December the Australian Healthcare and Hospitals Association released a statement (‘$676 million federal cuts to remote housing will lift already-shocking rheumatic fever rates’) (link here).

One of the confusions which permeate the whole discussion is the lack of specificity about funding. The figure of $776m, which emerged in some press reports possibly quoting the minister, relates (I think) to the balance in the National Partnership for Remote Housing over the last few years. It is not an annual figure, so the actual annual magnitude of the proposed Commonwealth allocation, and hence actual quantum of the cuts remains unclear.

On 8 January 2018, the Chair of NACCHO, representing 143 community controlled health organisations across the country issued a statement calling on the Government to ‘invest in remote housing’ (link here).

On 9 January an NT News article reported comments by Minister Scullion at Gunbalanya (link here):

In Gunbalanya, Indigenous Affairs Minister Nigel Scullion announced the Federal Government would kick in $1.1 billion into remote housing in the NT. A separate $776 million commitment by the federal government to the National Partnership Agreement on Remote Housing has meanwhile been slashed to just $100 million and only for homes within the NT…

…Mr Scullion said other jurisdictions should follow the NT’s lead in pledging significant cash if they expected Federal Government money.

In response to criticism from WA Housing Minister Peter Tinley, who accused the Turnbull government of turning its back on Aboriginal Australians through the NPRAH cuts, Mr Scullion said WA was having “a bit of a whinge”.

Senator Scullion said the WA government hasn’t pledged any cash so far. “Show me the money, as they say, West Australia,” he said.

On 10 January the NT Housing Minister welcomed the Commonwealth’s funding for remote housing (link here), and indicated he looked forward to meeting with the Minister in coming weeks to finalise the details.

On 11 January, the NT News reported that Minister Scullion is backing away from his comments in Gunbalanya (‘Federal Government backtrack on remote housing pledge’) (link here). The reports states:

INDIGENOUS Affairs [Minister] Nigel Scullion has backed away from his claim that the Federal Government would match the Territory’s $1.1 billion investment in remote housing across 10 years.

Speaking in Gunbalanya on Tuesday, Mr Scullion praised the NT Government for having the “gumption to put money on the table” in remote housing.

“And we’ll be matching that money, significant funds. They’ve put over $1.1 billion on the table and that’s why we’re having a conversation with the Northern Territory,” he said.

Mr Scullion said remote housing was a “shared responsibility”. But Mr Scullion’s office yesterday backed away from the commitment, and said no formal agreement had been reached.

The NT Government are quoted as expressing concern that the Minister’s reported pledge may not hold.

So what’s going on here?

It seems incontrovertible that the Commonwealth Minister is indulging in a deliberate process designed to both sow confusion and lower expectations of Commonwealth responsibility and investment.

The debate is being framed explicitly as one about jurisdictional responsibility for remote housing. Of course it would be desirable to see the states increase their investment in remote housing, but traditionally it has been the Commonwealth which has been the major funder in this space (notwithstanding the assertions of Minister Scullion and his officials). A debate framed around good policy would be focussed on maximising the quantum of resources for remote housing allocated by both the Commonwealth and the states, and a Minister focussed on such a policy framework would have convened a meeting with the his/her counterparts in the relevant jurisdictions and engaged in a constructive discussion. Instead, Minister Scullion has left negotiations to the very last moment, and then initiated a shouting match over who is responsible for the remote housing function.

A policy of unilateral withdrawal within six months of the expiry of a major Commonwealth-State Partnership Agreement will inevitably lead to a significant hiatus in investment across the sector in construction, refurbishments, and potentially worst of all, in ongoing routine maintenance. The Commonwealth strategy is placing at risk the effectiveness of the bulk of its investment in remote housing assets over the past decade or more.

Moreover, as Minister Scullion’s 21 December statement notes, while the states have primary responsibility for delivering social housing, the Commonwealth is a major funder both through the states themselves to the tune of around $1.5bn pa and most significantly to the tune of around $4.5bn pa through Commonwealth rent assistance. The structural problem however is that there is no private rental market in remote Australia, so the nation’s largest social housing program funded entirely by the Commonwealth is not available to remote residents. The current Commonwealth investment of $550m / year should be seen as a notional replacement program for the lack of access by remote residents to Commonwealth rent assistance which is a needs based program.

The views of the Indigenous Advisory Council appear to carry little weight. Their communique of 15-16 August 2017 noted (link here ): 

 Indigenous Housing: Acknowledged reductions in overcrowding as a result of investment over the past 10 years. Discussed the importance of ongoing investment in Indigenous Housing and the engagement and commitment from states and territories to address new housing, refurbishments, maintenance and tenancy management matters. The importance of engagement of the local community in housing design, decision making and developing sustainable employment and business opportunities was also raised. Members emphasised the importance of adequate remote housing as a pre-requisite for social outcomes.

The bottom line here is that the Minister is being too smart by half. He has failed to persuade Cabinet to renew the remote housing program, and decided on a tawdry political tactic of creating a blue with the states to cover for his own policy failure and lack of coherent policy justification.

The implications of this politicised and second rate Commonwealth strategy are disastrous.

First, he has micromanaged the information flow on this issue from the start: from his involvement (admitted by officials in the last estimates hearings) in shaping the supposedly independent review of remote housing, and his ultimate responsibility for allowing a fundamentally inadequate analysis to be placed into the public domain (link here), the delays in publishing the review, the delays in answering questions on notice from the most recent Estimates hearings (link here – they are still not available!) and the irresponsible and unwarranted delay in initiating negotiations with the states and the NT, through to his reluctance to even publish his media statements on his website where they can be independent scrutinised.

Second, Indigenous people will be the losers. Reduced investment in remote housing will deepen disadvantage, will add to health issues such as rheumatic fever (and by the way add to taxpayers liabilities via Commonwealth health funding), will shorten Indigenous lifespans and quality of life for many thousands of remote residents, will add to dysfunction in remote locations, will impact negatively on employment opportunities, and will make getting kids to school harder. It won’t make closing the gap easier either, notwithstanding the apparently cynical strategy of ‘refreshing’ the metrics (link here) to make the failure of government less obvious.

Whether ‘bad policy is bad politics’ is unclear. The bottom line is that despite all the Government’s rhetoric, when it comes down to tin tacks on difficult budget allocation decisions to fund support for Indigenous citizens, the government will do what it can get away with. So called state responsibilities ostensibly matter in remote housing, but not in school attendance (link here); the views of the Indigenous Advisory Council count for little; the Department appears too ready to provide ‘soft’ advice; and despite the Indigenous portfolio being in the Prime Minister’s portfolio, neither the Prime Minister nor his Minister for Indigenous Affairs have any apparent interest in pursuing good policy outcomes for the most disadvantaged Australians.

Taking the two core policy criteria identified earlier, it is clear there is no policy focus on future housing need across remote Australia. And there is no apparent concern about cutting crucial investment in basic social infrastructure. All the Government appears interested in is avoiding responsibility for its policy decisions.

It might work as a political strategy in the short term, but longer term, it will build disenchantment amongst Indigenous citizens as to the sincerity and trustworthiness of all governments. It will not only slow the gradual accretion of remote housing assets, but will likely undermine the effective life span and thus the effectiveness of the considerable past investments in social housing. And most importantly it will seriously constrain the life opportunities of many thousands of remote Indigenous residents, and further reverse progress on closing the gap.