Essential policy reforms for Northern Australia policy

 

What seest thou else

In the dark backward and abysm of time?"

The Tempest, Act one, Scene two

 

According to the Commonwealth Office of Northern Development (OND) (link here), Northern Australia can be characterised (inter alia) by the following ‘quick facts’:

• Northern Australia comprises 53% of Australia's land mass [see the map at the link above].
• It is home to 1.4 million people or 5.2% of Australia's total population.
• It has an Indigenous population of over 230,000, which comprises 17.4% of northern Australia's population, compared to 3.1% nationally.
• Indigenous rights and interests cover 78% of the north's land mass.
• The cattle industry represents the largest economic land use, covering around 60% of northern Australia's land area.
• 7.7% of northern Australia's workforce is employed in mining compared to 1.9% nationally.
• There are 8 world heritage sites in northern Australia.

A Walking Shadow has addressed numerous issues related to northern Australia over the past decade. While my posts have generally focussed on remote issues as opposed to northern issues the two institutional and policy frames are largely, but not entirely, isomorphic. Northern Australia includes several major urban centres (Darwin, Cairns, Townsville, Hedland) and remote Australia as defined in say ABS statistics or the Remote Jobs and Economic Development program excludes urban areas and extends well to the south of the notional boundaries of northern Australia. Clearly, the demographic and economic geography of the two frames are quite different, especially when considering Indigenous policy issues (although it must be remembered that many Indigenous citizens are resident in northern urban areas).

The wider formal policy context is laid out in the Government’s Northern Australia Action Plan 2024–2029 (link here) published in November 2024. The Action Plan updates the 2015 White Paper on Northern Development Our North: Our Future (link here). The policy architecture for northern development remains essentially unchanged since 2015: a ministerial forum with representation from the relevant states, the Northern Territory and the Commonwealth (link here); an Office of Northern Australia located within the Infrastructure Department (link here) and an Indigenous Reference Group (link here). There is a Minister for Northern Australia, currently Madelaine King and an Assistant Minister for Northern Australia, currently Senator Nita Green.

The Minister for Northern Australia released her annual statement on Northern Australia on 24 November (link here) which doubles up as the Government response to the NAIF review undertaken over the past year or so. My assessment of the review (link here) was very critical and worth reading (or even rereading) if you wish to properly contextualise the most recent ministerial statement.

The Minister’s Annual Statement on Northern Australia (link here) accompanied the publication of the Northern Australia Action Plan 2024-2029: Annual Progress Report 2025 (link here). The Annual Statement is a slick exposition acclaiming the government engagement with northern Australia across the breadth of the policy domain.

On NAIF, the Minister exudes positivity:

Our main vehicle for investment is the Northern Australia Infrastructure Facility, or NAIF. It has proven to be a catalyst in getting crucial projects off the ground. NAIF now has an impressive portfolio of 32 project investments — fourteen in Queensland, ten in Western Australia and eight in the Northern Territory. This represents more than $4.3 billion in approved loans to projects which are forecast to generate more than $33 billion in public benefit and support thousands of jobs across the north. By the end of October, around $2.8 billion in NAIF funds had been drawn down to progress these projects.

She proceeds to briefly comment on NAIF support for projects in agriculture (the Kimberley cotton gin), renewable energy (Arafura Rare Earth’s Nolans project north of Alice Springs; and the Alpha High Purity Aluminium smelter in Gladstone) before pivoting to extolling the (national, not northern) critical minerals strategy and the signing of the ‘historic’ Australia-US Critical Minerals and Rare Earths Framework where ‘together, our nations committed to mobilising at least AU$1.5 billion each towards an AU$13 billion pipeline of priority projects over the next six months’. She omits mentioning how the government will measure and report on progress on this commitment.

On NAIF itself, the Minister announced — in response to the most recent NAIF Review and the ‘overwhelming support for NAIF across government, industry and from the public’ — the Government’s intention to legislate an additional ten-year lifespan for the facility thus ensuring greater certainty for the current flow of potential projects seeking support. This makes sense, but implicitly signals more of the same rather than any major change in emphasis. This is a lost opportunity.

On First Nations’ participation in NAIF, the Minister stated:

NAIF-funded projects are supporting almost 1400 Indigenous jobs and over $200 million in Indigenous procurement.

Unfortunately, as I noted in my previous post on the Review, the NAIF does not publish aggregated tables of Indigenous employment, and potentially conflates permanent and casual, and construction and operational jobs. Similarly, there are no aggregated data on Indigenous procurement. Assuming the Indigenous Procurement Policy framework is applied, a $200m spend will likely mean around $100m is directed to First Nations corporation owners (who are not necessarily resident in the North).

The web page for the Indigenous Reference Group on Northern Australia lists the meeting dates and communiques, along with the IRG’s submissions on various topics over the past five or so years. I think it is fair to say that the IRG has been largely silent in public discussion of northern policy issues related to Indigenous issues, and there is not one issue which springs to mind where the IRG has led or shaped the wider policy discussion. I will leave it to readers to consider why that might be.

The broader context left unmentioned by the Minister (and the IRG) is that there are upwards of 40,000 unemployed citizens across remote (and primarily northern) Australia, and over 90 percent of these are Indigenous. The Government’s Remote Jobs and Economic Development (RJED) Program (link here) is funding 1700 jobs across remote Australia and is aiming to lift that to 3000 jobs by 2027. Between them, RJED and NAIF are presently funding 3100 jobs and approximately 35,000 First Nations citizens are unemployed and on income support across remote Australia. This makes clear that private sector investment, even when subsidised by government, will not on its own solve the challenges of deep social and economic disadvantage across the north or Australia.

On present policy settings, this assertion will remain valid for at least the next decade and likely beyond. The case for doing much more is irrefutable, but it requires hardheaded policy analysis, policy advocacy and of course political commitment, all of which appear to be in short supply. The same cannot be said for political flim flam.

In a section headed Looking to the Future, the Minister stated:

we’ve made enormous progress on our northern agenda, but we know our job is far from done. Transport and connectivity, housing and health – these are challenges we must continue to tackle, so that northern communities can fully participate in the opportunities on offer, and to grow resilient northern economies.

She is correct of course. She mentions several useful and important initiatives the Government continue to support. For example, she notes that

Our Indigenous Biosecurity Program now partners with 67 Indigenous ranger groups and two Indigenous cattle stations along 10,000 km of northern coastline.

The biosecurity program and the associated ranger groups are clearly important and potentially pathbreaking programs which has been in existence for some decades. Yet there are no rigorous evaluations of the biosecurity program and its interaction with ranger groups that I am aware of, and it is unclear how effective the devolved governance of the program is, and whether there exists any effective regulatory oversight to ensure that it is delivering more than an income stream for local community residents and a PR opportunity for the interests involved including governments.

Finally, there is a short section headed A Safe and Secure North.  The minister notes:

our government is acutely aware of northern Australia’s strategic importance in our region – investing up to $18 billion in our northern bases over the next decade. Major projects include:

• upgrades at the Bradshaw Field, Kangaroo Flats, Mount Bundey and Robertson Barracks training areas in the Northern Territory, and

• upgrades to RAAF Bases at Tindal, in the Northern Territory, • Learmonth in Western Australia, and

• Townsville in Queensland.

Articles by John Coyne of the Australian Strategic Policy Institute (link here and link here) provide more information and detail and strongly support the Minister’s agenda on northern security. For my part, I am somewhat more sceptical, but this is an issue for another post.

However, I can’t resist comparing the quantum of funding currently available for remote community housing in the NT (some $4bn over ten years in joint NTG and Commonwealth funding) with the $18bn available over ten years to upgrade defence training facilities across the north. Clearly reasonable people will differ on what are appropriate responses to the respective budget pressures for remote housing and northern defence infrastructure, but I for one do not consider that the nation has struck the right balance here.

As I argued in my submission to the NAIF review (link here), finding a way to allocate NAIF funds to supporting remote Indigenous housing and associated infrastructure would be a game-changing initiative, with flow on advantages in facilitating better health, education and employment outcomes in remote Australia.

Properly designed, such an initiative would be the most decisive policy intervention available to the Commonwealth in terms of delivering a step change in the life circumstances and opportunities of remote Indigenous communities and underpinning the long-term inclusion of Indigenous communities in the future of the north. It would incentivise the states and territories to invest more in sustainable social and economic infrastructure in the north and would target the existing deficits that will continue to constrain the opportunities that must be grasped if northern Australia is to reach its full potential.

The second major opportunity that would drive a step change in reducing remote Indigenous disadvantage would be to massively expand RJED, the remote jobs program. As I have previously noted (link here , link here and link here), the Prime Minister stood up at Garma three years ago and claimed that the previous government’s remote income support program, the Community Development Program (CDP), was a failure, and committed to replace it with funding for real jobs. His Government has dropped the ball on that commitment, with less that two thousand RJED program jobs funded, and over 35,000 income support recipients on a program which can only be described as ‘CDP lite’.

While the RJED program falls within the PM&C portfolio, and is administered by the Minister for Indigenous Australians, I mention this issue here because the Minister for Northern Australia cannot responsibly avert her eyes from a program that is of such significance to the future of the north and is chronically underperforming. This is especially the case because of the potential synergies between NAIF funded projects and the use of RJED program funds. She should be advocating for its reform both inside the Cabinet room and more widely.

The failure to date of the Commonwealth to grasp the opportunities for reform of NAIF and the RJED program means we will continue to read stories like this one from Roebourne in Western Australia’s Pilbara (link here) for at least the next decade, and probably beyond.

 

30 December 2025  

 

 

The 2024 NAIF Review: missed opportunities

Striving to better, oft we mar what's well.

King Lear Act one, Scene four

The Minister for Northern Australia, Madelaine King MP tabled the statutory review of the North Australia Infrastructure Facility (NAIF) on 28 August 2025. In her short media release (link here), she thanked the review panel which comprised the Hon. Warren Snowdon (Chair), Professor Peter Yu and Dr Lisa Caffery, and indicated that the Government would consider the review and respond to the 21 recommendations over the coming months. It is unclear why the Government and Minister have been so slow to respond to the Review. A cynic might surmise that when addressing a policy issue on its merits is not front and centre, then political management comes to the fore.

The review is available on the Infrastructure Department website (link here). The published submissions made to the review are also available on that website, albeit on a separate page which may be vulnerable to deletion at some point in the medium-term future. This would be unfortunate (link here).

This blog has followed NAIF closely over the past decade, and (inter alia) has been quite critical of its narrow focus on commercial (private sector) infrastructure and its effective absence in financial social infrastructure (link here, link here and link here). I posted my submission to the current review in September 2024 (link here) whereas (contrary to common practice such as adopted by the Productivity Commission) the Government decided not to publish the submissions to the review until it had released the review itself. The review was provided to the Minister on 12 February 2025 and released six months later on 27 August.

While the review team brought significant experience of northern Australia to the task, and extensive background in both politics, policy and Indigenous affairs, my high-level reaction to the final product has been one of disappointment and in some respects incredulity. The review team appears to have been heavily influenced by the Department and NAIF, both formally and informally. I wont list all the available evidence for this assertion but invite readers to read the Review Report Executive Summary and consider whether it reads as a ministerial media release or as the summary of a truly independent policy review.

More substantively, the conceptual framework adopted by the Review is to my mind flawed and underdone. There is virtually no data presented to underpin the arguments pursued. The single graph on page 22 (lifted from the NAIF submission) is difficult to interpret (it would have been more appropriate to present it as a bar chart) and the key take-out (contrary to the Review conclusion) is that over the past nine years, less than $2billion in concessional loans have been drawn down by successful proponents. In relation to Indigenous data, there is none provided to speak of and there are several questionable assertions that are smoothed over by statements suggesting data shortcomings in the census mean that Indigenous data is unreliable.

There is no clear description of the how the NAIF works, and what the net cost of The NAIF is to government is on a year-by-year basis. While there is the occasional mention of the views of those consulted or who made submissions, the Review makes no attempt to summarise even at a high level the totality of the views they received either thematically or by topic. This then allows the Review to avoid any discussion of why particular views advocated were either accepted or rejected and the reasons for doing so. Many if not most submission authors will likely conclude that the Review just ignored their views.

At a more technical level, key conceptual flaws in the Review report include:

·       The level of demographic analysis in the Review is close to zero. Yet this is crucial for understanding the infrastructure needs of the North. One consequence of this analytic gap is to facilitate avoiding the question of just who is the NAIF aiming to support: the users of infrastructure in northern Australia, or the owners of firms investing in infrastructure in northern Australia?

·       It is unclear from reading the Review whether the alleged benefits arising from NAIF decisions are real or imagined. (The Review somewhat amazingly mentions on page 22 ‘forecast benefits of $38.2 billion in public benefit for the north’ arising from the $4.4billion ‘committed’ (but over $2billion not yet drawn down). There is no mention of the source for this data, nor when this benefit will accrue, no explanation of why it is public benefit and not private benefit, no indication of whether it includes provision for failed projects (see the Addendum below for extracts from the AFR article about the NAIF dated 21 October 2025 headlined ‘$200m losses highlight risk of government ‘picking winners’) and no indication that these alleged benefits have been discounted appropriately to reflect their Net Present Value.

·       There is no examination of the rationale for NAIF assistance (i.e. why should government be subsidizing particular projects, how to determine if market failure exists or not, and what is the appropriate definition of infrastructure to use). If there is no market failure, then firms will invest if there is a commercial return available. If there is not a commercial return available, but there is a public interest in the project proceeding, then the concessional finance is best structured as a public investment with the returns being allocated to taxpayers. The risk in the NAIF model (not discussed in the Review) is that the provision of concessional loans to privately owned firms risks making no difference to the ultimate decisions on whether firms will invest but transferring the net quantum of the concession from taxpayers to firm owners.

·       There appears to be a preconceived assumption that the best way to assist remote Indigenous citizens resident in northern Australia is through support to Indigenous businesses. In relation to infrastructure investment required to support Indigenous communities across the north, the Review has adopted a framework built around what I termed in a recent post (link here)  ‘the policy pivot to Indigenous economic empowerment’ and which Professor Peter Yu has been instrumental in developing and advocating. Indeed, Chapter Four where the Review deals with Indigenous issues is titled: ‘Supporting First Nations economic empowerment’. While there is nothing innately wrong with such a focus, it is only partial and includes an inherent bias away from core infrastructure traditionally built by government in remote communities including housing, schools, essential services, health and community administration infrastructure, and importantly townscaping (roads, parks, ovals etc) usually provided by local governments. In focussing on Indigenous controlled commercial business opportunities, the Review has implicitly given governments at all levels an implicit ticket of leave to (yet again) not take the action necessary to bring social infrastructure up to acceptable standards (link here) in hundreds of remote communities.

·       There is no discussion of the rationale for focussing on support to small businesses rather than limiting NAIFs focus to infrastructure needs of strategic significance. Throughout the discussion, the Review advocates for the NAIF to expand its focus to the provision of smaller business loans. Such an expansion risks adding significant process to NAIF’s operations (with the concomitant risks of loss of focus) at the risk of losing strategic focus on the major infrastructure issues confronting northern Australia. It is never made clear why this should be a NAIF responsibility and not some other government entity’s role, either at state or national level. Both NIAA and Indigenous Business Australia have the capacity to fund such a program in the Indigenous policy space if they so chose.

·       There is an inadequate discussion of the rationale for the Review’s findings and recommendations to provide NAIF with greater autonomy. The Review essentially argues and recommends that the NAIF be converted from a ‘facility’ or mechanism for providing concessional finance operating within the Infrastructure Department’s financial balance sheet into an entity with its own balance sheet and governance structure. In effect, it is arguing for the establishment of a North Australia Infrastructure Finance Corporation, though it doesn’t articulate this overtly. To do so, it argues that the current model underpinning NIAF’s operations has a negative effect on the Department, the NAIF, the relevant Jurisdictions and proponents (see Observation 2 on page 13). It also points to the apparent success of the existing Board and Executive team’s leadership. (see Observation 3 on page 13). The message is that the governance quality of the NAIF is such as to warrant greater independence and autonomy. The reality is that the record of the NAIF has been very patchy with critical ANAO reports (link here) and as recently as 2023, there were allegations that it was ignoring its own processes (see Addendum below). The Review Discussion fails to demonstrate that the systemic flaws evident in 2019 are no longer a risk and fails to provide a comprehensive argument for the quite significant changes it is proposing. There may be a case for doing what the Review recommends, but to my mind, it does not make anywhere near a persuasive case for doing so. Not least in relation to the Review proposals, there is no discussion of whether there are potential additional costs for taxpayers going forward.

·       There is zero discussion of the issue of transparency, and its role in protecting taxpayers from potential missteps that are facilitated by excessive secrecy and the systemic issues that led to the critical 2019 ANAO review discussed above. The media reports NAIF as being overly secret (see the extracts in the Addendum in the articles by Wilson and Ludlow); the Review makes no attempt to assess this and identify a way forward. This is of particular importance because a shift to greater NAIF autonomy will exacerbate financial and governance risks which adequate transparency and greater commitment to merit in selecting Board members would play some role in managing (see Bill Shorten’s comment on former Board appointments in the Wilson article extract below).

·       It is significant in my view that there does not appear to have been an independent effectiveness evaluation (as opposed to the five-year statutory reviews such as the current Review) since the NAIF was established. Those Reviews have been largely focussed on operational issues and not overarching effectiveness. It is circumstances like the challenges facing the NAIF which strengthen the argument for a Commonwealth Evaluator General (as proposed by Nicholas Gruen) to independently evaluate major strategic initiatives by the Commonwealth on a periodic basis.

The conceptual shortcomings evident in the approach adopted by the Review inevitably invites deep scepticism regarding the robustness of its recommendations. To my mind however, the potential analytic flaws are not the major problem with the Review.

The fundamental policy problem is that the Review represents a missed opportunity. It fails to undertake a rigorous and conceptually sound examination of the problem NAIF exists to address, then identify potential solutions, and then recommend an approach to addressing the problem. Instead, it appears to be providing cover for an agenda that has already been decided. In relation to Indigenous interests in northern Australia, the Review focusses overwhelmingly on the absence of Indigenous engagement with NAIF (as if this will somehow drive greater social and political inclusion of Indigenous interests in northern Australia) rather than focussing on the absence of NAIF’s engagement with driving increased investment in social infrastructure. It won’t surprise readers if I acknowledge that this was the core message in my submission (link here), which was comprehensively ignored by the Review.

Incentivising greater investment by local, state/territory, and national governments in social infrastructure across the north will drive greater indigenous inclusion because that is where the overwhelming levels of needs are. Indigenous people represent a substantial proportion of the permanent population of the north. They deserve inclusive policies, not exclusion. What is required are across-the-board improvements in employment, health and education. These three sectors are all adversely affected by the extreme infrastructure deficits facing remote Indigenous populations including in northern Australia (link here).

In terms of driving medium- and longer-term change that will expand the contribution of northern Australia to the nation’s economic, social, cultural and strategic wellbeing and improve the quality of life of citizens living in northern Australia, the NAIF represents a potential mechanism to make a major contribution. So far, the NAIF has failed to take up this role, and the recent Review offers no real roadmap for it to do so going forward. This is both a missed opportunity, and to my mind a tragedy.

 

 

Addendum: Extracts from selected AFR articles

Grant Wilson AFR 18 July 2022, The NAIF is no longer an abject failure, (link here Paywall):

Before the federal election in May 2019, and in full campaign mode, then-Labor leader Bill Shorten eviscerated the Northern Australian Infrastructure Facility.

He characterised NAIF as an “abject failure”, and committed to an overhaul, with an emphasis on projects of national economic significance, such as gas infrastructure from Beetaloo Basin. Shorten was particularly aggrieved that “half of the board members are donors to the LNP…

…A longer-term issue for NAIF to consider is its status as a facility. As distinct from the Clean Energy Finance Corporation (CEFC), that also operates as a special investment vehicle of the federal government, NAIF has not been fully corporatised, and does not have a special account to receive appropriations.

This setup, while understandable given NAIF’s initial five-year remit, undermines the quality of its financial reporting. The contrast to the CEFC is stark, where financing facilities are included as part of the income statements and balance sheet, enabling its financial performance to be assessed on a comprehensive basis.

 

Aaron Weinman, AFR 23 June 2023, NAIF allegedly broke its own lending rules for barramundi farm (link here Paywall):

The Northern Australia Infrastructure Facility allegedly ignored its lending rules on at least two investments, and later pressured an employee who raised concerns to quit in a bid to avoid embarrassment while it sought about $2 billion in additional funding from the federal government.

The NAIF reviewed several loans it had written over the past 18 months but when some were deemed a potential concern – meaning the borrower could struggle to repay the debt – staff played down the severity of the borrowers’ creditworthiness, according to documents filed as part of an unfair dismissal claim lodged with the Fair Work Commission.

 

Mark Ludlow, AFR 10 August 2023, The $7b fund for projects commercial lenders won’t back (link here paywall):

In June, a former member of the NAIF’s credit committee lodged an unfair dismissal claim with the Fair Work Commission. They alleged the NAIF ignored its own lending rules on at least two investments, including $31.4 million in loans to the Humpty Doo Barramundi farm in the Northern Territory, which had “deep credit issues”, and the Kalium Lakes project….

… As of June 30, the NAIF has committed $3 billion in loans to 25 approved projects, with the agency confirming to the Financial Review that $1.41 billion in loans have been drawn down by 23 projects.

The NAIF, which can provide debt or equity finance, won’t publicly release a detailed breakdown of projects, saying it is up to potential proponents to reveal how much they have drawn down from their approved loans. Some money has been repaid to government, but NAIF won’t confirm how much.

 

Ronald Mizen AFR 21 October 2025, $200m losses highlight risk of government ‘picking winners (link here paywall):

Taxpayers will be forced to carry more than $200 million in losses after two companies backed by government loans failed, an outcome economists say underlines the risks of trying to pick winners with public money.

The Northern Australia Infrastructure Facility loaned $84 million to potash aspirant Kalium Lakes in 2019 and $150 million to mineral sands operation Strandline Resources in 2020. Kalium collapsed in 2023, while Strandline went into administration in February this year.

 

2 November 2025

The Commonwealth policy pivot to Indigenous economic empowerment

  

And thus the native hue of resolution

Is sicklied o’er with the pale cast of thought;

And enterprises of great pith and moment,

With this regard, their currents turn awry,

And lose the name of action.

Hamlet Act three, Scene one.

 

According to Senator Lidia Thorpe, the Prime Minister’s speech at Garma last week was an exercise in ‘optics” (link here). An editorial by the National Indigenous Times (link here) headed ‘Economic partnership or political theatre? Government’s Garma plan questioned amid worsening outcomes’ opined:

Yet there is reason to question whether this latest suite of announcements represents real change or another layer of process wrapped in new branding. Closing the Gap targets remain in crisis. Many indicators are worsening, particularly in the Northern Territory where Indigenous incarceration rates are among the highest in the world and child health outcomes lag far behind the national average.

The Prime Minister’s speech at Garma (link here) represents the culmination of the Government’s post referendum pivot to economic empowerment first articulated by the Prime Minister at Garma in his 2024 speech to Garma titled Economic Empowerment for Indigenous Australians (link here). In his 2024 speech he committed his government to take up the challenge to pursue a ‘comprehensive economic policy challenge for Indigenous peoples.’ He announced that the Government was creating a new First Nations economic partnership building on the work of the Coalition of Peaks and the nascent First Nations Economic Empowerment Alliance.

The recent 2025 speech was followed by a more detailed media release outlining the specific details of what is being proposed (link here). The key announcement is the release of the text of the new First Nations Economic Partnership Agreement between the Commonwealth and the Coalition of Peaks and the First Nations Economic Empowerment Alliance (link here). To be clear, this Partnership Agreement is national in scope and represents a new and complementary addition to the institutional framework established in 2020 with the establishment of the National Agreement on Closing the Gap.

There are two new elements to the structural architecture of this agreement: the first is the addition of the First Nations Economic Empowerment Alliance (FNEEA)  (link here) as a formal party to the Agreement; the second is the absence of the states and territories from the Agreement (in contrast to the National Agreement on Closing the Gap). I can see arguments both for and against having the states and territories involved, and on balance see the undoubted and direct involvement and engagement of the Commonwealth as a strong positive. There is no reason why the Commonwealth could not engage with relevant states and territories on relevant issues either through the regular meetings of the (so called) National Cabinet, through the Joint Council on Closing the Gap, or through targeted engagement with relevant states and territories as needed.

The key institutional changes foreshadowed in the PM’s speech and the associated media release were the references to making better use of capital and equity in special investment vehicles such as the North Australia Infrastructure Fund (NAIF) and the Australian Renewable Energy Agency (ARENA) and ‘ensuring’ these agencies ‘are delivering for First Nations communities across Australia’. Both of these foreshadowed changes remain opaque however as they are subject to detailed development by the parties to the new Partnership Agreement.

I have long been a critic of the NAIF’s failure to allocate resources to infrastructure investment in remote Indigenous communities (link here and link here). The latest review statutory review of the NAIF undertaken by former Member for Lingiari, Warren Snowdon, Dr Lisa Caffery and Professor Peter Yu was delivered two months late (link here) to the Minister for Northern Australia, Madeleine King in February this year and is yet to be publicly released (link here). One might be forgiven for thinking that the report has been warehoused to inform and feed into the new Partnership’s deliberations. On my reckoning it must be published by 1 September (the NAIF legislation requires the minister to table it within fifteen sitting days of receipt). Whether the Review’s yet to be revealed recommendations will emerge unscathed from the further prolongation of partnership review and the possible necessity for legislative amendment are moot.

A second potentially important institutional change is a proposal for the Partnership to consider ways to enhance the work of Indigenous Business Australia and the Indigenous Land and Sea Corporation, two key statutory corporations in the Indigenous Australians portfolio with economic development focus. Again, it is not clear what is intended here, although there are suggestions in the publications on the website of the FNEEA that they see potential for the considerable financial assets of the ILSC’s associated Land Fund and the IBA’s very healthy balance sheet to be made more accessible for commercial investment across the Indigenous estate.

For those who wish to dig even deeper, the NIAA FOI log (link here) includes a series of detailed policy recommendations prepared in 2019 by the Indigenous Reference Group to the Ministerial Forum of Northern Australia which canvass the issues of access to capital, land tenure reform, and NAIF reform in considerable detail. In 2019, the IRG was chaired by Professor Peter Yu. I would merely note that the devil is in the detail on these types of suggestions.

In terms of financial announcements, the Prime Minister announced an intention to make available $75m in additional funding for Prescribed Bodies Corporate (PBCs), the entities that are established to legally hold native title. I have long been an advocate of the Commonwealth moving to provide universal core funding for these bodies (link here), yet again it is unclear if the funding will be made available immediately or be delayed while the new Partnership decides on the scope of the reform of the funding model. According to data sourced from the NNTT, in August 2024 there were 280 PBCs (link here). Assuming the $75m is appropriated over three years there will be less than $90k available for each PBC each year in additional funding. This suggests that the prospect of allocating the funds equally across all PBCs will not be feasible, but the deeper take out is that the proposed funding allocation is entirely inadequate. Even were the $75m an annual appropriation, this would remain the case. The Treasurer’s comment (attached to the Prime Minister’s media release) that ‘we’re investing to equip Traditional Owners to leverage their land and sea assets to get better deals and bring jobs and wealth to First Nations communities’ is arguably factually accurate, but simultaneously an over-exaggeration of what is being provided. It will no doubt provide significant and welcome assistance to some native title groups but is not the wide-ranging reform that the Commonwealth’s media spin meisters would have us believe.

On closer examination, the Prime Minister’s announcement of $70m in Clean Energy funding refers to an Expression of Interest process which will feed into the development of a series of funding allocations to yet to be determined Clean Energy projects. The first step initiated on 4 August is to seek expressions of interest from potential project proponents. The available $70m will be allocated over three years (ie around $23m per annum) and the process by which the expressions of interest will be transformed into funding appears quite opaque (link here). What seems most likely is that the Department will allocate the available funds to projects which are already planned or underway. While the amount appears significant, and no doubt the successful applicants will appreciate the assistance, the reality is that this is a sophisticated form of virtue signalling rather than a developed strategy to drive significant impetus to expand existing energy provision frameworks.

The inarguable modesty of the Government’s funding announcements belie the Prime Minster’s rhetoric. Speaking of the significance of Garma, and framing his speech with the gravitas and aspiration accorded to the rites of serious policy contributions, the Prime Minister extolled:

this is a place for ideas, ambition – and accountability. Where we learn from the past, are honest about the present and ‘look up to the future’.

Given this ceremonial tone and rhetorical over-reach, what are we to make of this Prime Ministerial ritual at Garma? What is its purpose? What does it mean?

Perhaps the first point to make is that I am far from alone in expressing a degree of scepticism regarding whether to take the Prime Minister’s announcements at face value. The National Indigenous Times has reported critical comments from a number of prominent Indigenous individuals. As well as Senator Lidia Thorpe, Megan Davis (link here), Wayne Bergman (link here), Katie Kiss (link here), Denise Bowden (link here), all expressed either explicit or implicit reservations about aspects of the Prime Minister’s Indigenous empowerment strategy.

My own scepticism derives from the combination of four quite separate arguments. However, before listing those arguments, it needs to be stated up front that creating the conditions that facilitate improved economic security for Indigenous citizens, especially those who reside in remote Australia must be a key policy objective of Australian Governments.

Economic security is multifaceted and can not be encompasses by focussing solely on metrics such as income, or wealth, or employment status, or wellbeing. These are all useful measures but have complex causation and varying levels of durability and utility. Absolute measures are important, but so too are comparative measures as these play into complex issues such as relative status, degrees of social and political inclusion or exclusion. Further, both absolute and comparative measures of economic wellbeing or status are impacted by the social, political and economic environment within which thy exist. To make an extreme point, a healthy bank balance is no help in a famine. Or to make the same point in a more relevant way, for so long as there is an alcohol and drug epidemic across remote Australia (and I am not referring only to Indigenous people), then the underpinnings of Indigenous economic security will be unachievable (link here).

In turn, it becomes clear that ‘economic empowerment’ may well be a useful shorthand to describe a particular policy agenda, but unless carefully defined, it runs the risk of being utilised for essentially ideological reasons. In particular, there are indications in the FNEEA publications that the implicit policy agenda being developed under this terminological carapace is designed to shift policy priorities away from so called ‘welfare’ or ‘social’ sectors and towards institutional reforms and government funding allocations designed to support and benefit Indigenous access to revenue or profits-based wealth creation activities (commercial projects). Clearly there is a place for a focus on wealth creation and enterprise in any economic strategy, but in my view not at the expense of more basic economic foundations.

The arguments which suggest that the Prime Minister’s policy pivot to Indigenous economic empowerment should not be taken entirely seriously encompass both inherent shortcomings in the strategy itself and importantly what is not there or is under-emphasised.

First, the strategy represents a shift away from focussing on improving and reforming the foundations of economic security (which I would list as comprising education, employment, health / ableness, housing and community order). Each of these five elements are under enormous pressure in remote Australia and as I have argued for almost two decades (link here) these government shortfalls mean remote Australia is approaching a point of systemic breakdown or failure. Shifting policy attention to wealth creation (or economic empowerment) while ignoring essential reforms addressing deep-seated and ongoing government failure in the underlying elements of economic security would be fundamentally flawed policy.

Second, the strategy represents a pathway which can be utilised to reframe the public debate around the closing the gap agenda (yet again) in ways that allow governments to escape the annual reminders of their unwillingness and incapacity to allocate the intellectual and political resources as well as the funding necessary to successfully and substantively close the gap. Short term tactics work in the short term but ultimately don’t deliver strategic reform. The economic empowerment agenda sounds plausible and will buy the government time, and if Treasury can find an acceptable political path forward, it may buy time for another decade. However, eventually such a policy approach will fail because it is not based on rigorous policy analysis, ignores the fundamental drivers of economic security, and is not based on a transparent dialogue with all affected interests.

Third, the strategy creates the preconditions for the systemic co-option of the Indigenous leadership. Negotiations in private, combined with the increasingly parsimonious approach to transparency by the Commonwealth and other governments means that the temptation to ‘buy’ support from the Indigenous leadership for sub-optimal policies will be difficult to resist going forward. While the FNEEA Charter (link here) includes apparently robust individual conflict of interest provisions (see clause 10.5) related to the business of the Alliance, and the Partnership Agreement (link here) similarly includes sections on managing individual conflicts of interest and transparency (see sections 66 to 70), the inherent ‘commercial’ confidentiality involved in some aspects of the Partners’ discussions, the deep-seated reluctance of the Commonwealth to engage the wider public in policy issues, and the ultimate power imbalance between the Commonwealth and the First Nations partners means that there will inevitably be a heightened risk of inappropriate influence being applied either to individuals or to the Partners as a whole. The only effective protection against this is much greater commitment to transparency. For example, all funding to the First Nations Partners should be automatically made public, and the responsible Ministers should be required to make an annual statement to Parliament detailing all significant communications with, and funding decisions taken relating to, the First Nations Economic Empowerment Partnership.

Fourth and finally, the elephant in this policy room is the failure of the Commonwealth to address in any meaningful way the existing and ongoing use, and in some cases misuse, of financial benefits flowing from resource development on Indigenous land. The challenges involved are extraordinarily complex and raise difficult ethical and philosophical questions that cannot be addressed by unilateral government fiat. At a minimum, there is a need for much more robust regulatory oversight, and much more proactive financial literacy education. Most importantly however, there is an urgent need for an ongoing and open discussion around the overarching policy frameworks guiding the use, allocation and distribution of negotiated financial benefits by Indigenous landowners, and the potential alternatives which might be considered to ensure more equitable distributions overall, and greater savings and investment by beneficiaries rather than immediate consumption. The current free-for-all around the distribution and use of financial benefits reflects extremely poorly on the Commonwealth governments of the last thirty years. Any attempt to ‘empower’ Indigenous landowners without addressing the underlying rationales and impacts of these substantial and essentially unregulated financial flows is akin to using a fuel bowser to fight a fire.

Taken together, these four arguments constitute an overwhelming case for a comprehensive reconsideration of the current policy pivot by the Commonwealth. Unfortunately, the short-term political calculus strongly favours what I would characterise as a cynical policy framework with enormous opportunity costs, substantial risks (which will be borne by current and future generations of remote Indigenous citizens) and a limited contribution to the longer term public interest.

For an alternative view, I recommend readers take a look at the submission to the upcoming Productivity Round Table by Indigenous Business Australia (IBA) (link here). IBA is a member of FNEEA.

Conclusion

The Albanese Government pivot to Indigenous economic empowerment is in my view deeply flawed policy. It is not based on the rigorous policy analysis necessary to underpin a major shift in policy and political focus. The pivot will raise expectations but not deliver except for a minority of commercially and politically astute Indigenous entrepreneurs. Because institutional reform is so hard, it risks devolving into a focus on picking a slew of individual projects where Indigenous involvement can be facilitated and subsidised. Picking winners is fine until you begin picking losers. The pivot will steal oxygen from the policy discussions necessary to reform the underlying policies constraining the sustainable delivery of the real elements of economic security and thereby avoid the hard discussions with the states and territories who control many of those policy levers. The substantive import of the flawed logic appears to be: why argue about reforming housing provision, education, disability reform, employment, alcohol harm or hyper incarceration when the prospect of universal wealth is within our grasp. Additionally, the pivot portends the overhaul of the closing the gap policy framework by creating a plausible and intuitively attractive alternative policy framework.

The fundamental problem with this policy pivot by the Albanese Government is its role in allowing the Commonwealth to avoid the fundamental and necessary reform challenges in those crucial policy sectors that ensure economic security especially in remote Australia where Australia’s most disadvantaged citizens reside. It is an economic policy in name only; like Rumpelstiltskin, it promises to spin straw into gold.

 

6 August 2025

                                                                                                                                                                

A counter-intuitive proposal to expand rooftop solar in the bush

 

The self-same sun that shines upon his court

Hides not his visage from our cottage but

Looks on all alike.

The Winter’s Tale Act four, Scene four.

 

My previous post was essentially a high-level review of an excellent book titled Guide to Housing and Infrastructure Standards in Town Camps (link here). I recommend readers peruse that post before reading this post.

In this post, I delve a bit deeper into just one of the thirty essential services issues addressed by the Guide — the under-reliance on rooftop solar power in remote communities — and make a high-level policy proposal to break the current structural deadlock that contributes to energy insecurity, poor health, and the sheer liveability of remote community housing infrastructure.  

The Guide’s analysis of rooftop solar

The Guide (section 2.28 on pp. 148 – 151) identifies solar energy as one of the thirty issues it deals with. The Problem is identified as energy insecurity. The combination of temperature extremes, poor housing design, associated high demand for electricity, in a context of high reliance on prepayment meters amongst town camp residents leads to high levels of energy insecurity. The Guide references academic research to report on extraordinary rates of multiple power disconnection events affecting 91 percent of prepayment meter households across the NT (link here). Under Regulations, the Guide notes inter alia that the payback term for installed rooftop systems is often less than five years, and suggests that the introduction of rooftop solar systems could be the key to climate proofing homes in Aboriginal Town Camps (link here). Under Solutions, the Guide points out that while the upfront costs of incorporating solar energy systems into community and housing infrastructure has often been used as an excuse for not installing them, it calculates for one town camp that the payback period from installation would be four years, and points to the additional benefit of reduced health costs arising from avoiding the adverse implications of temperature extremes.

The Guide backs up this analysis with an aerial photo of a town camp showing nine houses, with no obvious solar alignment, and with no use of solar panels: the heading is Roof-top Solar Panels are not often used in Town Camps. On the facing page is an aerial photo of 23 houses in Alice Springs, of which 16 appear to be utilising solar panels. Furthermore, it is striking that the houses are all solar aligned to maximise the benefits of solar radiation in winter and minimise costs and radiation in summer. The Heading is Roof-top Solar Panels and Solar Oriented Houses in Alice Springs.

Subsequent sections in the Guide deal with the related issues of Passive Cooling and Heating, and the use of Outdoor Rooms and Courtyards.

In a rapidly warming world, the importance of addressing these issues is inarguable. Yet very few people would be aware or conscious of the fact that there are systemic disparities between the way mainstream and Aboriginal communities are designed and operate in relation to these issues. The consequences for communities are both real and deeply unfair. The degree of unfairness is magnified when it is recognised that over the past decade there have been substantial subsidies available to homeowners designed to encourage the take up of rooftop solar infrastructure, but that social housing ‘owners’ (ie governments) have not seen fit to invest in installation of rooftop solar on public housing in the NT — and I suspect elsewhere. The levels of recognition amongst policymakers and the informed public of the degree of inequity and unfairness in solar provision appears to be close to zero.

Again, as pointed out in my previous post, the policy context is complex, but it is not beyond the technical capacity of governments to address. It does however appear to be beyond their political and policy capacity, even in circumstances where addressing the issues would harvest both financial and social benefits for disadvantaged First Nations communities and for society as a whole.

Given the lack of proactivity from governments on the issue of energy insecurity for remote community residents, it struck me that an alternative approach might pay dividends (so to speak).

A strategic reform proposal

The relatively new NT Aboriginal Investment Corporation (NTAIC) which has adopted the name Aboriginal Investment NT: (link here).  I have opted to use the name used in the legislation that establishes the entity. NTAIC is a Commonwealth statutory corporation established to administer a proportion of ABA funds. I was one of a number of critics of the design of this entity when it was first proposed in late 2021 (link here). While I am yet to be persuaded that I was wrong, the establishment of NTAIC provides a degree of Indigenous agency over the allocation of significant ABA funds which are broadly designated as being for the benefit of Aboriginal people across the Northern Territory.

My proposal (for the NT) is that NTAIC should consider initiating negotiations with the NT Government based on an offer to assist in accelerating the take up of roof top solar across remote community housing in the NT. Almost all remote community housing is social housing managed by the NTG. While arguably the responsibility for rolling out roof-top solar across remote communities belongs to the NTG, it is a responsibility that is patently not being implemented. Moreover, due to the systemic incentives in play which shape the allocation of scarce government funding, the NTG is unlikely to unilaterally initiate the roll out of roof top solar over remote community housing anytime soon.

Given this context, the NTAIC might offer to fund a significant proportion (or even all) of the capital costs of a multi-year roof-top solar installation program on the condition that the NTG commits to the ongoing maintenance of the infrastructure along with the associated repairs and maintenance of the social housing assets. A second and crucial component of any such deal would be a commitment that the financial benefits in terms of lower power costs of the installation of rooftop solar would accrue to the householder and the local community. Such an arrangement would appear to fit squarely within the statutory functions of NTAIC as laid out in section 65BB of the Aboriginal Land Rights (Northern Territory) Act 1976 (link here). While it is not entirely clear to me whether this fits within the NTAIC current Strategic Investment Plan (link here), this need not be an absolute barrier to initiating good and common sense ideas.

The same model might be explored across WA, QLD, SA, and indeed the NT by Indigenous Business Australia (IBA), or in the NT potentially by NTAIC and IBA jointly. I acknowledge that the negotiation of a pure funding transfer with state and territory jurisdictions may not fall directly within the remit of IBA (see sections 147/148 of the Aboriginal and Torres Strait Islander Act 2005: link here). However, if developed along with arrangements for the utilisation of Indigenous firms to install and maintain infrastructure on behalf of these jurisdictions, the proposal could be easily brought within he IBA remit. This constraint would not apply to NTAIC in the NT, but would nevertheless be worth considering in any case.

I understand that this idea is counterintuitive insofar as it lacks a commercial rationale and may also appear to undermine the responsibilities of the relevant governments to provide and pay for social housing. However, when governments are not delivering on their responsibilities, and thus failing in their raison d’etre, and as a consequence Indigenous people are worse off than they should be, it seems to me that there is a case for Indigenous leaders appointed to roles on boards such as NTAIC and IBA to take action. While there is not a commercial return to the potential funders under my proposal (ie NTAIC and/or IBA), there is clearly a strong economic rationale.

The findings of the Guide discussed above that roof-top solar effectively pays for itself within 3 to 5 years (let’s say five years for simplicity) in effect tells us that there is a rate of return on the investment of at least 20 percent. I venture to say that NTAIC and IBA would struggle to identify any other broad scale placed base initiative across remote Australia that could match this return on investment.

The sticking point will be the definition of ‘investment’. It turns upon the difference between a commercial return (where the financial returns accrue to the investor) and an economic return where the financial returns accrue to the householder. Bearing in mind that both NTAIC and IBA are Commonwealth corporations utilising what are effectively public funds to operate, it strikes me that they should decide whether they exist merely  to beef up their own bottom lines, or to address the financial exclusion of a swathe of disadvantaged Indigenous communities. My point is strengthened when we take into account the positive externalities of addressing energy insecurity earlier rather than later, in terms of improved health, improved food security, and poverty mitigation.  

The proposal I have made has the potential to drive tangible increases in real incomes for remote families and thus deliver myriad financial and health benefits for thousands of Aboriginal and Torres Strait Islander residents of the north. Moreover, the adoption of my proposal by NTAIC and/or IBA would mean that action is initiated much sooner on what would necessarily be a multiyear effort and would ensure that governments would eventually accept that they had the responsibility to replace roof top solar infrastructure as it reached its end of life as a normal part of social housing provision.

Of course, a potential argument against my proposal is that it implicitly means that other opportunities will not be funded. If so, I suggest that the responsibility falls to NTAIC and IBA to identify just what those higher priorities are. One way of mitigating this consequence, and simultaneously driving further strategic change aimed at underming structural inequity, would be for the NTAIC and/or IBA to seek to have the NAIF provide concessional finance to assist in financing their contributions. See my recnt post on the NAIF (link here).

Conclusion

We hear a lot about self-determination, and Indigenous leadership as the prerequisite for effective policy outcomes. It strikes me that the opportunity to drive a major upgrade of rooftop solar across remote communities presents the boards of NTAIC and of the IBA with a once in a generation fork in the road: they either take the initiative to drive strategic change or they accept that failing governments should be left to continue to fail remote Indigenous communities.

The evidence of egregious and myriad policy exclusion by governments is inexorably accumulating. It is incontrovertible that remote communities have unequal access to essential services and are at greater risk arising from energy insecurity in a warming world. Governments, and our system of politics and policy development, have failed because they design and implement exclusionary policy frameworks which treat remote community and town camp residents worse than the residents of major urban centres. In these circumstances, the NTAIC and the IBA should step up and use their undoubted financial leverage to drive strategic policy reform.

 

Further reading:

Longden, T., Quilty, S., Riley, B. et al. Energy insecurity during temperature extremes in remote Australia. Nat Energy 7, 43–54 (2022). https://doi.org/10.1038/s41560-021-00942-  (link here).

 

Solar solutions could be the key to climate-proofing homes in Aboriginal town camps By Stephanie Boltje, The Drum  (link here).

 

18 December 2024