Systemic myopia: Public investment challenges in remote Australia

 

When clouds are seen, wise men put on their cloaks;

When great leaves fall, then winter is at hand;

When the sun sets, who doth not look for night?

Richard III, Act 2, scene 3.

 

My previous post focussed primarily on the social cataclysm engulfing remote communities through the primary lens of social and property violence and the impact of anti-social accelerants such as alcohol. Rather than focussing on spelling out the inevitable and significant implications for families, children, and the social stability of the communities, I sought to argue that there was a shortfall in the capabilities of governments to ensure citizens were able to live peaceful lives, thus raising questions regarding the legitimacy of governments.

 

In this post, I turn my attention to some of the sustained and systemic shortfalls in public investment in remote communities, and particularly capital investment requirements. While it would be foolhardy to argue that adequate public investment is all that is required (sufficient) to meet the complex challenges facing remote communities, I would ague that it is a fundamental prerequisite (necessary) for doing so.  Of course, even so, public investment must be well targeted, sustained, and be well designed. Accordingly, if we turn the proposition on its head, long term absence or under-provision of high quality public investment can be seen as a fundamental precursor, if not a major cause, for ongoing social dysfunction within remote communities. We cannot expect to address the social challenges in remote communities without ensuring that public investment is adequate and high quality.

 

Of course, the overwhelming majority of Australians have minimal experience of the conditions of remote communities. Families resident in remote regions constitute only 2.3 percent of Australian families (link here). While we may complain about the quality of government services, we expect, and mostly receive, a first-world level of government service provision from three levels of government. This is far from being the case in remote Australia.

 

A number of recent reports relating to infrastructure provision illuminate this observation.

 

Infrastructure Partnerships Australia (IPA), a body not previously on my radar, has recently released an extraordinarily useful report titled Remote Communities: Improving Access to Essential Services (link here).

According to its website, IPA is

Australia’s longest standing infrastructure think tank, formed in 2005 as a genuine and enduring policy partnership between Australia’s governments and industry. We exist to shape public debate and drive policy reform for the benefit of the national interest.

Our public sector membership is drawn from Commonwealth, state and territory infrastructure, planning, environment, finance and treasury departments, as well as government-owned corporations.

Our private sector members include major financiers, law firms, contractors, consultants, equity and debt investors, infrastructure technology providers, super funds and operators.

 

The IPA Remote Communities report is extraordinarily accessible, setting out key data points and utilising clear and striking graphics. I recommend readers take a look at it (not least because I cannot do it justice in this brief post). The report seeks to do two things. First, it lays out in stark terms the essential services shortfalls facing remote communities: communities ‘consistently experience poor water quality services’, ‘electricity supply is often unreliable’, and ‘have limited access to telecommunications services’. Contributing factors include ‘isolation’, ‘lack of meaningful engagement with communities for service delivery’, ‘inequality barriers’, lack of resources’ to utilities charged with delivering these essential services; a ‘systematic lack of transparency and reporting’, ‘skills and education shortages’, and inconsistent regulation and poor governance continue to impede improvements’. This is a pretty challenging set of constraints. The report then goes on to identify a range of technological possibilities, noting that ‘There are a variety of established technologies and governance approaches being applied across all jurisdictions — but they are coming at a glacial pace for most remote communities.

The Report’s second aim is to lay out the way forward. It argues for establishing a national minimum service baseline based on government commitments to National Cabinet, and a process whereby governments are accountable for meeting the baseline. It suggests existing Community Service Obligations should be ‘evolved’ or transitioned into Community Infrastructure Partnerships which lock in obligations to innovate, improve transparency, provide a social licence and facilitate collaboration and coordination between sectors. Funding and financing mechanisms for remote infrastructure should be reviewed and updated and regulatory reform undertaken to support community infrastructure partnerships.

 

The report appears to be unaware of the recent moves (yet to be included in the Productivity Commission Information Repository) to establish a new Closing he Gap target for community infrastructure (link here and link here ). The new target is framed as follows:

Target 9b: By 2031, all Aboriginal and Torres Strait Islander households: Within discrete Aboriginal and Torres Strait Islander communities receive essential services that meet or exceed the relevant jurisdictional standard; In or near to a town receive essential services that meet or exceed the same standard as applies generally within the town (including if the household might be classified for other purposes as a part of a discrete settlement such as a “town camp” or “town based reserve”.

 

The new target 9b differs from the IPA recommendation insofar as it accepts current jurisdictional essential services standards (which may in fact require strengthening – see below), whereas the national approach advocated by the IPA Report would ensure both uniformity and reduce the likelihood that some jurisdictions standards will lag national expectations. One would hope that the forthcoming Productivity Review of the National Agreement (link here) would recommend that the Joint Council consider amending target 9b to ensure appropriate/strengthened national standards for remote essential services are applied.

 

The IPA report is an exceptionally comprehensive and far sighted assessment. It proposes an extremely ambitious agenda; one which will be highly susceptible to governments’ reluctance to commit to new expenditures, and governments’ propensity to baulk or fall at the implementation stage. Nevertheless, this is an extraordinarily important report, and deserves wide circulation and attention across the Indigenous policy domain.

 

Notwithstanding the vision and focus the Report’s authors have brought to this analysis, I do have one criticism. The focus on water, power, and telecommunications is in my view too narrow. The policy reforms advocated by the Report should be broadened to include sewerage, roads, cadastral and related land surveys, and most importantly, housing in remote communities. The vast bulk of housing in remote communities is public housing, and it is a core component, a core foundation, for the associated essential services that we normally see as infrastructure. As the largest public housing peak body in the US notes on its website (link here):

Public housing plays a critical role in our nation’s public infrastructure, providing families with a stable home and helping them gain access to other services, including education and health. When we invest in public housing, we help low-income families achieve self-sufficiency and improve life outcomes, but we also generate economic growth, bolster productivity, and positively impact support services while significantly decreasing costs.

 

Of course, the IPA is not alone in Australia in failing to see social housing as infrastructure. Infrastructure Australia was very slow to acknowledge that social housing is infrastructure (link here and link here) and when it did, it never really gained traction within the bureaucracy and beyond.

 

Indeed, in the last year of the former Government’s term, it took steps to explicitly ensure that Infrastructure Australia did not consider social housing. In April 2022, the Shelter WA website reported (link here) that the former Deputy PM and Minister for Infrastructure, Transport and Regional Development, Barnaby Joyce, issued a Statement of Expectations to the Board of Infrastructure Australia (link here) that omits inclusion of social infrastructure such as social and community housing in IA’s list of priority sectors.

 

The Shelter newsletter states:

…As reported by Community Housing Industry Association (CHIA), regrettably, the new statement of expectations removes social infrastructure from the list of priority sectors despite its inclusion in IA’s 2021 Infrastructure Plan, and affordable housing being the most frequently cited infrastructure gap in regional areas. This is step backwards in efforts to treat housing as essential infrastructure.

 

What the Shelter website does not mention is that housing shortages are endemic in remote and regional Aboriginal and Torres State Islander communities, and that Aboriginal and Torres Strait Islanders are over-represented in waiting lists for social and community housing in regional and urban locations. Moreover, if one were to aggregate the outstanding remote community housing needs across regions or jurisdictions and treat addressing them as individual projects, the financial costs would exceed the capital costs of many of the major economic projects that Infrastructure Australia recommends (and the North Australia Infrastructure Facility funds: link here).

 

The failure to gain traction is evident in the recent release of the Independent review of Infrastructure Australia, and the associated Government Response to the Review (link here). The Independent Review recommended (pages21-22) that Infrastructure Australia’s remit be expanded to include social infrastructure, albeit without seeking to define or stipulate just what such a term covers:

The Review recommends that Infrastructure Australia’s remit be expanded to include social infrastructure (where it is relevant to the infrastructure investment project, or place and precinct in question) as well as future investment challenges where Infrastructure Australia’s position as the national advisor best enables it to incorporate those challenges in its advice and analysis.

 

Disappointingly, (particularly given the Government decision to make Infrastructure Australia a more influential adviser on infrastructure matters) the Government Response adopts the Barnaby Joyce approach, and effectively set this recommendation aside:

Support in part. The Government considers Infrastructure Australia’s focus should be on nationally significant projects relating to transport, water, communications and energy infrastructure, in support of Australian Government functions.  From time to time, it may be appropriate for Infrastructure Australia to consider social infrastructure implications where it is part of broader network analysis or place-based project advice. Where required, the Government can request this work through the Statement of Expectations. The Government notes that this approach minimises any duplication with regional and urban policy and program functions within the Australian Government…

For those who require a translation from bureaucratic parlance, this means ‘not on your nelly’!

 

Yet the Infrastructure Australia Regional Strengths and Infrastructure Gaps Report released recently (link here: Overview report) identifies the availability, diversity and affordability of housing as the most common identified gap across regional Australia (page 11) and in relation to Indigenous communities’ concerns, noted (para.4.7.7 page 38):

The availability, affordability and quality of housing was highlighted across consultations as being a key issue for First Nations communities. The 2019 Australian Infrastructure Audit (Challenge 126) identified that housing is not meeting the needs of First Nation communities across remote Australia, exacerbating health, education and well-being outcomes. Overcrowding is leading to poor outcomes for First Nations peoples in Remote Areas, which is also identified on our Infrastructure Priority List.

 

It is worth contextualising these persistent shortfalls. This week, Infrastructure Australia released its 2022 Market Capacity Report which identifies significant risks and pressure on the infrastructure pipeline currently in place across the nation. But more saliently for Indigenous citizens in remote Australia, the report notes that the current 5 year pipeline of major public infrastructure projects ‘is valued at $237 billion - an increase of $15 billion in the last 12 months and equivalent to 6.7% growth’ (link here). Or to contextualise the Commonwealth’s effort in relation to remote housing, where it has allocated $100m for the NT over five years, this represents on my calculation 0.04 percent of the total five year public infrastructure pipeline.

 

Taken together:

• v  the IPA Report outlining the extraordinary remote infrastructure challenge (albeit narrowly focussed);
• v  the current inability of the Productivity Commission’s Closing the Gap Information Repository to provide information on housing progress (target 9) in remote areas — it is listed as future reporting (link here); and
• v  the deliberate decisions to narrow the remit of Infrastructure Australia to exclude advice on disaggregated remote social housing needs  in favour of geographically focussed commercial infrastructure;

all provide a rather pessimistic insight into the longstanding systemic challenges driving under-investment in public infrastructure within remote communities. These challenges are exacerbated by the deliberate decision of the former LNP Government (not reversed by the current ALP Government)  to not continue the public investment in remote housing provision in the 2008 National Partnership Agreement on Remote Indigenous Housing (link here;  link here and link here).

 

Yet the public investment shortfall is deepening as the challenges of climate change are rising (link here).

 

A recent research note in the Medical Journal of Australia by Simon Quilty, Norman Frank Jupurrula, Ross Baillie and Russell Gruen (link here) is titled: Climate, housing, energy and Indigenous health: a call to action. The authors first paragraph states:

Most Australians take safe housing and uninterrupted electricity for granted. Yet in remote Indigenous communities, low quality poorly insulated housing and energy instability are common. Most houses require prepaid power cards, resources are meagre, financial literacy is low, and people often have to choose between power and food. New evidence reveals extreme rates of prepaid electricity meters’ disconnection in these communities, making people with chronic diseases who depend on cool storage and electrical equipment particularly vulnerable. The convergence of excessive heat, poor housing, energy insecurity and chronic disease has reached critical levels in many parts of northern Australia, and a multisectoral response is needed to avert catastrophe. Medical professionals have a key role to play.

 

The article is short and highly recommended. Among other things, it argues for the strengthening of building codes and housing standards in remote settings, not the acceptance of existing standards.

 

To sum up, over the past two decades at least, public funding in core capital investments related to essential services, social housing, and community infrastructure has been severely deficient. This has undoubtedly reduced the levels of recurrent funding by governments in remote settings, and also limited the opportunities for local employment, and stronger economic development and progress. It is undoubtedly one of the key contributors to limiting the opportunities available to the rapidly growing youth cohort within communities. While reversing the sustained under-investment is not sufficient to address all the challenges facing residents of remote communities, it is a necessary element in any viable transition to a more stable future for remote communities. The onset of climate change is making addressing these challenges even more urgent.

 

Yet relevant policymakers appear to be both deaf and blind to the systemic and structural nature of the crisis their predecessors have initiated and for which they have the current responsibility to address. It is past time for the Commonwealth to step up, commit funding and ensure that the states and Territory are focussed on these priorities, which after all are core responsibilities of governments.

 

 

 

 

 

 

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.