Fractured and flawed $billion remote housing spend

A NATIONAL program to improve living standards of remote indigenous communities has seen policy commissioners resign and receive threats of jail if they divulge the content of commission meetings.

The five-member National Policy Commission on Indigenous Housing was announced by the Prime Minister Kevin Rudd and Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin in a joint statement on June 27, 2008.

But the Commission has not met since mid 2010.

With expertise across indigenous affairs, social justice and design for healthy homes, the commissioners’ role was to advise the Federal Government on ways to improve the design and delivery of housing in remote indigenous communities.

They formed part of the government’s exhaustive preparations for the implementation of the $5.5 billion commitment to the 10-year National Partnership Agreement on Remote Indigenous Housing (NPARIH) which began on January 1, 2009 and expires on June 30, 2018. Under the NPARIH, over 4800 existing houses are to be upgraded by 2014 and 4200 new houses are to be built in remote communities across the states and the Northern Territory (NT) by 2018.

Remote housing refurbishment targets to 2014 announced by Minister Macklin

Remote housing refurbishment targets to 2014 announced by Minister Macklin

In January, Ms Macklin announced that the NPARIH had exceeded targets by two years. She also stated that it had achieved over 20 percent indigenous employment in the construction sector of the program – a performance benchmark of the NPARIH.

But questions about budget transparency and distribution, quality of construction, safety and liveability of new and refurbished homes and accuracy of annual progress reports by each state and the Northern Territory have plagued the government since the program began.

Mr Paul Pholeros AM, an architect and expert in design for healthy homes, is the most outspoken of the former commissioners and has received three warnings from the government after speaking to media. With almost three decades of experience working towards improving indigenous health through practical solutions that improve house function and service, Pholeros and his organisation, Health Habitat, are recognised as leaders in the field.

Pholeros confirms that under the terms of the commissioners’ contract, a 28 day jail provision applies if he talks about “anything that the Commission discussed in private.”

Other members of the National Policy Commission were Mr Danny Gilbert AM, Ms Leah Armstrong, Mr Joe Ross and Mr Warren Mundine. Gilbert is a lawyer with experience in indigenous affairs and social justice. Armstrong is CEO of Reconciliation Australia and has many years experience in improving economic independence and employment for indigenous people. Ross is an aboriginal man from Fitzroy Crossing in the Kimberley region of WA who has worked in indigenous affairs for many years and Mundine is an aboriginal leader and ex-president of the Australian Labor Party.

After visits to various sites across the States and NT to see results of the program between 2009 and 2011, the Commission reported back to the Government on the poor quality of construction and workmanship across all trades in both new and refurbished homes.

They questioned the budget allocation for new builds and renovations and the service delivery of the alliance construction companies engaged to deliver the program. A 2011 NT audit makes note of slow progress during 2009 and other contractual concerns but lacks specific comment regarding the quality of construction work.

Pholeros says the commissioners raised their concerns with the Federal Government over the progress of work numerous times. “Just about every suggestion that I and the other four commissioners made was seen as either being hostile or being unhelpful and the program simply waded on and I couldn’t see any point,” he says.

“We’ve been out of the loop since mid 2010 when the Federal Government stopped our program. I resigned from the Prime Ministers’ National Policy Commission on Indigenous Housing as did all the other commissioners.

“We have severed our links with the Federal Government and I think they are probably very happy about it,” Pholeros says.

Mr Mundine says that not all commissioners resigned and confirms that he is bound by a confidentiality agreement.

“It’s a tough gig,” he said. “Our role was not about power. We tried to influence the outcomes.

“Over time it was clear we were no longer required…you could say we were sacked.”

Pholeros maintains that the Commission was never provided with a detailed budget breakdown for the program but that a quantity surveyor with knowledge of construction in remote areas has reviewed completed buildings and confirmed to him that “the cost of houses being built is way in excess of the $450,000 stated.”

In some instances, the quantity surveyor has estimated that the raw cost of a house can be as high as $750,000.

“I couldn’t care less if they cost $1million each. What I care about is will they be around in 25 years giving proper service to those people living in them,” he says.

The extreme remoteness of many locations adds to the cost and difficulties associated with the management of such a large undertaking.

Remote areas are defined by the Remote Index of Australia (ARIA) as outlined by the Australian Bureau of Statistics. The degree of remoteness varies across the states and the Northern Territory. In Victoria no indigenous communities are defined as remote.

Commonwealth funding allocation and deliverables

Commonwealth funding allocation and deliverables

Pholeros is disturbed that, despite the large cost of building the average four bedroom house, they “don’t have the most basic function.”

If there is a lack of effective facilities in one house then the next house is subject to a heavier load. Bathrooms, toilets, kitchens and laundries are shared by a greater number of people which means greater wear and tear on plumbing and electrical services and fittings which leads to an increased rate of failure.

An objective of the NPARIH is to improve the lifecycle of houses from seven years to 30 years with ongoing maintenance and repairs so that this migration of people from one house to the next, if facilities in the first house fail, does not occur.

The NT’s Strategic Indigenous Housing and Infrastructure Program (SIHIP) evolved from an earlier remote indigenous housing program and officially began in 2008. It was then incorporated into the NPARIH. Since then, the high cost and poor quality of refurbishments and construction completed under SIHIP has received the most criticism of the work completed across Australia.

Independent member for Nelson in the NT, Mr Gerry Wood has also seen shoddy work first hand. He was Chair of the Council of Territory Co-operation (CTC) which released several reports about progress of the new home builds and refurbishments prior to the council’s demise.

“There are a range of issues from the big construction phase to people moving into houses and how they are managed for the next 30 years,” he says.

Leases on Aboriginal land and tenants’ understanding of tenancy agreements are a separate and complex issue altogether.

“I used to go out unannounced to see how things were on the ground,” he says. “I saw a house in Maningrida NT which was passed as refurbished at a cost of $90,000. The toilet, showers and kitchen were refurbished but the rest of the house was a dump. But the houses were good structurally.

“This house had dirt floors on the veranda and a second shower was outside for visitors to use. People would have a shower and then bring dirt on their feet inside the house.”

The CTC’s third progress report states “Community members were angry about the standard of refurbishments, with many community members saying the completed houses had only received basic maintenance, like pressure cleaning and painting. They were particularly disappointed with the lack of floor coverings and pantries in the kitchens.”

New Future Alliance, one of two current NT construction company consortia, “had provided the SIHIP Program Managers with an estimated cost for flooring, with two paint-based options.”

In the progress report and as stated in an ABC News story aired on May 26, 2010, Mr Brian Hughey representing New Future Alliance explains the tenants’ “dissatisfaction with the work was more a result of ‘miscommunication’ about what would be delivered as part of the refurbishment program.”

Federal Senator for the Northern Territory, Nigel Scullion, who is also Shadow Minister for Indigenous Affairs, has been scathing of SIHIP over several years.

In a statement released on March 6, 2012 he was highly critical of the Federal Government’s lack of budget transparency and “…saw dodgy refurbishments done under the government’s program.” More recently he claimed the program “remains a shambles” and says conditions of overcrowding and homelessness for the NT’s indigenous people hasn’t improved since the rollout began.


A 2009 government ordered review of SIHIP found that “in the development of the initial package of works an imbalance emerged between program objectives” and there was “a lack of effective oversight at the delivery level and a need to restructure the program governance and management arrangements.”

Amongst other issues of “unresolved leadership” and concerns that the program would not meet budgets and deadlines if the rollout of work was to continue without change, the review also advised a reduced management structure and “greater control by both the Australian and Northern Territory Governments over the day to day operations and management of the program.”

The review set an average cost of $450,000 per new house, an average cost of $200,000 for rebuilds and refurbishment costs ranging from $20,000 to $100,000 with an average cost of $75,000. It also advised that program administration costs should be reduced from 11.4 per cent to 8 per cent.

On March 17, 2010 a joint announcement of the Post Review Assessment of SIHIP by Minister Macklin and former NT Ministers Chris Burns and Warren Snowden said “a new independent, expert quality assurance team will be established to inspect and assess new houses and refurbishments delivered under the Strategic Indigenous Housing and Infrastructure Program (SIHIP) in the Northern Territory (NT).” It also stated that there had been improvements in the delivery and implementation of SIHIP after the 2009 review.

Wood says that the current NT Government, elected to power in August of last year, plans to look at how the SIHIP money was spent after their constant complaints about wastage when in opposition.

The construction rollout is part of the Federal Government’s broader aims to improve the health and living standards of indigenous Australians. As part of the Closing the Gap reforms, the NPARIH intends to reduce the incidence of homelessness in remote communities by 50 percent in one generation and create healthy and safe living environments for children in particular by reducing the occupancy rate per home.

Less overcrowding means less wear and tear and an increased life cycle for the home. Functional plumbing and electrical safety are basic components for improved living standards in remote communities.

Detailed site inspections of new and refurbished homes. Pictures: Paul Pholeros

Towards a Design Framework for Remote Indigenous Housing is a highly detailed 2008 report by the Australian Housing and Research Institute (AHURI) which preceded NPARIH. Written by a panel of experts in architecture and design, sustainability, planning and indigenous affairs, it addresses social and practical issues in the design and delivery of indigenous housing – some of which were re-stated in a review of failings of the Northern Territory’s housing construction program almost 18 months later.

Pholeros explains that house designs are meant to comply with the National Indigenous Housing Guide (NIHG). “But they are clearly not.”

Houses should be appropriate for climatic conditions in different locations as well as indigenous culture and family requirements. Some communities have reported dissatisfaction with the level of consultation between them and the alliance builders. Each alliance builder is responsible for the design and construction of housing works packages.

Wood says “house design was always a concern from the beginning.” He explains that houses built 20 years ago had four rooms and a breezeway and most people lived in the breezeway.

“There was an argument that perhaps we could have built new houses in the same simple design as these” he says.

With all the preparation, planning and sheer cost of funding NPARIH, it is clear that the Government has genuine intentions to greatly improve the health, education, employment and safety of remote indigenous communities. But it is a vast and unwieldy undertaking which continues to draw criticism despite the Government’s assurances that it is on track to meet and exceed targets.

“The government goes to incredible expense but never seems to fix it [indigenous housing],” Mundine says.

“There needs to be revolutionary changes and reform and [the government needs] to work more closely with the indigenous communities.”

He says that any housing program should take into account regional differences including climate and social needs of each community. Other considerations include job creation and training for local indigenous people and an appropriate mix of housing for each community.

“Most importantly,” he says, “The houses need to meet the real needs of the environment. They don’t need to be expensive.”

Wood says that the 20 per cent “aboriginal employment is a furphy…and [the reality is] nowhere near what they [the government] were trying to achieve.” He says that there is only a short term gain and suggests that there needs to be an ongoing strategy for employment and training which provides workers with practical experience and a trade certificate.

As outlined in the NPARIH, Commonwealth funding is distributed to the States and the Northern Territory for each to independently manage. In turn, they are required to provide annual reports of progress against Implementation Plans specific for each State and the NT, and against performance indicators and timelines as outlined in the NPARIH.

Annual funding allocation as set out in Part 5 of the NPARIH

Annual funding allocation as set out in Part 5 of the NPARIH

The Commonwealth distributes payments when performance benchmarks are reached and bonus payments if benchmarks are exceeded. It is apparent that the annual budget allocation across the 10-year program falls over $700 million short of the $5.5 billion fund but it is unclear if the bonus payments are a component of the fund or if this figure is set aside for contingencies.

At the time of writing, Macklin had not responded to requests to clarify if this shortfall partly covers the construction of essential services.

The Department of Housing in Western Australia said in a statement that “Funding for essential services, water, power and sewage was limited to service connections, although limited funding has been allocated with the agreement of the Commonwealth to undertake some essential services work related to capacity and reticulation where that has been impacted directly by new housing.”

It also states that the “NPARIH funding includes provision for the delivery of Urban Indigenous Community Housing Reform, Property and Tenancy Management Reform and the construction of Employment Related Accommodation.”

Former Prime Minister Gillard’s Closing the Gap report notes that “In remote areas, more direct action is needed to address issues such as poor construction and a lack of maintenance of both houses and essential services.” Delivery of essential services is covered by a separate pool of funds. In some remote communities, all new suburbs and new infrastructure has been built.

The office of the Northern Territory Minister for Housing, Peter Chandler, said in a statement that the “NT Government has adopted a three tier delivery method using a combination of alliance delivery, regional contractors and local solutions which permit smaller local businesses including Indigenous business enterprises to do works on a trade basis.”

The second phase of the $5.5 billion 10 year program begins on July 1 and ends on June 30 2018. As stated in the Closing the Gap report, the Federal Government’s investment will provide homes for 9000 indigenous families.

With overcrowding understood to be a major issue to be addressed by the NPARIH, it does not give the states and NT a numerical benchmark to aim for. It simply states that a 2006 Community Housing and Infrastructure Needs Survey (CHINS) found the average occupancy per remote house to be 8.8 people.

“It is way too simplistic to say that if you build a lot of houses you just divide the house number into the number of people and that equals a crowding level,” Pholeros says. “That is completely nonsense and it doesn’t work like that…There is lots of evidence that shows that simply isn’t the case.”

Mundine says that the “government’s intentions are good but they are naïve… We have to live with the reality of the Australian Federal Government and work a lot better together for better outcomes that are forward thinking.

“It’s sad and tragic that we spend so much for so little outcome over 10 years.

“I’m looking forward to doing meatier stuff into the future.”

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