Native Title Report:
2006
Fact sheet 3 – Housing
Background
The federal Government has made a commitment to ‘normalise’ Indigenous communities by increasing Indigenous home ownership and reducing reliance on subsidised rental accommodation.
The home ownership scheme is administered by Indigenous Business Australia and is available to low-income Indigenous Australians. However, basic economic modelling demonstrates that it will be outside the financial reach of the majority of remote Indigenous households.
Economic reality
The typical remote Indigenous household has an average gross weekly income of $267 per week.[1] The remote Indigenous adult has a 36 percent chance of having a disability or a long-term illness which will affect income earning capacity and an average life expectancy 17-years lower than non-Indigenous Australians.[2]
The life expectancy for Indigenous males is 59 years and 65 years for Indigenous females,[3] These circumstances limit the ability of Indigenous householders to service home loans over a 30-year period.
On a $150,000 loan the weekly repayments over 30 years at an interest rate ofthree percent is $145.37 per week. This is 54 percent of the average gross weekly income of a typical remote Indigenous household. Even at an interest rate of 0.2 percent, the weekly repayments are $98.75. This is almost 37 percent of the weekly income of a remote household.
By any measure this level of repayment is not sustainable. Given that Indigenous Business Australia will not lend amounts where the repayments exceed 30 percent of the household income, it is evident that the averageremote Indigenous household is in no position to support a home loan, with incentives or otherwise.
The remote communities
The Australian Government has targeted its programs and incentives to a select group of communities in the Northern Territory; Galiwinku, Tennant Creek, Katherine and Nguiu.[4]
Forty-five new houses will be constructed for private purchase across Galiwinku and Nguiu.
Discounts of up to 20 percent on house purchase prices will be available in other communities.[5]
The discounts will be available to good renters and there is sufficient funding for up to 160 low interest home loans specifically targeted to remote communities.[6]
Housing stock
There are indications that the housing stock for purchase may be problematic. The Australian Government has emphasised ‘cost effectiveness’ as the most important criteria for the provision of homes for purchase under the home ownership scheme.
The quality of the houses will be critical to the longevity of the asset and the cost of maintaining it over time. The Australian Bureau of Statistics outlined the following about Indigenous housing:
Although there are many factors which contribute to the sustainability of housing, the adequacy of design, construction and maintenance of Indigenous housing plays a crucial role. When houses are not culturally appropriate in their design, are poorly built, or where there is no systematic approach to their repair or maintenance, minor problems can escalate over time and shorten the life expectancy of houses. Given the serious backlog of housing need in rural and remote communities, it is important that resources are well targeted and provide the maximum benefit to Indigenous Australians.[7]
There are indications that the houses proposed for the federal Government’s home ownership scheme will not be of the quality that governments currently provide. The new homes will be ‘self built’ kit homes that are to be built at less than half of the cost of current government housing cost in remote communities. According to the Tiwi Local Government Housing for example, the cost of a government-built house on the TiwiIslands is $320,000.[8] The kit homes earmarked for the home ownership scheme have been costed ex-factory at approximately $150,000 per home.[9] According to the government they are built to cyclone code.[10]
1
[1] Australian Bureau of Statistics, 4102.0 -Australian Social Trends, 2004Year Book of Australia, Commonwealth of Australia, 2004, available online at: accessed 24 February 2007.
Note: Equivalised gross household income is a standardised income measure which has been adjusted for the different income needs of households of different size and composition. It takes into account the greater needs of larger households and the economies of scale achieved by people living together.
[2] Australian Bureau of Statistics, The Health and Welfare of Australia’s Aboriginal and Torres Strait Islander Peoples, ABS series cat. No. 4704.0, Commonwealth of Australia, 2005, available online at: accessed 23 February 2007.
[3]Australian Bureau of Statistics, 3302.0 - Deaths, Australia, 2005, 30 November 2006, available online at: accessed 24 February 2007
[4]Brough, M., (Minister for Families, Community Services and Indigenous Affairs), Galiwinku community gets down to MoneyBusiness, available online at: accessed 19 February 2007.
[5] Knapp, R., (Group Manager, Housing and Disability Group), Hansard, Senate Community Affairs Legislation Committee, Estimates, Canberra, 30 May 2006, p40.
[6] Indigenous Business Australia: IBA Partnerships Announcement, available online at: accessed 5 February 2007.
[7] Australian Bureau of Statistics, 1301.0 - Year Book Australia, 2004, available online at: accessed 25 February 2007.
[8] Housing worker, Tiwi Island Local Government Housing, Communication with Aboriginal and Torres Strait Islander Social Justice Commissioner, 27 January 2007.
[9]Bartlett A, Hansard, Senate Select Committee on the Administration of Indigenous Affairs, 30 May 2006, Canberra, p37.
[10] Gibbons, W., (Associate Secretary, Department of Families, Community Services and Indigenous Affairs), Hansard, Senate Community Affairs Legislation Committee, Estimates, Canberra, 30 May 2006, p38.