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HOIL

Community Affairs - 25 February

Senator SIEWERT—I want to ask about HOIL. Is it appropriate to ask that here?
Dr Harmer—Yes.

Senator SIEWERT—I wanted to ask about it in relation to the ANAO report. I want to follow up on some of the issues it raised. I want to ask about the unspent funds that have been committed to the program. If I understand it correctly, they have been transferred into the urban Home Ownership Program to address the waiting list there.

Ms Gumley—That is correct. The HOIL capital funding for the loans was into HOP. That reflects the fact that land tenure from state and territory government reforms is taking a little longer, but those funds will actually sit there and be replenished back into homeownership on Indigenous land. So when we have demand stepping up there will be sufficient to meet it.

Senator SIEWERT—I would like to go to that issue of demand stepping up. I am not going to revisit some of the policy issues behind this. At the time the program was started there was some contention around whether it was just land tenure that was the issue and the barrier to homeownership. There were a whole range of other issues that were identified. I am just wondering whether you have had a rethink—in terms of the ANAO report and the issues that have come up through the program—about whether you still believe it is just land tenure that is the issue or whether you are addressing some of the other barriers that have been identified?

Ms Gumley—The government had a homeownership discussion paper out and submissions closed just before Christmas. We expect those submissions will be loaded shortly. It is fair to say that it is still considering all of the issues. Land tenure is a really important part of that, though. Certainly where land tenure has been resolved on Tiwi we have seen some demand there. It is true, though, that it is a matter of making sure that people have the opportunity to exercise a choice around homeownership but also that they understand the impact that will have: what is the difference between renting a home and owning a home and do people have the financial literacy to be able to manage that? There are a number of other components of the homeownership program, such as the money management aspect and the support that IBA provides, that go to that, but I think it would be reasonable to say that those things will come under continual review in looking at how effective they are and what they are doing.

Senator SIEWERT—If there are going to be changes or modifications to the program, what is the time line for those?

Ms Gumley—I think they would be considered in the context of the Indigenous Economic Development Strategy.

Senator SIEWERT—Can you remind me what the time line for that is?

Mr Tongue—Senator, it is a little bit up to the government and we are working broadly around midyear.

Senator SIEWERT—I am sorry I am quoting from a report, but I am pretty certain you will be familiar with the ANAO report. It states:

In hindsight, the program’s performance targets have been overly ambitious. IBA and FaHCSIA were faced with the difficulty of establishing strategies to meet a target of 460 loans where there had been little opportunity to assess actual demand in the selected communities. FaHCSIA and IBA were unaware how many people living at selected HOIL sites were willing and able to purchase their own home …

Then it goes on to talk about the legislative reform which we have just talked about. Are you planning to address that issue of assessing the level of demand at all?

Ms Gumley—There are a number of steps, I think, in order to take someone from a rental arrangement and move them into homeownership. Some of them actually are things that the governments need to be doing around land tenure, but there are also some practical things such as the survey and the subdividing of blocks. Certainly, having people on normalised tenancy arrangements is a really important step—a building block towards homeownership—because people are making regular provision for bills, managing their responsibilities and taking care of the property. So that is an important transition towards homeownership. Building the capacity of the individuals and the local councils is certainly a really important part. And that money management component is in there.

I think it is probably fair to say that where land tenure has not been resolved we would not know the finite numbers of individuals who would want to take it up in all of the communities across Australia, but there are certainly a number of communities that we have been doing some work with, in particular in Queensland. The Queensland government has made some good headway on starting some of those land tenure reforms and the arrangements for subdividing et cetera. We have got some work going on which is to identify individuals, work with them over time, make sure we are working with the councils et cetera, making sure that the tenancy arrangements are in place and that people have a good understanding about what homeownership means.

Senator SIEWERT—I want to go back to this issue of where you have been going with land tenure but then I want to go on to demand and level of aspiration. You mention land tenure a lot, and it goes back to my original question of the other barriers to homeownership. What are you using as the evidence that land tenure is the main barrier? I am not going to go into quoting documents because then I will have to table them, but you will know the debate that was had and continues to be had that maintains that land tenure is not the only barrier to homeownership. There is a whole range of other barriers, including the fact of resale value for a start in communities, people’s low family income, issues about poor credit histories, level of savings, high construction costs et cetera. So, again, I come back to what level of work you have done—and evidence rather than a belief—to determine that land tenure is the barrier to individual homeownership.

Mr Tongue—Senator, I recall a report by the Australian Housing and Urban Research Institute on Indigenous homeownership which I am happy to, on notice, dig up and provide.

Senator SIEWERT—That would be great.

Mr Tongue—My memory of that report around some of the evidence base here is about homeownership. The motivations of Indigenous Australians in some instances may not look like an urban Australian property investor negatively geared. The motivation appears to be much more about leaving something for family and for children, attachment to country or wanting to normalise in the sense of the rest of the wider community. So the motivations around homeownership might be slightly different. We are conscious of the question: in promoting homeownership, are we promoting people into an asset that might have a limited value? But limited value is in the eye of the beholder. I have done a lot of work with states and territories around valuation issues to do with what the value of the asset is. At one level it is what the taxpayer paid for the asset in the case of a public house that might be put into homeownership. At another level it is the strict valuation—what the true value of an asset is in a remote location. So we are working through all of those issues.

In terms of providing the asset base—the underlying land assets that drive homeownership in the rest of the economy—it is pretty critical to moving forward. If we cannot find a way to work with traditional owners and communities about how to do that in a way that respects attachment to country and community title but at the same time creates the basis for the aspiration of the individual and the family, we will not get there. But we think we are on track now. We think we have found a way to explain to traditional communities what we are on about. We are working through that around the country but particularly in Queensland.

Dr Harmer—You are right. It is not the only barrier, but it is one of those cases where it is necessary but not sufficient. If you do not secure a lease which is available to be passed on and there is distinct and separate ownership, everything else falls apart. But in just securing the lease, if there is welfare income primarily and no market et cetera, there are other barriers. There is no doubt about that. But securing a lease is quite critical.

Ms Gumley—At the moment we are taking the submissions from the discussion paper that we have received and looking at those again. Certainly land tenure is a necessary precondition. But, as you say, there are many other components. So we are doing what we might call a pipeline analysis now—looking at all of the things along the way. There is the underlying tenure, so we need to get some long-term leasing around that. But there is also the subdivisions. There is also the capacity of the local councils and the capacity of the individuals. So at the moment we are working through those and identifying what works now and do we actually think that is sufficient. I suppose we are in that evidence-gathering stage, looking again at what people have told us with new information.

Senator SIEWERT—That leads me to the next question. During that work, are you looking at the level of aspiration in communities around homeownership and then housing? There are differences in aspiration for homeownership. I realise that many people do have that aspiration. But more often than not people say to me that it is about getting a roof over their heads, and that is the issue we have just been talking about.

Ms Gumley—Yes. So we are, as part of that, making certain that we have a good understanding on a community by community basis. It will not be a blanket arrangement; we will work with some targeted communities where the tenure is resolved. Their concept of homeownership might be, as you say, quite different from what we would have—rather than having a mortgage, they might be just after a good rental property where there is not the same overcrowding that they are currently facing. So we are going through that, and broadly that would be termed what the audit has identified in terms of making sure people have an informed choice. Do they actually understand the choices they are making? If it is that their preference would be for a rental property, then we need to look at how that might be addressed.

Senator SIEWERT—This is the last question, but I have a lot more that I will put on notice. I just wanted to ask about the 45 houses that were built that no-one wanted to buy and were transferred, I understand, to the NT government’s—

Ms Gumley—That is correct, as social housing stock.

Senator SIEWERT—Of course, I am not disputing that that was a good outcome in terms of the 45 houses, but how was the decision made to build them?

Ms Gumley—Senator, those houses at Wudapuli and Nama came about—and I think I would refer to an earlier question on notice that the department has provided—because essentially there were a mix of a couple of circumstances going on at the time. There was a lot of overcrowding and violence in Wadeye. Wudapuli and Nama is an outstation where traditional owners wanted to pursue homeownership and also wanted people to live there permanently. So the houses were built there, and they were built there to pursue a rent-buy model. As it eventuated, there were probably some mixed ideas around, ‘Is it homeownership or is it social housing that I want?’ My understanding is that not a lot of those houses at the moment—I have early data from May and June 2009, and I could get more data, from the Northern Territory—have permanent residents in them and that a significant number of people are actually living there only 50 per cent of the time or even less. I think it is the reality of the services being in Wadeye and the reality of living on an outstation during the wet season. Sometimes roads are cut; sometimes families need to be able to access health services. They might have health conditions that are not necessarily convenient to manage on an outstation. So, at the moment, they are managed as public housing stock.

Senator SIEWERT—Thank you.

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