Why governments committed to fighting inequality must expand public housing

Pat Honan is the Northern Territory grassroots delegate to the ALP National Policy Forum

The demand to end inequality should be instinctive to anyone who is socialist or social democratically aligned. Bill Shorten's admirable pledge to this effect, however, obviously cannot be achieved by the Commonwealth Government alone - particularly in the area of housing. 

State and Territory Governments have implemented social housing policies but these policies have relied on market forces, producing programs that are often expensive and inefficient. In the Northern Territory, Indigenous community housing is a classic example of this.

The housing crisis on Indigenous communities in the NT has long been a significant, but largely peripheral, issue for governments. Overcrowding and a lack of available houses on communities makes day to day living an unbearable experience for many families, with three bedroom houses commonly occupied by 25 people. There have been no significant improvements in community housing because of the high cost of construction driven by building companies and contractors demanding excessive remuneration for community construction projects.

In 2016, the Giles Country Liberal Party government committed to the Strategic Indigenous Housing and Infrastructure Program (SIHIP), stating that “up to 240” houses would be built each year with a $1.6 billion dollar establishment cost, and a broader price tag of $2 billion to build 2,087 houses in total. This scheme highlighted the apparently phenomenally large cost of building houses in remote areas – requiring approximately $450,000 in construction costs for each dwelling and a further $325,000 for the supply of related infrastructure.

This does not seem like a reasonable expenditure of government resources.

By way of comparison, the rebuilding of Darwin after Cyclone Tracy in 1974 (coordinated by the Darwin Reconstruction Commission) created 1,812 new houses, 141 new flats, and saw repairs to 425 houses and 128 flats. This was achieved at the hefty price tag of $150 million (adjusted with inflation to around $1.1 billion in 2017).

It is absurd to suggest that the rebuilding of Darwin would be a simpler or less costly project than a community construction project for a similar number of houses. Three questions must be asked: why do SIHIP and similar projects cost almost twice as much as the Darwin reconstruction? What justifies this premium? And why is the market unable to lower costs despite years of progress in architectural efficiencies?

In 2017, the Gunner Government introduced the “Room To Breathe” scheme which extends existing homes. This scheme is not the solution to the Indigenous community housing crisis as it relies on the same inefficient market mechanisms as the Giles government’s SIHIP scheme, with a $1.1 billion dollar fund to upgrade homes in 22 communities. Split equally, this would see $50 million spent on upgrades in each community, a price tag well above realistic costs for the required upgrades.  

Inequality and homelessness in communities will not be resolved through the market. State and Territory Governments need to step up and introduce public infrastructure programs to efficiently build homes where the market will not or the current inequality between homeowners and the homeless will continue indefinitely.

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  • published this page in Home 2017-09-26 17:48:11 +1000