Last week, the federal government released a report into remote housing in Aboriginal communities, called the Community Housing and Infrastructure Program Review (CHIP Review).

Although it’s one of the most misleading government reports I’ve ever read, it did contain one extremely important fact. The report noted: “We understand that the cost of dwellings in remote areas particularly has increased tremendously since 1999 approaching $400,000 in 2006.” In other words, the price of building houses in remote towns has sky-rocketed.

Why is this so? Well, in a remote Northern Territory community like Wadeye, for example, there’s no road access five months of the year, despite a regional population of more than 4,500 people. Building materials have to be shipped in on a barge for half the year.

You also need manpower to construct housing builders understandably charge a huge premium for work in remote communities. Materials are more expensive in remote areas, and the standard of construction is much higher to ensure homes can withstand cyclones and other extreme weather.

And of course, a century of government neglect means there’s no existing infrastructure – it’s one thing to build a house, but there’s not much point if there’s no plumbing, sewage lines, electricity or road access.

It all adds up to bad news for housing in remote communities. But in his haste to produce a biased report which mounts a spurious case for the abolition of remote housing on outstations and Indigenous housing in urban centres (which is what the CHIP review argues), Minister for Indigenous Affairs, Mal Brough, has painted himself into quite the corner.

Surely, if it costs $400,000 to build a house in remote Australia, that puts the kiss of death on Brough’s other grand plan – promoting private home ownership in remote Indigenous communities? Apparently not. Brough was last week still spruiking private home ownership.

So how ridiculous is the idea? In 2001, an Aboriginal household in remote Australia had a average household income of $267 a week. How exactly, are blackfellas in remote regions going to afford to service a home loan when repayments on $400,000 over 30 years are about $750 a week?

But let’s pretend Mal’s magic wand somehow overcame that fairly substantial problem. The very minute the construction of the home is completed and the keys are handed over to young Johnny, the value of his investment drops to almost zero.

Why? Because over-crowding in remote communities will ensure that a home that might have had a life expectancy of up to 50 years will last about ten (which is the average). And of course there’s no housing market in remote communities, so there’s no way to realise your asset.

You’ve just paid $800,000 over 30 years for an investment that was worthless the day you took possession of it. And that presupposes, of course, that the average borrower in a remote community is going to live long enough to service the loan. As we all know, they won’t.

The average life expectancy for an Aboriginal male in a community like Wadeye is 47 years. So in order to service a 30 year loan, Johnny Blackfella is going to have to sign up for a mortgage no later than age 17.

So which bank is going to be stupid enough to lend the money? The answer? No bank. Only a government would be stupid enough to lend a household which earns $267 a week $400,000 over 30 years to a guy who won’t live long enough to service the loan for an asset that is worthless the day he takes possession of it.

An Aboriginal person silly enough to sign up for this deal should be disqualified immediately from home ownership on the grounds that he’s silly enough to sign up for this deal. 

The federal government is trying to put the cart before the horse. You can’t create a housing market until things like reasonable health, housing, education and basic infrastructure exist and are stable.

Which begs the question – why would a minister of the Crown risk being committed to a mental health facility by supporting such a crazy plan?

Look no further than the explanatory memorandum which accompanied Mal Brough’s legislation to amend the Aboriginal Land Rights Act (Northern Territory). “The aim of this legislation is to promote economic development on Aboriginal land, especially mining.”

Bingo! This scheme has nothing to do with bringing the Great Australian Dream within reach of Aboriginal people. It’s about mining, and mining royalties.

Brough’s home ownership scheme is, quite simply, the dumbest government initiative since the creation of the Rum Corps. And the mainstream media coverage of it is no better.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey