The Productivity Commission’s Human Services Reform agenda in remote communities

The Productivity Commission recently released its report ‘introducing Competition and Informed User Choice into Human services: Reforms to Human Services (link here). The Final Report was presented to the Treasurer in October 2017, and was published on 26 March 2018.

The report includes two areas of particular relevance to Indigenous policy. The first relates to social housing, where the Commission recommends, inter alia, extending Commonwealth  Rent Assistance to social housing tenants, a move which if implemented would go a long way to eliminating the structural inequities between remote social housing and the treatment of non-remote housing assistance to low income citizens.

This post focusses on the second issue on the provision of human services in remote Indigenous communities, dealt with in chapter nine of the report. In December 2016 I commented briefly on an earlier study paper released by the Commission as part of its review (link here). The study paper appears to have been more adventurous and incisive than the Final report.

In the Final Report, the Commission argues at page 265, inter alia, that

·         Despite goodwill and significant resources, current approaches to commissioning human services in remote Indigenous communities are not delivering the benefits of contestability and are exacerbating its potential weaknesses.

·         Policy instability has created uncertainty and confusion for communities and service providers, and has undermined the effectiveness of service provision.

In relation to an earlier disposition to recommend more vigorous use of place based approaches:

·         there is merit to place-based approaches, but that a large-scale systematic rollout of place-based approaches across remote Indigenous communities is not feasible.

·         Government and community capacity for place-based reforms does not exist everywhere and would take time and effort to build. Expanding too far, too fast is a significant risk.

Moreover,

·         Governments should shift the balance away from centralised decision making in government toward greater regional capacity and authority to improve responsiveness to local needs.

These are all sensible and considered judgments which deserve serious consideration, but which governments, based on their record over the past few decades, are unlikely to address enthusiastically.

Nevertheless, the Commission’s chapter on remote communities deserves to be read by anyone interested in remote policymaking, not least because it represents the ‘standard view’ on what is the appropriate policy approach to addressing indigenous disadvantage, and improving Indigenous engagement. Moreover, the specific recommendations on human service are well argued and deserve serious consideration. The Commission recommends that contract lengths for commissioned service delivery be set at ten years by default, that governments publish a rolling schedule of upcoming tenders, that tenders include a focus on skill transfer and capacity building, that provider attributes (for example culturally appropriate service provision) be taken into account, that outcome measures and establishing evaluation and feedback systems be implemented, and that agencies adopt less centralised decision making systems which involve greater local engagement.

So what’s missing from the Commission’s analysis? I would point to three key issues.

First, the Commission appears to have dropped all references to greater transparency in program delivery from its analysis and recommendations. The Commission’s focus on policy instability and churn (which is largely driven by ministers and political factors) is absolutely correct, but it appears to have failed to make the link between greater transparency and reduced incentives on governments to countenance policy churn. Similarly, a focus on program and policy evaluation will be facilitated and indeed strengthened by a greater focus on transparency in relation to government policymaking. The Commission’s earlier study paper, mentioned above, was quite explicit in calling for greater transparency, so the decision to drop any mention of the value of greater transparency is difficult to understand.

Second, the Commission’s revised and more modulated support for place based approaches would be significantly strengthened if governments were to simultaneously establish an overarching policy framework so that while the scope for regional and place based differences was maintained, there was also a greater degree of certainty around expectations on both sides of the ledger: from providers, and form communities. Such an overarching policy framework would assist governments to articulate exactly what they are trying to achieve, deliver greater stability in coordination and cooperation between jurisdictions, and assist in managing community expectations. Furthermore, while Indigenous communities are diverse and heterogeneous, there is a risk that without an overarching policy framework to underpin place based approaches, communities who are outside the ambit of the place-based arrangements will be neglected and services will be under-supplied.

Third, and perhaps my most fundamental critique of this chapter of the report, the Commission’s approach ignores the reality, and indeed the centrality, of politics both within Indigenous domains, and within the public sector. This is clearly a deliberate decision of the Commission to make the report appear ‘policy focussed’ and to maximise the likelihood that its recommendations will be accepted, if not by this government, then by the next. However it has the effect of making the analysis extremely artificial and anodyne and somehow lifeless.  I am not advocating that the Commission takes sides in political debates, but to effectively ignore the existence of politics both as a driver of policy problems and challenges, and as a driver of potential solutions, seems somewhat otherworldly. The reality is that politics are ubiquitous in relation to these issues, and to blithely recommend policy ‘reforms’ as if politics don’t exist appears short-sighted at best, and potentially destructive at worst. One of the reasons that governments are so averse to transparency on any kind is that it increases the likelihood that blatantly political tactics will be seen for what they are.

Thus at present, we have a Federal Government with a substantial policy and program footprint in remote Australia, but without an overarching remote policy framework, and with both of the two largest Commonwealth programs in remote Australia, the Community Development Program and the Remote Housing Strategy subject to deep-seated uncertainty. In place of any policy framework, the Commonwealth appears to have decided that addressing remote challenges is just too hard, and instead, that it is easier to adopt a political strategy of blaming the states and territory for any issues which have emerged, ignoring the Commonwealth’s overarching stewardship responsibilities in Indigenous affairs and the fact that as the major funder in remote Australia, the Commonwealth has a responsibility to work with jurisdictions to develop coordinated and coherent policy frameworks.

Notwithstanding my criticisms of the Commission’s approach, there is much in the Commission’s report worth considering and pursuing. The report is an excellent example of open and transparent processes delivering better outcomes, and as a result, there is a clear ‘audit trail’ of the development of the Commissions thinking in relation to the conceptually challenging issues involved such as place based program delivery.

If this report goes un-noticed and un-addressed, remote Indigenous communities will be worse off. Unfortunately, because the Commonwealth does not have a comprehensive remote policy framework in place, it seems unlikely that we will see a serious and sophisticated response to these findings and recommendations. Nor does the present Minister see that he has a responsibility to respond formally to reviews and inquiries such as this; he has been quite open in stating that he does not intend to respond to the recommendations of the review into remote housing which he commissioned and which was delivered to him in 2017. Hopefully the Opposition and the Greens will take up the issue of a formal response to this Inquiry Report and ensure that the Government at least responds to the Commission’s recommendations and findings in a timely manner.

The Prime Minister announced over a year ago that the Productivity Commission would be supplemented with an Indigenous Commissioner. Legislation is currently before the Parliament. The omens will not look particularly positive in terms of the capacity for such an appointment to make a real difference to policy outcomes if the Government is not serious about dealing with the recommendations of worthwhile inquiries such as this.

Remote Indigenous infrastructure priorities

Infrastructure Australia (IA) has recently released its most recent Infrastructure Priority List (link here). I have posted on the topic of remote infrastructure previously (link here and here), and my comments and assessment have not changed substantially.

Infrastructure Australia is an advisory body which assesses proposals from state and territory governments, local government, private sector interests, and in theory the Commonwealth to compile a list of priority infrastructure projects across Australia.

The Board of IA is drawn predominantly from the business sector, and in particular from individuals with a backgrounds in communications, transport, gas infrastructure, and the like. While this is unsurprising, it is fair to say that there does seem to be a dearth of ‘community sector’ representation, which in my view is problematic.

My major concern with the model of policy development adopted by IA and its Board is that it is too focussed on a narrow conception of infrastructure, one which prioritises economic benefits over social benefits, and single larger projects over aggregations of smaller projects.

The definition of infrastructure may seem largely uncontroversial, however it is clear that housing per se is not deemed to be infrastructure for the purposes of policy assessment. While this may be justified in urban and regional Australia, in remote Australia, virtually all housing is social housing, and privately owned housing is virtually non-existent. The reasons for this are complex, and include historical dispossession, capital deficiencies within remote communities, high costs, land tenure challenges, and the absence of appropriate planning regimes. But whatever the reasons, it is clear that Governments must take some responsibility for the shortfalls.

It follows that there are good policy reasons for including remote housing as a core component of our economic and social infrastructure in remote Australia. In my view, IA and its Board (and by implication governments at all levels) have a serious blind spot in relation to this issue. For example, the IA 2015 Northern Australia Audit (link here) explicitly focusses on the needs of towns of 3000 or more, and notes that this excludes the needs of remote indigenous communities (refer page 43) and thus fails to include remote housing infrastructure needs in its assessment.

One implication of this narrow geographic and functional approach to defining infrastructure is that it ignores the massive undersupply of housing infrastructure in remote Australia, which I recently estimated would require an investment of $9bn to address (link here). In turn, this means that there is a concomitant underestimation of the true levels of related infrastructure needs in remote communities such as water, sewerage, power and even roads.

The most recent Priority List includes three priority projects in remote Australia, the upgrade of the Tanami road in the NT, improved roads access to remote communities in WA (both of which will benefit miners and other remote interests as much as Indigenous interests), and the provision of enabling infrastructure in three remote locations in the NT (Wadeye, Tiwi, and Jabiru). The summary for this latter project describes it as:

A portfolio of upgrades to road infrastructure, as well as a range of essential services and community infrastructure upgrades to support economic and social development in three remote regions of the Northern Territory.

One salient point to note is that the ten year National Partnership on Remote Indigenous Housing which ends in June this year invested substantial funding in upgrading the ‘enabling infrastructure’ in both Wadeye and the Tiwi Islands so as to facilitate the construction of significant subdivisions of housing ion both locations. In other words, Governments have been quite happy to use remote housing programs to construct infrastructure, but are unable to see that aggregations of housing should be seen as infrastructure.

While inclusion of remote social housing on the IA priority list will of itself not add to the supply of remote housing, it will raise the profile of an issue which the current Federal Government is intent on setting aside. It is time IA and its Board adopted a broader and more far-sighted approach to assessing the infrastructure needs of remote Australia.

For Governments, the policy challenge is not merely to allocate the necessary funding to ensure that remote infrastructure needs are met, and not degraded (which will be the inevitable outcome of the current Commonwealth disinvestment policy in remote housing in particular), but to also devise and progress appropriate policy reform particularly in relation to land use, planning and land administration regulation. This work needs to be led by the Commonwealth, and will necessarily involve the states and territories. In recent years, this challenge has proved to be too hard for governments, and the use of ‘smoke and mirrors’ as a substitute for real policy development too tempting. And there are no signs of change on the horizon.

One of the reasons Indigenous policy reform appears to be so difficult is that we appear to lack the political leadership at all levels to drive necessary reform. Remote infrastructure is a salient case in point.

How else to cut it: ruminations on remote housing and Senate Estimates March 2018

O, what may man within him hide,
Though angel on the outward side!

Measure For Measure, Act 3, scene 2

Last week the Finance and Public Administration Estimates Committee of the Senate convened for a day to address cross-portfolio Indigenous issues. The link to the transcript is here.  

I don’t propose to attempt to comprehensively summarise the hearing, rather I focus on a select number of policy issues of particular relevance to remote Australia.

In particular, I wish to focus on the issue of remote housing which has been the subject of previous attention in this blog (link here).

The discussion in Estimates was limited and partial, insofar as the bulk of discussion involved Senator Ketter from Queensland and he was focussed almost entirely on the implications of the Commonwealth’s approach for his own state.

Some basic facts.

The current National Partnership was initiated in 2008 and was for a period of ten years. It was innovative insofar as it took funding certainty beyond the normal four year forward estimate period. There was no discussion or understanding at the time that funding would cease at its expiry, merely that arrangements would need to be renegotiated.

Second, it involved $5.5bn in funding to the states over the ten years, all contributed by the Commonwealth. This was subsequently reduced to $5.4bn after the current Government cut $95m in 2015. In other words, the Commonwealth is currently contributing around $540m per annum on average to remote housing.

Third the current Minister initiated a review in late 2016 presumably as a precursor to renegotiating the current arrangements. The review which was finalised in early 2017 and made public in October 2017 makes a number of recommendations. The review was, in my view, seriously deficient in many key respects; see my previous post on this issue here. Most notably in the context of the current debate (see pages 51/52 of the Estimates transcript), there is no comprehensive information included on expenditure on the remote housing program year by year and state by state. Nor is there detailed information which justifies the Minister’s current allegations about states not allocating Commonwealth funding to housing purposes. In the absence of any serious reporting from his Department on these issues, my assessment is that they have virtually no basis nor justification.

Fourth, over the course of the ten years, arrangements were negotiated with NSW, Victoria and Tasmania for funding under the program to cease. This was essentially in acknowledgment that their ‘remote regions’ were minimal and outstanding housing needs had been largely met. It was not (contra Minister Scullion’s assertions at page 51) merely that they ‘had taken on their own responsibilities’. Moreover, the exit of those jurisdictions was the result of joint and methodical negotiation, not a ‘take it or leave it’ ultimatum from the Commonwealth as appears to be the approach adopted by Minister Scullion with Qld, SA and WA.

And fifth, the Minister appears to have allocated insufficient time for negotiation of new arrangements and has failed to put basic information on the table outlining the Commonwealth’s parameters and policy directions. Indeed, as previously argued (link here), it seems as if the Minister deliberately delayed negotiations so as to avoid having to include future funding in the Commonwealth’s budget estimates released in the December 2017 MYEFO.

The Minister’s arguments (insofar as they can be ascertained) appear to be as follows:

First, the Minister has alleged that the states (but not the NT) have mis-allocated current remote housing funding. As he stated in Estimates (at page 51):

Not only am I a minister but also I am a champion for Aboriginal and Torres Strait Islander people. When they put to me that in the state you're talking about someone has taken from them $600 million that should have gone to them, yes, I'm going to stand up. I'm not walking away from negotiations. I'm also not walking away from the bloody truth. And if you tell me the only money you're not giving out is to Aboriginal and Torres Strait Islander people, it's a bloody racist policy, mate. I don't care how else you want to cut it. So, no, I'm not walking away from this. We will negotiate on proper terms, but they will also be held to account for their actions.

As noted above, the Minister’s own review did not suggest that Queensland had shifted $600m, and his figure appears to have been conjured out of this air. Bluster might make effective politics, but it is extremely poor public policy. Unfortunately Senator Ketter failed to pursue this particular issue with the result that the Minister appears to have bludgeoned his way through.

Second, the Minister is basing his argument for not committing continued Commonwealth funding on the proposition that the states and territories have responsibility for social housing, and that the current National Partnership was a one-off arrangement or surge designed to remove the deficit in housing provision in remote regions.

The response to this rather complex argument is itself complex. The Commonwealth has historically been and continues to be the major player in funding social housing, and provides the bulk of social housing funding nationally – around $1.5bn pa - through the National Affordable Housing Agreement. In addition, the Commonwealth allocates some $4.5bn pa to low income individuals via the Commonwealth Rent Assistance program. Unfortunately, the absence of a private sector rental market in most remote communities means very little of this funding reaches Indigenous communities. So it is disingenuous if not dishonest to argue that the states have primary responsibility for funding social housing. And it is also disingenuous if not dishonest for the Commonwealth to do nothing to fix the ‘misallocation’ of Rent Assistance away from remote communities.

The states do have primary responsibility for delivering and managing social housing, but the funding responsibility is shared and historically in remote it has been with the Commonwealth. The Minister’s aspiration for the states to pull more weight in remote housing is legitimate as far as it goes, but for the Minister to use this argument as a fig leaf to cover further Commonwealth funding cuts is extremely poor public policy.

As to the ‘one-off arrangement’ argument, the Commonwealth has a long history of funding remote housing at least back to 1972. There was never an expectation that the current remote housing program would cease, or could cease upon the expiry of the ten years. Moreover, as the Ministers own review makes clear, the gap in social housing provision between remote and non-remote regions has been substantially reduced, but is still significant and thus there is no policy rationale for ceasing the ‘funding surge’ at this point.

So what did we learn from the recent Estimates Committee hearing?

First, with only three pages out of some sixty pages dedicated to discussion of remote housing issues in the transcript, the Labor Opposition and Greens appear to place remote housing issues a long way down their Indigenous policy priority list. This does not bode well for remote communities.

Second, the Minister in his opening statement to the committee made a point of confirming that he is not walking away entirely from remote housing:

In terms of the remote housing strategy, I am pleased to once again confirm that, despite the many fictitious and irresponsible claims to the contrary made by various state Labor housing ministers, the Commonwealth is not walking away from remote housing. We are, however, still waiting for those Labor states to come to the table and to put a clear and unequivocal financial commitment on the table. So far, the only jurisdiction out of the remote housing strategy jurisdictions to put any funds on the table is the Northern Territory, and I commend them. I'm looking forward to hearing from Mr de Brenni, Mr Tinley and Minister Zoe Bettison in South Australia on what their commitment to remote Indigenous housing would be.

Third, the Minister confirmed that the Commonwealth would not be providing a formal response to the recommendations of the review of Remote Housing which he commissioned, arguing with a classic non-sequitur that it is ‘an independent review. It informs where we go’ (page 50). While not unprecedented, it is highly unusual for a Government not to respond to a formal review, and leaves the public at large and Indigenous interests in particular in the dark as to the Government’s policy intentions.

Fourth, the Minister gave no indication of the quantum of funding the Commonwealth would be providing nationally for remote housing. As I have previously speculated, if the NT is to get $110m pa from the Commonwealth, and the NT has around half the outstanding remote housing need nationally, this suggests that the best allocation will be around $220m pa from the Commonwealth. This would represent a cut in Commonwealth funding of around $300m pa. and if fully matched by states and territories, a net cut of $100m pa on current funding levels. As an aside, as I have previously noted (link here) the outstanding need over the next decade for housing in remote Australia is probably around $9bn pa or $900m pa. The Turnbull Government is laying the foundations for a serious deepening of the major slow motion social disaster already underway in remote Australia.

Fifth, the Minister did indicate that the Commonwealth would be prepared to match the NT up to a figure of $110m pa. for as long as there was an outstanding need or housing deficit, via a bilateral agreement with the NT (refer pages 52/53 of the transcript). He has however given no indication of the proposed length of the bilateral agreements he is proposing.

Sixth, there was a rather extraordinary interchange between Senators McCarthy and Dodson and Department of Health officials regarding the worsening epidemic (to use Senator Dodson’s term) of syphilis and congenital syphilis in northern Australia, and the limited role and commitment of the Commonwealth in addressing this epidemic. Minister Scullion applied some soothing balm to the injury and agreed to ‘take a larger personal interest in this matter and report back to the committee’. The discussion was extraordinary because it was focussed largely on responses rather than prevention, and totally disconnected from the demographic realities of remote communities, and the huge outstanding housing needs.

Seventh, this discussion was followed by an insightful exchange between Senator Ketter and officials including Dr Hobbs, the Commonwealth Deputy Chief Medical Officer, on the Commonwealth’s Rheumatic Fever Strategy:

Senator KETTER: What causes that in the first place?

Dr Hobbs: Streptococcal infection is very common in the community, either in Indigenous people or indeed in non-indigenous people. But it's more common in circumstances where there is overcrowding, poor access to hygiene infrastructure and intercurrent illness. The response then is of the immune system, and that may target the heart or other organs, but particularly the heart, and then lead to the development of an anatomical defect, usually on the valve of the heart, which then progresses to rheumatic heart disease over a period of time.

Senator KETTER: If there was investment in overcrowding and housing conditions, would you say that would lead to an improvement of outcomes here?

Dr Hobbs: Certainly. The overcrowding and the access to hygiene infrastructure are a very important part of prevention. There has also been a lot of work done internationally and in Australia in collaboration with colleagues in New Zealand on a vaccine, but that's been very, very difficult to develop to date.

Senator KETTER: Minister, you can see here that housing is very important in relation to this particular issue. The government is increasing funding for this national partnership agreement. What I'm concerned about is, on the one hand, we're seeing developments there, but when you have housing as a driver, you've got the government moving in two different directions. If we don't fund housing properly then we're not going to see improvements in the area of rheumatic fever.

Senator SCULLION: I can't disagree with you. As I've indicated, I'm trying to hold those states accountable to ensure that they continue to fund housing.

Notwithstanding the Minister’s double negative response – a second resort to soothing balm - he gave no hint or acknowledgment that it is the Commonwealth Government’s policies which will, on the evidence of the Commonwealth’s own Deputy Chief Medical Officer, have further deleterious impacts on the health of remote communities.

Conclusion

The recent Senate Estimates Hearings served to reinforce that the Commonwealth is actively pursuing a political agenda to pressure the four Labor run jurisdictions who are beneficiaries of the current remote national partnership agreement to contribute greater funding.

Greater state investment in remote housing provision is a legitimate aspiration for the Commonwealth to pursue through genuine and serious negotiation, but it is entirely hypocritical to adopt a political strategy which advocates greater state contributions merely so as to sow confusion and divert attention from the Commonwealth’s apparent intentions to cut funding further than they have already.

The Minister and indeed the Prime Minister would do well to reflect very carefully on Minister Scullion’s advice to the Estimates Committee:

I'm also not walking away from the bloody truth. And if you tell me the only money you're not giving out is to Aboriginal and Torres Strait Islander people, it's a bloody racist policy, mate. I don't care how else you want to cut it.