Chapter 3Housing
3.1The number one issue raised in evidence impacting the ability of Northern Australia to attract and retain skilled workers was housing—both its affordability and availability.
3.2According to the Australian Industry Group, many 'businesses report that the ability to find staff to fill skills shortages is only part of the challenge, with the ability to house them proving at least equally problematic'.
3.3Multiple reports arose in evidence of candidates being offered jobs in parts of Northern Australia, only to decline because of a lack of housing.
3.4For example, despite the Pilbara region having a Designated Area Migration Agreement (a formal agreement between the federal government and a regional, state or territory authority on additional number of skilled migrants) in place, which would allow it to take more overseas workers than through the standard skilled migration program, the Western Australian Government reported that limited housing availability and affordability were preventing migrants from settling in the region.
The bigger picture on housing
3.5Issues with housing availability and affordability in Northern Australia are not new, but seem to have increased recently to become the key issue impacting attracting and retaining workers in Northern Australia. The 2014 Final Report from the Joint Select Committee on Northern Australia flagged that housing 'was another significant issue for people in the North', including the cost of construction. The report noted that costs in the Pilbara region were estimated to be 55–65 per cent higher than in Perth, because of distance, high labour costs, high accommodation costs and more rigorous building standards to withstand flooding and cyclones – with these standards adding 30 per cent to structural steel tonnages and 400–600 per cent to concrete footing volumes.
3.6Housing pressures are a nation-wide issue in 2023. The 2022 Local Government Workforce Skills and Capability Survey found that the two most significant impacts on workforce attraction and retention across Australia were the COVID-19 pandemic and housing pressures (see Figure 3.1).
Figure 3.1Most significant impacts on workforce attraction and retention across Australia
Source: Local Government Association of Queensland, Submission 54 - Supplementary submission, p. 14 (citing 2022 Local Government Survey)
3.7The 2022 Regional Strengths and Infrastructure Gaps report also included availability, diversity, and affordability of housing in regional Australia as one of the most frequently highlighted gaps in its review.
Reasons for housing pressures in Northern Australia
3.8The 2014 Final Report from the Joint Select Committee on Northern Australia flagged that housing ‘was another significant issue for people in the North’, including the cost of construction. The report noted that costs in the Pilbara region were estimated to be 55–65 per cent higher than in Perth, because of distance, high labour costs, high accommodation costs and more rigorous building standards to withstand flooding and cyclones – with these standards adding 30 per cent to structural steel tonnages and 400–600 per cent to concrete footing volumes.
3.9Housing pressures are particularly acute in Northern Australia because of:
High input costs, arising through distances and a higher cost of living;
Extreme weather events;
The availability and affordability of insurance;
Large-scale infrastructure or clean energy projects, which lead to an influx of thousands of temporary workers requiring accommodation; and
Governments and some businesses subsidising housing for staff to attract them to the region, which then impacts the availability and affordability of housing in the broader private market.
3.10According to the Queensland Local Government Association, the cost of housing in Queensland may be affected by:
Local governments developing blocks at a higher cost than what they will be sold for, in attempts to meet demand;
Development costs exceeding average sale prices, leading to delays for subsequent stages of development;
Over-capitalisation of blocks, with low property valuations meaning those who build being unlikely to make back the money spent on building or renovating a home; and
The cost and availability of finance to build and buy a house, with reports in some areas of banks refusing to fund loans or setting high deposit requirements of up to 60 per cent.
Impact of housing on workforce development
3.11Without appropriate housing, it is impossible to attract workers and their families to a region or to expand social services that would support population growth. Industry may struggle to finalise major infrastructure and resource projects, and it may be difficult to attract and retain essential workers in lower paid jobs such as childcare, aged care, disability services and hospitality.
3.12In short, housing underpins the development of Northern Australia. As the Cooperative Research Centre for Developing Northern Australia noted:
Lack of appropriate housing generally means businesses cannot expand and sector growth is limited because they can't physically house their workers and communities can't support the peripheral social services (childcare, health care) needed to sustain a growing population. There is significant anecdotal evidence suggesting even the offer of high wages isn't enough to attract workers to regional and remote areas, if there is no housing or social infrastructure to support individuals and families.
3.13The Clean Energy Council pointed out that insufficient housing supply can impact how receptive local communities are to infrastructure projects, noting that insufficient housing 'risks a rapid increase in house prices, which can impact the social license of a project when residents are priced out of their communities'.
3.14For example, the Queensland Nurses and Midwives' Union (QMNU) stated that on Thursday Island and in Weipa, 'the cost of housing has been artificially inflated to prohibitive levels by the demand for government staff accommodation', to the point that 'it is no longer affordable for the local population to live in their own communities'. The QMNU provided another example in Mackay where, despite recording a vacancy rate of 0.5 per cent in March 2022, no plans had been announced to support housing for the 100000 new jobs expected to be created by 2040 for the Pioneer-Burdekin Pumped Hydro Project.
Housing in remote Aboriginal and Torres Strait Islander communities
3.15The issues raised above are relevant for remote Aboriginal and Torres Strait Islander communities, as some evidence flagged inadequate access to housing and overcrowding as a particular issue for these communities. Emeritus Professor Jon Altman and Dr Francis Markham argued that since 2018, 'the Commonwealth Government has walked away from funding remote Indigenous community housing in all jurisdictions except the Northern Territory where it has responsibilities as a landlord'.
3.16Only 43.4 per cent of Aboriginal and Torres Strait Islander peoples in the Northern Territory were appropriately housed at the 2021 Census, compared with 81.4 per cent of Aboriginal and Torres Strait Islander peoples nationally. Further, housing design with poor energy efficiency outcomes may contribute to high energy bills. For example, the average energy bills in households in Yarrabah in Far North Queensland are $1000 a month.
3.17In the Northern Territory, the Central Land Council (CLC) noted that under the National Partnership for Remote Housing Northern Territory (2018–23), overcrowding had only dropped from 58 per cent to 55 percent. The CLC estimated that an additional 2000 new homes will be needed and stated its expectation that 'a new and more significant remote housing partnership agreement' be developed with the Northern Territory land councils and other Aboriginal and Torres Strait Islander housing stakeholders to replace the current partnership when it expires.
3.18However, housing shortages and overcrowding in remote Aboriginal and Torres Strait Islander communities may not be universal across Northern Australia. The Queensland Government informed the committee that as of the last census, in Queensland, 81.2 per cent of Aboriginal and Torres Strait islander people lived in appropriately sized (not overcrowded) homes—an increase from 79.4 per cent in 2016.
3.19The Boulia Shire Council in Central West Queensland suggested that the Ngamba Aboriginal Corporation in Brewarrina had 'developed their own housing construction workforce' before 2013. The committee was unable to locate further public information on this matter.
3.20At the 31 March 2023 public hearing, representatives from the Department of Training and Workforce Development in the Western Australian Government, told the committee that people living in social housing in Aboriginal communities in Western Australia may be reluctant:
… to stand on their own two feet because of their fear of losing their housing. You've got multiple family groups living in one family home—so, again, that overcrowding situation—and individuals, particularly young males and females, who want to break out and become their own family don't have that capacity, so having some pathway to that would be very helpful.
3.21Indigenous Business Australia noted that it had supported approximately 1100 Aboriginal and Torres Strait Islander homeowners to purchase their own home, including in regional and remote locations. The Queensland Government also outlined initiatives it was introducing to address housing needs in Aboriginal and Torres Strait Islander Local Government areas, including transferring 205 social housing dwellings into the private ownership of local Aboriginal and Torres Strait Islander families in remote communities.
Solutions
3.22Proposed solutions put forward by submitters to address issues with housing availability and affordability included:
Engagement with Traditional Owners and other stakeholders in remote Aboriginal and Torres Strait Islander communities to take over managing housing-related service delivery;
Continued investment from governments in housing models for Aboriginal and Torres Strait Islander peoples, including social and community housing, shared equity models and Aboriginal and Torres Strait Islander-specific home ownership programs;
Housing subsidies or concessions or tax benefits for essential care workers and other select industries in particular locations;
Modular homes, or homes built in cities and major regional centres that are then transported to rural and remote areas, with financial support from state and federal governments; and
On-farm accommodation to house agricultural workers, with incentives from government to help farmers develop such accommodation.
Questions – housing
(a)What interventions are required from governments and businesses to address the cost and availability of housing in Northern Australia?
(i)How should these interventions differ from Australia-wide interventions to deal with housing affordability and stock?
(b)What former or existing policy initiatives from the Australian and state/territory governments to help improve housing stock and affordability have worked, and what have had limited impact?
(c)What impact have major infrastructure and clean energy projects had on local housing stock?
(i)How have business and industry ensured the employees required for these projects have access to appropriate housing, without this impacting the local housing and rental market?
(d)Would tax concessions and subsidies to attract essential care workers to Northern Australia lead to an increase in rental and house prices? How would these impact housing affordability for long-term residents?
(e)What merits do the proposed solutions listed above from submitters have, and what might be their drawbacks?