Chapter 5 Cost of living in remote Indigenous communities—the price of
Cost of living
The price of goods and services in remote Australia is high compared
with capital city prices. Perishable goods such as fresh fruit and vegetables
are particularly expensive. As discussed in Chapter 3 and throughout the report
the epidemic of chronic disease in remote Indigenous communities such as heart
disease, obesity and diabetes is predominantly related to poor diet.
The financial capacity of remote Indigenous communities is limited and
this poses an even greater strain on accessing healthy and affordable food. The
National Aboriginal and Torres Strait Islander Nutrition Strategy and Action
Plan (NATSINSAP) submission commented that: ‘The majority of Aboriginal and
Torres Strait Islander people living in remote Australia are of low
socio-economic position—living primarily off pensions and other welfare
This results in a situation where: ‘Healthy food is the most expensive for a
population group that can least afford it.’ 
Research has highlighted that people experiencing financial difficulties
tend to purchase foods that provide the most calories for the least cost.
Research undertaken by Dr Julie Brimblecombe at the Menzies School of Health
Research suggests that this may apply to Aboriginal people living in remote
Australia where flour, sugar, rice, fats and oils cost the least in terms of
energy value (calories per dollar) compared to the recommended foods—fruit,
vegetables, lean meat and fish—that are 10 to 100 times more expensive in
calories per dollar.
This research demonstrates the negative health impact that high food
prices have on remote communities thereby contributing to chronic illness in Indigenous
The Northern Territory (NT) Government conducts a market basket survey
each year to monitor food costs, availability, variety and quality in remote
community stores. Results from the 2008
survey showed that the cost of the healthy basket of foods was, on average, 23
per cent more expensive in remote stores than in a Darwin supermarket. The cost
of the basket of foods increased by four per cent in remote stores and five per
cent in NT supermarkets from 2007 to 2008.
In addition to providing statistics on average costs of food baskets for
the Territory the market basket survey was able to break down the figures
between districts. This demonstrated that some districts were more expensive
than others; for example, the Barkly district was $95 more expensive than the
Alice Springs district. The average cost of a basket of food, for a
hypothetical family of six for a fortnight, was $720 in the Barkly district, whereas
the average cost of a basket of similar food in the Alice Springs district was
The Committee found there was no comprehensive current data available on
the cost of living for Indigenous Australians living in remote communities. The
Committee is aware of a cost of living study carried out by John Tregenza in
the Anangu Pitjantjatjara Yankunytjatjara (APY) Lands in 1993.
A report written in 2002 by the Centre for Aboriginal Economic Policy
Research (CAEPR), Competition and Consumer Issues for Indigenous Australians,
…that a concerted effort to establish the cost of living at
remote Indigenous communities has been largely limited by an absence of
statistical information. In particular, there have been few, if any, studies
that have rigorously examined Indigenous expenditure patterns and set these
against income. This contrasts with data on the wider Australian community
provided by the Australian Bureau of Statistics’ (ABS) regular Household
Expenditure Survey (HES). From its establishment in 1990, CAEPR has on a number
of occasions made cases to the ABS to include an Indigenous identifier in the
HES so that any particularities of Indigenous expenditure could be assessed.
Without such information it is difficult to assess the
overall economic impact of price differentials on Indigenous consumers. Indeed
the literature suggests that while researchers have alluded to these
differentials there has been little attempt to break data down into analysable
components such as structural factors (e.g. freight costs), inefficient store
practices, unconscionable conduct and cultural practices which may hinder
Stephan Rainow, Public and Environmental Health Officer, Nganampa Health
Council, commented at a public hearing in Fregon (Kaltjiti):
‘I would like to see a couple of things. One is an adequate and proper cost of
living study based on the fact that the people in these areas are economically
Professor Jon Altman and Dr Kirrily Jordan also highlighted in their
submission a lack of statistical information available on the cost of living in
remote Indigenous communities or whether income levels meet the requirements
for basic nutrition. They stated:
…there is very little information available on Indigenous
expenditure patterns because there is no Indigenous-specific data reported from
the regular Household Expenditure Survey carried out by the ABS.
The Committee considers it would be valuable to carry out a study on
regional cost of living standards for Aboriginal and Torres Strait Islanders
living in remote communities. This would be a beneficial study to identify
poverty in areas of remote Australia and could aid in policy formulation to
address these issues. Given the commitment to close the life expectancy gap,
the Committee considers informed and ongoing data is a priority. It recommends
commissioning a cost of living study for remote Indigenous communities. It also
recommends that the Australian Bureau of Statistics consider expanding its Household
Expenditure Survey to enable disaggregation of the data on remote Indigenous
The Committee recommends that the Australian Government commission
a regional cost of living study for Aboriginal and Torres Strait Islanders
living in remote communities in Australia and report by the end of 2010.
The Committee recommends the Australian Bureau of Statistics
consider expanding the Household Expenditure Survey to capture Indigenous
specific data and remote community data.
Over the past few years there has been a substantial increase in the
price of goods and services throughout Australia. In particular, the cost of
fresh fruit and vegetables has increased partly due to increases in fuel prices
and partly due to the ongoing drought.
The Northern Territory MBS has been conducted since 1998. Overall the
cost of the basket of foods increased by 39 per cent ($479 to $665) between
1998 and 2008. There is also a
Queensland Healthy Food Access Basket (HFAB) which demonstrates similar results
to the NT Market Basket survey. The 2006 HFAB survey indicated that the cost of
food was 24 per cent higher in very remote stores compared with major cities. Within
the very remote category, the basket cost around 33 per cent more than the cost
of the basket in Brisbane. In addition, evidence from the HFAB indicated that
the price of healthy foods is increasing at a greater rate than the price of
In its submission, the NATSINSAP discussed many of the reasons for high
food costs in remote areas. These cost elements included the following:
n Store managers' wages
and the additional cost of housing store managers in remote communities can be
the largest store costs. A manager in a remote store is approximately twice the
cost of a manager in urban areas,
n Store infrastructure
and repair costs for electrical equipment such as freezers and air conditioners
are higher in remote communities. Expenses are heightened when trades people
typically need to be flown in from outside the communities and can be expensive,
unreliable and irregular,
n Fresh fruits and
vegetables and some other healthy foods are more costly because they are
perishable and are not sourced locally. If they are not sold, stores have to
write these off as 'wastage'. As such, remote stores are often reluctant to
order sufficient supplies of perishable foods,
n Storage requirements
are higher in locations where wet season access is limited so that
non-perishable items must be forward purchased and stored for periods of many
months before sale. As well as higher infrastructure costs, this necessarily
means higher financial costs due to the long delay between expenditure on stock
and sales of the goods,
n Transport: freight
costs to remote locations are high, especially during the wet season, which
results in higher store prices.
n Fuel prices in remote
communities can be twice that of cities and are likely to increase
proportionally over time, and
n Lack of
accountability, poor store management practices and inefficiencies can result
in large financial losses and the cycle of boom and bust that many small stores
experience on regular basis.
All of these costs are absorbed and passed onto the consumer as higher
retail costs (or accrue as store debt). Consequently financial pressures bias
food sales towards high profit, non perishable snack food, soft drinks and high
fat convenience foods. This has a considerable impact on the nutritional health
of the community.
Small remote communities with populations of just a few hundred cannot
take advantage of bulk buying practices, especially for perishable goods, and
the cost of freighting chilled and frozen goods over several days is expensive.
As a result, remote Indigenous communities pay much higher prices for goods and
services than people living in urban Australia. In its submission, the
Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA)
highlighted the diseconomies of scale that exist for small remote communities:
Remoteness, geographic dispersion and low population size
provide a significant structural impediment to the efficient operation of
community stores. In particular, stores in these circumstances which choose to
operate independently, rather than as part of a chain, are less able to
exercise bargaining power in discussions with freight providers and tend to
experience higher costs for the transport of goods by sea, air and road.
It is not only the cost of goods that is very high in remote area of
Australia. The cost of service delivery is also very high. For example, high
freight and fuel prices, energy charges, maintenance costs, management fees and
banking fees are all high for delivering respective services to remote locations.
Freight—how much does it cost?
Evidence gathered during the inquiry into remote community stores
revealed that freight costs varied anywhere between two per cent and 20 per
cent of retail costs for goods. A number of factors contribute to the variances
in freighting costs, such as where the store is located and what sort of
infrastructure is available to enable the transportation vehicle or vessels to
reach the store.
In its submission FaHCSIA brought this debate surrounding the varying
costs of freight to the Committee’s attention. It commented:
There is some debate around the actual impact of higher
freight charges on food prices. McDonnell (2002) suggests that freight costs
account for between just two to five per cent of total costs relative to
turnover and, as such, are not a significant factor. Conversely, the 1999
Inquiry into Food Prices in the Northern Territory found that the impact of
freight costs of goods to remote centres to be a significant contributing
factor to higher food prices in the Northern Territory.
Distance is part of the reason for high freight charges. This is
especially true for island communities where it is necessary to use more than
one means of transportation to freight the goods to the store. For example,
groceries leaving the Cairns warehouse for Badu (Mulgrave) Island in the Torres
Strait would require a truck to transport the goods to the Cairns dock, then
the goods would be loaded onto the ship to Thursday Island, then a barge would
be loaded to transport the goods to Badu Island, and then the goods would be
eventually transported to the store. During a public hearing on Badu Island it
was brought to the Committee’s attention that goods leaving Cairns on Wednesday
would arrive at the earliest on Badu Island on Monday:
Our highly perishable lines are on the barge by Wednesday; we
receive it on the Monday. What is that—a five-day turnaround? That is on
average. But this week it is six days. We have had cases where it has been
anywhere up to eight days.
Evidence received by the Committee suggested that up to 50 per cent of
the groceries purchased by the store were perishable and would require cold
storage facilities throughout the freighting process.
Transporting goods and services long distance costs more not only due to
high fuel consumption but also due to the cost of maintaining these vehicles
often on unsealed corrugated roads or the risk of navigating through coral
reefs and rough seas. Such costs are factored into the freight charges.
In additional a fuel surcharge is probably incurred to recover the cost
of returning the vessel or vehicle back to base. Sea Swift highlighted this in
Sea Swift does charge a fuel surcharge that is calculated on
a percentage of freight charge revenue to recover the extra cost of fuel from
base 38.5 cent per litre (2003/2004) ex diesel fuel excise.
Freight in the Torres Strait
The Torres Strait is unique in that the entire region is dependent on
marine transport to deliver almost all of the requirements of daily life. The
Committee received evidence from Sea Swift, a privately owned company based in
Cairns, that provides a shipping service to the Torres Strait and has operated
for over 20 years. Sea Swift provides sea freight needs to some of Cape York
and all Torres Strait Island communities.
Over the years other freighting companies have tried to enter the market,
however it appears that two freighting companies are not able to be sustained
for this unique region. In its submission Sea Swift highlighted the following
constraints for the regular provision of freight services to the Torres Strait.
n The climatic
conditions, eg wet season,
n High travel and
rental costs (for labour and crewing),
n A varying quality of
infrastructure (in particular ramps and access channels), and
n A lack of commercial
enterprises worthy of providing volumetric back freight options.
In terms of calculating freight rates, the company takes into account
… relatively high cost of shipping from southern ports over
1000km away also have an impact. Port charges add further to the cost base with
levy's being applied in Port Kennedy (Horn Island and Thursday Island) 5 times
higher than those applied in Cairns, this consequently has a further negative
impact on the cost of goods for all Torres Strait residents.
Sea Swift pointed out that sea freight rates are charged by whichever is
greater between the cubic metre measurement or the tonnage weight. The cubic
metre measurement is nearly always the greater and the accepted transport
industry conversion is that 0.333 tonne equals one cubic metre. The Committee
was interested to find out that Sea Swift does provide a scale of freight discounts
which are determined by freight usage. Discount levels are five per cent, 10 per
cent and 15 per cent.
In relation to this inquiry and comments about exorbitant freighting
costs Sea Swift wrote:
There have been many examples cited throughout the
Parliamentary Enquiry of high priced goods, the inference being that the high
costs are as a direct result of freight charges. This misconception must be
addressed as freight charges represent 10‑20% of the retail price of goods
in the region even though anecdotally the retail price is, in many cases,
reportedly priced twice that experienced in Mainland centres.
There have been many suggestions of introducing a freight subsidy into
the Torres Strait region. If this were to be the case then Sea Swift noted that
careful consideration would need to be given to the following:
n How a subsidy would
provide parity across the region, ie. the level of subsidy provided to Bamaga
or Seisia (which are able to be supported by road based transport for part of
the year) compared to Horn Island and the Outer Torres Strait islands which rely
solely on sea based transport,
n How a subsidy would
be calculated, as some of the Island communities Sea Swift currently supply
freight services to are heavily cross subsidised by other services within Sea
Swift. If the true cost of providing services to these communities (ie. More
remote, with minimal infrastructure and population) was taken to account they
would therefore be more heavily subsidised than Thursday Island for example,
n How a subsidy would
be applied. In Tasmania for example subsidies are predominately applied to those
industries exporting to the mainland in order to provide parity with similar mainland
industry groups. As there are little to no export industries in the Torres
Strait, consideration would need to be given to where such a subsidy would be
targeted, ie with the freight provider, with the retailer, or with the
n How a subsidy would
be paid, ie assuming a rebate is paid to the end user proof of charges rendered
would need to apply. Further, allowance would need to be made for actual
payment to be remitted either into bank accounts or as tax rebates for example.
There are recent examples of where government subsidies have been placed
with transport providers (such as Macair) yet due to the failure of the
organisation have not been passed on to end users in one form or other.
Additionally placing subsidies with a provider of services could essentially
place the provider in an anti-competitive position.
In some circumstances, the government offers freight subsidies to people
working in remote Indigenous communities, such as teachers and nurses. Also,
people working in remote Indigenous communities often purchased their goods
from outside the local store because it was a cheaper.
Additionally, should the introduction of a freight subsidy occur, heavy
scrutiny of pricing and charges in the region would need to apply as
unscrupulous operators could see this as an opportunity for profiteering.
The Committee appreciated the candid points of view Sea Swift raised in
relation to possible freight subsidies for the Torres Strait region. The
Committee acknowledges that whilst the notion of providing a freight subsidy
appears to be a good idea, especially given the existence of the Tasmanian
Freight Equalisation Scheme (TFES) which compensates for additional shipping
costs to and from that island, the implementation of a fair and equitable
subsidy to the Torres Strait does seem fraught with difficulty.
The Committee has received numerous calls throughout the inquiry for a
freight subsidy scheme in the Torres Strait. Several witnesses have said they
want the Australian Government to provide freight subsidies since Tasmanians
have access to a freight subsidy.
It is clear to the Committee that the Tasmanian scheme, the TFES, serves
a specific industry focus. The scheme assists in alleviating the comparative
interstate sea freight cost disadvantage incurred by shippers of eligible
non-bulk goods carried between Tasmania and mainland Australia by sea. Its
objective is to provide Tasmanian industries with equal opportunities to
compete in mainland markets, recognising that, unlike their mainland
counterparts, Tasmanian shippers do not have the option of transporting goods
interstate by road or rail.
The TFES was introduced in 1976 and has been providing economic benefits
to Tasmanian industry for over 30 years. Similar to Tasmania, Torres Strait
communities are island communities without links to mainland transport routes.
Improvements to freight coordination
Improvements to freight coordination were discussed in the previous
chapter. The Committee received evidence that demonstrated a real need to
improve the supply chain and innovative management strategies such as regional
buying in order to ensure better quality fresh produce being supplied to remote
community stores at a cheaper price.
Ian Lovell, a cold chain and freighting specialist for remote
communities, suggested that streamlining the efficiencies in the supply chain
was the first and most important step before considering freight subsidies. He
…if you cannot be convinced that the supply chain is working
at the optimum already then to put a freight subsidy in is going to perpetuate
inefficiencies. I would say that before you entertain a freight subsidy to
anywhere you really need to be satisfied that the supply chain is working
effectively—both cost-effectively and in terms of service and delivery.
Mr Lovell highlighted the difficulty in ensuring that the freight
subsidy is passed on effectively to the consumer. He gave the following example
of how freight subsidies can become absorbed by the market:
…if you give a subsidy of, let us say, 10 per cent, who is
actually going to get it? In a free market, you will find that suddenly costs
change, and of that 10 per cent maybe four per cent will get through to the
community and the other six per cent will go to either the store, the transport
company or the supplier, because the price signal is there.
In conclusion he offered the Committee some frank advice in relation to
Freight subsidies, I believe, are a nightmare administratively,
and the real costs are really variable. I would say that, if a freight subsidy
is going to be applied, you might be better off applying it at the consumer
level, to buy the healthy, nutritious foods, but keeping a close eye on the
cost of the fresh or the healthy, nutritious food in the stores, and drive it
that way, rather than giving it to the transport service provider.
The Committee received information from the Government of Western
Australia about innovative management strategies that are proving successful.
In its submission it suggested that one of the key strategies is to facilitate
Economies of scale are possible through innovative management
strategies that establish group arrangements for consolidated purchasing, freighting,
staff recruitment and training. Community stores within proximity of one
another should be encouraged to consolidate their logistics including exploring
opportunities with nearby mining companies or other public sector services with
similar logistical needs. The Freight Improvement Tool Kit provides excellent information and
guidelines to assist in this respect.
The Committee recognises the many challenges that remote communities in
Australia face in relation to having a constant supply of nutritious healthy
food in community stores. As pointed out in paragraph 5.14 there are a range of
issues that contribute to the high cost of living that are not always apparent
to community members.
The Committee supports the regional buying model that aims to take
advantage of economies of scale that would otherwise be not possible for
smaller communities. The Committee encourages small community stores not yet
using a group buying model to investigate the potential benefits it would gain
from such a model.
The Committee urges all store managers to access the Remote Indigenous
Stores and Takeaways (RIST) Freight Improvement Toolkit to investigate
the benefits of improving the supply chain of goods to remote community stores.
The Committee also urges communities to grow market and local produce
where possible so that the freshest of food is available in shops. However,
much food will still need to be freighted in to communities.
The Committee argues that the health outcomes of Torres Strait
communities are being impacted by the high cost of transporting healthy food
alternatives and perishable goods. The Tasmanian freight subsidy enables
industries to be competitive in mainland markets and so returns an economic
benefit to Tasmania. Any freight subsidy to the Torres Strait would be premised
on a different purpose and outcome. However, the Committee recommends that a
freight subsidy for fresh produce is given consideration in light of the long
term health benefits of an improved diet in the area.
The Committee recommends that, following implementation of
supply chain coordination and efficiencies, the Australian Government give consideration
to a freight subsidy for fresh produce for the Torres Strait.
High fuel prices
The Committee heard from many locals in various remote communities about
the extremely high fuel prices. For example, in 2009, fuel was selling for
$1.69 on Thursday Island in the Torres Strait. Other
evidence collected during the Committee’s visit to the Torres Strait commented
that fuel prices could be as high as $2.65 on Masig Island. In Mimili in the
APY Lands the Committee was told that fuel was $2.06 per litre.These
exorbitant fuel prices restrict the use of private vehicles such as cars and
boats, which are often needed for hunting and fishing purposes.
At a public hearing on Masig (Yorke) Island in the Torres Strait community
leader John Mosby discussed his concerns about the high prices and quantity of
fuel accessible to the community:
Pricing is of great concern and the quantity can be a concern
too with weather like this where 3,000 litres can go in a couple of days. Our
local community has many great fishermen with lots of vehicles. Even though it
is $2.29, and sometimes $2.65 or so, 3,000 litres can still go in a week. We
buy what is there for us and price is not an issue when it comes down to it. If
it gets to $1.10 we are happy, but it is still of great concern for us. I think
last week they only brought in 1,400 for us and we were out of fuel for a
couple of days. It was only yesterday that we got more fuel. In a week, 3,000
litres is not enough.
Glen McConnell, island mechanic, also advised that not enough fuel is
delivered to Masig year around, and especially during the Christmas period when
the barge does not operate.
During the Committee’s visit to Amata in Central Australia high fuel
prices were raised by local resident Owen Burton who commented: ‘In the remote
community, people are talking about going hunting and all that. The price of
fuel is really up, and also the prices in the store’.
The Committee understands the importance of fuel for Indigenous people
living in remote communities. It is evident that they rely on it not only to
supplement food sources through hunting and fishing but in addition for the use
of cars and boats for travelling and visiting purposes which are an integral
aspect of Indigenous culture.
The Committee considers that coordinating supply chains, regional
purchasing strategies and potentially improving storage infrastructure capacity
in all communities could have the effect of reducing fuel prices and ensuring a
more secure supply of fuel. The Committee concludes that the recommendations
already made should provide assistance in this area.
Often low income earners check their account balance more frequently to
ensure they can still afford to buy goods. This can be a very costly practice
in remote communities as often the Automated Teller Machine (ATM) is the only
banking facility available, and requesting an account balance comes at a cost
of $2 when using a ‘foreign’ ATM (that is, when using a key card issued by a
bank other than that operating the ATM). Some banks also have limits on the
number of free transactions after which an ongoing fee is incurred. The
Committee heard that people can also access telephone banking to get account
balances however this option is not used often as people need access to a
telephone and then must wait to speak with an operator. This takes additional time
and is considered more challenging than using the ATM.
This issue was also raised during a public hearing in Amata, Central
…no matter what your situation is with your own bank, in
using a foreign ATM everyone has to pay a $2 fee. What I have noticed is that
the people who can least afford to pay any bank fees are the ones who are
paying the most—for example, the people who are on Centrelink benefits. I have
seen instances of people doing a balance check of their account through an ATM,
which incurs a $2 fee, two or three times a day. If the money is not there the
first time then they will try again a little bit later and keep trying again
until their benefit is actually in their bank account. I would be horrified to
see the bank statements of some of these people who live in these communities
because the ATM is the only way of getting their money, apart from the few who
still get paid by cheque from Centrelink.
Banking fees add up significantly for people living in remote
communities. During a public hearing in the Torres Strait this issue was raised
as one that increases the cost of living in remote areas:
…I wanted to say something to this committee about the ATM at
the store—it is a St George’s ATM. I do not know whether that is okay because
most of us have National FlexiCard accounts. I am not an accountant but I
talked to some of my family and they know and they understand. They said it
would be good if we had a National ATM then we would save our pocket. We are
talking about the high cost of living.
Welfare recipients who are regularly checking their account balance
throughout the fortnight would use a significant amount of their money just in
banking fees. The Committee believes that improvements could be made in this
area for Indigenous Australians in terms of specific workshops that address the
issue of checking account balances.
In the context of the Australian Securities and Investments Commission’s
(ASIC) expanded literacy mandate, ASIC stated: ‘Our aim is to improve the
financial literacy of Australians, including Indigenous Australians, and to
assist them to develop the attitudes and behaviours needed to achieve better
financial outcomes.’ The Committee noted the
CD provided to its inquiry from ASIC titled Money Talks.
This is a series of audio segments for Indigenous people about making good
The Committee notes the work being carried out by Australian Bankers Association
(ABA) member banks that focus on providing financial literacy training and
financial inclusion programs to Indigenous communities, including:
n “Family income
management” project focuses on working with Indigenous families to develop a
better understanding of how to effectively manage income to achieve improved
living standards for all the family and the benefits of budgeting and saving.
(Department of Families, Community Services and Indigenous Affairs, Centrelink
and community representatives, Westpac),
n “Financial First
Steps” training materials and workshop developed for young adults in basic
money management that has been delivered to CDEP participants and other
communities across Australia. Specific materials have been piloted in remote
Indigenous communities of Northern Territory and North Queensland (Westpac),
n “MoneyBusiness” is a
community based money management skills and savings program including financial
literacy workshops and training on topics relevant to the individual community.
The program is delivered in partnership with the Department of Families,
Community Services and Indigenous Affairs to people in Katherine, Tennant
Creek, Galiwin’ku, Niguiu, Kununurra and Geraldton (Department of Families,
Community Services and Indigenous Affairs, ANZ).
In the Torres Strait the committee also received evidence in relation to
high banking fees. It was claimed that Islanders Board of Industry and Service
(IBIS) EPTPOS facilities were charging $30 per transaction fee. The Committee
asked IBIS how expensive it was to provide banking and electronic fund transfer
services at IBIS stores.
The Committee received the following response from IBIS:
Some of these services are more expensive to provide than
others. The services include: bill paying; transfer of funds from one island to
another; and payments into peoples' bank accounts. IBIS is currently
investigating the feasibility of charging a sliding scale of charges dependent
on the size and type of transaction and the cost of providing the service. We
hope this will reduce the overall cost to the Community.
Book up is an arrangement under which a store offers short term credit
to customers, usually for the purpose of purchasing goods. Problems can arise
when a customer has run out of funds before their next payment is due and are
offered credit on the condition that the customer provides their debit card,
Basics Card, together with their personal identification number (PIN) to
the merchant. The store then uses its EFTPOS facility to debit the customers
account on the customer’s social security pay day.
Surveys indicate that the practice of book up in remote communities is
widespread and often involves provision of both the card and PIN. ASIC's 2002
report Book Up: Some Consumer Problems found examples of traders holding
over 300 debit cards and PINs of Aboriginal customers.
It was generally acknowledged that excessive use of book up can lead to
high debt levels in a store, posing a threat to store viability and risking
insolvency. The Western Australian (WA)
Government’s Office of Aboriginal Health cited the example of the community
store in Burringurrah (450 kilometres east of Carnarvon in the Gascoyne
region) which closed as a result high book up use, necessitating an emergency
air delivery of food by Commonwealth and state agencies and FoodBank WA in
Excessive use of book up is sometimes caused by a lack of banking
facilities in some stores. In other situations the use of the Basics Card,
which does not provide access to the balance on the card, boosted the incidence
of bad debt. Kimberley Aged Care and Community Services surveys indicated that
elderly people are particularly vulnerable as they are less likely to know
their account balances.
The Central Land Council observed that book up can be offered
selectively enabling a few people to monopolise the store's profits. The Office
of Aboriginal Health, Western Australian Department of Health, reported
incidences where communities have gained control over store management in order
to manipulate staff into providing book up under threat of being fired.
ALPA advised of a situation where traditional owners were receiving
payments from a private operator running book up in competition with the
community owned ALPA consultancy store, which did not accept book up:
ALPA has run the much cheaper store to this day in the old
shed. The private operator survives trading at night and "book up"
holding debit and basics cards as security. ALPA has managed to put aside a
small surplus as a deposit to build a new store but those influential people on
the private operator's pay roll are stopping progress by blocking the
allocation of a suitable site in the community.
John Tregenza, Coordinator, Mai Wiru Stores Policy, Nganampa Health
Council, advised that APY stores have decided not to use book up but compete
with private operators in the mining towns of Mintabie and Watinuma which do.
The banks, the Office of the Registrar of Indigenous Corporations and the Australian
Competition and Consumer Commission had confirmation of the practice as some Anangu
people’s full entitlements were being withdrawn by traders overnight to pay
book up debts on large purchases.
The South Australian Government explained that once traders have the
card and pin all future purchases must be made with the trader that holds the
card and PIN, so consumers are no longer able to make purchases from their own
local community stores. Around Mintabie
the nearest community stores of Indulkana, Mimili and Kaltjiti had experienced
severely reduced turnovers and the viability of Indulkana community store was threatened.
ASIC reported that it had taken action to address problems in the region
in 2005. As a result of lobbying the Australian Bankers Association (ABA) and
major banking institutions, most main bank merchant agreements now prohibit the
request or retention of a personal identification number. However, Mr Tregenza
noted that the banks’ decision to withdraw electronic banking services to
traders continuing the practice has been pending Federal and South Australian
Government approval for over 18 months. 
Despite these concerns, it was nevertheless recognised in evidence that
credit arrangements are important to Indigenous peoples to provide urgent short
term credit for food and necessities, and to enable them to purchase larger
items such as white goods which they otherwise could not afford.
ASIC, among other agencies, acknowledged that while reliance on book up in the long
term can promote credit dependency among Indigenous clients, the practice
itself is not illegal or unconscionable. There is a need, however, for
transparency of process.
The Committee notes that there are a range of mechanisms in place for regulation
of book up. The Department of Families and Communities in South Australia, for
example, has a ‘Casual Credit’ strategy whereby a deposit is made every week to
the store supporting future purchases of food. This has proven effective in
ASIC has taken the national lead on book up producing a follow up to its
2005 publication of Dealing with Book Up: a Guide which
set out ways for stores to provide alternative credit extension systems. The
publication is also intended as a resource for government and agencies. ASIC
advises it will take the program to 115 communities over next two years. 
The Committee believes the Money Talks CD is an excellent tool
and ASIC should ensure that this tool continues to be delivered to Indigenous
communities that would benefit from this financial money management training.
The Committee emphasises the need for a facilitator or trainer to deliver this
tool as part of a training program. Consideration should be given as to whether
the information could be delivered in local Indigenous languages. The Committee
commends ASIC for its innovative work in this area and urges it to expand the
assistance provided to include workshops preferably delivered by local
The Committee also commends the ABA on its commitment to assisting in
the area of financial literacy skills and improving money management for
Indigenous Australians. The Committee encourages the ABA to continue to
collaborate with member banks and FaHCSIA to continue to delivery training
programs and workshops in this field.
While these initiatives are positive in improving the financial literacy
of Indigenous Australians in remote communities, the Committee remains
concerned by the frequency of charges, the lack of banking choices available to
communities, and the high fees for some transactions. The Committee considered
a more collaborative approach is required to investigate, address and monitor
financial services charges in these communities and to oversee targeted financial
While the Committee received some disturbing evidence relating to fees
paid, it did not receive sufficient evidence on this matter to investigate
fully and its jurisdiction is limited. Consequently, the Committee recommends
that this issue is taken up by the Australian Government, state and territory governments,
the ABA and remote community store operators.
The Committee notes that book up remains a significant problem in most
states and territories and that ASIC will be taking a leading role as the
national regulator of all consumer credit on 1 November 2009. 
This holds promise for greater consistency in regulation.
At the same time, the Committee notes evidence that the features of the
Basics Card, which uses a standard PIN for identification and does not provide
in store access to account balances, may be a contributor to excessive book up
debt. This contrasts with the ALPA FOODcard system, which has photo
identification and provides immediate access to customer card balances.
The Committee considers that Centrelink could evaluate the utility of
the features of the ALPA FOODcard in any review of the Basics Card. Book up
should also be covered as part of a working group addressing financial charges
and literacy in remote Indigenous communities.
The Committee recommends that the Australian Government
establish a working group with representatives from the Department of
Families Housing, Community Services and Indigenous Affairs, the Australian
Securities and Investments Commission, state and territory governments,
remote community store operators and the Australian Bankers Association. The
working group should be tasked with:
the transaction fees being charged in remote Indigenous communities,
the impact of the limited banking choices available in remote communities,
such as the consequent extent of fees charged for using foreign Automated
Indigenous Australians in remote communities have the financial literacy and
access to facilities to make informed decisions regarding money management
options, including the use of book up, and
mechanisms to lower or waive financial fees and charges for Indigenous people
in remote communities.
Housing and food preparation
During the Committee’s visits to remote Indigenous communities it became
clear how challenging the issue of providing a daily well balanced diet was for
many people given the high proportion of inadequate housing that is available.
The Committee received evidence in public hearings about the need to improve
housing in remote communities and in particular, the need to either provide,
replace or repair essential kitchen hardware in order for people to be able to
make healthy food purchases at the store which in turn could be prepared in the
In its submission FaHCSIA outlined two key elements to food security: availability
and affordability. The third key element of food security involved utilization
of food through adequate 'health hardware'— that is, the equipment and
resources necessary to safely store and prepare foods in the home, including
refrigerators, potable water supply and waste management, and other resources
for safe food preparation.
Having the ability to store food safely reduces household costs, by
reducing food wastage, and enabling purchases of bulk quantities of staple
items and perishables. This can improve overall food security, as well as
maintaining nutrient value of perishables for longer.
The Healthhabitat survey data provided in the National Indigenous
Housing Guide indicated that in 2006 only 15 per cent of surveyed
Indigenous households had the health hardware needed to support food storage,
cooking and preparation.
The survey showed that kitchens were poorly designed and constructed,
poor quality materials and hardware were used, and kitchens were not
maintained. Two thirds of surveyed houses did not have benches suitable for
preparing food. Less than 75 per cent of houses surveyed had combined refrigerator/freezers.
Nine per cent of surveyed houses did not have a cook-top installed and only 29
per cent of stoves had all hotplates and control knobs working. These problems
impact on residents' ability to prepare healthy meals, especially meals that include
Improving utilization of food through adequate 'health hardware' was one
of the key objectives of the Community Clean-Up program of the Northern
Territory Emergency Response (NTER) and is currently being addressed through
the Strategic Indigenous Housing and Infrastructure Program.
During the Committee’s inspection visits to remote communities the
Committee became aware of the inextricable link between the need for adequate
housing and ‘health hardware’, and the access and availability to healthy and
affordable food in remote Indigenous communities.
At a public hearing in Alice Springs, Dr Bruce Walker, Executive
Officer, Centre for Appropriate Technology (CAT), made the following comments
in relation to community housing and store purchases:
Houses provide access to personal hygiene and health
facilities for individuals. Stores should in fact in our view provide access to
services that actually enable people to sustain a livelihood in their place of
living. It is not clear to me that all stores are charged with the
responsibility of doing that. There is a big investment going on at the moment
in Indigenous housing. Those houses are generally supplied without whitegoods
and furniture and all the things that make a house work. It is like providing a
car with no petrol. If you do not have access to not only purchase and then
sustain and maintain those things, then it is difficult to make that house work
for you, and the store quite clearly has an incredible and essential part to
play in that ongoing household maintenance and in people being able to actually
sustain their livelihood in their community.
In conclusion, Dr Walker remarked that stores can make a tactical
response but cannot alone create the demand for higher consumption of the
nutritional foods. In most cases inappropriate food preparation facilities,
usually in the home, reduced the store’s capacity to provide a healthy diet.
It is not only the large essential items such as fridges and ovens,
tables and chairs that people do not have; they also lack bare essentials such
as crockery and cutlery. Stephan Rainow from Nganampa Health Council highlighted
the acute lack of housing hardware in the APY Lands: ‘Tables and chairs are
very rare. People still sleep on the floor, on mattresses’.
Similarly, Mr Rainow also commented:
I did an exhaustive survey of houses in one community back in
1992. Part of the work involved mapping every item that was in that house over
a 12-month period. We could not find enough utensils to feed more than four people. 
Mr Rainow informed the Committee that as part of the capital cost of a
house there is the provision of a stove and a hot water system.
The Australian Government Community Cleanup Program in the NTER is providing
essential repairs to houses in remote Indigenous communities in the Territory.
In a sample of 53 NTER communities, 1 684 kitchen repairs were undertaken out
of a total of 2 351 surveyed houses.
Further repairs will be undertaken as part of the $547 million Strategic
Indigenous Housing and Infrastructure Program (SIHIP), announced by the
Australian and Northern Territory Governments in April 2008. SIHIP will fund
capital works in 73 targeted communities and urban living areas and will
n about 750 new houses
including new subdivisions,
n more than 230 new
houses to replace houses to be demolished,
n more than 2500
infrastructure to support new houses, and
n improvements to
living conditions in town camps.
The FaHCSIA submission highlighted the following: of the $547 million
for SIHIP, $420 million will be directed to 16 high-need communities for major
capital works. This will include building new homes and upgrades to existing
dwellings. More than $124 million of refurbishments will be funded in 57 other
Indigenous communities. A further $98 million will be set aside for town camps
and urban living areas, and $5 million for a small number of existing housing
The Committee recognises that improving the housing for Indigenous
people in remote communities is a significant and much needed undertaking.
The Committee acknowledges and encourages the continued use of the
comprehensive National Indigenous Housing Guide. It is a valuable
resource that assists in the design, construction and maintenance of housing
for Aboriginal and Torres Strait Islander peoples, with a particular focus on
providing and maintaining the health hardware that supports a safe and healthy
The Committee believes that adequate housing and food preparation and
storage facilities in the home is critical to ensuring better health outcomes for
the Indigenous people living in remote communities. The Committee urges the Government
to continue to work to improve the housing conditions in remote communities and
ensure that Indigenous families have appropriate cooking and food storage
facilities, and are equipped with the knowledge to best use and maintain these
The Committee supports the current housing and kitchen refurbishment
program in remote communities being undertaken by the Australian Government.
This will be critical to continue improvements for the benefit of safe and
healthy food preparation.
In the context of health and nutrition, cooking lessons could be an extension
of this training. Learning to prepare nutritious cheap family meals is an
essential life skill that should be encouraged in remote Indigenous
During a public hearing on Masig Island there was a suggestion that
cooking lessons would be one way of improving the quality of food provided for
families in remote communities:
I believe that you could improve the quality by having somebody
out here to do cooking lessons and to look at what food you can buy, what you
can add and what value there is for people.
You will see that a lot of families eat a lot of rice and
sort of traditional tin hamper food which they have on top of rice with tomato
sauce. It is a filling food and it is all that they can afford, bearing in mind
that hampers can have a high salt content. That, again, look at the kidney
problems that they have. So they need to be able to have better choices and to
look at nutritious and cheaper ways that they can feed their families.
Some cook books that have been written for Indigenous communities
suggest low cost nutritious meals. The Deadly Tucker cookbook was
produced as part of the FOODcents for Aboriginal and Torres Strait Islander
People in WA Program, in 2004. Patrick Davies, Nindilingari Cultural Health
Services, gave the Deadly Tucker cookbook ‘10 out of 10’:
Our people are interested in knowing how to cook different
meals and foods. They want to learn because they just snatched the books.
Single guys were snatching the books… That book was cleverly put together in
the way that its ingredients in the recipes are all stuff that you can find in
the stores and stuff that you know as opposed to food that you do not know—a
lot of Asian vegetables are all new to our mob. That Deadly Tucker cookbook
is where I see the gold in that basic stuff. You can try and find big
complicated answers to these questions, but a lot of the time it lies in those
simple basic resources and education programs.
The recipes in the book are easy to prepare and do not cost a lot of
money. The cookbook has a section on suggested foods to stock in the cupboard
and safe food handling recommendations. The cookbook even rates meals for
people with diabetes. Another valuable concept of the Deadly Tucker cookbook
is that it provides photos that demonstrate what to buy, the cooking process,
and what the finished product looks like.
Mai Wiru has also produced a very good Stores Handbook on Food and
Nutrition which includes healthy recipes.
The Committee saw a number of excellent resources aimed at increasing
the skills of Indigenous families to provide nutritious low cost meals. The
Committee considers that a more co-ordinated approach is required to
disseminate available resources and potentially adopt resources to be
appropriate to specific communities. The Committee also considers that, in
addition to cooking guides, there should be shopping guides and a range of
workshops provided that teaches Indigenous families how to purchase, store and
prepare healthy food for low cost meals.
The Committee recommends that the Department of Families,
Housing, Community Services and Indigenous Affairs support remote Indigenous
community service programs that develop lifestyle skills, such as home
cooking and shopping, to ensure Indigenous families have the skills to
prepare healthy and nutritious meals in the home at low cost.
Healthy and affordable takeaways
Healthy and affordable takeaways provide an alternative option for
remote Indigenous communities. This is particularly important for those communities
that do not have the household hardware in place to provide daily nutritious
The Committee believes healthy takeaways provide a good option for the
community to access nutritious food. However, in the long term, it would be
preferable if people were able to prepare safe and nutritious food in their own
homes regularly rather than relying on the store and takeaway for every meal.
During the Committee’s visits to remote communities in the Northern
Territory it was shown around several of the takeaway stores. The Committee was
impressed with the healthy food options available at some of the takeaways.
The Committee was told how some takeaway outlets were investing in Combi
ovens to bake food rather than deep frying food. This was the case in
Milingimbi in Arnhem Land, which is an Arnhem Land Progress Aboriginal
Corporation (ALPA) owned store and is focussed on delivering nutritious food
for the community. At a public hearing, Geoff McLean, ALPA Store Manager
commented that the takeaway had a new cook who was promoting healthy lines of
takeaway food at night. Mr McLean commented that:
We are trying to promote a healthy menu across the line, such
fresh salads and fresh hot meals, especially at night. When the community come
in, there is something available as an actual meal, not as a snack type of
The ALPA Australian Retail Consultant store on Goulburn Island also had
a nutritious takeaway store that offered boiled eggs, pre-made sandwiches,
salads, curries and baked vegetables. Both of the abovementioned takeaways were
an extension of the community store.
A takeaway business operating in Maningrida called the Bawinanga Good
Food Kitchen has been noted as a benchmark takeaway for remote communities in
the Northern Territory. This takeaway outlet has been operating for five years
with an emphasis on freshly cooked healthy food. The Committee was told the
Good Food Kitchen is ‘doing a very good job of providing very nutritious and
safe food for the community.’
In its submission the Good Food Kitchen outlined the food it sells and
its focus on healthy food items:
…we sell prawn and salmon wraps, fresh meat and salad
sandwiches, salads, homemade pies and quiches, sausage rolls, hot roast rolls,
toasted sandwiches, breakfast plates with real tea or coffee, curries, stews,
casseroles, roast dinners, local mud crabs, fresh healthy snacks for kids and
Nothing in the Good Food Kitchen is deep fried. We stock
juices, low sugar drinks and light milk, instead of coca cola and other sugary
drinks. Lollies are banned and we offer fresh fruits, boiled eggs, nuts and
salty plums in their place.
The Committee was encouraged to see first hand some healthy takeaway
options being sold in communities. The Committee strongly supports the Remote
Indigenous Stores and Takeaway (RIST) resources and considers the Healthy
Fast Food: a Resource for Remote Stores and Takeaways provide an excellent
model for use across remote communities in Australia.
The Committee believes that healthy takeaway outlets offer another
viable business option for remote communities. There would be positive flow on
effects in terms of improved health outcomes for better nutrition, food
education, and training and employment opportunities. These would all
contribute to capacity building for the community and future economic sustainability.
The Committee recommends that the Department of Families,
Housing, Community Services and Indigenous Affairs coordinate the
dissemination of a healthy takeaway food guide, such as the Remote Indigenous
Stores and Takeaways (RIST) Healthy Fast Food: a Resource for Remote
Stores and Takeaways, and provide appropriate start-up training for
remote store operators.
Appropriate governance structures in remote community stores are
fundamental to an efficient and well-run store and the provision of nutritious
food at reasonable cost. The following chapter discusses the governance,
cultural protocols and regulatory obligations of remote community stores.