SENATE

Friday, 21 October 2016 Senate Page 21
Many native title and Indigenous community groups lack access to professionally managed, well governed and
affordable investment solutions that enable the building of intergenerational wealth. This is where our Equity
Investment Program is making a real difference. Over the past two years, IBA has established and seeded the
Indigenous Prosperity Fund and the Indigenous Real Estate Investment Trust for Indigenous organisations to
invest in. Since its inception, the Indigenous Real Estate Investment Trust has delivered returns of 16 per cent per
annum. For 2015-16, the annual return was just under 22 per cent. There are 17 Indigenous investors across our
current asset platforms and we are looking to get another eight to 10 groups involved in investment prior to the
end of this year. Overall, the Equity Investment Program generated more than $23 million in financial benefit to
Indigenous Australians in 2015 through financial returns, wages, training and procurement outcomes. I think we
have done a number of things well, and we are working to do better in future across all of our programs.
CHAIR: Thank you. We will now go to questions. Senator Siewert.
Senator SIEWERT: Mr Bator, you have acknowledged that your targets have not been met. Can you explain
a little bit more why those targets were not met and tell us when you realised you were not going to meet them?
Mr Bator: With the Home Ownership Program, as I said, we did fully expend our budget in terms of the
money to be lent out. Clearly there has been a drop-off in the number of inquiries—from 5,700 down to around
4,500 last year. We know that there has been a downturn in the mining industry around the country, which may or
may not have impacted on demand. We have not been out there with much advertising either. We are now
looking very closely at different programs, particularly in the lower income bands—because that is an area that
the Australian National Audit Office and the minister are interested in us looking at—and we have had some
success in attracting people who are interested in home ownership. Last year, we thought we were going to get
closer than we did; but, at the end of the day, we did not. With home ownership it is not a very quick process; it
can be a longer process taking many months. And we just did not see the impact on home ownership of the
downturn in some regions.
Senator SIEWERT: In terms of not seen the downturn, when did you realise you were not going to make that
target?
Mr Bator: I was not there. Nevertheless, from talking to people, it was pretty evident that we needed to do
different things during the course of the year—and, as I understand it, we did do some things differently. To be
honest, you generally know in around January whether you are going to make your targets or not. There was some
effort put in to try to work on how we could find the customers. But you have to remember that customers have to
want to get a home loan; it is a voluntary thing. They themselves will know whether they are capable of taking out
a home loan or not. I think one of the things that we as an organisation need to do is be more proactive in trying to
understand that. One of the key things that our people do is work out how much you can pay for a home loan and
then help you find a place you can afford to buy.
Senator SIEWERT: You said you did not do much advertising. Did you do less than normal?
Mr Bator: I do not think we did less than normal, but we should have done more.
Senator SIEWERT: Why wasn't that done when you realised that you may not meet the target?
Mr Bator: I would only hazard a guess. As I said, we had a lower number of inquiries—4,500 compared to
5,700 in an earlier year. In fact, the market was also indicating to us that there was less demand. I suppose we
could have done more at an earlier stage, and from now on we will.
Senator SIEWERT: In terms of advertising and outreach?
Mr Bator: It is more about being out in the communities and trying to find out what the community demand
across the country is. Word of mouth is our bestselling product. We do not have a budget to be on television. We
use things like Indigenous football tournaments. We do advertising at those tournaments because it is
economically viable for us to do that and we have a client base that attends those tournaments. By and large, our
clients come from word of mouth. So we know we have repeat customers: when a mum and dad get a loan with
IBA, the daughter will come and get a loan with us. So we know that. And this year we have had some real
success with follow-up clientele, with children coming in to see us. After all, we think that is a good outcome.
Senator SIEWERT: Has there been a change in housing policy over the last couple of years within IBA?
Mr Bator: Obviously we changed the policy from 1 September—
Senator SIEWERT: This year.
Mr Bator: This year. That took into account the sorts of concerns that the Australian National Audit Office
had about our program—specifically, the targeting of the program. The board agreed on the new policy settings.
We have put in place new practices. We have an online presence now, which is getting a lot of hits. So people are
FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE