Senate Finance and Public Administration Legislation Committee, , 23:47 to 56:13
Indigenous Business Australia (IBA) outlines investment strategies, international travel approvals, and the transition of customers to mainstream banking.
Topics: First Nations, Infrastructure, Employment, Travel and event costs
Speakers: Speaker 4, Kerrynne Liddle, Speaker 7, Ellie Whiteaker, Speaker 6, Karen Grogan, Sean Armistead, Senator Kerrynne Liddle
>> And I would call the Indigenous Business Australia to the table. Welcome to Mr. David Knights, chief executive officer of Indigenous Business Australia and the other officers. Um, Mr. Knights, would you care to make an opening statement?
>> Yes, I would. Thank you, Senator Greg.
>> Please go ahead.
>> Uh, good morning all. Um, and uh, thank you for the opportunity to provide an opening statement. Um, firstly, I'd like to acknowledge and pay my respects uh to the Nanowal and Nambry people and extend this respect to the Aboriginal and toouristr islanders people that are here today. uh joining IBA as the new chief executive officer in August 2025. It is an exciting time as the organization seeks to grow with the amendment to the ATSIE Act, a refreshed board and a refreshed strategy. In February 2025, the parliament agreed to amend IBA's enabling legislation to remove the restriction on borrowing and raising money. This is a crucial step in the transformation of IBA to deliver on our legislative purpose. moving from a concessional lender to a value added specialist capital provider to accelerate the growth of the indigenous Whilst IBA contributes 89% of our annual operating expenditure, this will allow IBA to become more self-sufficient in generating capital over the longer term. Work is progressing to establish the rules, which is a legislative instrument that will set out the parameters under which IBA can borrow. The rules must be signed off by the Minister of Indigenous Australians and the Finance Minister. We are working with the central agencies including the Department of PNC, Treasury and Finance on the rules and we hope that this will be finalized shortly. IBA is continuing continuing to work hard to deliver for Aberiginal and Toristra Islander people. I'm pleased to report that IBA continued to deliver strong results during the first six months of the financial year. In fact, we are on track to exceed our PBS targets for 2026. The highlights include 1,895 Aboriginal and tourist rate islander people that have been provided with an IBA product or the opportunity to access the economy through a home job or procurement opportunity. $164 million in capital and capability development support has been approved or distributed by IBA in the first 6 months specifically for the benefit of Aboriginal and Toouristra Islander people. In the first half of the financial year 25 to 26, IBA's total consolidated assets were 2.4 billion, an increase of 92 million from the same period of last year in 2425. The growth was primarily driven by the expansion of the loan portfolio with increased lending activity pointing to continued strong demand. This year also marks the 51st year of the indigenous home ownership program. Since inception, IBA and its predecessors have supported over 22,000 families, benefiting more than 75,000 Ainal and Toouristra Islander people. In the first half of the financial year, over 1,700 people nationwide attended IBA workshops. In the first half of this financial year, Housing Solutions in IBA is currently tracking above our target uh with 320 approvals for the number of home loans and expected to exceed 600 home loans by the end of this year. First Nations businesses are also thriving with support from IBA's business support program. For the first six months of this year, $49.9 million in business finance was delivered to 110 businesses, helping create or sustain 545 jobs. And based on these projections, we will exceed all of these metrics by the end of the financial year. The strong women strong business network also continues to grow, now connecting almost 2,800 first nations women's entrepreneurs. And since the start of the year, financial year 3 direct investments have been improve approved, bringing the value of the investments portfolio to over half a billion dollars. In fact, 624 million of which 50% or 309.2 million is equity of our First Nations investment partners. The government announced a boost to IBA's home loan capital fund by 70.9 million over two years from 2025 to 26 to increase the opportunities for First Nations people to buy their own home. Our corporate plan of 2526 expands on the important initiatives we're delivering this year. It also outlines our long-term strategy towards 2030. The new strategy takes a fresh approach given the recent changes to our enabling legislation. It seeks to facilitate and attract private sector investment, not just government funding. Consistent with previous announcements from the minister, treasurer, and prime minister. Whether through home ownership, business investing, or structured project finance, we're proud to support First Nations people and communities to building economic prosperity. Thank you, and we look forward to your questions.
>> Thank you, Mr. Knights. Uh, Senator Little.
>> Thank you very much. Um my first question is about the um IBA's interest in the Port of Darwin. In an interview with the Australian Financial Review on the 16th of October 2025, the IBA chair, Mr. Caldwell, said that IBA wants to buy the port of Darwin and is willing to enter a process with other biders. Can you confirm IBA was considering that? >> exploring that,
>> Senator D. Uh yes, IBA has entered into a tripartite agreement uh with AINT uh and the Laraka um u um association corporation. Um now that tripartite agreement uh is not just centered on the port of Darwin. It's about um developing infrastructure within um that uh that homeland community. Uh and the port of Darwin was used as an example. Um uh the rationale behind that announcement was also uh to ensure that uh indigenous interests uh considered by any um bidder in that port process um should it come to market. Uh so it was it was effectively to put a a united indigenous voice forward um around infrastructure development uh in LA.
>> Just trying to unpack what you're just saying. So are you saying that there was interest in the actual port of Darwin business specifically or are you talking generally about the port of Darwin that area?
>> I'm talking about general infrastructure in uh on Laare country
given that IBA's new rules are I don't think they're approved yet are they?
>> No they're not s
>> No. How is it the organization can make public statements about what transactions it may or may not be considering um if you don't have the legislative capacity to to do that?
we uh we are working through uh the legislative enablement senator uh at present. Um it does have a lead time. Um the uh the announcement was around um uh intent for consideration, not a commitment. Uh and uh these transactions take a very very long period um to come to fruition and require significant due
>> So perhaps it was a little premature. Um Minister, I just want to ask has Mr. Godwell ever worked or volunteered for you previously, including your time in the Northern Territory Parliament? I want to ask a question that comes from notice 70 from Senator Hume where she asked, "Since 4th of May 2025, how many official international visits have been taken by agency heads?" And my question relates to how many international trips have been done to date in which um either members of the board or the executive have taken international
>> Uh Senator, I am aware that international trips have been taken. Um those trips uh are approved under a policy by the board. um I'll need to refer to either my colleagues or take it on notice as to the number of trips uh that have been undertaken.
I'm not sure if that that is public, but I'm trying to understand whether it's approved generally under the um rules of the board or there has to be um a pitch to someone for each individual trip and
specific um requirement for the board to review all international travel and requests um from any um colleague or or member including board members of the IBA.
>> So who actually approves international
>> The IBA board.
>> Right. Can you provide me a list of uh international travel that's been done in the last 12 months including the staff that accompanied that travel? >> Yes, we can. and where they didn't. I want to talk to you about um the Albanese government and their pursuit of economic empowerment which is a fantastic thing. I wouldn't couldn't not agree with that. But can you explain the first nations economic partnership announced at GMA in August 2025 by the PM why that's still being negotiated?
>> Uh I may pass that question over to Sean Armstead who actually sits on that economic um partnership. [clears throat] Um and uh
>> Sure. Thank you Sean Armiststead deputy chief executive officer. Uh the economic partnership there are a couple of components to it. IBA used to be the hold the secretariat function. That doesn't sit with IBA anymore. That's with NIAA. Um but IBA has a role to play on that partnership via the alliance which is one of the the members of the of the partnership and so IBA sits on the alliance with other members providing input into the economic development aspect.
>> I'm just wondering why this is so seemingly complex. What what's what's
>> different about
>> what's what's different about this about negotiating agreement? I mean, I'm just trying to understand why it's taking so long.
>> Y
>> So, Senator, maybe if I could just add so um Julian Gavvara, the CEO of the National Indigenous Australians Agency, yes, as Mr. Armistad said, the um First Nations Economic Partnership Agreement, the partnership agreement itself actually was finalized uh that happened uh in September. Uh there is now uh work underway to establish working groups for specific areas that were part of the um uh early uh actions under the under the uh partnership agreement. There were listed in the actual agreement itself. a number of areas that the agreement the agreement partners committed to doing in the first year. And so those working groups are being stood up now to look at how they progress the work on each of those areas that were priority areas of work in in the agreement which was published and is available on the Treasury website.
>> Okay. Thank you. I'm interested in the 2 million in appropriation money that was left on the table and not used for economic empowerment u for indigenous Australians when there are so many businesses that could have actually benefited from that. We got $2 million left on the table somewhere. We spent it
>> under the economic partnership.
>> This is in terms of appropriation money. Where is that money? The $2 million.
Apologies that with respect to the economic partnership.
>> So, Senator, uh the announcement that was made in relation to funding the economic partnership was there was an initial um appropriation of 16.9 million for the economic partnership. Um that included um funding for the alliance partners to uh participate in activities including the working groups of the partnership. There was also money set aside for uh the provision of uh secretariat functions for the organizations involved.
>> So that was 290,000 that was drawn down. So what about the balance? What are you doing with that balance of that money?
>> Well, obviously Senator, the work of the partnership is still ongoing. So um there are regular meetings now of the uh the First Nations partners with uh it its government partners. I think the next one is early March if I >> the next >> next week. Okay. Um and so uh that that money obviously supports the ongoing secretariat functions for uh all of the activities of the the partnership agreement itself.
>> Yeah. Um I'm just wanting to talk about um uh banking and home loans. Um you only had 119 customers that transitioned to mainstream banks. Um and of course your aspiration has always been on um IBA being a stepping stone to somewhere else for people. Um that's is that a small number? Would you like to see that number higher? I'm just wondering what's restricting you from getting more people off IBA when they're actually able to to enable the pathway for others to come in.
>> So Senator, I I will pass this over to Fasil Fasy who runs that division for IBA. Uh I I will just make a a covering comment though that um IBA's role uh statutory role is unchanged. Um we are the bridge uh if you like for indigenous Australia into mainstream financing uh and our our product uh and our strategies um reflect that intent. But
uh Mr. FY thank you executive director products and markets. So senator we do not push customers to leave IBA. We give them we we want to give them a choice. it is their choice to stay with us or to refinance. Um, usually when the economic situation is a bit difficult, they prefer to stay with us. Whereas when interest rates are very low, for instance, during the COVID period, a lot of customers refinance because it was easier for them and they could get actually a better deal with with with the banks who are very uh aggressive and being very competitive on on on pricing.
do they when things get tough, do they remain with the um with the other banks or is there ever a situation where they look to come back to you?
>> Yes, there are situations where they look to come back to us. We have a refinance product ourselves. So if they want to come back to us, it is possible. Now, of course, we make sure that they are able to service the loan if if they want to come back to us. The difference with the banks is that we are able to provide them with a discounted rate depending on their on their income level. Uh which means that they would be able potentially to repay an IBA loan when they are struggling to repay a bank
>> Thank you.
>> Thank you. Um I'm just trying to explore a little bit more about the cost of living impact on um people being um or staying rather with IBA rather than um moving moving to the banks and the impact on freeing up capital for those who are on the waiting your waiting list. How many are on the waiting list
>> Currently we don't have many customers on the waiting list. Uh we have about 200 customers who are pre-approved >> uh but they struggle to find a property
>> and what's happening to them in this cost of living crisis? Are they is it becoming further out of reach? How do they actually they just sit there until hopeful something might happen?
>> Uh Senator, it it is a challenge uh for for all Australians. Uh we do have a a a product range that assists customers. So we have a shared equity product um that uh we will um provide between 35 to 50% of of the equity of loans for for applicable customers. Uh and second to that uh we have significantly reduced deposit requirements anywhere from $1,500 to I think $8,500 >> $9,000 um for customers to be able to save to
get into a home. So what's do you have something that will give me an indication of um in the in say in the last three years where you've got those people who are sitting there on your waiting list how that's grown. Do I have to go to annual report to find that or can you provide that more quickly for me?
>> So again Senator we we don't have u a significant waiting list currently. I think the weight list people wait when
they >> let's sorry pre-approved let's talk
about pre-approved. Yes, the yeah the list of pre-approved increased and it increased mainly because property prices went up significantly and so the market is very competitive. When our customers go to market even if they have been approved they find it difficult to uh bid and win the the bidding war with other uh applicants. Um however again we are we have approved 320 uh loans this year uh and we aim to approve more than 600. I would add senator that more than 80% of our customers are in advance of their repayments which gives them uh some breathing space uh in in this current environment.
So what's the current duration average duration of an IBA loan and how has that changed over the last few years?
>> So we our standard term is 32 years. So slightly above what you find in the market which is usually 30 years and our customers usually refinance after seven or eight years. Now uh 70% of our customers are on a discounted rate and 30% are on the standard home loan rate. Those who are on a discounted rate usually stay with us until they reach the standard home loan rate as the rate increases by 25 basis points every year.
>> Thank you. Um so I wanted to ask a question about it's a little surprised by this um the superanuation anomaly that you reported um given that you are a financial agency um this is around managing the overpayment of superanuation for six consecutive years without noticing and I understand Mr. notes that you're new, but I'm wanting somebody to explain to me how um given the the finances that you deal with every day, that could have been um overlooked for six years.
>> Uh Senator, um I'll say a few things on this. One, one is um uh IBA has um as soon as it came to our attention has actioned uh that issue straight away. Uh the the uh reason for that anomaly was that there's a disparity for superanuation between those in uh non-government schemes in the government scheme. Um and uh we have uh worked to rectify that in an ongoing sense. Um and secondly uh we are working through the assessment um of recompensement of those
So your report states that you are still evaluating whether it is economically sensible to recover the funds. Um why is there hesitation in reclaiming taxpayer money when we're talking about people who are in senior executive roles?
that's uh due to a a couple of factors. One is the complexity of uh retrieving funds out of superanuation schemes for the materiality that is involved. Uh so we're working through to assess that. Um with your question with respect to taxpayer funds, the the the question then is do we spend more of taxpayers funds to recoup recoup the the amount in question? Um uh and then an appropriate um commercially balanced decision will be put forward to uh for consideration.
Is it the board's decision about what you do? Whether you recoup those funds
>> It is currently the board's decision,
>> Okay. Thank you. Um, that's that's all
>> thank you very much, chair. Good morning. Thanks for uh joining us today. Um, just further to uh some of the conversation we've already had about um housing. Of course, one of the biggest challenges for housing at the moment is supply. Uh, and so I'm wondering if you're doing any work, undertaking any partnerships to increase housing supply.
Uh yes we are uh we have uh done a small housing development uh in Broom
>> my in my home state great uh
>> 10 houses over there uh and we uh through our uh business financing operations and I'll I'll defer to Mr. F. He has further information on this uh we're currently financing a housing development um of circa 500 plus homes in Palmyon. Um construction is one of our largest uh business sectors uh that IBA lends to. Um but Mr. FY, do you want to comment further on that?
>> Yeah, thank you. In terms of supply, we provide home loans for construction as well. So we are supporting our customers to build new new dwellings >> and as Mr. And I uh uh mentioned we have a residential development pro program whereby we work with Aboriginal corporations, indigenous organizations who want to activate their land and to build properties either for their members so they can stay on country for instance or simply to sell the properties and use the proceeds for the benefit of their communities.
>> That's great. And um I understand that you recently signed anou uh with Commonwealth Bank. Um can you talk me through what thatou is uh and what benefits it will bring for first nations Australians?
>> Uh yes. So I seeks to work with all the major banks. Uh in fact we do today. uh the memorand memorandum of understanding uh uh explores um explores the opportunities for IBA and CBA to work together both in terms of financing customers um and that's across all the various different segments um that that we serve um customer segments that we serve and communities uh and secondly um for um uh an exchange uh of um if you like uh capability um uh into IBA um to to uh enable us to provide a better customer experience. Um so uh as a government institution we want to work alongside all the major banks. Our job is to transition customers into the major banking system. Uh and thatou reflects that intent.
>> That's great to hear. Um I understand you run workshops for business customers. I'm interested if you can tell us a little bit more about that. So perhaps the types of businesses that attend, the range of work that those businesses undertake. Thank you,
Senator. Uh so we have a range of different workshops and these workshops aim to support businesses across the whole life cycle from uh entrepreneurs who just have an ID and they need to understand what it means to go into business because going into business can be hard and difficult and so it's important for them to understand what it entails to larger businesses who are growing and who want to improve their uh capabilities for instance in digital marketing uh in strategic planning or or other areas. These workshops have been very [clears throat] um popular. We run two types of workshops. We run the face toface workshops and usually we try to do this uh with community so with an indigenous corporation, a corporation so they can bring their members or we do them online. Online workshops are quite successful because it allows people to just connect from their homes. It can be in the evening, it can be in the weekend. And as I said, we have a strong attendance at these workshops.
>> And what kind of data do you have on the geographic spread of those participants? I guess both in terms of those workshops that you run in person and also those who are participating online.
>> Yes, Senator. I I don't have the exact data in terms of the spread. I'm happy to take this on notice but uh we of course try to run them across the whole country knowing that online uh workshops are available to everyone wherever they are located.
>> Absolutely. Um could you is there anything you can tell me about the strong women strong business network and perhaps explain I I noticed in the opening statement um uh it was noted that the strong women strong business network continue to grow connecting almost 2,800 first nations women entrepreneurs that's quite an extraordinary number um can you tell us about that network
>> absolutely so the we launched the strong women strong business network in 2018 it has been quite successful uh it is led and managed by uh indigenous women who are in business or or who aspire to be in business. There is a Facebook group with about 2,800 people. There are about 2500 um members on Instagram. We also have a mentoring platform with about 1,200 indigenous women who are mentoring each other, helping each other, supporting each other. Um and it's important to also to note to mention that this is not just in the city, it's in regional, it's in remote areas as well where um indigenous women who are in business or who want to be in business feel more comfortable uh talking to other indigenous women who have been uh who have done it before them. We continue to support this this network. We also have the first nations women in business mentoring program that is going to start. It was announced by the government last year for $3.4 million in which we are going to support about 150 indigenous women in business with uh mentoring and coaching.
>> What type of spread of businesses are you seeing indigenous women particularly um show an interest in and and start up?
>> So in in in terms of the businesses we have many businesses that are in uh retail, many businesses that are in um agriculture, I'm not sure or construction. I'm not sure exactly about the the split in terms of sectors between men and women. So I can I can take this on notice.
>> Okay. Thank you.
>> I have a couple more questions too if you're happy for me to keep going. >> Right ahead. >> Uh so uh I think you may have mentioned in your opening statement um uh the IBA is very much embracing the net zero future which is of course um really important to our government and I'm really pleased to see the IBA um embracing that too. Could you talk us through what opportunities there are for First Nations businesses to embrace the clean energy economy and the work you're doing with First Nations businesses who might be engaged in that space?
>> Certainly. So, the IBA strategy u is very very closely aligned to the the government strategy. One of those sectors is renewables and renewable energy. Um we're proudly supporting uh a micro grid project uh in Northern Australia at the moment uh to move off diesel uh where that will transition into indigenous ownership um and significantly lower the cost of living for uh remote energy um and um we should that be successful, we're now talking to indigenous organizations about how do we actually scale that program up >> um and provide opportunities um for both indigenous ownership but indigenous uh jobs on country as well uh as we work through that. So that's that that's the renewable energy space. Um uh we are equally working across um mining on renewables as well. Um so critical minerals um there's a very very large percentage of critical mineral development that uh sits uh on uh indigenous um land. uh and IBA's role is to ensure that there's indigenous economic participation in all of those projects as we move forward. Uh from an IBA corporate perspective, we're also piloting an ESG strategy and ESG measures. I might just pass over to uh Deputy CEO Sean just to talk briefly about that.
>> Yep, certainly. Thank you. So the uh ESG uh which was uh measure um uh measure five which was uh effectively we've uh we're baselining what our what our our use of a better term footprint but measuring uh identifying where we can there are opportunities for better reporting and therefore if we can measure it reduce um our impact on on the environment but it's also across the board because ESG isn't just environment it's sustainability our reconciliation action plan being driven And um so there are a number of factors there that we're we're working on.
>> Yeah. Great. Just Mr. Knights, you you touched on something um in your response that I hope you might be able to expand on a little bit. You talked about um facilitating indigenous engagement when there are projects on on their land. Could you talk us through kind of practically how you facilitate that?
>> Yes. So I I does that today. So we have a number of direct investments um where we work alongside the traditional owners. So we will um through uh our distribution and and footprint uh engage with traditional owners. So whether that's uh via PBC's, land councils or corporations um to enable them to consider uh equity positions um in projects and developments on country. Um so rather than uh just the illu type model uh we're moving more to economic participation uh which then um provides jobs um then provides home security.
>> Thank you very much for your time. We do really appreciate it. Um and for all the good work that you do. Um we will let you go. Thank you very much. >> Thank you. Um, and I would ask the Indigenous Land and Sea Corporation to come to the table. And I believe we may have some of your um, crew online.