The Northern Territory aboriginal affairs minister, Alison Anderson, is so appalled by the federal government’s inability to put its funding into bricks and mortar for indigenous housing that she is threatening to quit the Labor Party altogether.

The Rudd government has become so tangled in its own red tape that it has so far failed to build one home out of the 700 promised by the $673 million Strategic Indigenous Housing and Infrastructure Program (SIHIP).

Anderson has claimed that huge amounts of public funds are being squandered after she was told, along with other aboriginal ministers, that as few as 300 houses could be delivered by the SIHIP. Inefficiency, profiteering and excessive administrative costs are to blame for the shockingly low return on the public funding, she said.

“It was quite openly told to us that there will be 15 per cent administrative costs going to the government, 40 per cent for the alliance (building) partners, and another 15 per cent for indirect costs, whatever that is,” Anderson told The Australian.

The lack of progress was unacceptable, ex-indigenous affairs minister Mal Brough told ABC Radio.

"That not one single home has been built through this program is just unacceptable and I think the alliance model of housing that they (Labor) went to was flawed from the start,” Brough said.

"That has now let down Aboriginal people yet again."

Current federal indigenous affairs minister Jenny Macklin has refuted Anderson’s claims, arguing that in the last 18 months more than 90 homes have been built in the Northern Territory.

However, the 90 homes Macklin refers to have not been funded by the SIHIP.

'The vast majority of the money that is being made available will go to building new homes, and upgrading homes, exactly what it's intended to do,'' Macklin said.