A $4 billion ten-year agreement between the federal and Northern Territory governments that aims to see up to 270 houses built annually in remote Indigenous communities will be unveiled by Prime Minister Anthony Albanese on Tuesday.

The federal government is contributing $2.1 billion, of which about $844 million is new money.

While most of the funding is for new houses, the Commonwealth is committing $120 million over three years to match the NT government’s annual investment for housing and infrastructure upgrades in homelands.

Albanese will make the announcement when he visits the community of Binjari near Katherine. The federal cabinet is meeting in Darwin on Wednesday.

A partnership agreement will be set up, to support the delivery of the housing, between the two governments and Aboriginal Housing NT, the NT’s peak First Nations housing body, and Aboriginal Land Councils.

Albanese said in a statement released ahead of the announcement the “landmark agreement” would help close the gap between Indigenous and other Australians.

“The Northern Territory has the highest level of over-crowding in the country which we are working to halve by building 270 houses each year,” the Prime Minister said.

Minister for Indigenous Australians Linda Burney described the agreement as “an historic investment”. “Increasing housing supply will ease overcrowding which we know is a major barrier to closing he gap,” she said.

Northern Territory Chief Minister Eva Lawler said the agreement would “achieve unprecedented housing outcomes across the Territory. The commitment to build 2700 homes in ten years means new homes for more than 10,000 people.

"This is a game changer for the Territory, as this investment goes straight into the hands of our remote communities and Territory businesses.”

The closing the gap national target on housing is to increase the proportion of Indigenous people living in appropriately sized, not overcrowded, housing to 88% by 2031. There has been improvement but it is not on track.

Since the failure of the Voice referendum the Albanese government is looking to roll out practical measures on closing the gap. The housing announcement follows a $700 million Remote Jobs program aimed at creating 3000 jobs over three years.

The NT government faces an election this year. It has been plagued with problems, including the high rate of crime in the territory and internal scandals.

 

Michelle Grattan, Professorial Fellow, University of Canberra

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