A decade-old public housing funding deal for people in remote Indigenous communities remains in limbo in Queensland with no announcements in the Federal Government's Budget this week.

Key points: A 2008 agreement between state and federal governments saw $1 billion invested into housing for remote Queensland communities

A 2008 agreement between state and federal governments saw $1 billion invested into housing for remote Queensland communities The partnership now needs renegotiating but remains in limbo with no announcements as part of the 2019 Budget

The partnership now needs renegotiating but remains in limbo with no announcements as part of the 2019 Budget Overcrowding remains a major issues for residents on the remote Indigenous community of Palm Island

The National Partnership Agreement on Remote Indigenous Housing (NPARIH) was developed in 2008 as part of the Closing the Gap strategy, aimed to reduce overcrowding and ensure houses were well-maintained in Indigenous communities.

Lockhart River Aboriginal Shire Mayor, Wayne Butcher, said many young people in the community were doing apprenticeships and moving into trades through the program.

"There's going to be a big question around employment and whether we'll be able to sustain that employment," Councillor Butcher said.

"On one hand you talk about people's capacity and trying to skill people into proper employment and real jobs.

"On the other hand the federal cuts in remote housing is making it like a roller coaster."

Lockhart River Aboriginal Shire Council Mayor Wayne Butcher says if the program was scrapped jobs will be lost for apprentices. ( Facebook: Wayne Butcher )

Remote Queensland communities saw more the $1 billion invested into housing between 2008 and 2018 through the partnership between the state and federal governments, which now needs renegotiating.

Councillor Butcher said he had given up on the program after lobbying Federal Indigenous Affairs Minister, Nigel Scullion, to extend the program in his Cape York community for the past two years.

"We've been told 'yep, the money's coming', but if the money's not in the Budget then I guess there is no money coming," he said.

"It's very sad to see there is no more investment in remote housing and overcrowding is such a big issue."

'Bitterly disappointed' with funding

Off the north Queensland coast on the remote Indigenous community of Palm Island overcrowding is still a major issue for residents.

Mayor Alf Lacey said the housing issue has had a flow on effect on the island's social issues.

"[It] affects our community in terms of the high rates of domestic violence and crime rates, so certainly I would think that the Budget should have taken that into account," Mr Lacey said.

About 300 social housing homes have been built on Palm Island and the community had plans for more under the National Partnership on Remote Housing.

"We've got a further 300 people still on the waiting list for a home on the Island," Mr Lacey said.

Mr Lacey said he was "bitterly disappointed" funding for the program was not extended in the Budget.

"Closing the Gap indicators will never come down unless we are at the forefront of ensuring healthy lifestyles and families are addressed," Mr Lacey said.

Will there be an agreement?

The Federal Government has committed to the program in the Northern Territory, striking a deal for both parties to commit $550 million over five years.

Funding for the National Partnership on Remote Indigenous Housing remains in limbo in Queensland, with no deal between state and federal governments. ( ABC News: Sally Rafferty )

Member for Leichhardt, Warren Entsch, said the money was still available for the program but the Morrison Government was struggling to strike a deal with the Queensland Government.

"There is no oversight, there is money for social housing in the Budget, there is a significant amount," Mr Entsch said.

"I've actually written to the minister [Nigel Scullion] asking that the money go directly into the communities."

But Queensland Minister for Public Works, Mick de Brenni, said the state had already committed to the program and the Commonwealth had failed to put forward an "investment proposal".

Mr de Brenni said $145 million over the next financial year would be put towards public housing.

"It's currently being invested straight into those communities now, in fact topped it up by a further $40 million," he said.

"Even with the withdrawal of the Morrison Government from this historic funding commitment, we can make a modest commitment towards continuing to save those 600 jobs and close the gap."

Federal Indigenous Affairs Minister Nigel Scullion said the Government was willing to contribute its share but the state was refusing to come to the table.

"The Commonwealth is committed to contributing its fair share of funding for remote housing in Queensland but only on the condition that Queensland also contribute its fair share," a spokesman for the minister said.

"Aboriginal communities are involved in the decision-making and have the opportunity to be trained and employed in housing projects."