Budget fears for community groups

While resource-rich states have been somewhat shielded from inflation pressures by rising fossil-fuel revenues, other states and territories are doing it tough.

The federal budget is traditionally handed down in the second week of May, with states and territories issuing theirs between May and August each year.

Advocates warn that any cuts to the community sector will hurt the whole nation, and are urging groups to lobby hard for a better deal for the sector.

The Victorian Government is reportedly looking to slash spending on community groups, not-for-profits and outreach programs as it hunts billions of dollars in savings.

Victoria has the highest debt of any state, projected to reach nearly $166 billion by 2026.

In a statement, the Commonwealth and Public Sector Union’s Karen Batt said that Victorian departments had been told to cut 10% of staff, equivalent to about 6000 jobs, and that this meant “real cuts to services”.

Ms Batt believed the threatened cuts to the May budget were “crisis conditioning” but said the state’s borrowings were sustainable, the gross state product was “higher than any other time in history”, interest payments were serviceable and revenue was rising.

The Victorian Council of Social Service’s budget submission has called for additional funding for the sector, declaring: “The funding provided to community services organisations doesn’t reflect the true cost of delivering services. Meanwhile, overall demand for social assistance and the complexity of that demand continues to increase. Underfunded services simply cannot provide help to everybody who needs it. This leaves many organisations with limited capacity to deliver on the Victorian Government’s vision for system reform.”

Assistant Treasurer Danny Pearson told reporters the government had not finalised decisions on the budget, but Premier Daniel Andrew told the Herald Sun, “We will deliver all of our election commitments, but there’s going to have to be some very difficult choices made. We don’t shy away from that.”

The incoming NSW Labor government is similarly facing tough choices, with a pre-election budget update warning of “significant pressures and risks” amid a predicted deficit over the next two years that has risen $1.3 billion since February. The government’s debt was also expected to increase by $800 million more than forecast by June this year.

Similarly, in South Australia, SACOSS warned: “to put it bluntly: South Australia is in trouble economically, and most of the indicators show that we are under-performing relative to the rest of the country”. Its pre-2023 budget submission warned that “a business-as-usual budget won’t be enough to reverse the worrying trends, grow the economy, address inequality and to ensure that every South Australian has full access to the support they need”.

In the NT, public sector wages are rising, while debt has ballooned by nearly $600 million, with total debts proportionally bigger than even Victoria’s.

In Tasmania, community service providers have called for a 9.5% increase in spending.

“The community services industry is critical to Tasmania’s society, delivering essential services either instead of, or on behalf of, the Tasmanian Government, as well as contributing $1.9 billion each year to the Tasmanian economy,” said TasCOSS’s Dr Charlie Burton.

Resource-rich states, meanwhile, are relying on the buffer that’s caused partly by the world’s demand for energy.

Queensland is looking at a $5.2 billion surplus on the back of coal royalties, while Western Australia expects a $1.6 billion budget surplus to cushion funding pressures.

What community organisations can do

Community Council for Australia chief executive David Crosbie said his members were rightly concerned that governments would hunt savings from the community sector.

“Many in the community sector are concerned that governments around Australia believe supporting the most vulnerable and strengthening our communities are areas where they can make savings in without impacting productivity and economic wellbeing,” Mr Crosbie said.

“Of course they are wrong: we need to offer more, not less, community level support and connectedness if Australia is to recover from Covid-19 and cope with inflation-led cost-of-living pressures.

“In the current tight economic climate, treasuries and government policy advisers tend to overlook what is most important in growing Australia’s productivity, and focus most of their attention on meeting short-term expenditure cut targets.

“We are likely to see this cost-cutting approach across all governments and it is rightly making many charities and community groups very nervous.

“If organisations are not already lobbying to maintain support for their programs and the communities they serve, they should consider their position at a time when government savings will be the order of the day.”

Funding Centre grants database manager Stefanie Ball said that organisations should be ready to apply for whatever funds became available in forthcoming budgets and urged them to subscribe to the EasyGrants newsletter to keep tabs on funds they were eligible for.

She said the Federal Government had already shaken up the grants world by dumping former Morrison government programs that were plagued with claims of favouritism.

She said last year’s budget had outlined spending that reflected the new Albanese government’s priorities in NDIS-related activities, aged care, local government, working with First Nations and CALD groups, rural and regional areas, sports, community development, climate action and schools.

She said grants cycles were predictable, and according to Funding Centre data, the first third of the year was one of the busiest for grants, with many funding rounds opening in March and April. She said there were many help sheets available on the Funding Centre website to help groups prepare applications early and write the best possible funding pitches.

“I would suggest not-for-profits have clear projects in mind, so that when budget funding is released, they are already ready to lodge their applications.”

More information

Fundraising and grantwriting help sheets

1. Ten questions every director needs to ask about funding
2. Finance for board members
3. Grantseeking basics
4. Sample answers for grant applications
5. How to cast a wider net for grants
6. Your fundraising readiness checklist
7. Developing a fundraising strategy
8. Fundraising on social media
9. How to build great relationships with funders