How the budget impacts the NFP sector

An in-depth look at how the 2018 federal budget affects the NFPs sector

Following Treasurer Scott Morrison’s announcement of the federal 2018-19 budget at Parliament House on Tuesday, it has become clear that the budget left little to the Not-for-Profit sector.

Whilst it appears that sectors, such as mental health and aged care, will benefit from the new budget, organisations in other sectors working for the greater good are now left to fill in some of the financial gaps.

“A responsible budget would strengthen the revenue base so that the government can do its job, especially to provide the essential services people need and protect from poverty,” said ACOSS CEO Dr Cassandra Goldie. “Unfortunately, this budget does the opposite, and the budget mistakes of the 2000s are being repeated.”

With the escalating housing crisis, the sector expected to hear of budget plans to address the almost 200 people who are homeless on any given night and a plan to overcome unaffordable housing as fewer people are able to afford a home.

Furthermore, disability funding and the Newstart and Youth Allowances were virtually ignored, despite calls from the sector for reforms and improvements.

However, in one of the few measures aimed at Not-for-Profits, the Australian Charities and Not-for-profits Commission will receive funding from the 2018 federal budget for anticipated litigation as the sector seeks to pursue a regulatory enforcement role.

This promised funding came on the back of the 2017 federal budget’s commitment to the NFP sector, with the $3 million going towards increasing accessibility to the Annual Information Statements and Charity Register, an updated IT system and web design, and an implementation of a customer relationship management system.

A spokesperson from the ACNC told Third Sector that “ahead of the 2018 Federal Budget, the ACNC informed the Government that we were not appropriately resourced for litigation should issues arise in the course of charity regulation. The Government allocated an additional $1 million to the ACNC for litigation for the 2018-19 financial year.

“The ACNC is now properly resourced, should it be necessary to clarify any questions of charity law or regulation through appeals.”

With the rising social inequality, the 2018 budget proposed a further $1 million for ACNC under the increasing demand for a longer-term strategy and further funding to social infrastructure to address the escalating social issues.

With this additional funding and an overall “have” and “have not” across the Not-for-Profit industry, here’s what the sector can expect from the 2018 budget:

Aged Care

The federal budget demonstrated commitment to the future of aged care with NFP services receiving substantial funding to improve care services but did little to improve long term issues, like staffing shortages.

Dementia Australia welcomed a $5 billion federal government funding for aged care, which will increase the quality and the overall ageing for Australians.

“This funding will go towards helping thousands of Australians who are on the waiting list to receive home care packages, with some people waiting more than 12 months to receive support,” said Dementia Australia CEO Maree McCabe.

Mental Health

Mental health has become one of the nations’ top priorities with the federal budget announcing substantial investment over the next four years to strengthen suicide prevention programs, provide advice and achieve better support for consumers.

The Commission’s CEO, Dr Peggy Brown AO, said the annual budget increase will strengthen the sector’s ability to understand what does and doesn’t work.

“This includes monitoring and reporting on the implementation of the Fifth National Mental Health and Suicide Prevention Plan and aspects of the National Disability Insurance Scheme relating to psychological disability.”

NDIS

The Turnbull Government confirmed its commitment to the NDIS with $43 billion funding secured. Chief Executive of the NDIS, Dr Ken Baker, said the sector relies on all sides of politics for a plan for long-term funding.

“Any future Treasurer should be clear that the NDIS is not a political football,” Dr Baker said. “It is a source of security for people with disability and their families who have enough uncertainty in their lives. Long-term certainty for the NDIS is imperative.”

Indigenous Australia

In response to the budget, Oxfam called out the lack of funding commitments to address the worsening health and disadvantage, poverty, and discrimination faced by Aboriginal and Torres Strait Islander people.

Chief Executive Dr Helen Szoke said that while the Government proposed $550 million for rural health services, it failed to recognise Aboriginal people in remote Australia.

The Government is continuing with the Community Development Program with minor changes and has effectively abandoned the National Partnership for Remote Indigenous Housing. The Budget also failed to recognise funding commitments for Western Australia, Queensland, and South Australia.

“Oxfam Australia shares the widespread concerns of Australia’s Indigenous leaders and peak groups,” said Dr Szoke. “This Budget has been yet another squandered opportunity to work in partnership with Aboriginal and Torres Strait Islander People to drive the solutions to the challenges they face.”

Although the budget welcomed some improvements to the Indigenous sector, organistions working for a more inclusive society and an overall healthier life for Australia’s first people, can expect to wait longer for financial support.

Tax reform

Low and middle-income earners received substantial relief in this year’s budget with plans to implement tax cuts and introduce a flat tax rate with earners standing to gain a tax offset of approximately $200 to $530.

ACOSS CEO Dr Cassandra Goldie pointed out that more tax cuts were coming at the wrong time, leaving low income earners vulnerable to the changes.

“There is a seven-year plan for tax cuts, but where’s the seven-year plan for reducing poverty among adults and children, guaranteeing growth funding for health care, and closing the gaps in essential services such as mental and dental health and affordable housing?” asked Dr Goldie.

This relief comes as rising costs and stagnating wages in the economy continue to cripple workers. The future growth of this sector, however, is still heavily reliant on the business sector as housing becomes increasingly unaffordable for vulnerable groups.

Violence

The budget proposed an extra $54 million to tackle violence across the nation, including domestic violence, sexual assault, cyber safety and elder abuse.

With domestic and family abuse estimated to cost the economy upwards of $12.7 billion each year, $54 million is a small investment towards an important societal issue and a blow to the Not-for-Profits acting on behalf of abuse victims.

Welfare

The Government announced a new round to the robodebt scheme, with measures implemented to recover fines and save $300 million.

“The proposal to deduct State Government fines from social security payments without their agreement is unnecessary, intrusive, and could leave many people homeless,” said Dr Goldie. “The ball is in the states’ court to reform the system of court-ordered fines so that people are no longer imprisoned because they can’t afford to pay.”

These changes will leave NFPs in the sector to fight further for an increasing support for the nations most vulnerable and disadvantaged.

Refugees and migrants

Support services for refugees and asylum seekers was cut by $54 million, putting vulnerable people under greater pressure to survive in the face of adversity, societal issues such as violence and welfare cuts, and the rising costs of living.

Dr Goldie said the 2018 budget would leave some of the most vulnerable people in the community open to disadvantage.

“New migrants lacking paid work, who will be left without income support for the first four years. This is not the way to welcome people to this country and help them contribute to its future prosperity.”

The limited resources allocated to the refugee’s sector will leave NFPs with several gaps to fill as disadvantaged refugees are put under further stress.

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Written by: Naomi Neilson 

Recently graduated with a Bachelor in Communications with a major in Journalism and Public Relations, Naomi Neilson has jumped straight into the world of media and press with Third Sector. She is motivated and passionate to explore the industry and thrives on creating an interactive and social platform for Third Sectors unique readers.

In her free time she can be found either watching the footy or designing her next big art piece around sourcing stories and engaging with new people.

Follow me on LinkedIn for information regarding future Akolade events as well as future blogs posts @ Naomi Neilson