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Sector Sustainability

The Challenge

The social service sector is the largest employer in Australia and is projected to grow even further, contributing $15.4 billion each year to the NSW economy. However, the sector is facing significant sustainability challenges.

Frontline services increasingly report that they cannot keep up with demand, as the needs of the community are becoming more complex and widespread due to the impacts of COVID-19, natural disasters, the affordable housing shortage and cost of living challenges.

Many – such as neighbourhood centres and services providing domestic and family violence, homelessness, tenancy advice, financial counselling, mental health, and child and family supports -  report that they are seeing more people who have not previously needed help before, and more who are in crisis. They also report an increase in those reaching out who are in the workforce, but struggling to get by.

In this context, long-standing challenges associated with lack of growth funding, over-reliance on short-term funding boosts, and uncertain and inconsistent approaches to annual indexation are becoming more acute.  They are contributing to workforce shortages, health and safety issues and service viability concerns.

 What’s In the 2023-2024 Budget?

  • $34.3 million to support 20 Women’s Health Centres providing health and mental health services for women.
  • $8.1 million to Redfern Legal Centre to expand their financial abuse service statewide.
  • $4.4 million over three years to establish a new specialist multicultural domestic and family violence centre in southwest Sydney.
  • $1 million for renters’ advocacy organisations.
  • A taskforce will be established to deliver more job security and funding certainty for the NSW community services sector.
  • Increased grant payments to non-government organisations, indexed at 5.75% for 2023-24.

What does it mean for those doing it tough?

While the modest additional investments for social services announced in the budget are welcome and will benefit some, they are piecemeal and insufficient in light of the  challenges faced.

Women from low socio-economic backgrounds, priority populations and those who are most at-risk will benefit from the additional funding for Women’s Health Centres, which will enable them to continue operating to provide women with a safe, private and women-focused space to address mental and physical health concerns. The new specialist multicultural domestic and family violence centre will provide vital supports in Sydney’s growing South West, where the impacts of economic disadvantage are most acutely felt.

Similarly, the state-wide expansion of Redfern Legal Centre’s financial abuse service will enable more people across the state to access information and support to protect themselves and recover from financial abuse. Renter’s advocacy organisations will have some increased capacity to advocate, educate and advise in relation to renters’ rights.

For the sector more broadly, indexation of 5.75% to eligible organisations is a higher rate than that awarded in other states and territories, and signals awareness of the challenges faced.  However, there remains a need for a consistent, transparent and evidence-based approach to annual indexation and for population-based funding models that better respond to rising demand.

What is needed?

The Budget’s strong focus on better recognising and supporting the public sector’s  delivery of essential services is welcomed.  But the equally critical role of the non government social service sector in providing essential services for those most in need must also be better recognised and supported.

Similarly, while investment in essential physical infrastructure such as public schools and hospitals for under-serviced growth areas is much needed, so too is investment in social infrastructure – services that support those doing it toughest to get their lives back on track and participate in their communities.

Collaborating with the sector to develop an evidence-based, consistent approach to indexation to reflect the real cost of service provision is long overdue; as is the development of a population-based approach to funding social services aligned with growth, changing demographics and demand.

In the meantime, the provision of core funding to neighbourhood centres and other similar place-based services – which act as hubs for accessing support, social connection and pathways to other assistance – would be a welcome development and bring NSW more in line with neighbouring jurisdictions.  Bolstering, on a recurrent basis, the capacity of essential programs facing rising demand from the cost-of-living crisis, including tenancy advice, mental health supports, and financial counselling, would also make a significant difference.

Budget responses from the Sector

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