Senator the Hon Katy Gallagher

The Albanese Government recognises the significance of government funding to community sector organisations and is mandating that agencies pass on indexation to grant recipients where grant programs are linked to one of the wage cost indexes. 

Despite government applying indexation to many grant programs, not all agencies currently pass this onto grant recipients. The Albanese Government discovered this practice upon coming to Government and has acted to fix it. For impacted community sector organisations, this will mean they receive additional funds to deliver their vital services.

The Government is also announcing that it will work with the sector to develop a Community Sector Partnership Framework. The Framework will drive administrative and cultural change across government agencies, to deliver grants that are designed to better serve the sustainability of community sector organisations and ensure better outcomes are achieved in delivering government policy. The Framework will be developed in partnership with the Community Services Advisory Group over 2024.

This builds on the reforms made since the election and is part of the Albanese Labor Government’s commitment to reset the relationship and restore respect for the community sector, which was neglected under the former Government. 

• Labor’s first Budget in October 2022 invested $560 million to support community sector organisations keep their doors open. 
• The 2023-24 Budget built on this initial investment by updating the methodology for determining wage cost indexation. This updated methodology provides greater ongoing financial support to grant recipients, including community sector organisations, providing indexation that is more closely aligned with economic conditions. This change provided an additional $4 billion above the existing indexation increase.
• The Government’s Secure Jobs, Better Pay Act strengthened the Fair Work Act to promote job security and gender equality and included the creation of expert panels at the Fair Work Commission to focus on pay equity in the care and community sector. 

The Department of Finance is also currently reviewing its guidance to entities and the whole-of-government grant agreement template to reinforce the Government’s commitment to longer-term grant agreements, where they are appropriate.  

Upcoming consultation on the Government’s proposed Secure Australian Jobs Code will also explore how government funding arrangements are supporting the rights of community sector workers. Consultation on the Code will commence in the first half of this year.

Minister for Finance, Senator the Hon Katy Gallagher, said the actions taken by the Government demonstrate our commitment to the community sector in recognition of the important role they place in society.

“We are fortunate in Australia to have a capable workforce within the community sector committed to supporting Australians during times of need,” Minister Gallagher said.

“The change will ensure funding government has set aside for community sector organisations flows through to them. As a highly feminised sector, our support for the community sector is aligned to the Government’s efforts to achieve gender equality. After a decade of neglect under the Coalition Government – we have demonstrated a renewed commitment to work with the sector.”

“The Government remains committed to strengthening the sector’s ability to deliver vital services to Australians,” Minister Gallagher said. 

Minister for Social Services, the Hon Amanda Rishworth, said by improving support to community sector organisations, Australians utilising their services would receive greater support in turn.

“Australia’s community sector provides integral frontline support to countless people and communities but as dedicated and passionate as our CSOs are, they are no more immune to the changing economic conditions than an individual.” Minister Rishworth said.

“By supporting our organisations to better navigate fiscal pressures and working with them to improve their sustainability, they will be better able to focus on what they do best – supporting Australians in need.”