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Policy Context

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Another way to think about how these reforms have come into place is to consider some of the information from the Economic Audit Report, that the sustainability of the sector is questionable. If this is the case then, the question to ask is what will make our sector sustainable?  

First, we need an acknowledgement that the way we have been doing things is just not working. This is inherent within the current reform because there is, as discussed by the Economic Audit Committee, a push on a true partnership and collaboration between community service organisations and government departments.  

Second, we need more funding. By and large, the sector is not sustainable because it is significantly under-resourced. Staff are often under-paid and projects are only ever funded for one year at a time creating a massive uncertainty in the sector. The sector has for so long been asked to do things on a shoestring budget. The complexity of managing a ‘not for profit’ and delivering community services sustainably has not been well understood by funding bodies which has led to funding and contracting practices that have been deteriorating the viability of the sector.

This is how funding reform has become the first agenda point, in a much broader context of community service reform. It is clear that the sector will not be sustainable unless it is supported by adequate funding. It is important to note that the other aspects, such as the nature of the relationship between government and community service organisations, are just as important in driving lasting change. In addition, it is also good to keep in mind that there will be other agendas in years to come in order to really make our sector sustainable, and to reinforce this concept of partnership between community organisations and government.

To move forward the concept of funding reform, and drawing from the recommendations of the Partnership Forum, the WA Government’s 2011-12 State budget delivered a substantial funding increase of $604m to the not-for-profit sector. This represents a 25% on average spread over 4 years on state contracts in recognition of a shortfall of funds for a sector that is historically underfunded and its employees underpaid. 

The second funding injection, Component II of approximately $117 million has been allocated to address issues of service sustainability which may not have been fully addressed in Component I. Component II will be phased in over two years through contract development and reviews, commencing from 1 July 2013, with $50.1 million in 2013-14 and $66.4 million in 2014-15 and subsequent years (subject to indexation).

The funding commitment signals to the sector that the Government is serious about strengthening its relationship with the not-for-profit sector so that we can deliver better outcomes for those most disadvantaged in our community. It is a transformative step in addressing a significant shortfall in funding that has worsened over recent years and put enormous pressure on service organisations.

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