Valuing the community sector

BUDGET ANALYSIS

This is a long-form analysis of the Victorian Government’s investments in the community sector. For a quick summary of specific Budget program expenditure in this space click here.

It is crucial that the Government supports and adequately funds community service sector organisations so they can continue to provide vital services and support for all Victorians.

VCOSS notes the ongoing investment ($90.4 million/4 years) in supporting community sector organisations to meet the rising cost of wages and inflation.

The funding allocated in this Budget is not sufficient to fully cover the increasing financial pressures facing the community sector. Given the impact of the pandemic and other economic trends, this funding will not address the underlying, structural challenges facing the sector, including the recruitment, training and retention of community services workers. VCOSS continues to call for a workforce strategy that will inform and shape government investment in the sector going forward.

The Victorian Government must be fully transparent on the indexation formula used to fund the sector and to factor in the full costs of service delivery such as superannuation and portable long service leave. Indexation at 2.5 percent effectively means a cut for community service organisations, likely to lead to job losses and service reductions.

Volunteers are also fundamental to the operation of the community services sector and sustain a wide range of community and social service organisations. There is some welcome funding to support volunteers in emergency services including Life Saving Victoria and the SES but the Budget does not adequately provide for Victoria’s vital volunteer workforce. 

COVID-19 has decimated Victoria’s volunteer workforce, directly impacting organisations’ ability to deliver services. Funding is urgently needed to reinvigorate volunteering, including to support place-based volunteering services, help Volunteering Victoria build the capacity and capability of volunteer organisations, and to deliver a communications campaign to boost the volunteering sector.

Indexation at 2.5 percent effectively means a cut for community service organisations, likely to lead to job losses and service reductions.

The local labour market has never been tighter. The Budget provides welcome, record investment ($371.5 million/4 years) to continue to build the pipeline of workers required to deliver Victoria’s mental health reform agenda. However, finding a workforce to enable the mental health system’s expansion is going to be a significant challenge. There is a risk that the mental health system’s expansion may exacerbate workforce shortages in intersecting sectors, such as alcohol and other drugs, disability support, homelessness, family violence, child and family services, and aged care. That’s why VCOSS is calling for an overarching strategy to grow, sustain and skill all parts of the community services industry. This must include action to address the key structural barriers to workforce attraction and retention: insecure work and low and unequal pay.

In the meantime, VCOSS acknowledges the Government’s funding ($7 million/2 years) for a recruitment campaign and scholarships to help attract workers to the sector and improve employment pathways for people with lived experience of using social services.

The budget makes a mammoth investment in health infrastructure, particularly hospitals. VCOSS notes the need for equitable investment in community services infrastructure. Too many community services are operating out of ageing facilities that are no longer fit-for-purpose.