Community organisations such as housing, Indigenous and domestic violence services will receive an extra $560m over four years in Labor’s first budget since its re-election.
The partial indexation of funding revealed by the finance minister, Katy Gallagher, aims to help community services keep up with rising costs.
The Australian Council of Social Service (Acoss) and Australian Services Union had both called for a 5.5% increase in payments to community organisations, as surging inflation puts services already under strain from high demand during Covid at risk.
The union pointed to increases in the superannuation guarantee and minimum wage, and inflation tipped to peak at 7.75% as sources of pressure that could force some organisations to shut their doors or reduce services.
In its pre-budget submission Acoss said “many organisations in the sector have seen real cuts to the value of their funding” due to inconsistent indexation.
Acoss warned that “unfunded shortfalls seriously impact the sector’s capacity to offer services to local communities, especially at a time of rising community demand and increased complexity of service user need”.
It called for the wage price index or consumer price index to be used “as the primary index for annual funding adjustments”.
Rather than ordering increases across the board, the government will establish a pool of $560m over four years which organisations will apply for, with ministers for social services, housing, Indigenous affairs and health able to award increases on merit.
“We’ve had a look at indexation arrangements in light of the rising cost of providing services and wage increases, and this increase of over half a billion dollars goes to help community organisations meet these costs whilst still maintaining services,” Gallagher said.
The ASU welcomed the announcement, which assistant national secretary Emeline Gaske said “gives the sector room to breathe after three years of providing services under the constraints of the pandemic with chronic underinvestment by the previous federal government also taking a toll”.
“Most people in the community recognise that community services workers are over worked and underpaid and support government investment here,” she said.
“The past few months shows what is possible when the community’s concerns are matched with a government that actually cares about workers and our most vulnerable.”
On Sunday the Albanese government also announced an extra $12.4m for parent-child playgroups and toy libraries, alongside a suite of measures designed to make paid parental leave easier to access.
In total 180,000 families will benefit from Labor’s commitment to increase paid parental leave from 18 weeks to 26 weeks by 2026.
The social services minister, Amanda Rishworth, revealed that while legislating the reform the government will change the rules to allow either parent to be the primary claimant.
Parents will also be able to take weeks of leave at the same time, so they can spend time at home together with their children.
The PPL reform will allow non-birth parents to receive PPL even where the birth parent does not meet the newly arrived resident’s waiting period, meaning a further 1,500 migrant families will benefit.
Eligibility will be expanded through the introduction of a $350,000 family income test, which allows families to access paid parental leave if they exceed the individual income limit of $156,647. That measure will see about 2,200 high income earners added to the scheme.
Rishworth said the government was “committed to making a better Australia and leaving no one behind”.
“Our PPL changes will make it easier for families to share care by removing the current requirement that the primary claimant must be the birth parent,” she said.
“This will make it easier for partners to take leave and remove assumptions about mothers and fathers being ‘primary’ or ‘secondary’ carers.”
