community sector leaders forum 29 may 2009 emerging issues

Community Sector Leaders Forum

29 May 2009

EMERGING ISSUES

Presented by Sue Ash, CEO &

Irina Cattalini, Director Social Policy

Facilitated by Chris Hall, WACOSS President

Changing Landscapes

Changes in the economic landscape

Economic Data

The chart shows forecast negative growth figures for most major economies and the world as a

Whole, for 2009 and 2010.

Economic Data

The contraction in industrial production is particularly pronounced in our number one

trading partner, Japan, showing -30% production for the period.

Economic Data

While 6% real growth may appear relatively comfortable, factors such as the rate of internal migration and industrialization mean that 6% growth is effectively recessionary in the Chinese context. The outlook for China remains uncertain. It is largely dependent on the export of consumer goods, and is therefore highly sensitive to global variations in consumer demand. The CEO of BHP Billiton said on 27 May: “the outlook for China’s trade performance is still unclear, with the fall in exports hitting it much harder than was anticipated.”

Economic Data

As a result of the global recession, Australia faces a period of contraction. The chart shows Australian GDP growth for the past two decades. It is expected that the next national accounts will show that we also contracted in Q1 2009. This is our first recession since 1991. The federal budget forecasts Australian real GDP to fall by 0.5% in calendar 2009. The budget forecasts below-trend growth of 2.25% in 2010-11, with above-trend growth thereafter.

Economic Data

Treasury modelling shows that the economic stimulus package has had a significant impact on GDP growth. Treasury’s forecast for a 0.5% contraction in 2009 would have been a 2% contraction in the absence of the stimulus packages.

Economic Data

Estimated Actuals Forecasts Forecasts

2008-09 2009-10 2010-11

WA - Real GSP Growth 8% -1.25% -0.50%

- Real GDP Growth 0% -0.50% 2.25%

The table shows the WA economy is expected to shrink by 1.25% in 2009-10, and by 0.5% in 2010-11, while the national economy will shrink only by 0.5% in 2009-10 and will grow by 2.25% in 2010-11.

Economic Data

WA experienced significantly higher rates of growth in recent years than other States in Australia.

In 2008-09, it’s estimated that the WA economy grew by 8% in real terms, while the national economy neither grew nor shrank. However, the medium-term forecast for WA is more pessimistic in some respects than the national outlook.

Three interpretations:

DTF is too pessimistic in its growth outlook for WA, or

Federal Treasury is too optimistic in its growth outlook for Australia, or

Both forecasts are accurate, and other States will grow much more rapidly than WA.

Economic Data

Revenue growth for 2008-09 is only 1.7%, down from 10.1% last financial year. Expenses in the current financial year have grown 13%, mainly public sector wages growth, and are expected to overtake revenue for 2011-2013.

Economic Data

WA’s share of national GST revenue was, in 2006-07, roughly in line with its share of population at 10%. In 2008-09 this has fallen to 8.7%. By 2011-12 it is projected to fall to 5.7%, meaning for every dollar West Australians pay in GST, the WA Government will receive only 57 cents, with the balance transferred to other States and territories

Economic Data

The number of unemployed people in WA has already nearly doubled, increasing from 28 000 to 55 200. Unemployment is forecast to rise by a similar amount again between now and 2010-11, increasing by a further 27 170 for a total of 82 370 unemployed West Australians. We estimate that there will also be an additional 356 731 unemployed people in Australia by 2010-11.

Mid-2008 April 2009 2010-11Change: 2008 to present

Change: present to

2010-11

Change 2008 to

2010-11

WA - rate 2.30% 4.50% 6.75% 2.20% 2.25% 4.45%

WA - number 28,000 55,200 82,370 27,200 27,170 54,370

- rate 4.10% 5.40% 8.50% 1.30% 3.10% 4.40%

- number 463,500 614,600 970,131 151,100 355,531 506,631

Economic Data

The chart shows that WA has had a significantly lower rate of unemployment than Australia for the past five years, but the gap is rapidly closing.

There are disturbing trends in welfare provision, with Governments increasingly favouring politically powerful or sympathetic groups such as seniors and disability pensioners while ignoring unemployed people and students.

Economic Data

Economic Data

The inadequacy of Newstart Allowance, coupled with the rising number of unemployed people, means that the level of disadvantage in the community is likely to rise considerably. The chart below shows the rise in the number of people claiming Newstart and Youth Allowance (Other), the allowance that is paid to young unemployed people.

Emerging Issues - Economic

ISSUE 1- FINANCEThe lack of access to finance, which has

caused the economic downturn, is affecting the sector’s capacity to do its work.

How? Diminishing value of investmentsReducing funding from governmentMaking it more difficult to solve fundamental

problems like housing and service


ISSUE 2 - OPPORTUNITYBoth State and Federal Governments are

prioritising infrastructure spending to stimulate the economy. The emerging opportunity for the sector is to present initiatives that have a short term stimulus effect, at the same time as providing longer term sustainable benefits for our clients and organisations.Eg Jobs Fund tenders


ISSUE 3 - INEQUITY

The distinction of entitlements between ‘pensions’ and ‘allowances’ is widening, further entrenching the expectation of engagement with the labour market, either through volunteer work, education or training etc.

Eg Weekly increase, stimulus payments vs capacity to work assessments, etc

Changes in the political landscape

Political Data

Intergovernmental Agreement (IGA) on Federal Financial Relations

COAG has reaffirmed its commitment to cooperative working arrangements through an historic new IGA that provides an overarching framework for the Commonwealth’s financial relations with the States and Territories (the States).

Political Data


The IGA represents the most significant reform of Australia’s federal financial relations in decades. It is aimed at improving the quality and effectiveness of government services by reducing Commonwealth prescriptions on service delivery by the States, providing them with increased flexibility in the way they deliver services to the Australian people.

Political Data


The IGA provides a clearer specification of roles and responsibilities of each level of government and an improved focus on accountability for better outcomes and better service delivery. This is accompanied by a major rationalisation of the number of payments to the States for Specific Purpose Payments (SPPs), reducing the number of such payments from over 90 to five.

Political Data


Central to these reforms is a substantial financial package that provides an additional $7.1 billion in SPP funding to the States over five years to improve services for all Australians.

Political Data


Commonwealth-State financial relations have seen the creation of five new national SPPs, including total funding of:

$60.5 billion in a National Healthcare SPP;

$18 billion in a National Schools SPP;

Political Data


$6.7 billion in a National Skills and Workforce Development SPP;

$5.3 billion in a National Disability Services SPP; and

$6.2 billion in a National Affordable Housing SPP.

Political Data


Each SPP is associated with a National Agreement that contains the objectives, outcomes, outputs and performance indicators, and clarifies the roles and responsibilities that will guide the Commonwealth and States in the delivery of services across the relevant sectors.

Political Data


COAG agreed to six new National Agreements – National Healthcare Agreement, National Education Agreement, National Agreement for Skills and Workforce

Development,National Disability Agreement, National Affordable Housing Agreement, and the National Indigenous Reform Agreement.

Political Data


The performance of all governments in achieving mutually-agreed outcomes and performance benchmarks specified in each National Agreement will be monitored and assessed by the independent COAG Reform Council and reported publicly on an annual basis. COAG agreed that the new National Agreements are central to achieving service delivery improvements and reforms.

The new federal financial framework began on 1 January 2009.

The opportunities available for the sector to influence these decisions have been limited and ad hoc.

Political Data

2009 COAG Reform Council Since the COAG Reform Council’s first report to COAG

in March last year, COAG has agreed to an expanded role for the Council as part of developing its reform agenda.

There are six NPs which identify a role for the COAG Reform Council in assessing performance: Hospitals and Health Workforce Reform;Preventative Health; Improving Teacher Quality; Literacy and Numeracy; Low Socio-economic Status School Communities; and Seamless National Economy.

Political Data

COAG National Partnership Agreements

Include data on objectives, outcomes, outputs and performance monitoring

Emerging Issues - Political

ISSUE 1 – NATIONALISATION

Social policy, service design and funding strategies have been nationalised through COAG processes, leading to greater engagement by state based community service organisations at a national level.

Outcomes, outputs, performance indicators, data collection, funding has all been agreed and published

The engagement with the sector on state based implementation is pending

Our opportunity to influence has been ad hoc (eg SIB, CRTF, bureaucratic/government relationships)

Emerging Issues - Political

ISSUE 2 – REVIEWS

The need to engage in State and Federal Government reviews has become very important to the impact on our sectorRed Tape, EAC, Early Years Leg Council

PC, Henry, Harmer, Senate Employment Services

Questions?

Changes in the social landscape

Social Data

Population Data:2.2 million (Sep 08 quarter), up 2.9% or

626,000 people from last year – the highest increase in the country.

WA, like Australia has an aging population, though the Aboriginal population has a younger profile.

Social Data

Detail of People Living on Low and Fixed Income:

How Many?

At the 2006 Census, 92,541 households in the Perth-Mandurah area received gross weekly income less than $500. This was 19.8% of all households.

Who?

Household income is affected by the number of income earners in the household as well as the amount of income earned by each individual. The distribution of low income households shows some similarities to that of people aged 60 years and over, one-parent families with dependent children and unemployed people.

Social Data

Detail of People Living on Low and Fixed Income:

Where?

Concentrations in eastern side of the city from around Balga in the north to Armadale in the south-east;

In the southern coastal areas of Kwinana, Rockingham and Mandurah; and suburbs to the immediate south of Fremantle.

These suburbs typically have more than one third of households classified as low income.

Similar proportions were located in the south of the region, particularly in the suburbs of Calista, Medina, Rockingham, Shoalwater, Mandurah, Furnissdale and Coodanup.

Social DataIncome Distribution The incomes of households considered to have the lowest

levels of economic wellbeing (i.e. those people with household income between the bottom 10% and bottom 30% of incomes) grew by 8% ($24 per week) from 2003-04 to 2005-06, an 8% growth was also recorded for middle income people compared to 13% for high income people

The distribution of net worth across households is very unequal, partly reflecting the common pattern of people gradually accumulating wealth throughout their working life. In 2005-06 the 20% of households with the lowest net worth accounted for only 1% of total household net worth, with an average net worth of $27,000 per household.

Social Data

Effect of recession on the cost of living

CPI Headline 2.2%, Mar 08 - Mar 09

Food up 8.6%

Housing up 8.1%

Health up 11.9%

Education up 15%

Social Data

Social Data

Despite the fall in some house purchase groups, the ratio of house prices to earnings remains considerably above its long term trend.

0

200

400

600

800

1960 1970 1980 1990 2000 2010

Inde

x (1

960

= 1

00)

Median FHB real house price Real AWE

Social Data

SOCIAL HOUSINGThe number of public rental dwellings in WA has

now fallen to 1993 levels, despite an 18% increase in WA’s population over the last 15 years.

More dwellings were built under the public housing rental program in the 1950s (an average of 1254 dwellings per year) than have been built this decade (an average of 913 dwellings per year), despite a 278% increase in WA’s population since 1950.

Social Data

SOCIAL HOUSING

Social housing represents approximately 4% of the total housing stock in WA, lower than any other Australian State, and than most comparable OECD nations.

20,000 people are currently waiting for a home in WA, many of whom have been waiting for 5 years or more.

Social Data

PRIVATE RENTAL MARKET:

REIWA predicts that the private rental market vacancy rate will rise above three per cent in mid-2009. A three per cent vacancy rate is widely seen as a ‘neutral’ figure; if the rate is below three per cent then rents are expected to rise, while a vacancy rate above three per cent would see rents fall in real terms. The vacancy rate has not exceeded three per cent in Perth since 2004.

Social Data

PRIVATE RENTAL MARKET: However, rents have risen significantly faster

than average wages in recent years. A prolonged period of stagnation or falls in rental prices would be necessary to restore the affordability of earlier years.

The median weekly rent in Perth is $370 per week according to REIWA. While this figure did not increase during the first quarter of 2008, it is 15.6% above the median rent 12 months ago.

Social Data

Housing for government and corporate employees in regional WA is

supported with private subsidies or GROH. The NFP sector and general

public are exposed to prices at the rates in the columns above.

Karratha 4 Bedroom House Rent Comparison

$0

$500

$1,000

$1,500

GROH Owned $450 $550 $773

GROH Leased $600 $799 $1,182

June 2005/06 June 2006/07 June 2007/08

Ave Rent Ave Rent Ave Rent

Social Data

Regional Cost Loadings

Infrastructure, development and maintenance in regional areas is compounded by regional cost loadings. Examples of regional loadings are:

Broome & Roebourne: 150%Kalgoorlie: 125%Albany: 115%

The extreme weather conditions from heat to wet in remote regional locations increases maintenance demand. These conditions promote rot, corrosion and also increase maintenance costs on electrical systems.

Social Data

HOMELESSNESS

Despite the economic prosperity of recent years, the number of homeless people in Western Australia has risen. The rate of homelessness in WA is the second worst of any State (64 per 10 000 people), and is significantly worse than the national average (53 per 10 000 people).

Social Data

Unemployment is likely to place some mortgagee households in an untenable situation, leading to greater incidence of forced sales and repossession.

Supreme Court of WA data, shows the number of property repossessions increasing per quarter in WA since mid-2000.

Social Data

Mental health and AOD issues – Represent a significant cost to the Australian economy

(about $20 billion for mental health, approx $56.1 billion for licit and illicit drugs (alcohol 27% of that and illicit drugs 15%).

Lack of access to supported accommodation and other services mean that many people with a mental illness or with drug and alcohol issues end up being misdiagnosed, homeless or detained.

WACOSS PBS 2009/2010 - Only 9.4% of health spending in WA is allocated to mental health, with only 6.6% of that going to NGOs who provide 88.5% of the services.

Social Data

Mental HealthFederal – COAG: National Action Plan (NAP)

on Mental Health 2006-2011 provides a whole of Government approach to streamline service delivery.

Like children and family services, services provided by Government, private and NFP sector are difficult to access, many services duplicate and there is poor coordination between them.

Social Data

Mental Health

WA’s contribution to the NAP for Mental Health is a continuation of the State’s Mental Health Strategy. It focuses on spending for:

promotion, prevention and early intervention ($60.7 mil over 6 years);

integrating and improving the care system ($53.6 mil over six years);

participation in the community and employment (incl accommodation) ($129.4 mil over 6 years); and

increasing workforce capacity ($8.8 mil over 6 years).

Social Data

Mental health State Budget:

No money to mental health and drug and alcohol in corrective services. Mental health facilities being planned, built, and completed at major hospitals across the State (Joondalup, Broome, Sir Charles Gardiner, Osborne Park).

Mental health services in WA will be reformed through:A review of the Mental Health Act 1996, and preparation of a Mental

Health Bill

Mental Health and Wellbeing Commissioner

Developing a State Mental Health Policy and Strategic plan 2010-02020

Developing a State Suicide Prevention Strategy

Establishing a peak body for mental health consumers and advocates for metal health services

Social Data

Children of Parents With A Mental Illness

In 2005, it was estimated that there were between 21% and 23% of children living in Australian households where at least one parent has a mental illness, equating to just over a million children at that time.

Social Data

COPMI:

The objectives of the current phase of the Australian COPMI initiative (2008 - mid 2010) are:

To increase the availability of information for workers and families about enhacing childrens’ resilience, reducing risk factors

To increase access to quality workforce development resources for people working with children and families affected by parental mental illness.

To increase access by 'copmi' program planners and facilitators to knowledge, skills, resources, models, etc.

The Mental Health Division, Department of Health, WA supports the Project in partnership with Ruah Community Services.

Social Data

Children’s Wellbeing & Child ProtectionEarly Childhood:Western Australia is falling further behind on having a

clear direction for early childhood development with little forward planning to ensure that basic services can keep pace with the population birthrates.

WA is currently 94 maternal health nurses short of the basic health needs of newborn children.

A Victorian child will have seen a child health nurse five times at four months old. A Western Australian child will not have seen a child health nurse five times until the age of 18 months.

Social Data

Increasing numbers of kids in care – WA 2,546 kids in out-of-home care in 2008 (1,181 in

foster care)Care and protection orders in 2008.State Budget papers (09/10) state 3,011 children

in CEO’s care at 30 June 2008, an increase of 13% on previous year (up from ~1400 in 2003)

Increasing numbers of foster carers and increased funding allocated to foster carers - $15 p/fortnight with focus on recruiting new foster carers.

Social Data

National Frameworks

National Framework for Protecting Australia’s Children (COAG) released April 30 2009 to outline a whole of Government reform approach to reduce the numbers of children experiencing abuse and neglect.

A National Quality Framework for Early Childhood Education and CareTrend towards education based approach to early years

support is evident in WA

Social Data

Interventionist Policy

Income management:

$18.9million over two years committed by Federal Government. It has now expanded to Midland and Joondalup in WA.

Evaluations of CIM and VIM in WA commenced in April. The scheme has been expanded without evaluating the first trial sites (Cannington, Kimberleys). It has been very difficult to report on any data and evidence that is not anecdotal, due to the very small numbers of participants in the trials. Recent figures are:

Since November 2008 –

Cannington Kimberleys

CIM: 5 11

VIM 5 116

Social Data


Mandatory Sentencing:

Increase in prisoner numbers – 4,100 currently in a system designed for 3,462, recently modified to 4,217. Tougher sentencing laws mean an increase in prisoner numbers, and the need to invest more heavily in the prison system rather that preventative programs that help to beak the cycle of offending.

Prisons and police spending vs prison rehab services and programs spending to reduce re-offending – corrective services.

$665 million across forward estimates has been allocated the build or install 1,675 prisoner beds across WA prisons.

Grants to NGOs have decreased from $87,000 in 2008/09 to $45,000 in 2009/10

Social Data

Prison Population Effective 8th March 2009– In custody 4154 (632 over design capacity)

– Juvenile detention 152

– Community Corrections (Adults) 5670

– Community Corrections (Juveniles) 766

Aboriginal people = 41% of WA’s prison population, compared with:

SA : 23% QLD : 21% NSW : 20% VIC : 6%

Indigenous persons are 21 times more likely to be in prison than non-indigenous persons in Western Australia

29% of Aboriginal prisoners are located “out of country”

Costs of imprisonment range from $40-80k pp pa

Social Data

Interventionist PolicyMandatory reporting:It is a legal requirement in Western Australia for doctors,

nurses, midwives, teachers and police officers to report all reasonable beliefs of child sexual abuse to the Department for Child Protection.

On 1 January 2009, the legislation that governs mandatory reporting of child sexual abuse, the Children and Community Services Amendment (Reporting Sexual Abuse of Children) Act 2008 became part of the Children and Community Services Act 2004.

Social Data


Welfare Quarantining for Truancy:

Was also to be trialed in the Cannington district – but has not happened yet. Minister McSweeney has opposed the move, saying it may further disadvantage already struggling families.

Emerging Issues - Social

ISSUE 1 – PRIORITY

The consistent focus of State and Federal Governments is on support for young children and families as ‘preventative’ approach.

Neglecting adult based services re housing, mental health, drug & alcohol risks undermining that strategy, and these areas remain priorities for the community.

Emerging Issues - Social

ISSUE 2 – PRESSURESResponses to the pressures on people experiencing financial and

other hardship is ad hoc, and at times politicised, largely through specific, targeted grants, subsidies or concessions etc, causing greater complexity for those least able to deal with it

Eg seniors fuel card, free transport for seniors 9-3, Utilities Allowance,

Electricity (thermo, daily supply rebate, Power Assist, HUGS, HEP, UA, ER, FHP)

Consumer Law is being reformed nationally, which aims to legislate against unfair contracts, with potential benefits to mitigate pay day lenders, loan sharks and consumer credit pressures.

Changes in the environment landscape

Environment Data

Spending on energy and water consumption Domestic fuel and power costs the lowest gross

household income quintile (LGHIQ) more as a percentage of total income than any other income group.

3.9% of (LGHIQ’s) weekly expenditure is used for fuel and power. For the highest quintile it is only 2.6% .

As outlined in the recent state budget, essential service charges have increased:

Electricity Tariffs: 15% increase Gas Tariffs: 9% increase*Water Consumption and Annual Supply Charge: 10% increaseSewerage: 4.2%Drainage:6.66%

Environment Data

According to the Budget 2009/10 fiscal Outlook, residential customers will have a electricity tariff increase of:

25.9% for 2010/11

12.9% for 2011/12

4.1% for 2012/13

.

Environment Data

Increase2009/10Increase2008/09Increase2007/08Item

$23.73$260.83$19.00$237.10$30.78$218.10Water: Consumption and Annual

Supply Charge

$266.94$150.00$25.31Total Increase on Previous

Year

$21.87$542.36$17.22$520.49-$11.61$503.67Water:

Sewerage

$4.19$67.10$3.47$62.91$4.24$59.44Water:

Drainage

Estimated Financial Impact of Increased Charges in Budget on WACOSS Representative Household

$38.61*$467.61*$39.00$429.00$0.00$390.00Gas

$123.50$946.86$74.85$823.36$0.00$748.51Electricity

Utilities

Environment Data

Spending by the Sector“…non-government organisations are forced to allocate

significant resources to preventing the disconnection of essential services or ensuring reconnection. The Financial Counsellors Association of WA recently indicated that in the 2006/07 financial year, financial counselling organisations spent almost 30% of their emergency relief funding on assisting Synergy Energy customers facing, or having recently experienced disconnection. This was estimated to have cost approximately $1,359,000 .”

.

Environment Data

Climate Change & Carbon Pollution Reduction Scheme Costs of commodities such as food and other goods are likely to

be significantly impacted by the introduction of a future Carbon Emissions Trading Scheme. Such a scheme will mean that carbon-emitting businesses will be required to purchase licenses from a market in order to legally emit carbon dioxide. Inevitably, the costs incurred by emitting industries, which may include transport, electricity generation, agriculture and manufacturing industries, will be passed-on to consumers in the form of higher prices,.

.

Environment Data

Cost Impacts

It is envisaged that [The CPRS]… will add an additional $200 per annum to an average household electricity account.

Research by Langmore and Dufty into households demand responses to electricity price increases found a low price elasticity of demand: A proposed estimated price increase of $200 associated with carbon trading will only result in a $40 reduction in demand, still leaving household $160 per annum worse off.

.

Environment Data

Cost ImpactsRecent research for the Brotherhood of St

Lawrence by Dr Peter Brain from the National Institute of Economic and Industry Research found that 'the four household categories most adversely impacted in relative welfare terms by carbon pricing are poor households, unemployed households, retired aged pension households and households with children where government benefits exceed 30% of income.

.

Emerging Issues - Environment

ISSUE 1 – RESPONSE

The policy response to climate change will drive up not only energy and waters costs, but also the cost of providing services, due to embedded carbon costs. The sector needs to get ready by monitoring its consumption pressures and driving down its costs.

Eg audits, retrofits, service planning, design, travel etc

The same is true for vulnerable clients, who require support to undertake a similar response.

Emerging Issues - Environment

ISSUE 2 – UNCERTAINTYIt is certain that a response to climate change will be

forthcoming, but the nature of the response is still uncertain. It is possible that political dissent on the CPRS legislation could be used as a trigger for a double dissolution election.

It is more likely if that occurs for the election issues to focus on the economy than the environment

Questions?

Changes in the Services landscape

Services Data

Employment Services

All providers required to tender for services to be re-funded, inviting large multi-national companies to be part of the same tendering process. Many four and five star-rated WA services have lost their contracts, in turn affecting the rest of their services as they no longer have this income to count on.

Results of the tender process show that:72 per cent of Job Services Australia contractors are existing employment service providers.

They will deliver 93 per cent of services.

74 organisations delivering specialist services to help job seekers with special needs. This includes young people, the homeless, those with a mental illness and people from non-English speaking background.

27 Indigenous organisations delivering employment services.

88 not-for-profit contracts and 28 private sector contracts. A number of private sector contracts will see not-for-profit providers delivering services. This means the employment services share between not-for-profit and private sector providers will be similar to the current system.

There will be two new overseas entrants which deliver less than 2 per cent of employment services.

Services Data

Purchasing Quality Services (PQS) 2009 - PROCESS

The Service Group Review is first stage of the PQS process. Other stages are:

Individual Service Reviews

Service Provider Assessments

Invitation to Preferred Providers

Service Provider Applications

New Service Agreements by 30 September 2009

The Service Group Review (SGRs)

Provides an analysis of aggregated data reported by the sector to inform planning and future service design and contracting.

SGRs have been recently completed by DCP for The Family and Domestic Violence Accommodation and Support Services and Homeless Adults and Families, Private Rental Support, Advocacy and Meals service groups.

Attended by service providers and cross government state and federal depts.

Emerging Issues - Services

ISSUE 1 – INDIVIDUALISED

The State and Commonwealth Governments are both demonstrating an interest in moving towards individualised models of service purchasing, providing individuals with control of their needs assessment, purchasing, and choices. This lends itself to a fixed fee per client funding model, which has implications for the business model of service providers.

Eg childcare, disabilities, employment services

Emerging Issues - Services

ISSUE 2 – TECHNOLOGYTraditionally, our service delivery models have

been predicated on having an effective workforce. The not-for-profit workforce has been insecure even in good economic times for our sector. This is increasing pressure to reform service design and introduce more efficient and productive service technology, in order to move away from reliance on people.Eg aged care, rural mental health services,

Changes in the Sector landscape

Sector Data

Headline data653 not-for-profit organisations in the human services

industry36,512 paid staff80% of staff are womenApproximately $500m is pent on community services in

WA each year, including state government funding and grants, plus corporate donations and fee for service, but NOT including direct commonwealth funding

542,000 people volunteers each year in WA, representing 36% of the population

Sector Data

Contracting trends:

Still operating in a competitive tendering environment; an ad hoc mix of funds released at a Commonwealth level.

Community service organisations will have to get used to new ways of funding as more and more money come from Commonwealth pools. Without significant investment in the capacity of the sector to respond to these tenders (which are complex and have very short timeframes), many organisations will struggle to remain viable.

Sector Data

Jobs Fund in response to the GFC.

The recently announced $650 million is part of the Government’s Jobs and Training Compact. The Jobs Fund will support and create jobs and improve skills, by funding projects that build community infrastructure and create social capital in local communities. It was announced in response to the economic downturn to stimulate jobs, but community services should get used to these tender processes.

Sector Data

Community Housing Reform & Regulation

Changes to the regulatory framework for community housing encourage CH providers to apply for growth provider status. Those who fail to demonstrate their financial viability will not survive. This will see a smaller number of large housing providers with a greater stake in the market. Small housing providers are well placed to provide housing assistance to people with high and complex needs, in a way that large housing providers often may not be able to.

Sector Data

Community Housing Reform & RegulationProviders in the stipulated categories will be

obliged to enter into new funding arrangements, or renegotiate existing ones. In addition, providers will be obliged to undertake monitoring, recording, and reporting duties as part of those funding agreements. This will inevitably lead to an increased regulatory burden on providers, and additional financial costs associated with accurate compliance to that regulation.

Sector Data

Services in the Regions

Community Services in regional/rural areas

The ACOSS Community Sector Survey 2008 (2007 shown in brackets as comparison) showed a significant decline in the availability of regional services from 2007-2008

Only 2.6% of WA services deliver services across a whole region (6%).

10% provide services primarily in a regional centre (20%)

9% provide services primarily in a rural centre (21%)

15% provide services primarily in a remote area (2%)

Growth in regional Peaks and Networks

Pilbara Association Non Government Organisations (PANGO)

WACOSS Regional Networks

Sector Data

Royalties for RegionsNationals’ policy which sees 25% of State mining and

petroleum royalties directed into regional areas. There are three streams

Country Local Government Scheme. $500 million in funding over 5 years.

Regional Infrastructure and Headworks FundThis includes the Regional Grants Scheme. $40

million in grants 09/10 available to assist in creating infrastructure, services and community projects to contribute to community development, administered by RDCs

Regional Community Services Fund. Provides additional funding for existing services and establishes new ones. EG: Royal Flying Doctors and Bushchange Housing Grant.

Emerging Issues – Community Sector

ISSUE 1 – REFORM

The sector is undergoing reform, both intentionally and unintentionally. This includes mergers and growth, closures and shrinking, regionalising and nationalising agencies and networks, and

This is being driven by loss of funding, the rise of for-profit community services, capitalisation of opportunities, and the desire of government to rationalise/minimise its funding and relationships.

Emerging Issues – Community Sector

ISSUE 2 – POSITION

The positioning of the community services sector in WA is at a crossroads.

There is a new state government, and changing national landscape, with risks and opportunities. The future of the sector will be different and our position, and indeed the community of WA, will be shaped by the choices we make now.

Questions?

community sector leaders forum 29 may 2009 emerging issues

Documents