Working in Partnership: Labor's Approach to the Community Sector

3.30pm | May 13, 2019

FRIDAY, 10 MAY 2019

I acknowledge the traditional owners of the land upon which we are gathered and pay my respects to elders, past and present, and emerging – and to any First Nations people here this morning.
I’m grateful to the Riverwood Community Centre for hosting us here in their beautiful children’s playroom. They do terrific work, and I can’t think of a better place to discuss the importance of the community sector than here in a community sector organisation.
Since taking on this portfolio I’ve tried to talk with as many community sector organisations as I can. More importantly, I’ve tried to visit them. I think that seeing and understanding the places where organisations do their work is an important part of understanding that work. You can sometimes learn a lot about the lived values of an organisation from the spaces they create – and it can change the conversation to sit in a room that just earlier that day was used to meet clients or host a playgroup.
Since late last year when I started this role I’ve visited indigenous run organisations in remote northern Australia, and youth homeless services in the inner city, women’s refuges in regional NSW and neighbourhood centres in the outer suburbs of Brisbane.
There are two consistent themes that I’ve noticed across all of these varied organisations.
The first theme is the depth and diversity of capabilities in the community sector. The same, small government grant that is used in one place to help recently released prisoners avoid recidivism is used in another place to help elderly members of an ethnic community. I have met so many dedicated and hardworking people doing important work, often on the smell of an oily rag.
The second theme is the devastating impact that the present government has had across the country. At its best it has been indifferent. At its worst it has been wilfully destructive of the institutions and knowledge that have helped generations of Australians. The government has, in effect, sought to extend its ‘efficiency dividend’ to the community sector. That was a terrible mistake. It is only thanks to the resilience, resourcefulness and determination of people like you that the sector is not in worse shape than it is today.
One thing is clear – the community cannot afford three more years of what this government has given you for the last six years.
The Liberal’s approach to funding community organisations and frontline services has been a disaster. It has left the community sector – and the communities you serve – uncertain about the future.
Significant cuts to grant programs have left gaps in the provision of important services such as emergency relief and financial counselling – gaps which we have committed to filling.
Short grant contract terms have seen organisations unable or unwilling to offer secure employment to their workers.
The community sector has been cut out of government processes. Successive ministers have appeared disinterested in consulting meaningfully with the sector, its workforce, or those who rely on it.
The government hasn’t even been able to get the basics right. Tenders have run significantly overtime and the basis for funding decisions is often opaque and illogical
This has to change.
A Shorten Labor government will reset the relationship with the community sector.
Meaningful consultation
An important first step is actually speaking with the sector.
It is a practice we will take with us from opposition into government.
Labor’s Community Sector Partnership met for the first time in April 2015 and has been meeting ever since. It brings together leaders from the community sector including service delivery organisations, researchers, workers and their representatives, and service users. Together we have discussed priorities for policy reform and set a new agenda for working together to deliver positive social change.
Under a Shorten Labor government, the Labor Community Sector Partnership will continue to meet regularly to inform and advise on the best approaches to tackling new and emerging community issues.
Consultation doesn’t mean consensus. Although we agree about a great many things I can’t promise that we’ll always agree about everything, but we will hear each other. I believe that those informed and respectful conversations will make better and more effective policy.
A Shorten Labor government will also formally commit to new norms governing the government’s relationship with the sector.
In 2010, the then Labor government signed up to the National Compact with the Third Sector. This was an agreement to:

  • Document and promote the value and contribution of the sector
  • Protect the sector’s right to advocacy irrespective of any finding relationship that might exist
  • Recognise sector diversity in consultation processes and sector development initiatives
  • Improve information sharing including greater access to publicly funded research and data
  • Reduce red tape and streamline reporting
  • Simplify and improve consistency of financial arrangements including across state and federal jurisdictions
  • Act to improve paid and unpaid workforce issues
  • Improve funding and procurement processes.

The National Compact provided a solid foundation for engagement between government and the community and not-for-profit sector. The Liberals have allowed the compact to languish. It is a reflection of the regard they have held the sector as a whole.
A Shorten Labor government will work with foundation signatories as well as members of Labor’s Community Sector Partnership to reinvigorate and strengthen the National Compact with the Third Sector.
A better funding process
It is clear that the Liberals’ approach to funding community sector organisations is not working.
While Labor remains committed to honouring existing contracts with community organisations, we are going to take a different approach to funding the sector going forward.
Critical to this is working out what is going wrong. One of our priorities if we obtain government will be an assessment of all of the Department of Social Services’ funding models.
This is a first step in moving towards a grants program that is capable of identifying and properly funding some of the best that the sector has to offer. What would that look like?
Best practice will ultimately depend on the nature of the particular service we are partnering with the community sector to provide, but it should at least reflect a number of important principles:

  • We should seek to support diversity amongst small and large not-for-profits to ensure a vibrant sector which includes local community organisations capable of marshalling the resources of local communities.
  • The delivery of community services is largely not a commercial undertaking. In most circumstances it will not be appropriate for funding arrangements to be commercial in confidence For-profit providers should not receive funding for essential frontline services such as homelessness, domestic violence and emergency relief.
  • Advocacy should be recognised as a key component of the work of the community sector, and funding agreements should not include barriers to advocacy such as gag clauses.
  • There should be appropriate incentives for programs with a strong evidence base.
  • Where appropriate, funding should include proper indexation so community organisations do not see the real value of their grant drop away during the term of the grant.
  • Funded organisations must respect minimum award pay and conditions. Poor IR practices should be a relevant consideration in funding decisions.

Longer, more stable funding cycles
Best practice should also include a move to longer term funding for ongoing services. Frequent retendering of grants programs is unproductive. That is a criticism shared by community organisations, community workers and their representatives, service users, us, the productivity commission – basically everyone except the present government. 
A Shorten Labor government will move towards longer, more stable funding cycles.
This involves more than just longer contract terms – it requires investment to develop capability within the sector and within government.
Longer contract terms represent an investment of trust in an organisation. Organisations need to develop the internal systems capable of honouring that investment. The shift also requires active contract management. At its worst, frequent retendering serves as a substitute for proper contract management by an overstretched and under resourced Department. We need to address this dynamic by ensuring the Department of Social Services has a proper partnership with the delivery organisation and a strong understanding of the way the services are delivered.
Our public servants are more than up to the task. Empowering the Department to do this, though, requires us to work against six years of efficiency dividends, wage freezes, and neglect.
It is a challenge worth undertaking. The benefits of more secure funding extend to an organisation’s workers and end users. Changes to service providers are very disruptive to clients.
Labor also expects that longer contract terms should give organisations the funding certainty they need to adopt more secure employment practices, including full time and permanent employment where appropriate.
Recognising the significance of government funding
Finally, government must recognise and accept the central role it plays in the finances of many community sector organisations.
In some parts of the community sector, government is the only real purchaser of services. The amount government pays for those services is of systemic importance.
The funding provided to an organisation should reflect the efficient costs of providing the services it is contracted to deliver. This is not a licence for organisations to spend freely and expect the government to cover their costs. After all, a dollar that is wasted is a dollar that could have been spent helping vulnerable people and families. Labor recognises, however, that we should not be asking community sector workers to subsidise the provision of services. 
Community sector workers deserve to be paid a fair wage. Labor considers that a competitive dynamic driven exclusively by competition on Labor costs is ultimately unhelpful to the people the service seeks to serves, not to mention the workers who provide that service. It is a dynamic that can be avoided by ensuring tenders and grant programs are sufficiently and appropriately funded to provide for adequate and safe staffing levels, and fair and reasonable wages and conditions.
This is critical for the sector and intersects more broadly with questions of pay equity. The community sector is a female dominated sector. Almost a decade ago, many of the people in this room won a hard fought battle to have the value of this work recognised through the Equal Remuneration Order. We know that many older women retire into poverty. Without proper pay and conditions today’s generation of community sector workers may become tomorrow generation of community sector clients. We can’t consider our funding decisions in isolation – community sector funding has the capacity to have a real impact on the gender pay gap.
Where to from here
It took six years of chronic underinvestment by the government to bring the sector to where it is today. I’m not going to pretend that we can undo the damage overnight, but I am confident that together we can undo it.
The principles I’ve discussed today – fairer funding, better tender processes, meaningful consultation – are different ways of achieving the same outcome. They are all part of the development of a genuine partnership between government and the community sector. It is a partnership that the community deserves.