Budget Knocks Confidence – NFPs
Wednesday, 14th May 2014 at 11:56 am
Not for Profit sector confidence remains low despite some positive Federal Budget measures, according to the Community Council for Australia.
“Making savings in grant programs may be economically desirable, but cutting charities hurts us all in the long run.
“This budget appears to continue existing funding for the charities regulator, but provides no clarity for the future of regulation for the whole Not for Profit sector.
“Almost no-one in the charities sector wants to return to the bad old days of having the Australian Taxation Office as their default regulator, but that still appears to be the policy the government intends to impose on all charities. The continued uncertainty around the future regulation is having a negative impact on sector confidence.”
“We are pleased that the government has allocated $6 million for the new Community Business Partnership. This new body has the potential to help drive real improvements for all Not for Profit organisations in Australia and the communities they serve,” he said.
“CCA looks forward to working with the government to ensure the new partnership fulfills its potential.
Crosbie said that the charities and Not for Profit sector is critical to the economy and to all Australian communities.
Greens Senator Rachel Siewert addressed the effects of the Budget on the Not for Profit sector saying cuts to vulnerable people will lead to higher and higher demand for support and emergency relief by community organisations, putting more pressure on these community organisations.
“After the last round of parent payment cuts, community organisations and charities reported an increased demand for services and support. In this budget we see single parents losing important supplements and family payments, while people on Newstart or Youth Allowance face long periods without income support or on inadequate work for the dole programs.
“The Government is looking to save $240 million by reforming discretionary grant programs administered by the Department of Social Services. This is likely to lead to a large reduction in funding for important services like financial counselling and emergency relief.
“The Government has said they will provide five year contracts for welfare bodies, but as we have seen with the Environmental Defender’s Office, they’re not afraid to backtrack on these agreements, so this will offer little security to many organisations.
“I am especially concerned that advocacy groups will come under funding pressure as a result of their work holding the government to account for their cuts,” Senator Siewert said.
Social Services Minister Kevin Andrews says the Government is honouring its election commitments to support the community sector as part of the 2014–15 Federal Budget.
“The Abbott Government will invest $6.0 million over four years to re-establish the Community Business Partnership in 2014 to promote a culture of giving and volunteering in Australia.
“This partnership will see government, community and business leaders come together to develop practical strategies to unlock Australia’s full potential for philanthropy and reduce unnecessary regulation.
“The community sector is the engine room from which strong and resilient communities are built, and when empowered, develop their own solutions and respond to individuals’ and community needs.
The Government will deliver on its commitment to abolish the Australian Charities and Not-for-profits Commission, which created unnecessary and duplicative red-tape burden for a charitable and Not for Profit sector that is already highly regulated by government,” the Minister said.
As well, the Minister confirmed five year funding agreements totalling $1.5 billion will be offered to the more than 250 service providers that deliver Communities for Children Facilitating Partner Services, Family and Relationship Services and Family Law Services.
“The new five year funding agreements, which will begin on 1 July 2014, will help reduce staff turnover, ensure better service delivery, and enable longer-term agreements for these priority services,” he said.
Minister Andrews said existing grant programs will be consolidated into seven grant programs, and substantial funding has been committed across these programs for new and existing services.
“The new arrangements include the creation of the Families and Communities Program; Disability, Mental Health and Carers Program; and the Housing and Homelessness Program; in addition to the existing Home Support Program; Residential and Flexible Care Program; Workforce and Quality Program; and Ageing and Service Improvement Program.
“These changes will make it easier for organisations to apply for funding and allow them to focus on delivering important services in the community instead of filling out forms,” the Minister said.
Accounting firm Moore Stephens says one of the Budget benefits for Not for Profits is the decision not abolish the Fringe Benefits Tax (FBT) capping concession for Not for Profits.
“In a variation from what was anticipated, Not for Profits can breathe a sigh of relief in respect of the anticipated abolition of the FBT capping concession,” according to an analysis by the firm.
“The cash value of benefits received by employees of applicable Not for Profits will continue to be exempt from FBT up to the applicable threshold. Additionally, these thresholds, historically $30,000 or $17,000 depending on the entity type, will increase to factor in the increase in the FBT rate.”
As well Creative Partnerships Australia will have its funding continued.
The Government will provide $5.4 million over four years to continue the operation of Creative Partnerships Australia (CPA). CPA generates private sector support for the arts through encouraging philanthropy, sponsorship and corporate volunteering.
Treasurer’s Budget speech is HERE
The details of the Budget’s Social Services package can be found HERE
The Budget Papers can be found HERE