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Productivity Begins with Charity

8 July 2014 at 11:09 am
Staff Reporter
New ABS data released this week has put a question mark against the supposed dichotomy between building an economy and building our communities, writes David Crosbie, CEO of the Community Council for Australia.

Staff Reporter | 8 July 2014 at 11:09 am


Productivity Begins with Charity
8 July 2014 at 11:09 am

New ABS data released this week has put a question mark against the supposed dichotomy between building an economy and building our communities, writes David Crosbie, CEO of the Community Council for Australia.

Analysis of the 58,000 economically active Not for Profit organisations reveals they employ almost 1.1 million people, turn over more than $107 billion, have over $175 billion in assets, and contribute around 4 per cent to GDP.

What is really remarkable about these figures is the level of growth.  For over a decade the Not for Profit sector has been increasing in size by around 8 per cent each year even during the Global Financial Crisis.  This kind of performance blows most industry sectors out of the water.

It is important to remember that when talking about Not for Profits, we are talking about the charities and community organisations that strengthen our communities; our welfare organisations, schools, churches, arts, environment, housing, international development, health, sports and recreation groups.  They enrich our communities.  They are about having value and belonging, and ultimately they are the resilience that binds us together in good times and bad.

It is the work of Not for Profits in our communities that makes them some of the most trusted organisations and professional groups in Australia – way ahead of government departments, politicians, journalists, lawyers and most other groups.

Internationally, governments are recognising that Not for Profit are not only part of the solution to our social, spiritual, health and developmental goals, they are also a critical part of the economy.  Meanwhile, the Australian government is sending very mixed messages about the value it places on this sector.

Coalition Government rhetoric is all about the need to strengthen civil society, cut red tape and enable Not for Profits to better serve community interest and need.  The Government proposes to re-establish a Community Business Partnership group to be led by the Prime Minister and is seeking views about establishing a National Centre of Excellence that may function as a ‘super clearinghouse’ for the Not for Profit sector. Both these measures have been welcomed.

At the same time, the Government has dismissed most experts, most charities, and the Productivity Commission among many others in insisting it will dismantle the one regulatory body working to cut red tape for charities in Australia; the Australian Charities and Not-for-Profit Commission.  

As with other ill-considered policy positions, the Government’s approach is to abolish first and consider replacements later.  The likely replacement is the Australian Taxation Office – about as far removed from being supportive of Not for Profits as you can get.

Perhaps even more worrying is the recent announcement that the Liberal Party Federal Council has unanimously supported Tasmanian MP Andrew Nikolic in his call to prevent environment charities like the Australian Conservation Foundation receiving tax deductible donations from the community.  Apparently they are not ‘real charities like Red Cross or the Salvos’.  This kind of anti-advocacy approach to charity is the first step down a very slippery slope towards punishing civil society organisations opposed to the government policies and rewarding those prepared to offer support.

The anti-advocacy supporters believe that in short, helping the sick and poor is good (charitable), but advocating against a proposed Medicare co-payment that may prevent the sick and poor gaining the medical treatment they need is bad (not charitable).

The Government has also suggested that their primary role is to get out of the way of Not for Profits and promote a ‘profit or perish’ environment for all.  There is no real evidence anywhere that this approach promotes stronger not-for-profits or stronger communities.

Most of us, including those of us working in Not for Profits, understand that a stronger economy provides the bedrock for social cohesion and stronger communities.  Give someone a job and you are offering them a sense of value, a reason to get out of bed each day and become part of their community.  No-one I know argues against the value of work, but cutting charities does not promote employment.

The latest ABS data tells us that Not for Profits are in the engine room of our economy directly creating jobs for over one million Australians, increasing the value of our GDP and delivering substantial benefits to communities across Australia.

Rather than governments getting out of the way perhaps it is time they actually engage with the sector, listen to what would really make a difference and offer support through policies that strengthen Not for Profit capacity to generate jobs and serve our communities.

As the ABS data highlights, if we increase investment in our Not for Profits, we can deliver both a stronger economy and a stronger community.

The bottom line may well be that real productivity begins with charity.

About the Author: David Crosbie is the Chief Executive Officer of the Community Council for Australia (CCA), and a member of the Advisory Board to the Australian Charities and Not-for-profits Commission (ACNC).

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