COMMUNITY
SECTOR
SUSTAINABILITY
ANALYSIS
STATE BUDGET 2011-12
May 2011
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SUMMARY
The 2011-12 Budget included $200 million over four years to fund the outcomes of the pay
equity case, resourcing the Government’s pre-election commitment. This is welcome,
however VCOSS expects that additional funds will be required to implement the Fair Work
Australia decision.
VCOSS was disappointed that the outcomes of price reviews, particularly in disability
services, were not funded. However, the commitment of $4.6 million over 4 years to support
sector sustainability, including the development and implementation of a Single Funding
Agreement will provide a valuable opportunity for the community sector and Government
to work together on whole-of-government rates of price indexation for the funded sector.
VCOSS also welcomed the Government’s commitment to meeting increased costs of
insurance for funded agencies.
VCOSS budget priorities
In 2011-12 Budget
VCOSS comment
Funding the full unit cost of
service delivery.
No budget announcements.
It is disappointing that there
continued to be a lack of
funding for the outcomes of
unit price reviews.
The introduction of whole-ofgovernment rates of price
indexation for funded
community service
organisations.
No budget announcements.
VCOSS looks to the current
development and
implementation of the Single
Funding Agreement as an
opportunity to introduce a
whole-of-government rate of
price indexation.
A commitment to fully fund
the outcomes of the Fair
Work Australia equal
remuneration case for
community service workers.
$200 million over 4 years.
Government needs to be
prepared that the Fair Work
Australia decision may
require significantly more
funds than currently
provisioned.
Investment in community
sector workforce initiatives
as part of a community
sector workforce strategy.
No budget announcements.
Initiatives in various
subsectors are underway but
there is the need for a whole
of sector approach.
The introduction of a
Portable Long Service Leave
(PLSL) scheme that
encourages highly skilled
workers to stay in the sector
while not diverting funds
from service delivery.
No budget announcements.
While the Government
provided in-principle support
prior to the election, no
additional funding has been
allocated to the scheme’s
establishment.
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INITIATIVES AT A GLANCE

$200 million over four years towards the forthcoming Fair Work Australia equal
remuneration determination.

$7.2 million over four years to meet the increased costs in community service
organisations’ insurance payments.

$4.6 million over four years to support the sustainability of the not-for-profit sector
including the development of a Single Funding Agreement, improving links between
funding and outcomes and tailored governance training.
VCOSS ANALYSIS
The cost of service delivery
Many areas of community sector service delivery are currently underfunded and this, in
part, can be attributed to the current pricing structure. A Department of Human Services
(DHS) Price Review Framework is currently in place, however this has not translated into
increases in unit prices because there is no guarantee of funding if a review finds that a
new price is required..
In 2003 DHS introduced a consistent rate of price indexation for funded services that then
flowed to those services whose funding transferred to the Department of Health (DH) and
the Department of Education and Early Childhood Development (DEECD). While this was
welcome, VCOSS is seeking a common rate of price indexation for all funded community
sector organisations, irrespective of the department funding them.
VCOSS is disappointed that the outcomes of price reviews, particularly in disability services,
were not funded in the 2011-12 Budget, and that the Government did not commit to a
whole-of-government rate of price indexation. However, we are pleased that funding was
announced to support the development and implementation of a Single Funding
Agreement as this is a valuable opportunity for the community sector to work with
Government around the development of whole-of-government rates of price indexation.
A strong community sector workforce
The 2011-12 Budget included funding of the Coalition’s pre-election commitment of $200
million over four years to fund the outcomes of the pay equity case currently before Fair
Work Australia. However, VCOSS expects that additional funds will be required to fund the
pay equity decision and the Government will therefore need additional resources.
VCOSS was pleased to see the child protection workforce initiatives announced in the
budget, but was disappointed that no funding was allocated to the whole-of-communitysector workforce strategy that was committed to prior to the election. This remains a priority
if the community sector is to meet impending workforce challenges and continue to deliver
services in partnership with government to improve the lives of all Victorians.
A sustainable community sector
VCOSS welcomes the $4.6 million allocated over four years to support the sustainability of
the community sector. Initiatives such as the development of a Single Funding Agreement ,
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outcomes based funding models, and tailored governance training have the potential to
not only improve the sustainability of community sector organisations but also to reduce the
regulatory burden, leaving more time for the core business of working with vulnerable
people and communities. VCOSS looks forward to playing a central role in the delivery of
these initiatives.
The $7.2 million over four years to meet the increased costs in community sector
organisations’ insurance payments will ensure that funded organisations will continue to be
able to meet their insurance obligations. This investment is testament to the strong
partnership and commitment to quality service delivery that exists between the sector and
government.
WHERE TO FROM HERE
The year ahead presents interesting challenges for the community sector including the:

implementation of Fair Work Australia’s equal pay decision

transition to the modern award – the Social Community and Home Care and
Disability Services Award 2011

development of the Single Funding Agreement

renegotiation of the price index for the next round of three-year funding and
service agreements, and

ongoing workforce challenges.
VCOSS looks forward to working with the Government on these demands but notes they will
require new and significant levels of investment and reform.
Once the Fair Work Australia decision is handed down VCOSS believes that significant work
will be needed to ensure that community sector organisations are funded to meet the new
rates of pay without compromising on the quality or quantity of service delivery.
VCOSS welcomes the opportunities that are presented through the development of the
Single Funding Agreement and a commitment to improved governance in the sector and is
perfectly placed, through the VCOSS Training and Development Clearinghouse, to support
this work.
VCOSS also looks forward to working with the Government on the development and
implementation of community sector workforce strategy. Such a strategy needs to be
developed in partnership with the community sector, particularly given the complexity and
varied nature of the sector and organisations.
While efficiency gains were prominent in the 2011-12 Budget there are minimal productivity
gains to be made in the community sector, aside from those achieved by progressing the
reducing the regulatory burden agenda. What we can focus on is building the capacity of
the community sector to not only meet the upcoming challenges but also strengthen the
role of the sector in Victorian communities.
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