Not For Profit: Funds to follow policy review

09/01/2008 - 22:00

Some charities and non-government agencies in the human services sectors are set to benefit from a boost in funding, after a revision of the state government’s indexation policy delivered an extra $36.3 million for organisations over the next three years.

Some charities and non-government agencies in the human services sectors are set to benefit from a boost in funding, after a revision of the state government’s indexation policy delivered an extra $36.3 million for organisations over the next three years.

 

Those agencies currently funded by the government will receive a one-off back payment to make up for a funding shortfall during the past three financial years, which followed the introduction of an indexation formula in 2004. 

 

In addition, the government has committed to assessing the indexation rate each year at the same time it delivers the mid-year budget review.

 

The decision follows the release last month of an independent report by PricewaterhouseCoopers into the indexation policy, which found that funding had not kept pace with increasing costs.

 

National Disability Services WA state manager Carlo Calogero said the back payments would improve service delivery for agencies that had been affected by a cumulative shortfall in funding since 2004.

 

“What it does is, it gets the indexation right, so we can maintain our current level of services,” he said.

 

Mr Calogero said the new funding calculation would better compensate for increases in the consumer price index and the wage price index.

 

“It will help agencies with workforce planning issues to set the right pay levels for staff,” he said.

 

One of the problems with the previous method of funding was that the estimated CPI and WPI levels used in calculating the budget were often lower than actual levels, resulting in a funding shortfall.

 

In addition, the calculation changed each year, sometimes using the budget estimates and other times using forward estimates.

 

Activ chief executive Tony Vis said the new system of determining the indexation rate would be an improvement, and would allow Treasury to deliver more accurate costings.

 

“As an agency, we view it very positively, although we will wait until the process is complete to give our opinion,” he said.

 

However, Mr Vis said Activ would continue to face funding challenges.

 

“In terms of our core service – accommodation – we’ve got declining terms of trade. Funding has failed to keep up with increases in costs,” Mr Vis said.

 

“You can only be sustainable for so long, and you have to bring in funds from elsewhere to make ends meet.”

 

The disability sector has also struggled with staff shortages in recent years, highlighted in a report by the Chamber of Commerce and Industry WA in May 2006.

 

The report recommended that a coordinated workforce plan be adopted, as well as salary increases for staff.

 

Another independent report, by Shenton Park-based Cumberland Consulting Group, released in December 2006, found disability support workers in WA were earning $50 less than their counterparts in other states.

 

To address this, the government has introduced a $33 per week increase for disability support workers.

 

The Disability Services Commission is currently arranging a back payment for the past three financial years for the 116 non-government organisations it funds.

 

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