Sustainable Investment in an Essential Industry

At some point in our lives, each and every Tasmanian will have contact with or be supported by the community services industry. However, over the last two decades in particular, community services funding has fallen behind the real cost to community service organisations of doing their vital work — this places people at risk of not having their essential needs met.

The scope of industry’s work provides significant economic returns to Tasmania. It is part of one of the largest and fastest-growing industries in the state, employing just over 15% of Tasmania’s total workforce and contributing 13.1% of Tasmania’s Gross State Product (GSP) in 2021.

But our ability to continue the important work of supporting Tasmanians to participate in the educational, economic, social and cultural life of our state is under threat as demand for services increases. Years of underinvestment has seen financial reserves depleted, while current indexation rates do not allow organisations to keep up with the current cost of living increases.

Tasmania’s Cost Indexation for Government Purchasing of Community Services Report 2022 (Cost Indexation Report) (also available as a simplified fact sheet), prepared for TasCOSS by the University of Western Australia’s Centre for Public Value and made possible thanks to the financial contributions of the Network of Peaks, confirms the current indexation rates applied by the Tasmanian Government to community service organisations is not keeping pace with the increased costs of doing business, which in real terms translates to funding cuts.

The proposed solution, as put forward in TasCOSS’s 2023/24 Budget Priorities Statement: Sustainable Investment in an Essential Industry (supported by the Network of Peaks), is an immediate increase of 9.5% to indexation to all government procured community services in 2023/24 and at the same time, the introduction of a method of calculating indexation that results in sustainable funding for our industry in the long-term.

Without a sustainable community services industry, the wellbeing of Tasmanians and the state as a whole will suffer. Not only that, it makes economic sense to invest in our industry because of the economic growth it contributes and the savings to government over the longer-term.