Speech by The Hon Jenny Macklin MP

Impact of the economic crisis on social services

Location: Major Church Providers' Summit

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I would like to acknowledge the traditional owners of this land.

And thank you all for the hard work you are doing in these very difficult times. Your report (The Impact of the Global Financial Crisis on Social Services – commissioned by Anglicare, the Salvation Army, Catholic Social Services and Uniting Care) brings home to us the impact the global financial crisis is having on those who are already under pressure.

It predicts that services including employment, housing, financial counselling and emergency relief will be under great demand. It tells us what we know. Many Australians are under extreme financial stress. And you are the ones they turn to for help. Your grassroots work in the community brings you face to face with the consequences of rising mortgage stress, shrinking rental accommodation and the increasing cost of living. You see first hand the crippling social exclusion brought about by inter-related problems such as unemployment, poor skills, low incomes, sub-standard housing, substance abuse, high crime levels, poor health, disability and family breakdown. And you deliver programs that make a difference. A huge range of services. Food and material aid, care for children with disabilities, family and financial counselling, help for victims of child abuse and neglect, parenting advice and support, residential and crisis accommodation

As demand increases so does the pressure on these services. It’s becoming more of a struggle to meet the demand. This was already the case in a society undergoing rapid and comprehensive structural, social and demographic change. Now the very difficult economic conditions make your job and mine, more complex.

The Government knows many families, pensioners and carers are finding it tough going. That is why we announced the $10.4 billion economic security strategy to give pensioners and families immediate financial support and boost the Australian economy. Around four million pensioners, carers, people with disability and veterans and around two million families will receive lump sum payments from 8 December 2008, after legislation was passed in Parliament on Monday night. Of course more needs to be done. These payments are a down payment in the lead up to comprehensive reform of the pension system. They will provide additional support in the nine months between now and the introduction of long-term reforms following next year’s Budget.

As your report finds, housing pressures are affecting many families – those buying homes and those who rent. Rental vacancy rates are below two per cent in most capital cities.

To help relieve this shortage – and to help low and moderate income earners pay the rent, the Australian Parliament passed legislation yesterday to establish the Rudd Government’s National Rental Affordability Scheme. This will ultimately provide 50,000 new rental properties across Australia at a cost of $623 million in the first four years. It is a key component of the Rudd Government’s $3.7 billion housing package, which will boost rental stocks, help people save for their first home and lower housing infrastructure costs for some entry level housing.

The two key elements of the incentive are:

  • an annual Commonwealth Government incentive of $6,000 for each dwelling in the form of a refundable tax offset or payment; and
  • an annual State or Territory government incentive of $2,000 or more, for each dwelling, which will be provided through cash payments or in-kind financial support.

Up to 1.5 million households will be eligible to be tenants under the Scheme. If market demand remains strong, another 50,000 incentives for a further 50,000 affordable rental dwellings will be made available over five years from July 2012.

In addition to the Government’s $10.4 billion economic security strategy, we are providing more than $49 million to deliver financial management services. Last month I announced $3.5 million funding for existing Commonwealth Financial Counselling organisations to allow 41 organisations to continue to provide financial counselling services. The Government has invested an additional $20 million over four years in financial counselling and support for people under financial stress. This has doubled the Commonwealth Financial Counselling program; $2.5 million a year is also being provided to develop easy to understand and practical financial management information relating to mortgages, credit cards and hire purchase.

This expanded financial counselling package is a modest but important part of the Government’s commitment to supporting Australians doing it tough. The expansion of Commonwealth Financial Counselling means that working and non-working people are now better able to find a financial counsellor and to get help that can really make a difference. Sometimes it’s the difference between holding a family together, keeping your home, or working out how to deal with a credit card debt.

Your experience and your report shows that demand for emergency relief services is likely to increase with the impact of the global financial crisis. As a Government we stand here with you ready to help. This year around 700 organisations are receiving Commonwealth funding to provide emergency relief to people in financial crisis from over 1200 locations across Australia. Last year emergency relief providers helped 730,000 clients with assistance such as food, purchase vouchers, payment of utilities and rent, crisis accommodation, material aid, referrals and advocacy.

In these difficult times strong partnerships between the not-for-profit sector and the Government are essential. We need to take on the challenges together. The Government values the enormous contribution made by the community sector. We need you to tell us about to hear about the work you do on the ground. You connect us with people’s lives. You see what they are experiencing first hand. Your feedback is absolutely critical to policy development. That’s why we want to establish a better and more coordinated relationship with you. A strengthened sector can play a critical role in reducing disadvantage and boosting opportunities for social and economic participation.

Soon we will be releasing a report from the first stage of consultations on the National Compact which will guide a new framework to strengthen the relationship between the not-for-profit sector and the Australian Government. It outlines how we can work together through a National Compact. It will be underpinned by specific measures including a code of conduct, mediation approaches and agreed ways to resolve conflict.

All of you here know only too well that the challenges we face are complex. s you point out in your report, they will require co-ordinated, collaborative responses driven by a new partnership between government and the social service sector. I look forward to working with you to get through this challenging period and keep building a fair and caring Australia.