Address to ACOSS Conference Seminar Series: Towards a National Compact

Location: ACOSS Conference, Sydney

Senator the Hon Ursula Stephens Parliamentary Secretary for Social Inclusion Parliamentary Secretary for the Voluntary Sector

Address to ACOSS CONFERENCE
Seminar Series: Towards a National Compact’

Friday 3 April 2009

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• Good afternoon and thank you for joining us in this forum discussion. Thank you Marilyn for your introduction.
• I would like to acknowledge the Gadigal people of the Eora nation on whose land we meet. I pay my respects to their wisdom, traditions and culture.
• I would like to acknowledge the fellow panellists who bring much expertise to this discussion:
  • Dr Bronwyn Dalton from UTS who has written widely on the role of advocacy of non-profits and on the relationships between non-profits and governments; and
  • Jill Lang, Director of QCOSS. I look forward to hearing from Jill on her perspective of the developing and now implementing the Queensland Compact, which was launched recently.
• You may be aware that I spoke at last year’s national conference on the crucial role of a strong, vibrant and innovative non-profit sector to work with government and business to develop a fairer and more inclusive Australia. I spoke of the need for change in the way government and the sector work together, to focus on outcomes. I spoke of the important role of non-profits in a flourishing democracy.
• I announced the Government’s commitment to move forward on its election promise to consult with organisations on the merits of a compact to develop an effective and respectful relationship. Many of you may have been involved in the consultations held to October last year – they were fruitful and worthwhile discussions and I gained much from hearing first hand what real opportunities a compact could deliver.
• My thanks go to ACOSS who worked with us to start the process and coordinate the consultations. The final report of the consultations captured a range of views and produced a helpful report which showed a strong desire for better ways of working and that there were real merits and practical value in pursuing the development of a compact or agreement.
• The first stage of consultation was intended to gain insight into the value of a compact to the sector, to be followed by further consultation with a longer timeframe – with a broader range of non-profit organisations. We see arts, the environment, sports & recreation, development organisations and local movements all part of this third sector agenda – this will drive consistency across government, recognise the value of the entire non-profit sector and enrich relationships into the future.
• The commitment to developing this relationship is more important than ever, in view of changing economic circumstances as well as emerging social and environmental challenges.
• The economic downturn is leaving many individuals and families vulnerable and is compounding the struggle of those already dealing with often severe and complex disadvantage.
• With the level of unemployment rising, demand for a range of community services is increasing. This increase in demand is being seen from traditional clients including the homeless, refugees and people living on income support.
• We are also aware that low and middle-income earners are increasingly turning to welfare agencies, with housing, employment and financial counselling services most in demand. Several major providers are telling us that demand for these sorts of services have doubled. Meanwhile the financial crisis has diminished the income streams of some charities as investment values decline and philanthropic activity has also reduced.
• In January, the Acting Prime Minister, Julia Gillard, also announced the establishment of a Community Response Task Force allowing the non-profit sector to deal directly with the Government about the impact of the economic downturn on vulnerable Australians.
• The Task Force is focused on a range of key issues including looking at what the community and financial sectors can do to support Australians experiencing difficulty with personal and household debt and how we can best assist those who find themselves facing redundancy or unemployment.
• It is also looking at options for regulatory reform in the non-profit sector to free up capacity in and focus on services.
• So our commitment to social inclusion will only gain importance in coming months as will our commitment to a meaningful dialogue with the non-profit sector, not just for now but into the long-term.
• So how could a compact build effectiveness in non-profit organisations in a downturn and enable government to also respond nimbly as well?
• To answer this we can look to established compacts, such as the UK, which is using its compact to do just this. The codes that are enshrined within the compact offer practical guidance to both sectors.
• For example, the Consultation Code says that government should consult the sector where new roles and responsibilities for the sector are being proposed. The Compact ensures public bodies work closely with sector and organisations have been mobilised to offer solutions and get the balance in new contracts right from the outset.
• Likewise, the code has guided the involvement of the sector in the formulation of new program design. This is particularly valuable when there is a sharp increase in demand for services and enables the services to get where they are needed.
• There are other good examples. The Community Code specifies that government promises to help create and maintain conditions that help organisations to succeed. This recognises that capacity building in communities is increasingly important in times of economic change and that sector organisations also have a responsibility to demonstrate outcomes of their work.
• The Procurement and Funding Code also provides practical guidance. For example, the funding agency must give a fair amount of notice on the end of grants. This enables programs to end smoothly and appropriate transitional arrangements are made possible.
• I think the lesson here is that principles, while symbolic, are important to drive a change in culture and mindset. We have to start our discussion at a different place to the past, which genuinely recognises the sector as part of the solution from the outset. This has great value in times of economic downturn.
• The UK Compact has been supported by a strong sector leaders and government compact champions. For example, Compact Voice, Friends of the Compact & the Office of the Third Sector. It’s backed up by sector capacity tools, information exchange, innovation and strategic policy development.
• It reminds us of the crucial role of leadership in any reform agenda; particularly reforms which guide our relationships and could lead to profound changes in the way sectors do business, as well prioritising reforms and identifying where capacity needs to be enhanced.
• Government can do much to develop a reform agenda – both through the compact and to recognise and reduce regulatory burdens facing non-profit organisations which are impacting on capacity to deliver services. We are already driving this agenda through COAG and across federal departments.
• We also recognise that some changes will take a long time. It will be important for champions in the public service to demonstrate leadership and challenge the status quo which is where so many of the interactions between government and non-profits take place.
• Likewise the sector being able to present a unified voice on priorities, issues and expectations. Leadership is needed in regulatory reform not only from government, but to drive joined-up and collaborative arrangements across the sector which could address some of these issues.
• The sector must be equal partners in the consultation and development process, meeting Government in partnership to work towards a compact that can deliver real results and satisfaction for both Government and the sector.
• There are exciting developments in this space. I encourage you to be involved in discussions about establishing an organised and coherent sector voice which genuinely represents the range of non-profits and addresses the strategic sector challenges which include the compact, the global financial crisis, climate change, tax and regulatory reform and workforce issues.
• Although there is more work to be done, the key community services champions are making a start to join together to create a basis for meaningful and ongoing dialogue between the Government and the sector
• To progress the next stage of the compact, I am proposing that a joint compact taskforce be established with representatives from the sector and government to negotiate the wording and structure of a draft compact.
• I also think that we should find an appropriate way for business to engage in this process. I urge you to have a look at the Centre for Corporate Public Affairs Report: Relationship matters: non-profit community organisations and corporate community investment, which is available on the FACHSIA website.
• This research found that the most critical challenge facing non-profit organisations is building their capacity to achieve their missions. But it also found that corporate community partnerships playing a lead role addressing these capacity constraints.
• Most of the work of non-profit organisations requires multi-party collaboration with government agencies, other non-profits and businesses. For example, many rely on volunteers from corporate partners and other businesses.
• The report found there is high demand among non-profits of all sizes to have access to the skills and capability that corporations can offer, transfer and embed. This includes capability in core management enterprise functions such as human resource development and training, finance, marketing, corporate governance, administration, strategy and leadership development.
• Before we proceed to a further consultation process, we would like to have some concrete framework for the sector to respond to.
• One of the criticisms from the initial process seemed to be that the theoretical concept of a compact was difficult for people to relate to.
• To gain real value from a second stage of consultations and to make real progress in the development of a compact we must have some definite direction, agreed by both government and the sector.
• The second phase of consultations on the development of a compact will be progressed later this year. It will be a more comprehensive process with more time for individuals and organisations to consider the issues. A report on the compact process is due to Government in December 2009.
• I am also proposing that we use innovative ways to consult on the draft principles and framework. We will be enhancing the Government’s social inclusion website to drive communities of best practice and ideas exchange to get the broadest range of views possible.
• You might like to have a look at the new-look social inclusion website which was launched yesterday at the Social Inclusion Board meeting in Adelaide at www.socialinclusion.gov.au
• .Linked to this process would be the development of a five to ten year work plan helping to ensure the development of a compact that achieves results and meets the needs of both government and the sector.
• Overseas experience demonstrates the need for strong compact champions within the third sector and government to raise awareness of the compact and to ensure longevity that goes beyond the electoral cycle.
• I know the development of a compact has the full support of the Prime Minister, the Deputy Prime Minister and Minister Macklin as well as Ministers from a diverse range of portfolios – environment, arts, agriculture, sports, regional development and immigration and citizenship. It is important that we drive whole-of-government commitment to the compact and we are working across offices to drive this commitment.
• Likewise I have been working the APS Commission to see what development opportunities are possible to develop culture change in the APS.
• We also recognise that we need a better understanding of the way the sector contributes to our economy and to our society. Establishing a robust evidence base will help all of us – government, the sector and academia – to work towards a compact that will strengthen capacity within the sector, promote innovative policy responses and provide strategies to improve support for volunteers.
• As you may be aware Minister Jenny Macklin opened the conference this year, announcing the new Financial Management Program and also the funding of the Australian Bureau of Statistic’s Non-Profit Institutions Satellite Account.
• The ‘Satellite Account’ seeks to provide critical information about the characteristics of the non-profit sector. The value of having a strong evidence base in making informed decisions is significant.
• This will complement and inform the Productivity Commissions study into the contribution of the ‘non-profit’ sector announced in March.
• The Productivity Commission study will assess how the sector’s contributions to Australian society are currently measured and whether these measures can be improved.
• I look forward to any questions and input you may have on the way forward in developing a compact between government and the non-profit sector, and hearing your views on the progress to date.
• A range of themes emerged from the first stage of consultation on the compact – but I am keen to hear what the priorities are: is it developing best practice and client centric services; is it the way we better value the non-profit sector, or enable them to advocate, or is it about mediation and conflict resolution? How can a compact enhance mediation and resolve conflict?
• These are all important but I’m also very interested in hearing how you think a compact could impact on disadvantaged Australians and communities and the organisations that support them.
• My commitment is to continue to progress an agenda which promotes mutuality, respect and partnership and I welcome your input into how we can achieve this.

Suggested forum discussion topics

The compact and the social inclusion agenda

• The Australian Government Social Inclusion Agenda means all Australians given the opportunity to:
  • secure a job
  • access services
  • connect with families, friends, personal interests and local community
  • deal with personal crisis and
  • have their voices heard.
• The compact represents the government commitment to work in partnership with non-profit organisations to build stronger communities and improve the lives of all Australians. The compact is part of the government’s reform program to build an Australia for the 21st century.
• The Government sees the compact as an important vehicle for advancing its social inclusion agenda (SIA). A strengthened non-profit sector will play a critical role in providing opportunities for social inclusion, social cohesion and increased economic participation, not only by providing services but also by providing advice to Government on policy and programs.

Themes for development of a compact with the third sector

• A compact should be designed which enhances capacity in the third sector for effective service delivery. The initial stage of consultations on the compact and continued discussions with the sector have highlighted a range of issues currently affecting the sector and how a compact could contribute to addressing these. Themes for the development of a compact, that have arisen through these consultations include:
  • Engaging communities and valuing the third sector
  • Developing best practice and client centric services
  • Advocacy for non-profit organisations and guidelines for government consultation
  • Valuing and encouraging volunteering
  • Mediation and conflict resolution
  • Governance issues – sector &government
  • Using technology to engage with communities
  • Respecting and valuing diversity
  • Accessibility
  • Sector leadership

Compact success depends on

• We recognise that the success of a national compact will depend upon:
  • a better understanding of the sector;
  • champions within the Government and the sector;
  • recognition and willingness by all to reform governance, capacity and accountability; and
  • recognition and willingness by all to engage in a continuous process of refinement of the Compact.

Community response taskforce

In late January this year, the acting Prime Minister, the Honourable Julia Gillard, also announced the establishment of a Community Response Task Force allowing the non-profit sector to deal directly with the Government about the impact of the Global Financial Crisis on vulnerable Australians.

• The task force met on 3 March this year. This was a very productive meeting. Discussions, in the context of the Global Financial Crisis, focused on regulatory reform issues affecting the sector and the capacity of the sector to meet higher levels of need.
• It was noted that regulatory and administrative reform are critical to building sector capacity. Minister Macklin emphasised the range of regulatory and administrative reform processes underway across the Government and requested advice from the task force on their priorities.
• The Community Response Taskforce focuses on social inclusion issues such as:
  • what Government and the community sector, working with financial service providers, can do to provide support to Australians experiencing difficulty with personal and household debt ;
  • what assistance can be offered to Australians facing redundancy or finding themselves unemployed; and
  • options for regulatory reform in the non-profit sector that could help agencies to focus even more on meeting the needs of vulnerable Australians by cutting red tape, streamlining contracts and compliance procedures and improving collaboration between Governments.

Third sector reform

• The compact is only one of a suite of third sector reforms. There are three broad elements guiding reform:
  • acknowledging the third sector as an equal and independent player in the Australian economy;
  • enhancing the role of the third sector within the community and recognising the value of volunteers within the sector; and
  • strengthening the sector to be an active participant, not only in providing services and support, but in representing the views of their constituents and actively contributing to decision-making and policy development.
• Consultation into the development of the national compact is occurring in parallel with a number of reform initiatives that are expected to have considerable impact on the non-profit sector and their continued contribution to the advancement of the Government’s social inclusion agenda.
• The Government has already committed to a range of reforms for the sector by restoring the sector’s right to advocate and participate in public debate by removing contract, or ‘gag’, clauses that restrain this role.
• The national compact is a visible way to improve the relationship with the sector; however it is not the only way.
• As part of the overarching social inclusion framework there are many related agendas that are being progressed nationally which will impact on the operating environment of the sector. Some of these are:
  • The Review of the Taxation System with the report to Government due at the end of 2009;
  • The National Reform Agenda, through the Council of Australian Governments (COAG), which will have a significant impact on the way services are delivered;
  • The Senate Economics Committee Inquiry into disclosure regimes for charities and the non-profit sector; and
  • The Council of Australian Government (COAG) Business and Regulation Competition Working Group’s (BRCWG) recent agreement to start work immediately on how to implement a standard Chart of Accounts and a nationally consistent approach to fundraising in order to address red tape reduction in the non-profit sector.
• As I mentioned earlier, work is also underway to develop better ways of measuring the social and economic impact of the non-profit sector in Australia. A critical piece of this work will be the Productivity Commission Study that has recently commenced. Findings from these will be fed into the development of the compact as results come to hand. Public submissions are invited and details of the study can be found at the Productivity Commission’s website.

Australian Bureau of Statistics’ (ABS) Non-Profit Institutions Satellite Account

• Minister Macklin announced yesterday the Government’s decision to fund the update of the ABS Non-Profit Institutions Satellite Account. As she mentioned good policy and decisions related to the sector must be based on robust evidence.
• Studies such as this will have much to contribute to providing a clearer picture of the size and composition of the Third Sector and will provide important evidence relating to the contribution of the non-profit sector.
• Non-profit organisations play an important role in the provision of welfare, social and other services in Australia. The scale and number of such organisations has been increasing and they have taken on expanded roles as governments seek to provide social and other services in more flexible, cost-effective ways. At the same time, economic statistics covering non-profit organisations have been quite limited.
• This research seeks to provide critical information about the characteristics of the non-profit sector. It will show the contribution of non-profit institutions, classified to type of non-profit institution and principal non-profit activities, to major economic aggregates such as GDP.
• In addition, this research will update our understanding of key questions of:
  • patterns of employment in non-profit institutions;
  • the contribution of volunteer labour, in terms of full time equivalent employment valued at market rates of pay; and
  • the contribution that non-profit institutions make to the economy.The outcome of the study will be valuable across all Commonwealth Agencies that depend on the non-profit sector to deliver key community services and will support the development of policy relating to the community across agencies and jurisdictions.
• The ‘Satellite Account’ will enable the continuation of goodwill and momentum of the non-profit sector reform agenda and will value add the work to be undertaken by the Productivity Commission on the size and contribution of the sector.

Volunteering

• In any discussion about the role and value of the non-profit sector, we cannot forget the amazing contribution of the millions of Australian who volunteer their time and their labour to support a vast array of community and emergency services.
• This was highlighted in the recent Victorian bushfires where volunteers were critical to support the community during and in the aftermath of the tragedy.
• I am pleased to announce that the Government has provided $74,000 to Volunteer Australia to help celebrate the role of volunteers during National Volunteer Week.
• National Volunteer Week is the largest celebration of volunteers and volunteerism in Australia, and provides an opportunity to highlight the role of volunteers in our communities and to say thank you to the more than 5 million Australians who volunteer.
• Australian volunteers are essential to society, and many charities would struggle to survive without the support of their volunteers. Australian volunteers contribute more than 700 million hours of community service to so many areas of society, including community health care, heritage and arts, environment conservation, emergency services, education, social justice and sports.
• National Volunteer Week provides gives us an opportunity to pay tribute to these volunteers who donate their time and energy to help others.
• In further recognising the crucial role of volunteers, the Commonwealth Government has invested considerably in supporting volunteers and those organisations that rely on them
• The Government’s Volunteer Management Program has allocated $16.7 million to volunteer resource centres to train and manage volunteers over the next four years. This funding will support volunteers and the non-profit sector.
• Further to this, the Commonwealth Government’s Volunteer Grants Program assists community organisations with funding for the purchase of equipment and facilities such as tools, computers, microwaves, kettles, sporting equipment and uniforms.
• In the last financial year the Government invested an additional $15 million over three years under the Volunteer Grants Program to further assist community organisations and their volunteers with their work, and to include the reimbursement of fuel costs.

Impact of a compact on the non-profit sector

• Exactly how the compact will affect the non-profit sector will depend on the second stage of consultation on a draft compact.
• The consultations on a national compact and the Government’s partnership with a new sector- led leadership group and the Community Response Taskforce will help to ensure agreement is reached on the best way forward in addressing sector sustainability.
• The combined efforts of:
• continued consultation;
• the reform agendas currently underway;
• recognition of the crucial role of volunteers; and
• the sectors efforts to form a unified voice can only lead to a greater partnership between Government and the non-profit sector, and ultimately ensure the long term sustainability of this much needed sector in Australian society.
• We will continue a way of working together that involves mutuality and partnership, and recognising the sector’s role as not only provider of essential services but a conduit between the community and Government and a voice for the Australian public.