Turnbott cuts funding to community groups

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By Leith van Onselen

Readers might recall that in the lead-up to Christmas 2014, then Community Services Minister, Kevin Andrews, threw his moral compass out the window and informed a broad range of welfare agencies that they would no longer receive federal funding, with the homeless and the low-income housing sector particularly badly hit by Budget cuts.

This move angered many Coalition MPs at the time, who were not made aware of the funding cuts, and were then forced to explain them to angry constituents.

Thankfully, then Community Services Minister, Scott Morrison, restored the groups’ funding on an interim basis, although future funding remained up in the air.

Today, there are reports that Tony Turnbotts’s Government is once again cutting funding to community groups in a bid to reduce their influence over policy debates. From The Canberra Times:

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The Coalition has flagged about $1.5 billion in cuts to funding to health, Aboriginal groups and community legal centres, stifling their ability to lobby government on behalf of their members, the Australian Council of Social Service says.

The Human Rights Law Centre released a report titled ‘Safeguarding Democracy’ on Monday, which argued governments were eroding Australia’s democracy…

ACOSS chief executive officer Cassandra Goldie estimated about $1.5 billion in cuts had been flagged in the past two budgets. This included $800 million from health flexible funds last year, $500 million from Aboriginal and Torres Strait Islander programs and $270 million from social services in 2014.

“The combined effect of the savage cuts . . . requiring organisations to compete against each other to survive and the constraints in the contract against the ability to advocate has had a really serious, chilling effect,” she said.

Instead of attempting to claw back loose change from the most vulnerable members of society in a desperate bid to plug the Budget deficit, Tony Turnbott’s Government should instead attack Australia’s world-beating tax expenditures – such as superannuation, negative gearing, and capital gains tax concessions – which deprive the Budget of many billions of dollars of revenue, make the tax system less progressive, and overwhelming benefit richer, older Australians.

Unfortunately, with Tony Turnbott opposing meaningful reform to negative gearing and the CGT discount, in a bid to keep Australian house values inflated, he has limited the scope for Budget repair, which means that funding cuts to important social programs will remain the order of the day.

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So much for equitable Budget reform.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.