New economic research shows up to 12,000 community service jobs are at risk due to the Federal Government’s failure to confirm whether federal funding for community service organisations will be maintained.

The new report released today by the Australia Institute’s Centre for Future Work demonstrates the economic importance of Commonwealth pay-equity funding at a time when these community services are critical to Australia’s pandemic-damaged economy.

Key Findings:

• The Federal Government is yet to confirm whether it will continue $576.5 million in supplemental funding for federally-supported community services, currently set to expire in the current (2020-21) financial year.
• This special funding was part of the Commonwealth government’s legislated 9-year timetable to phase in pay equity wage adjustments in community services.
• If this funding is not renewed (either by incorporation into a higher level of core funding for affected organisations, or through the extension of explicit pay equity supplements), the resulting funding shortfall will undermine and reverse the progress that has been made toward pay equity since the 2012 pay equity order.
• The loss of federal pay equity supplements would inevitably produce some combination of staffing cuts and wage cuts, as organisations respond to such a significant loss of funding.

“If experienced fully through staff cuts, the end of federal supplements would result in the loss of close to 12,000 jobs in federally-supported community organisations,” said Dr. Jim Stanford, director of the Australia Institute’s Centre for Future Work.

“Alternatively, if the brunt of the funding cut is experienced through effective wage reductions it would reduce annual incomes for federally-funded community service workers by as much as $15,000 for full-time staff.

“To put up to 12,000 community service jobs at risk, or force community service workers to take a $15,000 a year pay cut in the middle of global pandemic and an economic recession is both heartless and economically self-destructive,” Dr. Stanford said.

The Centre for Future Work report also found that the broad health and social services sector (which includes most of these community service organisations) has reduced the gender pay gap by more than any other industry in the years since the pay equity reform was announced.

Those past gains will be undermined and reversed unless federal funding consistent with new pay equity norms is quickly confirmed.