Show me the money: NFPs brace for budget belt-tightening

As the for-purpose sector steels itself for possible budget funding cuts by Canberra and the states, veteran government engagement specialist Angus Crowther says significant amounts of cash are routinely set aside in politicians’ war chests.

He says the key to finding out just how much money has been kept in reserve is to scour budget documents for references to “decisions taken not yet announced.”

While federally this can include multimillion-dollar defence spending contracts which can’t be disclosed ahead of time for national security reasons, Mr Crowther says the descriptor is also used as a fig leaf for reserves of cash warehoused to be spent on initiatives and programs designed to aid MPs in their electorates – particularly in the lead-up to an election.

As the co-founder of advisory firm Tanck, Mr Crowther, who has previously worked as a government insider in Queensland, now uses his political expertise to advise social sector organisations on ways to achieve their funding goals.

He said the vast amounts of money held back by governments could potentially be tapped by NFPs and charities who do their research, ask the right questions and can demonstrate the impact their programs have at a local electorate level.

This means that the May 14 federal budget isn’t the “be all and end all” for NFPs, who have until the next federal election to plead their case.

“I tell my social sector clients, don’t believe this line that there’s no money in the budget for you,” said Mr Crowther.

“It’s about building political will and convincing these people [politicians] to invest in your programs.”

In what is expected to be a horror Victorian budget for NFPs, the cash-strapped government of Premier Jacinta Allan will deliver its financial blueprint two weeks earlier than normal on May 7.

Western Australia will follow suit two days later on May 9, and most other states are scheduled to deliver their budgets in mid-June.

Federal treasurer Jim Chalmers will hand down the Albanese government’s budget on May 14.

Amid the ongoing cost-of-living crisis, debate over housing affordability, homelessness and calls for welfare payments such as Jobseeker to be increased, sector organisations such as ACOSS, Mission Australia and Anglicare have been lobbying hard for Canberra to offer some budget relief.

Incidents such as the Bondi stabbing attack and anger over violence against women have also increased pressure on governments to invest more in mental health and anti-domestic-violence programs.

While the federal government is tipped to deliver some cost-of-living relief measures, Mr Chalmers has been careful to manage expectations, citing powerful international economic headwinds and global security issues.

Canberra has already announced a $50 billion increase in defence spending over the next decade, leading some NFPs and charities to ponder if their programs will be cut to help fund the commitment.

Victorian organisations are particularly nervous about their state’s budget, expected to be hit hard by massive transport infrastructure spending blow-outs and the government’s controversial decision to walk away from hosting the 2026 Commonwealth Games – resulting in a $380 million compensation pay-out.

Despite the difficult fiscal choices faced by Victorian treasurer Tim Pallas, the Victorian Council of Social Service (VCOSS) has urged Spring St to make the cost-of-living crisis a top priority in the 2024–25 budget.

The VCOSS pre-budget submission contains more than 250 recommendations, ranging from targeted assistance measures to prevent people falling into poverty to increased funding for community service organisations and calls for long-term policy reform.

VCOSS CEO Juanita Pope said it was possible for Victoria to address the cost-of-living crisis and pursue courageous systemic change that would create a “bedrock of equity for generations to come.”

“It’s not good enough to stop people falling through the cracks. We need to plug the gaps so there’s no risk of falling.”

Tanck’s Angus Crowther said the budget challenge was far from universal across the nation, with resource-rich states such as Queensland – which faces an election in October – and Western Australia in better fiscal shape than financially challenged Victoria.

With the Queensland election likely to be close, he said both sides will be keen to make commitments that could help them retain or gain government, presenting an opportunity for NFPs and charities to bend the ear of MPs and access much-needed funds.

“There is money that is deliberately put aside so that MPs have a little war chest that they’re allowed to play with on an electorate basis, to help them win that seat so that their party can win government,” said Mr Crowther.

“Sector organisations should be looking at what it is that they need and make a case through approaching an MP, knowing that going into an election that MP is going to have a pool of money that they can draw upon to make election commitments.”

Financially challenged Victoria, Mr Crowther said, is increasingly reliant on federal government co-funding to support programs – a trend NFPs and charities should take note of.

“You might draw the majority of your funding from the state government and they’re in a bad way financially, but there’s no reason why you couldn’t – and in fact I think organisations in Victoria must – build relationships with federal Victorian MPs that are Labor members and use those relationships to try to build a bridge for funding from the Commonwealth to the state.”

Community Council for Australia CEO David Crosbie described the state budget landscape across the nation as scary for the NFP and charity sector.

Speaking on Our Community’s Not-for-profit Agenda news webcast, Mr Crosbie said while some states were still doing well, notably WA and Queensland thanks to mining royalties, many states were struggling to balance their budgets.

“And as we all know, when governments are struggling to balance their budgets, they don’t look at their ongoing fixed costs. They tend to look at costs they can reduce and in many cases that means not continuing programs that have limited term budgets.”

Mr Crosbie said this could mean bad news for sector organisations reliant on limited term government contracts.

“If you’re funded for two or three years and the program has only existed for that period of time, then every time those programs come up for renewal, you’re at risk in the budget process,” said Mr Cosbie.

“I think there are a lot of programs at risk at a state level because of that fixed term contracting approach of government to our sector generally, because of increased competition, efficiencies of scale from commercial organisations, and just the very strong pressure on state and territory budgets at the moment.”

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