Jenny Macklin (Jagajaga, Australian Labor Party, Minister for Families, Housing, Community Services and Indigenous Affairs) Share this | Link to this | Hansard source

by leave—New research released today confirms what community organisations have been telling us since the global economic crisis struck last year. More Australians are under financial stress and are turning to community organisations for help. At the same time, these organisations are experiencing a reduction in investment income, corporate funding and funding from philanthropic trusts and foundations.

The report commissioned by my department and undertaken by the Centre for Corporate Public Affairs examined the impact of the economic downturn on not-for-profit organisations. Its findings confirm the anecdotal evidence many members are hearing in their electorates. Sixty-five per cent of community organisations reported an increase in demand for services as a result of the economic downturn. And, in the coming year, they expect things to be even tougher. Almost all community organisations expect an increase in demand and most anticipate a further drop in donations. As more low- and middle-income earners seek the services of welfare agencies, they are expecting a spike in demand for emergency financial assistance and counselling, employment services and housing. For the organisations on the ground these are more than just statistics in a report. For them there are faces behind the numbers—each person’s own story, the circumstances of despair which bring them to the doors of emergency relief providers.

We know from earlier research that more than half the people seeking emergency relief are women. Nearly all are on income support. Some are homeless. Most asked for help because they had run out of food or money. And we know with the onslaught of the global financial crisis that many more families are being buffeted by rapidly changing events beyond their control. Many are struggling because they have lost their jobs or have had their working hours reduced. In such cases, suddenly more than half their income can be consumed by rent or mortgage repayments. Then there is not much left to buy food or pay the bills.

The government has acted promptly and decisively to support Australians through these difficult times. We have doubled emergency relief funding and provided funding for more financial counsellors. From 1 March 2009 until 30 June 2011, current funding to the emergency relief program has been doubled. That is an increase of more than $80.4 million. Eleven million dollars of emergency relief funding was distributed immediately to providers back in March to meet urgent demand.

Today I can announce the allocations of extra funds to charities for the next two years. Emergency relief funding will flow to 689 organisations working in 1,299 locations across Australia. This will help very vulnerable Australians in 297 locations across New South Wales, 257 in Victoria, 254 in Queensland, 184 in Western Australia, 177 in South Australia, 38 in Tasmania, 18 in the ACT and 76 in the Northern Territory. Because it is difficult to forecast emerging areas of need in an economic downturn, we are building the capacity and flexibility to respond quickly where we have to so that we can deliver help when and where it is most needed. For example, in communities which might be dependent on mining or manufacturing, a sudden downturn has an impact on everyone. It then puts enormous pressure on emergency relief services.

To make sure we can move emergency relief funding quickly to where it is needed, we are putting $10 million into key community organisations so that they can use their local knowledge and distribute emergency relief funding through other community organisations to get help to people when they need it quickly. We are also investing $2 million to improve training opportunities for the people who are the face of emergency relief—the workers at the frontline. All up, this means that over the next two years there will be more than $120 million in emergency relief funding out there in our communities, helping an estimated one million people a year.

But we know that, to get people back on their feet for the long term, we need to do more than just fix their immediate problems. We want to equip them to take action early when faced with personal financial difficulties to reduce the likelihood of problems escalating. This means using the capacity and reach of emergency relief organisations to connect people who are struggling financially with other services.

We do want to harness the front-door capacity of emergency relief services to build ongoing financial capability and resilience. That is why we are funding 50 new financial counselling positions for the next two years—to try to break this cycle of financial crisis. This brings the total number of government funded financial counselling positions to 121 across Australia.

We are also investing $50 million over two years in innovative money management projects. This will include no-interest loan schemes or matched savings schemes to help people build financial self-reliance. Details of the organisations to be funded under this program will be announced very soon.

What I have spoken about today builds on our commitment to rebuild our social infrastructure, whether it is our unprecedented investment in social housing and in our schools or delivering long overdue pension increases to over three million age pensioners, people with disability and their carers. Our commitment is to shape a nation which shares its wealth to create opportunity for all, which tackles disadvantage and brings the vulnerable in from the margins and works for the betterment of all our people.

I ask leave of the House to move a motion to enable the member for Cook to speak for seven minutes.

Leave granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent the member for Cook speaking for a period not exceeding seven minutes.

Question agreed to.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

I welcome the opportunity to rise to respond to this ministerial statement. The coalition welcomes the re-announcement of the increased support for the emergency relief program providers announced by the minister here again this afternoon. In particular I draw attention to her comments on financial counselling and measures related to financial management and support for those individuals.

These funds supplement the existing activities of these community and charitable organisations who, frankly, do an outstanding job in all of our communities. Their task, though, as we have just heard and as we all know from our own experience, has become more difficult, not only because the economic downturn placed enormous pressure on their ability to raise funds from their own supporters but also because the circumstances of economic downturn have resulted in an increase in the demand for their services right across the board. We extend our thanks to all of these organisations for their tireless efforts. We thank them for what they do, in many many cases on a voluntary basis.

It is a sad truth that these organisations are suffering from the forces that I have already mentioned and which were outlined in the report and research that the minister referred to. But they are also under threat because, I think, a traditional notion of community in our society is also under threat—replaced by a swelling notion that the state is the organisation that must step in on all of these occasions. I think a vitally important task we have is to seek to build, as the minister said, the social infrastructure. The social infrastructure we really need to build is in the institutional capacity of the not-for-profit and voluntary sector. So to that end I welcome the statements of the minister to provide that funding support, because these organisations have been the lifeblood of our community for hundreds of years and we want to see that continue. We want to see them become stronger and we want to see them be able to do the things that we all rely on them to do.

Times such as these also provide a practical and necessary reminder of our need to reinvest not just our funds but also ourselves in the health and wellbeing of these vital organisations. In my own community in the Sutherland Shire we run an event each year which basically tries to support all of the community organisations in one event called the ‘Cook Community Classic’. We seek to raise the awareness of the voluntary organisations as well as raising funds for those organisations at the same time.

It is also important to address the issue of the demand which these organisations are facing and to look at what we can do to lessen demand for these services. That obviously goes to the issue of how people are coping with the cost of living in their communities, particularly at this time. The coalition has supported many measures announced by the government. In this place yesterday I indicated and announced again our support for some $3½ billion worth of measures, particularly in the areas of housing, homelessness and housing affordability. So, while there may be much debate about what we disagree on in this place, I think it is important for all Australians to understand that there are some things that both sides of this House can agree on.

Those matters we probably do not agree on are in the area of how we are managing some of these cost-of-living increases that are being imposed on individuals and families around the country. Of course we are seeing rising childcare costs. We are seeing increasing prices and threats to increase the prices. There are pressures that will come from higher taxes and higher interest rates, and these forces of higher taxes and interest rates will be caused by the need to pay for all of this spending that is taking place—billions and billions of dollars. This is where the coalition obviously has a different view to that of the government.

The good news is that Australia is weathering the storm better than most if not all of the developed world. It is important that we celebrate that fact—and understand why it is happening and acknowledge why it is happening. I believe, as many do in an emerging consensus, that the government significantly overstated the impact of the global financial crisis on the Australian economy early this year and late last year and have refused to acknowledge the reasons why the Australian economy has weathered this storm. This is a convenient oversight because if you do not acknowledge that it is the strength of the economy that we took into this crisis—that it is the strength of our financial system—and if we do not acknowledge the strength of our resources sector in particular and our much greater terms of trade, and that these things have contributed significantly to our ability to weather this storm, then you keep spending money. You keep spending money, you keep running up debt and you keep rolling out what is the single largest pork-barrelling exercise in our nation’s history.

The net effect of this approach is higher interest rates, and the Governor of the Reserve Bank flagged this last week. If the government are not willing to consider that in light of the fact that things with the Australian economy are not as bad as they said they would be, in cyclonic terms and in this place, then they risk the threat of higher interest rates. Higher interest rates are bad enough as it is, and we expect, according to market forecasters, rates to rise by around two percentage points over the next 12 months. That is almost $400 a month for the average mortgage for a family. It is bad enough that interest rates will rise but it is even worse that banks are starting to decouple their movements in interest rates from the traditional movements in official rates by the Reserve Bank. One of the reasons I believe this has been made possible is the appalling lack of competition amongst banks for providing mortgage finance in this country.

Under the coalition one in five mortgages were provided by the non-banking sector. It is now down to less than one in 10. You would think there should be a plan for this, and the coalition has outlined a plan for this in relation to the guaranteeing of AAA-rated mortgage securities. But this morning when the Minister for Finance and Deregulation was asked whether the government had a plan to deal with the appalling lack of competition, his answer was, ‘We have no plan.’ So, while I support the measures outlined by the minister today, I draw attention to the issue that mortgage holders are going to be paying more for their mortgages. If we do nothing to address the chronic lack of competition in our banking sector—which is at historically low levels—then people will pay more for their mortgages, and the pressure on all the organisations that we have referred to will be greater, not lesser.