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Tuesday, 17 June 2003
Page: 16734


Mr Andren asked the Minister representing the Minister for Family and Community Services, upon notice, on 16 May 2002:

(1) Can the Minister explain how a salary increase of 11.5% granted to social services employees under the new Social and Community Services award in NSW on 28 November 2001 can be adequately covered by an indexed annual increase of 2.54% for the express purpose of wages growth as reported in The Australian on 18 February 2002.

(2) Is the Minister aware that (a) the wages of employees under this award have increased incrementally with each of the Industrial Relations Commission's safety net adjustments, (b) these incremental rises have absorbed the indexed increases in Commonwealth funding and (c) massive increases in other fixed costs such as insurance have further eroded any benefit to be had from the indexed Commonwealth funding increase.

(3) In light of the fact that the annually indexed increase in Commonwealth funding has been absorbed as intended, is it a fact that the community service groups who rely on Commonwealth funds do require additional funding to meet the increased costs of the new award.


Mr Anthony (Minister for Children and Youth Affairs) —The Minister for Family and Community Services has provided the following answer to the honourable member's question:

(1) Indexation is generally applied to all FaCS directly funded programs on an annual basis. This indexation covers for wage increases and other non-wage costs. Wage Cost Index 2 is composed of 90% for wage costs and 10% for changes in non-wage costs. The Commonwealth automatically provides this indexation to provide for the continuing real value of the payment. The Commonwealth provides this additional funding regardless of wage increases occurring. The SACS award was a significant wage increase since the last award decision in 1991.

(2) The Government is concerned about the impact that significant wage rises and increase in insurance costs have on Commonwealth directly funded services. In the disability sector FaCS is currently undertaking a number of trials including case based funding and the assessment and contestability trial. These trials are about getting the assessment, funding and the quality right. We are also working with services to identify ways in which long-term service viability can be improved. This research project aims to provide advice on appropriate indexation and demand factors for Commonwealth funding to the States/Territories in respect of accommodation and support for people with a disability.

(3) In June 2002, a one off payment of 4% of recurrent grant funding was made to Commonwealth directly funded disability employment services. Around 930 services were assisted nationally, including employment, advocacy and respite at a cost of $9.2 million. The Government maintains full funding responsibility for our directly funded services. Currently 40 Commonwealth services have contacted my department seeking assistance and we are currently assessing the impact of SACS award with the help of an independent financial advisor. Currently (as at 17 Jan 2003) seven organisations have received financial assistance with a further eight awaiting approval. I also agreed to a NSW request to roll-over $6.4 million of unspent SAAP funds last year and wrote to all NSW SAAP (403) services advising them to approach the NSW government for their share of unspent funds. My department is prepared to provide assistance if required to any directly-funded Commonwealth service to maintain current service arrangements as a result of these cost pressures.