Australia’s community service sector delivers essential services to people affected by poverty, disadvantage and inequality. The sector helps people meet basic needs, build and rebuild their lives after trauma or adversity, and find supportive communities of which to be part. While the sector has been navigating chronic underfunding and other challenges for many years, these have recently intensified.

This report outlines how the community sector experienced challenges during late 2022 and the impact on organisations and staff. Data was collected as part of the Australian Community Sector Survey (ACSS), conducted by the Social Policy Research Centre at UNSW Sydney, in collaboration with the Australian Council of Social Service (ACOSS) and the State and Territory Councils of Social Service of Australia.

The information comes from 1,476 community sector staff, including 318 CEOs and senior managers, who completed the ACSS during September and early October 2022. Participants were working closely with clients and communities, in organisations directly delivering services and supports, as well as in peak bodies, and other member-based or representative organisations (see Appendix 1).

Key recommendations:

• Fund the full cost of service delivery, including infrastructure, management, workforce development and administration costs in all Commonwealth grants and contracts for community services.

• Apply equitable and transparent indexation to all grants and contracts for community sector organisations, that reflects the actual increase in costs incurred by funded organisations.

• Undertake a comprehensive service needs analysis to better understand community need for services, drivers behind changing need and gaps in the funding of service delivery.

• Guarantee necessary funding for pay decisions made by the Fair Work Commission affecting the community sector. Pay and conditions for the community sector should be improving with the introduction of industrial relations changes at the end of this year.