‘Perfect storm’ as SA’s not-for-profits battle rising costs and increased demand for services
The rising cost of living crisis is putting South Australian charities and community organisations under pressure to continue providing services and care to those who need them.
South Australian charities and community organisations say they are being pushed to breaking point as the cost-of-living crisis drives up demand for help while squeezing their own budgets. From food relief services to aged care providers, many not-for-profits are fielding record calls for assistance as households struggle to cover rent, power bills and groceries.
At the same time, inflation is biting hard on the sector itself. Rising energy, wage and insurance costs are eroding operating margins, leaving organisations with less capacity to respond just as the community needs them most. Leaders warn that without stronger funding support, smaller providers in particular face an uncertain future.
The situation has been described as a “perfect storm”: more South Australians are turning to charities for basic survival, but the organisations they rely on are fighting their own financial battles. State and federal support measures have helped, yet many not-for-profits say indexation and one-off grants are failing to keep pace with real costs.
Lutheran Homes Group (LHG) chief executive officer Tim Chia says the cost-of-living crisis is “very real, not only for aged care providers but also for residents and staff”.
To counter rising costs, LHG has implemented a strategic approach to procurement to ensure value for money outcomes. “This helps us manage costs while maintaining high-quality care,” Tim says.
“Where possible, we also work to secure additional benefits for our staff through supplier agreements, to help ease the pressures they face in their own households.”
You might like
The Fair Work Commission’s Annual Wage Review for 2025 resulted in a 3.5 per cent increase to the National Minimum Wage and award minimum wages. This brought the National Minimum Wage to $948 per week or $24.95 per hour for full-time and part-time employees. For casual employees, the rate is $31.19 per hour (including the 25 per cent casual loading).
While the award means rising costs for employers, Tim says it also ensures a better standard of workforce.
“We view the award wage increase as a positive development,” he says.
“Our staff play an essential role in the lives of residents and their families, and anything that better supports our workforce and their families is welcomed.
“While there are some cost implications, these increases strengthen our workforce and, in turn, support the delivery of high-quality care.”
Stay informed, daily
The combination of rising living costs and significant sector reforms, including the new Aged Care Act and Standards, are creating additional complexity and financial pressure for providers.
“Implementing these reforms requires investment in people, systems and processes, all while managing existing cost pressures.” Tim said.
“Despite this, LHG remains resilient and our priority continues to be providing high-quality care for residents.”
This resilience has seen LHG announcing the business is expanding beyond South Australia, with the acquisition of two regional Victorian aged care communities.
“Our expansion into Victoria is part of a long-term growth strategy to strengthen our services and ensure sustainability,” Tim says.
“Achieving a certain level of scale is widely recognised as supporting long-term sustainability, and these new sites are in large regional centres where there is ongoing demand.
“This move builds on our strong financial performance over the past two to three years and will allow us to extend our high-quality services to more communities.
“This expansion has been underpinned by a strong financial position and a commitment to continuous improvement. Over the past three-and-a-half years, we have grown our revenue from $40 million to $120 million, underpinned by strong surpluses and now have assets approaching $500 million.
“This gives us the confidence to continue investing in our services and exploring further opportunities for growth.”
LHG is a sponsor of the South Australian Business Index lunch and networking event, which announces the top 100 South Australian businesses and delves into the insights it provides about the state’s economic future. Purchase your tickets now for Friday, 17 October at the Adelaide Convention Centre.
