New report shows SA Govt ‘second worst’ in nation for funding needy
New data crunching from the state’s peak social services body shows South Australia is falling behind in finding crucial funding for those most at risk or vulnerable – with fears more services will fall into administration without urgent help.
Peak industry groups fear SA will see more services like the Bedford Group and MS Society struggling to survive with a new report showing state government funding for organisations tackling issues like youth, domestic violence and homelessness is failing to keep pace with ballooning costs.
SA Government funding value had fallen 3.6 per cent over the past four years and South Australia’s indexation funding rate was the second lowest in the country this year, according to the South Australian Council of Social Service’s (SACOSS) Indexation for the SA Not-for-Profit Sector report.
“We are at a point where we can’t sustain the continuing erosion in the value of government funding,” SACOSS CEO Dr Catherine Earl said.
“We have seen two long-standing disability service providers go into administration this year, and I am fearful we will see more services lost if the funding issues aren’t addressed.
“Our sector organisations support some of the poorest and most vulnerable South Australians and provide services on behalf of government, so the government really has to put up the money to cover increasing costs because no one wants to see services cut.”
The report found South Australian government funding of services like homelessness, youth and mental health supports, community centres, programs, and domestic and family violence services was “inadequate”.
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Key Findings included:
- The South Australian government indexation rate of 2.5 per cent is the second lowest in the country this year;
- Community sector organisations have seen a loss of 3.6 per cent of the value of funding over the past four years;
- If no supplementary indexation is provided in the Mid-Year Budget Review, sector organisations face a further loss of one per cent of funding value;
- For every $1m of expenditure, an average community service organisation faced additional costs of $41,000, with indexation only covering $25,000 of these costs.
Earl said the report showed the gap between funding and increasing costs, and made clear recommendations to properly fund vital community services.
“Community sector organisations are very efficient and make limited budgets stretch a long way – but unlike businesses they cannot cover costs by increasing prices,” she said.
South Australian Multiple Sclerosis not-for-profit MS Society SA and NT appointed voluntary administrators in September, citing “sustained financial pressures” as the reason for its collapse.
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Its primary recommendation was that in the Mid-Year Budget Review in December, the state government must provide a minimum one per cent indexation supplementation plus an extra increment as a step towards addressing the shortfall in previous years.
This needed to come alongside a rebate for the additional costs of the portable long service leave scheme.
If there is no rebate for additional portable long service leave costs, a minimum of 1.8 per cent indexation (plus an increment to address the previous shortfall) will be required.
Treasurer Tom Koutsantonis said the not-for-profit sector provided an important community service and the State Government “is pleased to be able to support it as a key partner to support the delivery of vital services”.
“Over the course of recent budgets, we have progressively announced additional ongoing funding in excess of $33 million per annum to support the NGO sector in meeting additional costs associated with wage inflation and other CPI pressures,” he said.
“However, the budgetary pressures the sector faces are the same as those faced by the state government and every other South Australian business and household.”
While SACOSS noted the indexation in SA in 2025 to 2026 was the second lowest in the nation, average indexation over the past give years has been the second highest in the nation.
The SACOSS report was released at SACOSS’ Vital Support: Community Sector Funding and Workforce Conference at the Adelaide Convention Centre today.
