National Strategy for the Care and Support Economy

SVA’s response to the draft National Strategy for the Care and Support Economy highlights the need to consider the distinctive nature of not-for-profit employers, opposed to other types of providers.

This document provides feedback to the draft National Strategy for the Care and Support Economy led by the Care and Support Economy Taskforce from the Department of Prime Minister and Cabinet.

• The submission endorses the three goals but urges the Taskforce to consider the incentives and constraints that not-for-profits face from the way they are funded and regulated by government
• The submission notes three key dynamics that are fundamentally different in Not-For-Profits as opposed to private businesses or government entities:
  • Inappropriate funding structures: Many government contracts contain features that work against the goals outlined in the draft Strategy;
  • Challenges raising capital: NFPs have particular challenges in raising capital.2 Unlike businesses, NFPs can’t raise equity from shareholders. Most aren’t in a position to take on debt to help them smooth their income, adapt their business model or invest in rebuilding;
  • Chronic underfunding of the full costs of service provision: SVA research, conducted in partnership with the Centre for Social Impact and Philanthropy Australia, demonstrates that Australian NFPs are consistently underfunded to deliver the full cost of services.
  • Examples of ways the government could strengthen the Care and Support Economy are also explored, such as funding for indirect costs, appropriate indexation, and the switch to more effective contracting and commissioning processes.