Budget 2011: What’s in it for you

We explain what the budget means for aged care, and why the boss of one major not-for-profit is worried.

By Stephen Easton

The Federal Budget lists five measures related to aged care, including three that involve spending a total of more than $25 million, and one that treasury tips will save around $200 million over five years.

In terms of spending, $4.4 million will pay for a new aged care facility in Hughenden, Queensland this year and $1.1 million will support the Ambassador for the Ageing for a further four years.

Another $16 million has been allocated to extend the aged care viability supplement, which supports providers of aged care for Indigenous people, the homeless and in rural and remote areas.

Despite the sector’s overall disappointment with the budget, Minister for Mental Health and Ageing, Mark Butler, explained that the viability supplement will benefit more than 300 aged care providers.

This, he said, would be enough to keep struggling parts of the sector going while the government mulled over the reforms to be recommended by the Productivity Commission next month.

“The 40 percent increase in the so-called viability supplement, introduced as part of the 2009-10 Budget, will be extended for one year, allowing the Government to consider long-term reform options for the sector,” he said.

The taxpayer will break even on the fifth measure, a dedicated unit within the Department of Health and Ageing (DoHA) to improve health and aged care outcomes in regional Australia, since it’s funding comes from within the existing DoHA budget.

The dedicated unit will provide advice to the public and government agencies “on regional health and aged care matters”, according to a Budget document, as part of the Gillard government’s commitment to regional Australia, extracted at the negotiating table by indepedent MPs Rob Oakeshott and Tony Windsor.

This one goes out to the non-profits

One budget measure was welcomed by not-for-profit (NFP) organisations: the establishment of a much-anticipated single national regulator to provide relief from the complex regulatory burden placed on them.

Nearly $54 million was allocated to run the Australian Charities and Not-for-profits Commission for the next four years, although negotiation with the states and territories through the Council Of Australian Governments to complete the process is still ongoing.

Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, said the new regulator’s first task would be “determining the legal status of groups seeking charitable, public benevolent institution, and other NFP benefits on behalf of all Commonwealth agencies”.

“The Commission will also implement a ‘report-once use-often’ reporting framework for charities, provide education and support to the sector on technical matters, and establish a public information portal by 1 July 2013.” 

“A Commissioner will be appointed to drive all the changes, who will be fully independent and report directly to Parliament via the Assistant Treasurer.”

Mr Shorten also announced reforms to rules for how tax concessions are used by non-profits, to encourage them to use money generated through “unrelated commercial activities” only for their primary “altruistic purposes”.

“The government strongly supports the provision of welfare, education, sports, arts, worship, culture and community services provided by NFPs through access to significant tax concessions,” he said. 

“But the government believes it is important that charities use their tax concessions only to assist disadvantaged people and not for unrelated commercial activities.”

But Martin Laverty, CEO of one of Australia’s biggest non-profit health and aged care providers, Catholic Health Australia, used his budget response to warn that any new legislation affecting NFPs must be carefully thought out. 

Above: Catholic Health Australia CEO, Martin Laverty, is worried about future changes to tax rules for non-profits.

“The proposed new charity tax is unheard of,” Mr Laverty said. “Designing it to enable essential not-for-profit hospital and aged care services to continue as usual is our priority for this Budget.”

“We welcome government commitments that commercial activities generating revenues that are applied to charitable purposes will be exempt from tax, but defining this to prevent it from resulting in a cut to health and aged care services is essential.”

Mr Laverty also noted the lack of any new funding for the aged care sector but like other industry leaders, had not expected much with the Productivity Commission yet to hand their final recommendations for large-scale reform to the government.

“The Productivity Commission report that is due in coming months will detail a blueprint for the future of aged care. This budget was not the place for major announcements, but later this year the time for aged care action will have arrived.”

Tags: 2011-federal-budget, acnc, aged, aged-care, aged-care-funding, aged-care-spending, ageing, australian-charities-and-not-for-profits-commission, bill-shorten, budget-2011, catholic-health-australia, charity-tax, charity-tax-concessions, coag, council-of-australian-governments, mark-butler, martin-laverty, nfp, non-profit, non-profit-regulator, not-for-profit, npo, productivity-commission, rob-oakshott, tony-windsor,

2 thoughts on “Budget 2011: What’s in it for you

  1. Many of the people I speak to are horrified at the huge cost imposed on the Australian taxpayers for dealing with and subsequently paying to support illegal immigrants.
    It is seen as money coming from aged care and other organisations at the bottom of the heap and being freely given to people who travel halfway round the world to gain entry to a soft country.
    Its always the people most in need who suffer at the generosity of governments who give money to others and take it from Australians who really are in desperate need.
    A refugee is somebody who’s life is in danger and safe haven. Subsequently to return to their own country when the danger is past.
    How many of the illegal immigrants fit that description?

  2. Ms Gillard…Is your government really serious about giving all our aged a FREE set top box. I know my poor mum won’t be up long enough to enjoy it. I found out she had spent most of last winter in bed because she could not afford to heat her home.Surely some sort of heating subsidy for our aged pensioners would be a more sensible way to spend taxpayers money…..AND much more appreciated

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