Food banks, homeless services fear funding axe as horror Victorian budget looms

Food banks, homelessness organisations and community legal centres are among the frontline services under threat as the state government tries to rein in spending and stop the state sliding further into debt at the May budget.

Community organisations providing relief to vulnerable Victorians are bracing for a brutal budget with the Allan government making it clear to the sector that “tough decisions” will be made about important programs, particularly those facing expiring funding.

Mary Parfrey (right) and Louise Fumberger at a Neighbourhood Houses Victoria street pantry in Fitzroy North. Credit: Justin McManus

Victorian Council of Social Service chief executive Juanita Pope said providers were facing deep uncertainty despite facing unprecedented demand in a cost-of-living crisis.

“In the context of this being a very tight budget, services are very concerned that they are being stretched to breaking point,” she said.

“There’s a general air of uncertainty and definitely hearing from government that tough decisions will need to be made.”

The community sector is the recipient of about $3.6 billion in yearly agreements with the state government to deliver social services, according to VCOSS.

Heidi Tucker, chief executive of Anchor Housing, said the message filtering down from government was that fixed-term contracts would not be renewed at the budget.

She believes her agency, which provides pathways away from homelessness, is at risk of losing funding for a program helping children placed in kinship care.

“This is a whole new world for community services,” Tucker said.

“There is a huge air of uncertainty, we keep hearing horror stories. Things had been tightening for a number of years. They’re telling us we’re in a tight fiscal environment.”

Neighbourhood Houses Victoria was last year given $2.5 million to run a program offering free food for people in need. But it has been given no indication if the government will extend that program beyond June 30.

Treasurer Jaclyn Smyes has committed to cutting government spending.Credit: Justin McManus

Chief executive Keir Paterson said he was concerned the program would have to close despite high community need.

“Clearly we’re all hearing it’s going to be a tough budget,” he said.

“We all know the state’s financial situation at the moment is real. We are concerned that if the state government has to cut back, it will come back to areas that are one-off programs like this one.”

Victorian Treasurer Jaclyn Symes has already flagged widespread cuts to the public service with up to 3000 jobs at risk. She announced in February an independent review of the sector while conceding previous attempts to cut government spending had failed.

Symes said frontline services and integrity agencies would be excluded from cuts, but has made no such guarantees for community organisations which deliver services for the government.

Pope wants the treasurer to rule out funding cuts to community sector organisations delivering frontline services.

“There’s a real sense of anxiety. Services are facing rising demand and higher costs, but their funding is flatlining or at risk,” she said.

“Cuts to services that are already overwhelmed with demand would be disastrous for people who rely on this assistance.

“Community services have been given no assurance that funding will continue.”

She said cuts to community organisations providing frontline services would mean more households would sink into poverty.

Shadow treasurer James Newbury said Labor pretended to be responsible in managing taxpayers’ money but actually put vulnerable people at risk.

“Every budget proves Labor overspends on running a high-taxing, big government and interest on their big debt, but often neglects the most needy,” he said.

A state government spokesman said its May budget will be focused on making sure that every dollar of investment goes to where it matters most – supporting families and frontline services.

“Victorians rightly expect we’re focused on their priorities – whether that’s good schools and hospitals, help with the cost of living or keeping communities safe,” the spokesman said.

The spokesman did not address questions asking whether non-government organisations providing frontline services would be quarantined from funding cuts.

The Greens’ community services spokesperson Anasina Gray-Barbario said cuts to critical services would be not only heartless, “but completely irresponsible and will cost us more in the long run”.

“We’re in a cost-of-living and housing crisis where homelessness and food services are overrun as is,” she said.

The fears of widespread budget cuts in the community sector comes at the same time the Allan government moves to scrap underperforming government programs and merge or abolish entire entities in a clean-out of the Victorian Public Service.

The government last month has appointed Helen Silver, a former top bureaucrat in both Labor and Coalition governments, to conduct the wide-ranging independent review of the public sector.

At the time, Symes said the government hoped to save “several billions” through the cuts.

The mid-year budget update, released in December, showed Victoria’s budget deficit had grown to $3.6 billion, and net debt was forecast to be $187.3 billion in 2028.

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