Senate Economics Legislation Committee [Part 2], , 2:26:23 to 2:30:06
The ACNC reports on how inflation and rising operational costs are forcing some charities to close or merge.
Topics: Social services, Government spending
Speakers: Speaker 5, Senator Dean Smith, Unknown Speaker
>> Just in the limited time and then I'll refer to Senator Little. I do have some questions of the ACNC. Um Miss Woodward, welcome. um how are cost of living pressures manifesting themselves in um the experience of charities and not for profofits in Australia?
>> Uh Senator, probably the best uh document to refer you to and I'm sure you're aware of is the most recent edition of our annual Australian charities report, the 12th edition that we released at the end of uh June. And it does show that expenses grew significantly in fact outpaced revenue growth. So there was growth both in revenue but a greater growth in expenses. So it does affirm a lot of what we see and we hear from the sector and you've summarized there that the sector is under quite significant pressure in terms of many charities finding that their uh expenses are growing and the demand for their services uh is also growing and in a sector where it's not a matter of you can just increase your price to meet greater demand uh they are under pressure.
>> So how are they managing that pressure?
Uh it it's a very broad sector and as you know uh comprised of some very large organizations right down some to some very micro organizations. Uh they range across so many different activities. So for some uh they they will be able to continue in the normal way and and others perhaps more at uh the front line where you see you know regular reports for example about food relief services um homelessness services it can be more difficult for them to manage that pressure uh and they continue to do I guess the best they can with uh the
that report, you highlight the year in review and you identify that 1,298 charity registrations were revoked either invol either voluntarily or due to ACNC action. Of those 1,176 that were voluntarily revoked, how many of those do you think might be uh acting in response to growing cost of living or growing cost of doing charity business?
uh we could get you a more detailed breakdown. We do there's a voluntary question. So when they uh apply it it not all of them complete that question. We do I think summarize in the report the uh types of answers given. Sometimes it will be that the work that they were doing a project has been completed. Sometimes it will be that they've merged and sometimes it will be that they've
had to close. But the experience must be because this is what you say in your opening statement but also what you say in your annual report that charities generated 239 billion in revenue a significant 7 12% increase that surpassed growth in the broader economy. However uh growth in expenses rose even faster increasing by 8.6% to $231 billion and if I recall correctly that has been a common feature over a number of years now. So would it be right to assume or expect uh that you know some of those 1298 charities that are no longer registered with the ACNC might be closing their doors because of cost of living and cost of doing charity
business. Uh yes definitely some of them would be closing uh under under that pressure and you you see reports of that that trend has been fairly consistent although uh there was a year fairly recently when uh revenue did exceed expense the growth in revenue did see growth in expenses but I think as a general comment that's that's fair. I