Chapter 5Supporting Australians through assistance for not-for-profits
5.1This report has set out the significant cost of living burden carried by many Australians, particularly focusing on evidence on the relentless rise of food and grocery prices, rising prices for electricity, and a crisis in the housing market for both owners and renters.
5.2This chapter turns to consider the unprecedented demand that not-for-profit organisations and the charity sector are currently asked to meet, which illustrates how the growth in cost of living over the last few years has incrementally drawn more Australians than ever before into crisis.
Not-for-profits struggling to meet need
5.3The committee’s First Interim Report found:
Finding 4: The cost of living crisis is causing an increase in the demand for services provided by the charitable and not-for-profit sector.
Finding 5: As demand for charitable services increases, there is a parallel downturn in the ability of charities to meet this demand due to increased overheads for these organisations and lower levels of charitable giving.
5.4Some not-for-profit organisations provided extensive evidence to the committee on the correlation between growing cost of living pressures and increased demand for their services.
5.5For example, Ms Jennifer Kirkaldy, the General Manager of Policy and Advisory for the Salvation Army, told the committee that cost of living pressures have become the leading reason (33 per cent) for people needing the Salvation Army's emergency relief services.
5.6Other charities reported similar startling growth over recent years, with Wesley Mission reporting an increase of 67 per cent in 2022 for people seeking assistance, and OzHarvest noting a 73 per cent increase in demand from the charities they support over the six months to March 2023. Concerningly, OzHarvest also suggested that almost half those charities were unable to meet current levels of demand.
5.7The committee was alarmed to hear that individuals in full-time employment as well as families with dual-incomes were now often among those seeking support from charities.
5.8For example, the Salvation Army told the committee that it was seeing beneficiaries with one or two jobs, as well as double-income families. Ms Kirkaldy noted a shift in the types of individuals accessing services, telling the committee that: 'we are seeing more people who are employed and more people asking for food instead of vouchers'.
5.9Similarly, Mr Pattinson of Foodbank SA & NT stated, 'there are no longer stereotypes of people who require food assistance', telling the committee that half of Foodbank’s recipients of food assistance had jobs and around a third had mortgages.
5.10The St Vincent de Paul Society Tasmania also gave evidence that an increasing number of beneficiaries of its nightly soup run service were employed, telling the committee that often, both parents were working.
5.11Financial Counselling Association Tasmania (FCAT) similarly told the committee in mid-2023 that the composition of its clients had changed over the past year. FCAT described how it was now seeing couples who had exhausted their resources despite both being in long-term work.
5.12Nationally, Foodbank pointed to a shifting profile of households impacted by the cost of living crisis, finding:
…households experiencing food insecurity for the first time were more likely to be those younger (aged <45s), employed or with mid-to higher-annual gross household income.
5.13Evidence to the committee has shown that some vulnerable cohorts had been particularly affected by cost of living pressures and have changed the way they feed themselves and their families. This included:
Young people, with indications that 1.3 million children are living in food-insecure households, skipping meals or going entire days without eating;[13]
Older Australians, particularly those with chronic illnesses or health issues, many of who have to make 'difficult' decisions in spending, sometimes doing without fresh food; and
First Nations Australians, who evidence suggested were disproportionately affected by food poverty and increasingly turning to not for profit organisations or 'buy now pay later' debt for basic necessities.
5.14Some charitable organisations observed that their startling statistics may not tell the full story of need in the community, as many people may have barriers to asking for help, including a perceived stigma for seeking charitable assistance.
Charities struggling to secure resources
5.15At the same time as meeting increased demand, charities have also been struggling with higher operational costs. For example, Ms Brianna Casey, the CEO of Foodbank suggested that the same pressures that were driving increased use of charities by everyday Australians, were also creating difficulties for those organisations themselves:
…we currently exist in a perfect storm of a cost-of-living crisis, an income crisis and natural disasters that are growing in frequency and intensity. All of this is impacting on not only the demand for food relief but also our supply. Just as it is costing customers more to buy food and groceries, turn on the lights, fuel their vehicles or keep a roof over their heads, it is also costing Foodbank more to source, store and transport essential food and grocery relief at a time when demand for that relief has never been higher.
5.16Uniting Country SA told the committee that inflation, wage rises, and superannuation increases were driving up operating costs for charities, leading to increasing pressure on its services and capacity to support vulnerable families.
5.17Other charities concurred, highlighting other trends that made it increasingly difficult to meet need in the community. YouthCare and the Association of Independent Retirees pointed to a 'reduction in volunteerism' resulting from many former volunteers being forced back to work, due to cost of living pressures.
5.18As one survey respondent put it, '[I] save petrol by stopping voluntary work'.
5.19Foodbank WA similarly told the committee that its costs had risen by over two-thirds and that the donations on which it relies had not kept pace, as well as difficulties maintaining adequate numbers of volunteers following the COVID-19 pandemic.
5.20The Salvation Army’s Major Gaye Day also noted that fundraising opportunities had decreased in Port Augusta, and that they were increasingly turning to innovative methods to boost their access to fresh food for their clients.
5.21Although evidence suggested charities were struggling on several fronts—from overheads, to volunteers, through to increased demand for their services—it was clear to the committee there has been a significant increase in demand specifically for food and grocery products, so that this kind of support can be offered to individuals and families in need.
5.22For example, Major Day from the Salvation Army commented that declining resources meant innovative ways of sourcing food were necessary:
The overheads obviously have been growing. Where we were able to provide a $50 food voucher, now it's just putting food on the table and we've had to increase the amount that we're helping people with. We're finding other ways, locally, to try to do that with Foodbank, with fruit and veg, and Woolworths with bread. But we've also got gardening projects where we've got a gentleman who gets vegetables growing to a certain level and then we're teaching people how to make them grow, to work out ways to grow their own fruit and veg. The overheads are up. We're just trying to find innovative ways to work with people to help them with the cost of living.
5.23Meanwhile, this heightened demand for food assistance presents at a time when a huge amount of edible food is wasted or discarded every year, with a massive cost to the economy—as compelling KPMG and Foodbank data discussed below shows.
Charitable donation of food and potential incentives
5.24Supermarkets provided evidence to the committee that they looked for opportunities to assist the charitable sector, where possible, and had noted increasing demands on charities providing food to Australians in need.
5.25For example, Mr Paul Harker, Chief Commercial Officer of Woolworths, told the committee that they had increased their donations of food to their charity partners by around 20 per cent, to keep up with increasing demand.
5.26Mr Oliver Bongardt, Aldi’s Managing Director of National Buying, informed the committee that it had a national connection to a number of food-related charities, and donated the equivalent of 8.3 million meals to food rescue partners.
5.27Metcash also recognised the growing stressors on the charitable waste sector, observing there had been a 55 per cent increase in demand over the previous year. Mr Scott Marshall, Metcash’s Chief Executive Officer, noted relationships with a number of food rescue charities, including donating up to 650 tonnes of food over the previous year, equivalent to 1.3million meals.
5.28However, there is still a staggering amount of food that is sent to landfill every year. According to KPMG research undertaken in collaboration with Foodbank, Australia generates 7.6 million tonnes of food waste every year, 70 per cent of which is edible, which is estimated to cost the economy $36.6 billion a year.
5.29Foodbank advocated for Government to encourage primary producers, manufacturer and retail organisations to increase their assistance to charitable and not for profit use, by offering a tax incentive for food donation. This would offset these organisations’ costs of picking, packing, storing and transporting food, which are often greater than simply sending surplus products to landfill.
5.30Foodbank noted this proposal had widespread stakeholder support and described the potential measure as follows:
Australia’s tax settings be recalibrated to incentivise donations to food relief. Experience in other countries, including the USA, France, Canada and the Netherlands, shows that tax incentives are the most effective way to increase the redirection of food donations to food relief. The National Food Donation Tax Incentive proposal…recommends a two-tiered tax incentive based on the ability to offset a percentage of costs related to food donations from taxable income. Its aim is to encourage food producers to donate surplus product to food relief rather than sending it to landfill.
5.31KPMG has modelled the economic impact of a food donation tax incentive, which estimated it would generate $2 billion per annum in social, economic and environmental benefits.
Committee view: assistance for the charity and not for profit sector
5.32The not-for-profit and charity sectors play a critical role in our society, as they deliver assistance for Australians in difficult circumstances facing need. The committee is concerned by evidence that shows the COVID-19 pandemic, natural disasters and a severe cost of living crisis has brought years of hardship to many Australians, and that the charitable sector is having difficulty meeting need in the community.
5.33While the most acute effects of the pandemic may have waned, there has been little reprieve for many vulnerable families and individuals. Many people are seeking help from not-for-profits and the charity sector, some for the very first time.
5.34At the same time, charities are facing significant challenges with securing enough resources and supplies to do their vital work.
5.35The committee considers that the Government should do more to assist this sector, which in turn would better enable their work to help so many struggling Australians. This includes the many who are facing difficulties meeting the spiralling costs of basic necessities, and of feeding themselves and their families.
5.36One way that the Government could do this is through creating more incentives for philanthropy, which would boost the resources that these organisations have to do their valuable work. More specifically, as evidence to this inquiry shows, there is an opportunity to incentivise the charitable giving of food and goods to foodbanks, which help many Australians.
5.37As set out above, the charity Foodbank conceived a tax incentive that would better match supply to demand, and greatly relieve some of the food stress Australians face.
5.38This initiative would allow Australian corporations to claim a tax offset for expenditure they incur through donating food to organisations working to address need.
5.39At a time when there is such unmet need in the community–with all indicators suggesting that this will continue to grow, the committee considers that reform in this area is necessary and important.
Recommendation 13
5.40The committee recommends that the Australian Government should consider ways to encourage philanthropic activity, including providing tax incentives for charitable giving of goods and services.
5.41The committee recommends that the Australian Government consider policies, including tax deductions, that encourage private sector donations to food and hunger relief charities as a means to support those in desperate need in the cost of living crisis.
Senator the Hon Jane Hume
Chair
Senator the Hon Matthew Canavan Nationals Senator for Queensland |
Senator Dean Smith Liberal Senator for Western Australia |