Changes proposed to Queensland government funding legislation

(26 February 2014)

This article is relevant only to groups which expect to receive, or plan to apply for, funding or assistance from the following Queensland Government Departments: Communities; Education, Training and Employment; Justice and Attorney-General; Transport and Main Roads; and Aboriginal and Torres Strait Islander and Multicultural Affairs.

On 11 February 2014, the Queensland Government introduced the Communities Legislation (Funding Red Tape Reduction) Amendment Bill 2014 into Parliament.  If passed, the Bill will change the way that funding and assistance are awarded and administered under the Community Services Act 2007 (the CSA) and Disability Services Act 2006 (the DSA).

Given the number of government departments which use the CSA provisions to administer funding, any changes to the CSA will affect large numbers of organisations. The Department of Communities (‘the Department’) estimates that the changes will save NFPs receiving funding a collective $2.6 million per year in reduced red tape.

The Bill also seeks to give greater flexibility in decision making to the Department and the Minister so that the government ‘investment’ of taxpayer funds can be protected. The changes would leave a number of important matters to ministerial or departmental discretion.

If your organisation will receive funding from any of the above government departments in the future, or plans to apply for funding or assistance, you should be familiar with the significant changes proposed in the Bill.

The Bill is currently before the Health and Community Services Committee and is still open for comment for a short time. Submissions should be sent to the Committee by COB 27 February 2014. The committee will hold a public hearing on 5 March to hear from invited witnesses, and must report to Parliament by 12 March 2014.

We have set out a summary of some key elements of the Bill below. You can read the Bill and associated Explanatory Material on the Committee website, here.

Streamlining the legislation

The Bill removes provisions in the DSA which are replicated in the CSA, and repeals the Family Services Act 1987. The Department of Communities hopes that the CSA will be used as the ‘template’ for funding processes by any Department or government agency administering funding.

Similarly, service standards and governance and policy requirements currently contained in the CSA will be removed and left to funding contracts. There will also no longer be a requirement to have a written funding contract.

Expanding the range of government assistance regulated by the CSA

‘Funding’ will include most forms of government assistance from the Department, whether in cash or in kind, whether one-off or ongoing, where there is an obligation on the part of the funded organisation to produce a particular result. This will encompass subcontractors who have been engaged by a funded entity to deliver a product or service. Currently, only recurrent funding to approved providers is covered by the CSA.

To compensate for this expansion, the CSA will only apply to ‘funding’ if the Minister declares that it does. This enables the Minister to exercise their discretion as to whether they wish the powers in the CSA to be available in relation to the particular funding or project. The current Minister has suggested that smaller, low risk projects may be exempted from the CSA regime.

The Minister will be able to make a declaration before or after funding is awarded and can take into account anything they consider relevant in deciding whether to make a declaration. If a declaration is made over your organisation after funding is received, thereby causing the CSA to apply where previously it did not apply, the Department must tell you that this has happened. However, even if the Department fails to do so, this does not stop the CSA and its powers from applying to your organisation.

Opening up funding to more organisations by removing ‘approved provider’ requirement

Removing the current ‘two tier’ process for obtaining recurrent funding under the CSA – ‘approved provider’ status will no longer be required. The Department has said that it expects most funding opportunities would be opened to public tender. This has a two-fold aim of reducing unnecessary paperwork and increasing the competition between services providers. The Department has specifically stated that there is no plan for acquittals to become more onerous to make up for reduced paperwork at the award stage.

Increasing departmental discretion in deciding to intervene

Grounds for appointing an interim manager and other intervention in a funded organisation will now be linked to ‘serious concerns’.  Proposed new section 16 states that a ‘serious concern’ exists if:

  • funding is ‘improperly used’;
  • a funded entity ‘significantly fails to deliver a funded product or service’
  • a funded entity does or fails to do something in the course of ‘providing a funded product or service’ which ‘results in harm to an individual’; or
  • where the funding is for disability services under the DSA, a funded entity breaches the DSA,

or if there is a ‘serious risk’ that any of these things will happen.

These standards are very general and are not further defined in the Bill or anywhere in the existing legislation.

Reducing the ability to access external review

Funded organisations would no longer be able to apply to QCAT for external merits review of a Department decision to appoint an interim manager, cease funding, or suspend funding. Review will be internal only. Similarly, funded entities will no longer be able to apply to QCAT for a stay of a decision while the decision is being reviewed. The Department can choose to stay the decision but is not required to do so.

DISCLAIMER: This article is a general summary of some of the provisions of the Bill based on our interpretation of the information available at this time. Our interpretation of the effect of the proposed provisions may not be how the provisions are applied in practice. The Bill may also change before it becomes law. If you or your organisation may be affected by the Bill, you should seek advice as to how the Bill may apply to your circumstances rather than relying on general information.