The impact of proposed changes
Proposed changes would have a direct and negative impact on staff in the disability sector
The 2015-16 Federal Budget contained an anticipated announcement of a ‘cap’ for Exempt Benefits (refer to Re:think Not-For-Profit sector). The cap is an annual cap, is expected to commence on 1st April 2016, and has been announced as a $5000 ‘grossed-up’ cap.
As Chief Executive Officer of a Not-For-Profit disability organisation that employs over 200 staff we are deeply concerned about proposed changes to salary packaging. If implemented, these changes will have a direct and negative impact on our capacity to recruit, retain and reward staff in the disability sector.
The bulk of people who work in the disability sector (along with aged care, child care and welfare services) are staff:
- with few or no formal qualifications,
- who work on the ‘front line’ and who are responsible for providing personal care and support to the most vulnerable, and
- in most situations the work is hard, poorly paid (based on the Modern Award) and staff mostly work on 24/7 rosters on a part time basis.
In short, people working in the disability sector have to work very hard for a meagre income.
Salary packaging is a key initiative in our recruitment, remuneration and retention incentives, because the direct financial benefits are highly valued.
Industry experts have predicted that with the introduction of the National Disability Insurance Scheme the number of staff required to meet the demand for services will double over the next two years.
It is already very challenging to recruit appropriate staff. If we lose the added benefits associated with salary packaging, it is highly likely that the complexities of recruiting and retaining staff will increase at a time when demand for staff in the disability sector continues to increase.
From a social justice perspective, there is considerable evidence that people who work for Not-for-Profit organisations are generally paid considerably less than those in equivalent private and government positions. There are gender imbalances here (mostly women in such positions) and many people work part-time. This contributes to a wage construct which has a direct and negative impact on a range of already vulnerable people.
Opportunities to access salary packaging go some way toward addressing this and also reducing the income gap between private, government and non-government remuneration, and is a key initiative in workforce planning and ongoing organisational development.
Conversely, if the benefits of salary packaging were to be withdrawn in any significant way, the gaps become more significant. This is a social justice issue as well as a staff recruitment and retention issue.
Finally, it is really disappointing that the proposed cap on Meal Entertainment benefits has not been considered at a broader policy level, particularly in light of the current Tax Discussion White Paper ‘Re:think’. This Paper was subject to broad consultation with submissions due on 1st June, 2015, and when released the Not-For-Profit sector, in good faith, understood that no change or reforms would be introduced until after the consultation period had concluded and submissions were considered prior to the release of a Green Paper later in 2015.
The above points should be considered through broad industry consultation before finalising any legislation that will directly impact salary packaging arrangements utilised across the whole of the Not-For-Profit sector.