Skip to Content
 Close search

Expenditure on children in the Northern Territory

Study report

Released 08 / 04 / 2020

This report is about how the Commonwealth and Northern Territory Governments can work more collaboratively so their expenditure decisions improve outcomes for children and families.

Download the overview

Download the report

Government response

  • At a glance
  • Contents

Key points

  • Children in the Northern Territory are three times more likely than Australian children overall to come into contact with the child protection system, and face higher rates of socioeconomic disadvantage. To help address this, the Commonwealth and NT Governments commit significant funds to children and family services. In 2018‑19, they collectively spent about $538 million through 9 funding agencies, making more than 700 grants to over 500 service providers. This does not include the significant expenditure directed to primary services, such as health care and education, which also influence child and family wellbeing.
  • Despite these significant resources, the Commonwealth and NT Governments continue to make funding decisions in relative isolation. This has led to fragmentation, inefficiencies in service delivery, and significant overlap in expenditure effort.
    • There is inadequate coordination between and within both governments, with each often unaware of what the other is funding and of what is being delivered on the ground.
    • It is unclear how the merits of activities for one place are weighed against the merits of activities in another, with the risk of inequitable funding flows driven by the capacity of service providers to apply for funding, rather than by needs and priorities of communities.
    • The current approach to funding service providers is largely short term and output focused. This creates uncertainty and inhibits the ability of providers to build capacity, develop trust, and design and deliver culturally appropriate services over the long term.
  • Positive reforms are being implemented and there are pockets of good practice, but a fundamental shift in approach is needed — one that is underpinned by a stronger commitment to transparency and collaboration between governments, service providers and communities. This would help to ensure that governments are collectively accountable for achieving their shared objective — of keeping children and young people safe and well.
  • A formal process — of agreed funding and selected funds pooling — should be established between the Commonwealth and NT Governments. This would involve both governments agreeing on what children and family services each will fund (and where they will pool funds) based on the service needs and priorities identified in regional plans.
    • Regional plans should be developed that incorporate the perspectives of people from each community in the region on the strengths and needs of their children and families, which children and family services they would like to retain and those that should be changed.
  • Governments should transition to longer‑term contracts (a minimum of seven years) that reflect the cost of service provision and take into account the capacity of providers to deliver outcomes, particularly for Aboriginal communities. This should be supported by a relational approach to contracting, where regional government staff visit providers and engage in regular collaborative discussions on service outcomes and continuous service improvements.
  • Better use of data on services and outcomes for children and families at the regional and community level is also needed. And both governments need to significantly improve their record-keeping for the services they fund, and create and maintain a public services list.
  • Stronger institutions will be required. The Children and Families Tripartite Forum should be strengthened so that it can provide advice to governments on funding arrangements. And both governments should ensure that their regional networks have the skills and authority to undertake relational contracting and to work with communities to develop regional plans.
  • Implementing these reforms will be challenging and will require leadership and long‑term commitment from governments. The Commonwealth and NT Governments should negotiate a joint funding agreement by the end of 2021 that formalises the reforms proposed in this report. The agreement would provide impetus for greater cooperation between governments and help to facilitate greater accountability of both governments’ funding decisions.

Media release

A new approach to NT children and family services needed

A report released today by the Productivity Commission calls for a fundamental change in approach to the way the Commonwealth and NT Governments fund children and family services.

“The current COVID-19 crisis has shown how well governments can work together when they have to,” Productivity Commission Chair Michael Brennan said.

The Commonwealth and NT Governments collectively spend over $500 million per year on services to prevent harm to children.

“Despite their significant funding efforts, governments are operating in isolation. We saw too many examples where one agency didn’t know what others were doing.”

“The system is so fragmented that Governments can’t know where all relevant services are being delivered and whether they’re having an impact on the lives of children and families. There are overlaps, gaps and duplication in services,” Chair Michael Brennan said.

The report recommended that local communities and regional government staff work together to decide what services communities need and want. There are cultural strengths in every community and these should be built on.

“Community priorities should form the basis for negotiation and agreement between governments on what each will fund,” Chair Michael Brennan said. “There should be fewer decisions made in Canberra and Darwin.”

The funding process also needs significant reform. The report contains an example of a provider who has 11 different grants from the same funding agency to deliver the same type of service.

“Grants are too short and too uncertain. Longer contracts and more certain funding is needed to deliver children and family services in the Northern Territory,” Chair Michael Brennan said.

The Productivity Commission says it has been mindful of the history of abrupt policy changes in this area and has instead sought to build on reform efforts already underway.

The final report was handed to government on 30 March 2020 and can be found at

Fact sheet

Final report

We released our final report on 8 April 2020. The report looks at how the safety and wellbeing of children in the Northern Territory can be improved. The focus is on how the Commonwealth and Northern Territory Governments can work better together to fund services.

What we have found

To help prevent harm to children in the Northern Territory the Commonwealth and Northern Territory Governments collectively spent…

About $538 million

Through 9 funding agencies

More than 700 grants

To more than 500 service providers

Despite these significant resources, governments are making short term funding decisions in relative isolation without a good understanding of:

  • the needs and priorities of communities
  • existing services funded by other government agencies.
  • There is significant motivation, positive reforms and pockets of good practice decision making.
  • But the system of children and family services is highly fragmented.
  • There are overlaps, duplication and gaps in expenditure effort between and within governments.
  • Services are poorly targeted and don’t always account for cultural strengths or the needs of children and families.

What does our report propose?

A new approach to funding children and family services in the Northern Territory.

Reform area 1

Governments determine funding by working with communities to develop regional plans.

Governments should establish a formal coordination process (formalised in a new intergovernmental agreement) in which they:

  • agree on what types of services they will each fund and in which locations
  • agree to pool funds in specific policy areas or locations.

We are proposing a four step process

This figure outlines a four steps process to improve funding decisions. In the first step the NT Chief Minister’s department is responsible for collating available community and regional level data. The second step requires the regional representatives to work with the community to develop a regional plan informed by the collated data. In the third step, the Tripartite Forum provides advice on the funding allocation by communities. The final step is for the relevant Ministers to reach, and publish details of agreed funding. This process is to repeat annually at first but less frequently over time.
Reform area 2

Longer term, more collaborative contracting of service providers

  • Transition to longer term funding (7+ years) with a relational approach to contracting that focuses on continuous improvement.
  • Ensure funding reflects the full cost of service delivery.
  • Take into account providers’ ability to provide culturally appropriate services to children and families.
Reform area 3

Better, more transparent data that is shared at the community level

  • Harness existing data on children and family wellbeing outcomes to develop and share community snapshots.
  • Develop a public list of children and family services available in each community.
  • Adopt a continuous improvement approach to monitoring and evaluation.
Reform area 4

Stronger supporting institutions

  • Strengthen the role of the Tripartite Forum to provide advice to governments on the funding allocation and funds pooling.
  • Support and authorise regional network staff to work with service providers to improve services and to work with communities to develop regional plans.

Visit our website to read the final report. or call 1800 020 083

  • Preliminaries: Cover, Copyright and publication detail, Foreword, Terms of reference, Contents and Abbreviations
  • Key points
  • Overview
    • 1 Why coordination of funding for children and family services matters
    • 2 A siloed and fragmented service system
    • 3 A better approach to funding children and family services
    • 4 Implementing the reforms
  • Recommendations and findings
  • Chapter 1 About this study
    • 1.1 Background to the study
    • 1.2 What is this study about?
    • 1.3 Our approach to the study
    • 1.4 Consultation for this study
  • Chapter 2 Expenditure on children and family services
    • 2.1 A complex funding landscape
    • 2.2 How much do governments spend?
    • 2.3 Where is money being spent?
    • 2.4 A closer look at grant funding
  • Chapter 3 Linking expenditure to services
    • 3.1 Does expenditure data capture what services are being provided?
    • 3.2 Does the data reflect what is happening on the ground?
    • 3.3 Is there evidence of gaps and overlaps?
  • Chapter 4 Sharing responsibility
    • 4.1 Roles and responsibilities
    • 4.2 Current arrangements for coordination
    • 4.3 Initiatives to improve coordination
  • Chapter 5 Choosing which services to fund
    • 5.1 How do governments decide which children and family services to fund?
    • 5.2 What assessments of needs are undertaken?
    • 5.3 How are communities involved in selecting and designing services?
    • 5.4 How are governments using evidence to guide the selection of services?
    • 5.5 Overall issues with current processes
  • Chapter 6 Coordinating funding between governments
    • 6.1 Options for coordinating funding decisions
    • 6.2 Choosing between the coordination options
    • 6.3 Putting the preferred option into practice
    • 6.4 Step 1: Collating data about regions and communities
    • 6.5 Step 2: Developing regional plans
    • 6.6 Step 3: Obtaining advice from the Tripartite Forum
    • 6.7 Step 4: Making funding decisions
    • 6.8 Supporting the coordination and planning process
  • Chapter 7 Data for children and family services
    • 7.1 Why data is important for funding decisions
    • 7.2 Current data on children and family outcomes
    • 7.3 Making better use of data
    • 7.4 Improving information about services
  • Chapter 8 Funding and contracting
    • 8.1 Issues with existing funding approaches
    • 8.2 Reforms to achieve better funding outcomes
  • Chapter 9 Monitoring and evaluation
    • 9.1 Current monitoring of children and family services
    • 9.2 Evaluation of children and family services: an imperfect range of options
  • Chapter 10 Implementing the reforms
    • 10.1 An overview of our recommendations
    • 10.2 A joint funding framework to support the reforms
    • 10.3 Challenges of implementing reforms
  • Appendix A Public consultation
  • Appendix B Case study: Yuendumu
  • References

Printed copies

Printed copies of this report can be purchased from Canprint Communications.

Publications feedback

We value your comments about this publication and encourage you to provide feedback.

Submit publications feedback