FTI Consulting lead administrator John Park said FSG owes “millions” Photo: Cameron Laird
FTI Consulting lead administrator John Park said FSG owes “millions” Photo: Cameron Laird

Taxpayers to foot bill for charity’s collapse

ADMINISTRATORS for FSG Australia have revealed the embattled charity owes "millions" to employees and creditors, but all staff will be paid their entitlements.

FTI Consulting lead administrator John Park said yesterday employees were protected by the Fair Entitlement Guarantee, meaning taxpayers who have already helped subsidise the charity through government funding may also have to pick up the bill for what is owed to staff.

The Fair Entitlement Guarantee scheme is a safety net for workers.

"If an employer goes into liquidation, the scheme protects employees," Mr Park said.

"Historically, if a company went into liquidation and they didn't have any assets, employees wouldn't be paid, so this was introduced years ago to protect employees.

"If the company has insufficient assets, the Federal Government will step in, verify entitlements and arrange with liquidators unpaid wages, accrued annual leave, redundancy, things like that, but it excludes superannuation."

At the time FSG announced it would enter voluntary administration, the not-for-profit organisation employed around 900 staff across disability, child, mental health, homeless and aged care services.

Vicki Batten, FSG Australia. Picture: supplied.
Vicki Batten, FSG Australia. Picture: supplied.

Despite receiving up to $60 million in government funding a year, under CEO Vicki Batten FSG had reported annual losses up to $5.2 million, as well as now owing "considerable" amounts to creditors.

"Obviously it is a considerable amount, the accrued employee entitlements alone is considerable," Mr Park said.

"There are hundreds and hundreds of employees, so there are millions in accrued entitlements alone.

"Then probably a few million between the ATO (tax office) and other creditors.

"Telstra has a substantial claim as well as the financiers of the properties.

"Employee entitlements are the priority, then unsecured creditors.

"The Fair Entitlement Guarantee does not cover unsecured creditors."

The next major meeting for creditors on August 3 would decide whether FSG entered liquidation.

If it does, Mr Park said the large amount owed to FSG staff would be paid out regardless, under the guarantee scheme.

FSG staff owed payouts would be required to register their claims online before they could be paid.



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