Not-for-profit organisations have praised the Gillard government for its plan to get "really serious" and cut red tape within the sector.
Prime Minister Julia Gillard has promised to set up an office for the not-for-profit sector as well as a reform council if Labor wins a second term on August 21.
Catholic Social Services Australia's director Frank Quinlan said the announcement was welcome news for a sector that has been strangled by bureaucracy.
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A survey conducted last year showed that just 19 of its members had 620 separate contracts with state and federal governments, to implement really basic programs.
"That sort of administration and bureaucracy and red tape wastes a lot of resources that we could be spending on vulnerable and needy Australians," Mr Quinlan told reporters on Monday.
He said Ms Gillard's announcement showed Labor was "really serious about addressing those problems" and urged the coalition and the Greens to offer their bipartisan support.
Up to 50 per cent of funding of some programs was wasted on administration, Mr Quinlan said.
With demand for social services rising steadily, he said it was vital for government to support the sector.
He said governments over time had become risk adverse, opting to micro-manage rather than risk bad press for small mistakes.
"A small problem in a program can really become a huge political problem, so it's quite understandable at one level to micro-manage and manage every sort of step.
"But these are problems that can take generations to overcome, so the short term political cycle is really not the sort of the place where these policies should be determined."
Anglicare Australia, which helps out one in every 40 Australians, said reform would see services better directed to those who needed it.
Vision Australia's Michael Simpson said introducing single-point reporting could potentially make a huge difference, cutting down on the time spent on applications and tenders.
He said the government appeared to have listened to the sector, which roundly appealed for significant change in submissions to a 2009 Productivity Commission.
