Community funding to help break disadvantage cycle

Federal funds being used to provide more localised support to disadvantaged people will help make Australia fairer, the treasurer says.

The Commonwealth will spend almost $20 million over five years to establish Partnerships for Local Action and Community Empowerment, which will help design and deliver programs that address issues like youth development, health, education, employment and youth justice.

The government will partner with local communities to develop solutions to these complex social issues.

The initiative is expected to help hundreds of communities and thousands of Australians within its first five years.

Treasurer Jim Chalmers said the funding would help to stop disadvantage flowing across age groups.

"We're working very closely with philanthropic organisations and governments at all levels and local communities to try to see the change that we want so that disadvantage doesn't concentrate and cascade through the generations," he told reporters in Melbourne on Wednesday.

"There's not just some switch that you can flick to eliminate disadvantage in our country, you need to begin where we can make the most difference, and that's what we're doing."

Similar programs in south-east Queensland and northern Tasmania have helped boost year 12 completion rates and reduce child vulnerability, respectively.

Social Services Minister Amanda Rishworth said the initiative would drive meaningful change.

"We already know that place-based change is delivering outcomes in community, particularly in communities where they've identified areas of disadvantage," she said.

"This new organisation will drive change right around the country."

The Commonwealth's funding for the initiative will be matched by five philanthropic partners - Minderoo Foundation, Paul Ramsay Foundation, the Ian Potter Foundation, the Bryan Foundation and the Dusseldorp Forum - bringing the total investment to $38.62 million.

Chief executive of the Paul Ramsay Foundation Kristy Muir said the program would allow communities to thrive.

"It's about providing those people and places doing incredible work in their communities, the kind of resources and supports they need to do that better, no matter where they're based," she said.