The budget provides once-off funding worth $2.1 million that will be shared between community service organisations in the next financial year.

While this pool represents a 4 per cent increase in funding, it does not give organisations the future certainty they need to continue to offer the same levels of service.

It also comes as a shock to the sector, who have advocated government to provide ongoing, indexed funding so that Tasmanians organisations are saved from cutting services, and people calling for help do not miss out.

TasCOSS acting chief executive Charlie Burton said it had been in discussions with government about indexing funding so that organisations can keep up with rising costs and associated financial strains.

"We have been talking with government, after commissioning our own research on the issue, and advocating for them to commit to a fair and reasonable amount of indexation for our industry so that organisations no longer have to lose staff, and penny pinch, in order to still deliver the services that Tasmanians are in desperate need of," Dr Burton said.

"The government did its own review of indexation and what we were expecting was for them to come up with an indexation figure, even it if was 4 per cent, it would at least be a commitment over a number of years of funding with indexation so organisations can plan budgets and at least know that any extra rising costs would be somewhat covered."

Dr Burton said community non-profit organisations run like any small business, subject to energy, wage and insurance costs.

"Government departments don't operate with that level of insecurity, it just seems wrong that they treat us in this way," Dr Burton said

"We are the engine room supporting Tasmanians in need and at the moment we have no budget certainty, and that would put any business at a higher degree of financial distress," he said.

"For every dollar we don't get, we are making choices around how many Tasmanians we cannot support."

He said the inadequate funding meant early intervention services may be lost.

"These services stop people spiralling into debt, falling into a health or mental health crisis,turning up in emergency departments, or simply, even getting food.

"It is really stressful."

Dr Burton said organisations were already at breaking point, and some were facing the real possibility of closing.

He said others were turning away government contracts due to operating at a loss, or were running budgets at a loss, leaving them financially vulnerable.

"Boards are increasingly saying you can't take on that contract because it is too much of a risk, and potentially, these government services will not be delivered at all," Dr Burton said.

"A very common thing we are hearing is organisations been stripped down to the bare bone services. For example, one organisation provides counselling to women experiencing domestic violence. They no longer can afford to have a child carer on site so that children do not have to sit in the room hearing incidents of trauma," he said.

"Another can no longer provide mobile phones or data to women to connect with friends and family after escaping a violent home."

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