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She said the government needed to make regulation of the sector clear, simple and consistent so that resources were directed to helping others, not administration.

"Regulation... needs to take account of the nature and operations of such organisations," the senator said.

"For voluntary organisations which apply for government funding, they often find themselves deep in complicated application forms, contracts and conditions. Some organisations give up when the process is too draining on their minimal resources, resources which could be going into providing services and input into communities where they are needed most."

The federal government will begin talks with the non-profit sector in coming months to resolve some of the dilemmas facing the volunteers, the senator revealed.

Statistics show there are six volunteers for every paid staff member in the not-for-profit sector.

Australian Bureau of Statistics figures indicate 5.2 million people – 34 percent of the Australian population aged 18 years and over – were volunteers in 2006, working 713 million hours in total.