Every year the Elsternwick centre educates more than 30,000 visitors - 21,000 of them school children - about anti-Semitism. This includes showing documentary films about the genocide projected on the wall.

The centre is run by dedicated volunteers and a handful of staff, including Holocaust survivors, and operates on a shoestring. It is supported by philanthropy, public donations and grants, including $7700 promised by the federal government for a video screen and dress curtain.

But its management was dismayed to learn this month that the federal government had abruptly withdrawn the funding in its midyear economic statement.

Development officer Reuben Zylberszpic said small grants were the lifeblood of community organisations. ''We'll continue with this painted brick wall,'' he said. ''I'm sure other people are impacted far more adversely than us, but for us it just means that we don't have the facilities to deliver our message in the best way possible.''

The small grant was one of hundreds of community projects to win funding under Labor's Building Multicultural Communities Program. Money had been allocated in the 2013-14 budget and letters of offer sent out.

But it is now part of $1.1 billion the government will save by abandoning grants promised by the Labor government.

John Tucker, chief executive of Newcastle's Ethnic Communities Council - which had an offer of $159,000 to build Australia's first multicultural men's shed withdrawn - has written to the Federation of Ethnic Communities Council of Australia to urge it to consider taking legal action on behalf of hundreds of community organisations affected by the $11.5 million cut to the multicultural communities program.

Coalition senator Cory Bernardi accused Labor last month of using the money to ''pork-barrel'' migrant groups in the lead-up to the election.