Will A Charity Commission Cut Red Tape?


A proposal to regulate and oversee a section of the Australian economy that employs 8 per cent of workers and comprises over 600,000 different organisations went through the House of Representatives last week. It’s due to come before the Senate in the next sitting of Parliament.

The proposed legislation will set up a commission to manage all aspects of governance and require annual financial reporting by organisations across the country.

The Australian Charities and Not-for-profit (NFP) Commission is a long-standing goal of the NFP sector and has been recommended in a series of reports into the sector since 2001. Currently, charities and NFP groups report to a myriad of government agencies. They often have to report a number of times and in different ways, creating a great deal of red tape.

"We are at the altar of the reforms we want and need and we ask for the support of our national parliament and of the states and territories to deliver for us better and smarter regulation. We don’t want to be jilted yet again," David Thompson AM, Director of the National Roundtable of NFP Organisations, told New Matilda.

The Commission will also oversee future changes to the definition of what is a charity and which organisations are able to claim the lucrative Deductible Gift Recipient (DGR) status, that allows donations to be tax-deductible — this has an impact on the kind of fundraising an organisation can do. The Commission could also frame the unique place the NFP sector holds in relation to the government and business sectors.

The CEO of ACOSS, Dr Cassandra Goldie has said:

"Our sector is overly but ineffectively regulated. For the reams of paper and hours of analysis that charities put in to reporting the same information to multiple funders and regulators, we know little about the activities, size or scope of this essential sector."

The proposed Commission will, according to Senator Ursula Stephens, have three main objectives.

"Its first object is to maintain, protect and enhance public trust and confidence in the NFP sector. Its second object is to support and sustain a robust, vibrant, independent and innovative NFP sector. The third object underlines the important role that the ACNC will have to promote the reduction of unnecessary regulatory obligations on the NFP sector."

In a statement from the State, Territory and National peak groups for the sector, Goldie states that "the creation of the Australian Charities and Not-for-profit Commission is the culmination of a long process and has broad support from the community and social services sector.

UnitingCare Director, Lin Hatfield-Dodds, told New Matilda that the opportunities offered by the Commission could be of great benefit to the community and to the sector:

"It’s important that funders can quickly and easily get an objective and transparent look at the community groups they support. The Commission could also act as a ‘Report once, use often’ tool, so that community groups report to one agency across all government. When we are spending public money, we have to be transparent. However, there is a risk that we spend more time and administration on reporting, rather than delivering innovative services."

However, there are concerns that, without support from the states and territories, the impact of the Commission will be to increase, rather than decrease, the administrative burden on NFP groups. Currently, organisations can either incorporate, and be regulated by ASIC, or form an association, which is regulated by state-based Departments of Fair Trading. The addition of a Commission, with no corresponding reduction in state-based regulation, is of concern to many groups. COAG is due to consider these issues early in 2013.

In the interim, the Commission could drive reform of red tape within the federal government by streamlining reporting requirements across departments and agencies. For example, each time a group applies for a grant, they have to start from scratch, rather than being able to register with the Commission once for all other agencies.

The relevant bills have been available for public scrutiny for some months, and have been through an extensive consultation process, including a formal review by the Senate Community Affairs Committee. The current legislation is the result of many changes, however there are still concerns held by the Greens, who intend to move amendments in the Senate in the next sitting of Parliament.

"As I outlined in my dissenting report on this legislation, the Greens remain concerned that there’s not enough detail about gag-clauses for advocacy groups, and we think there needs to be more consultation on the governance arrangements and independence for the sector to advocate on behalf of those they look after," Greens Senator Rachel Siewert told New Matilda:

"Not-for-profit groups are an essential part of civil society and it’s important that this legislation gives transparency in dealing with government. We also want to see the Commissioner given more power to drive the red-tape reduction agenda."

The Greens confirmed to New Matilda that they will consider blocking the legislation if their amendments are not adopted by the Government. However, they stated their commitment to working with the Government to improve the bills to address the remaining issues of concern to the NFP sector.

The LNP currently opposes the creation of the Commission. Despite the broad sector support, the LNP provided over 30 speakers against the Bill when it came before the House last week. Kevin Andrews, the Shadow Minister for Families, Housing and Human Services, stated  that "this is legislation which has been foisted upon the charitable sector in Australia which they do not want, which there has been no case made by the hapless minister at the table."

"This is simply not true," said Thompson, who leads the sector’s peak body. "The evidence is in the thousands of words in submissions from the sector, calling for this reform. The Government has taken on board a significant number of issues raised in submissions."

Other LNP members quoted a range of charitable and NFP groups’ concerns about the Bill. However, some of these quotes were from submissions about a much earlier version of the legislation and many of these concerns have now been remedied. Several sources have confirmed that there has been considerable disquiet among those groups named by LNP members in the debate.

One, the Australian Institute of Company Directors, is quoted as having concerns regarding the impact of the legislation on board members, most of whom are volunteers. In a recent statement, the AICD said: "if suitable amendments giving effect to these changes were to be made to the current Bill, and subsequent to our review of the revised Bill wording, we would support its passage through Parliament." They support the amendments that the Greens will be putting to the legislation.

The Bill has been introduced into the Senate and is due to be debated in the next sitting, starting 9 October. If the legislation is not passed, Thompson says "it will be back to the drawing board in the quest to get the regulator we want. We have waited a long time and an enormous effort has been put in to get it this far."

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