Government vows to remove ACNC secrecy provisions, but won’t budge on fundraising reform

The government has released its response to the Australian Charities and Not-for-profits Commission review

The Morrison government is moving to strengthen public trust in the charity sector by removing laws stopping the charities commission from explaining why it is investigating charities.

The decision forms a key part of the government’s response to the Australian Charities and Not-for-profits Commission legislation review, which was released by charities minister Zed Seselja on Friday.

Sector leaders have welcomed the response, but expressed disappointment that some of the review recommendations – particularly around fixing fundraising regulations – were not supported.

Government looks to increase accountability and transparency

The government has vowed to put in place reforms to “reduce red tape, improve transparency and ensure the ACNC continues to be an effective regulator”.

While the ACNC can publicise when it revokes a charity’s registration, current legislation means it cannot tell the public the reasons for such a decision.

Seselja said the government will legislate to provide the ACNC commissioner discretion to disclose findings from investigations when it is in the public interest.

“This will provide the public confidence that the ACNC is actively pursuing misconduct and provide guidance to other charities on complying with their obligations,” Seselja said.

The government will lessen the compliance burden on smaller charities by reducing financial reporting obligations and increasing reporting thresholds.

It will ban people convicted of fraud, terrorism financing or child sex abuse offences from serving on charity boards.

And it will increase transparency by requiring large charities to report aggregate salaries of key management staff.

ACNC Advisory Board chair Tony Stuart said the board endorsed the government’s response, particularly its move to protect children.

“The ACNC Advisory Board [recommended] prohibition of convicted child sex offenders from serving on charity boards. Protecting children is central to the charity sector’s purpose,” Stuart said.

Sector disappointed by fundraising response

The review also said the federal government should fix fundraising laws by developing a mandatory code of conduct and amending Australian Consumer Law (ACL) to ensure its application to fundraising activities.

While this has been a key demand from the charity sector, the government rejected the recommendation.

The government said ACL was not an appropriate mechanism to harmonise laws in the NFP sector.

It argued that repealing state fundraising laws and relying on the ACL’s broad protections could leave regulatory gaps.

Community Council for Australia CEO David Crosbie said most of the government responses to the review were positive, but it had dropped the ball on fundraising reform.

“It is disappointing that one of the biggest areas of pointless red tape – the dog’s breakfast of charitable fundraising regulations around Australia – has not been streamlined as recommended,” Crosbie said.

Sue Woodward, a spokesperson for Justice Connect and the #fixfundraising coalition who has consistently pushed for fundraising reform, also expressed severe disappointment at the government’s inaction.

Woodward said this decision was especially surprising given the bushfire crisis had highlighted how state-based laws were inadequate to deal with the modern reality of cross-border, internet-based fundraising.

“Astonishingly, the federal government has rejected the recommendation of the expert panel’s report – a report that it commissioned. In doing so it has also shunned consistent and clear calls from all parts of the charitable sector and their advisers,” Woodward said.

“Instead the federal government says it will leave it up to the states to harmonise their fundraising laws. The thing is, we know this hasn’t worked over previous decades and there is no reason to think this is likely to change in the future.”

Labor’s charities spokesperson Andrew Leigh savaged the Morrison government for rejecting the fundraising recommendation.

He said the government’s inaction meant real people were getting less help than they needed.

“Right now, there are charities supporting communities devastated by bushfires. If the Morrison government had already acted on the sector’s concerns, they would have more money to spend on the victims who need it,” Leigh said.

Door ajar for single national scheme for the sector

A common theme of the ACNC review was the need for a national scheme for the sector, which requires a referral of powers from the states to the Commonwealth.

The review panel noted Australia currently has eight separate jurisdictions whose regulatory regimes impact on charities, causing “inconsistency, complexity and inefficiency” for the sector.

“In the absence of a national scheme, the sector will continue to be subject to an unacceptable level of unnecessary red tape,” the review said.

The government said it noted this recommendation but needed cooperation from the states and territories.

ACNC Advisory Board deputy chair Dr Martin Laverty said he was pleased the government left the door ajar for a single scheme to be implemented.

“When the ACNC was established, I and countless others argued there needed to be harmonisation of state and territory fundraising laws. In time, we need a single national approach to how charities are regulated,” Laverty said.

“The government has noted potential for a national scheme to occur, if states and territories agree. It’s now time for state and territory governments to act.”