Charity Regulator Start Date In Doubt

The start date of Australia’s first charity regulator on October 1st is in doubt after the Greens announced their intention not to pass the establishing legislation without amendment and until the concerns raised by the Not for Profit sector have been addressed.

The Australian Greens have raised the concerns of the sector and suggested amendments in a dissenting report to yet another Senate Committee Inquiry into the proposed Legislation to establish the Australian Charities and Not-for-profits Commission (ACNC) delivered to Parliament late yesterday.

Since 1 July 2011, the Australian Greens have held the balance of power in the Upper House of Federal Parliament.

West Australian Senator Rachel Siewert, the Australian Greens spokesperson on Community Services says the legislation, in its current form, does not go far enough to improve outcomes and operations for the Not for Profit sector.

“The Greens are supportive of the need for the types of reform that have been called for by the Not for Profit sector,” Senator Siewert said today.

“However, on the back of consultations with the sector and evidence to the Senate Committee I am concerned that omissions and areas of uncertainty will see this legislation fall short of the mark.”

A spokesperson for the Greens says that while the Greens Senators will work towards delivering the amendments, a delay to the start date of the ACNC will depend on when the Government brings the Legislation to Parliament.

According to the Parliamentary Sitting Days Calendar, there are five sitting days remaining before the 1st of October and 17 Senate sitting days before Christmas.

The Federal Opposition has already formally announced that it will oppose the Legislation to establish the ACNC.

The Shadow Minister for Families, Housing and Human Services, Kevin Andrews says the Federal Government is trying to impose upon the Not for Profit sector and charitable organisations a new unnecessary and uncalled for level of regulation and red tape. 

Senator Siewert said the areas of concern relate to the introduction and governance of external conduct standards, the timeframe for red tape reductions and the interaction between the Commonwealth and states over the development of a ‘charities passport’ where organisations can report once to the ACNC rather than multiple times to different departments and governments.

“The Australian Greens have recommended a number of amendments to the Bills,” Senator Siewert said.

The Senate Community Affairs Committee received submissions from 48 individuals and organisations.

Some of the Greens amendments and recommendations include:
That the references to the independence of the sector need to be strengthened in the text of the Bill.

That the Bill be amended to ensure that the governance standards cannot now or in the future be used to prevent a charity from advocating for its charitable purpose.

That an amendment be made to the relevant Commonwealth legislation to ensure that Commonwealth contracts are prevented from containing 'gag-clauses' that restrict a Not for Profit organisation in its advocacy or criticism of Government policy or other issues relating to its mission or purpose.

That the governance standards and external conduct standards be added to the legislation as a schedule of amendments once appropriate sector-wide consultation has  occurred.

The Greens say in the Senate report that “although there remain considerable problems with the ACNC and Transitional Bills, The Australian Greens do not believe that they are insurmountable. However, they do need to be addressed before the Bill can proceed.”

South Australian Independent Senator Nick Xenophon, who took part in the Community Affairs Committee said the Bills should be passed with appropriate amendments to strengthen its intent and purpose.

He recommended amendments to the ACNC Bills including a requirement that all charities and NFPs register with the ACNC within 12 months in order to receive any tax concessions.

“The automatic registration by the ACNC of charities already endorsed by the ATO as income tax exempt is also of concern,” Senator Xenaphon said.

“The ACNC should conduct a review of all such automatic registrations to ensure those charities with income tax exempt status are continuing to meet the obligations necessary to be awarded such status.

“The legislation should be be amended to include the requirement that an entity must satisfy a public benefit test before being defined as a charity or NFP in order to receive tax free status.”

The Labor Party committee members concluded in the report that there should be no delays to implementation of the Legislation.

“The committee expects that the government and the ACNC will monitor closely the effects of the thresholds on the reporting burden of charities, and the balance that this strikes with transparency and confidence in the sector,” the Chair of the Committee, Labor Senator Claire Moore said.

The full Senate report can be found here.