Government Should Keep the Australian Charities Commission

Labor’s Shadow Assistant Treasurer, Andrew Leigh has weighed in on the debate on the future of the charity regulator saying the ACNC is functioning well, actively working to protect public trust and confidence in charities.

Over recent weeks, we’ve heard a lot from the Abbott Government about the need for transparency and accountability. These are worthy values; the public interest is rarely served by secrecy and the lack of a proper complaints process.

So it is surprising that those who believe in open government want to abolish the Australian Charities and Not for Profits Commission (ACNC): a body that handles complaints and ensures charities are transparent and accountable.

For decades, independent reports have made the case for an independent ACNC. It was after all a 2001 Howard Government report that concluded a Commission would provide “a clear and consistent accountability framework…to maintain and enhance public confidence in the integrity of charities and related entities”.

Created by Federal Labor, the ACNC is functioning well and in the public interest, actively working to protect public trust and confidence in charities. It has registered 2000 new charities in the past year, in addition to 58,000 existing organisations. And just as lawyers and doctors’ professional associations maintain their standing by investigating complaints, so too the Commission plays a similar role by looking into allegations of bad behaviour by charities.

In its first compliance report issued in late January, the ACNC told us it received more than 200 complaints in 12 months. That’s a significant number from a body that’s just beginning to get known. The majority of the complaints came from the public. Key concerns involve governance issues such as conflict of interest, fraudulent or criminal activity and claims of private benefit.  Fifty-five of the complaints of inappropriate behaviour are being followed up.

The Commission’s approach is gentle and graduated, shaped by many years of consultation. That approach begins with guidance and support from the ACNC and moves towards intervention, only if a charity is not open to change and meeting its obligations.

The ACNC is designed to serve the best interests of the sector, government and the wider community. It provides a ‘Governance for Good’ guide, a resource to help charities (especially new players) stay on track. The ACNC website has had unexpectedly high levels of traffic from in and outside the sector.  Feedback from large and respected players confirms the ACNC has been reasonable and accommodating in its dealings with charities and Not for Profits. Its people are easy to talk to and not at all heavy-handed.

What we have is a body designed to support the sector so the public can have confidence in the work it does. It’s the quid pro quo for charities getting generous tax concessions worth up to a billion dollars each year.

The Abbott Government often expresses concern about how taxpayer money is spent; arguing that accountability is crucial. And yet  when it comes to charities, which receive significant tax concessions, it seems to prefer no accountability at all.

Among the ideas flagged is a heavy-handed ‘Charity Navigator’, modelled on a US website that ranks charities but has no teeth to intervene. That’s like saying we should replace MySchool with RateMyTeacher.com. Ironically, the founders of Charity Navigator are themselves frustrated by a lack of transparency in a growing sector, and advocates for the US to have an independent regulator like the ACNC.  

Despite the government’s rhetoric about the ACNC creating ‘red tape’, the reverse is true. The commission has a Reporting and Red Tape Reduction Directorate, aimed at freeing charities from double reporting. It will facilitate a Charity Passport so charities don’t have to engage in double-reporting.

Under the Abbott Government, handling of the ACNC has moved from the Assistant Treasurer to the Minister for Social Services. This is a mistake. There are many charities and Not for Profits that do not provide social services with Commonwealth government funds. The ACNC recognises the diversity of the sector. It may aim to be a one-stop shop but it is not a one-size fits all agency.

If the ACNC’s public register role is scrapped, charity regulation will default back to the Australian Taxation Office (ATO). Now subject to savage staffing cuts, it is hard to see how the ATO would manage the extra workload. And it’s difficult to see how charities are well served by being regulated through a body that focuses only on revenue collection.

Around the world, countries recognise the inherent conflict of interest in having a revenue collection agency decide whether or not a charity should get a tax break. That’s why many developed nations are moving towards the ACNC model. A recent survey of charities found that four in five wanted to keep the ACNC. Australian charities deserve better than a ‘back to the future’ approach from the Abbott Government.

Andrew Leigh is the Shadow Assistant Treasurer, and his website is www.andrewleigh.com.