Two-stage Plan to Abolish ACNC

The Federal Government says it has a two-stage plan to abolish ACNC in line with its election promise to demolish the charity regulator.

As part of the introduction of Repeal Day legislation, Social Services Minister Kevin Andrews introduced the first of two Bills to implement the Government’s election commitment to repeal the Australian Charities and Not-for-profits Commission.

Andrews told Parliament that the establishment of the Commission had introduced new powers in information collection, monitoring and compliance that are not available to Commonwealth bodies with comparable roles, such as the Australian Taxation Office, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.

Andrews said an independent regulator had not proved to be the best use of government funding.

“Repealing the Commission will remove unnecessary regulatory control over the civil sector, and move instead towards Commonwealth support for the sector to self-manage,” he said.  

“The repeal is consistent with the broader deregulation agenda to boost productivity by removing any excessive, unnecessary and overly complex red and green tape imposed on business, community organisations and individuals.

“This Bill will repeal the Australian Charities and Not-for-profits Commission Act 2012 , thereby abolishing the Commission.”

However, he said that the Bill would not take effect until the enactment of a later Bill, which would provide the details of the successful agency that will replace the Commission.

“This Bill will also provide transitional arrangements for matters such as transferring to the Chief Executive of a successor agency records held by the Commission, any outstanding Ombudsman investigations, and certain annual reporting requirements,” he said.

The explanatory notes attached to the legislation say, “the Government believes it should not be imposing unnecessary regulatory control over the civil sector; rather, Government should work with and support the sector to self-manage.  

“Vesting powers in a separate entity to oversight and regulate charities runs counter to the deregulation approach, which takes a risk-based approach to oversighting the institutions of civil society, whether they are for-profit or Not for Profit.

“In the absence of harmonisation across all jurisdictions, the ACNC has added compliance burdens on the charitable sector from additional oversight and reporting obligations,” the notes said.

However Community Council for Australia Chief Executive Officer David Crosbie said that the Council’s understanding was that neither the Opposition, the Australian Greens or Independent Nick Xenaphon would support the abolition of the ACNC.

He said he expected that the bill (number 8 on the repeal list) would be referred by the Senate for inquiry, which would give the sector the chance to offer its views on the need for red tape compliance to be reduced.

“I don’t expect the bills to go through Parliament,” Crosbie said.

“This is the kind of repeal you have when you don’t know what to do.  The focus of this bill is solely to get rid of the ACNC. There’s no real plan, no real narrative or vision for what will happen when the ACNC is disbanded.”

Kevin Andrews told Parliament that the majority of the sector which are unincorporated organisations – approximately 21,000 of whom are registered charities – are now subject to this new regulatory regime, whereas they previously fell largely outside of the sector’s regulatory framework.

“The large number of incorporated associations (approximately 136,000, with around 6,000 of whom are charities) already regulated under relevant state and territory Acts now have duplicated reporting requirements.

"Charitable trusts, accountable to the state Attorneys-General, are now regulated at the Commonwealth level, with obligations or compliance activity they were not subject to previously.

“Given existing regulators can provide similar regulatory oversight at a lesser cost, both in terms of administrative costs to Government and in terms of costs imposed on regulated entities, the introduction of a specialist regulator to monitor and enforce a codification of generally applicable laws does not represent best use of Commonwealth funding,” he said.

The Legislation can be found here.