ACNC - Are We There Yet?

CEO of the Community Council for Australia, David Crosbie

OPINION: After another week in which two Parliamentary Committees have considered the revised ACNC charity regulator legislation and 18 months of continuous discussion, the CEO of the Community Council for Australia and member of the Not-for-profit Sector Reform Council, David Crosbie asks “are we there yet?”

It seems a long time ago since the then Assistant Treasurer Bill Shorten agreed to support the establishment of an independent Not for Profit regulator and managed to have over $40 million allocated to that task through the Federal Budget.

In the last 18 months there have been numerous reports, consultations, inquiries, reviews, explanations, roundtables, headland speeches, draft legislation and proposed Bills. It has been an almost full time job keeping across the various developments. At CCA, we have provided three written submissions, appeared before three parliamentary inquiries and attended over 20 briefings and consultations on the proposed regulator. We have also fielded over 100 inquiries from members and others.

Throughout the whole process there have been two key factors that have informed the CCA position. The first is that the current situation in relation to the regulation of charities and Not for Profits is ridiculous. The level of duplication, red tape, and unnecessary compliance costs associated with trying to operate any charity in Australia almost defies description.

Each and every time a charity wants to gain a concession or preferential treatment, it has to demonstrate that it is a bona-fide charity. In practice, this means a small charity must produce copies of letters from the Australian Taxation Office about their concession entitlements in order to be able to demonstrate their charitable status whether that is to the local church group when they book their hall for an event, the local council when they are seeking a reduction in rates, the State government if they want to register to undertake fundraising, the Australian Taxation Office if they want any kind of income tax concession or other benefit, a Trust or Foundation if they want to be eligible for grants.

The second constant is that the Australian Charities and Not-for-profit Commission Task Force and the government have consistently argued that their actions are informed by the need to support and strengthen the charities and Not for Profit sector, not to undermine it.

This is not just sentiment, but is very clearly set out in the framing of the current ACNC Bill which has three definitive objects:
‘1a) to maintain, protect and enhance public trust and confidence in the NFP sector
1b) to support and sustain a robust, vibrant, independent and innovative NFP sector
1c) to promote the reduction of unnecessary regulatory obligations on the Australian NFP sector.’

The success or failure of the ACNC will be measured against these three objects. The government will hold the ACNC to account for achieving these objects in the annual ACNC report to Parliament. The NFP sector will hold the ACNC to account through various mechanisms, including direct political and media advocacy. No-one should underestimate the growing capacity of the Not for Profit sector to raise issues if they feel their concerns are not being addressed.

It is also worth noting that in exercising the powers of the ACNC, the Commissioner must also ‘have regard to a range of factors including:
d) the maintenance and promotion of the effectiveness and sustainability of the Not for Profit sector and
h) the unique nature and diversity of Not for Profit entities and the distinctive role they play in Australia.’

Perhaps the most disappointing aspect of the last 18 months has been the ill-informed commentary from some who make money providing specialist services to the Not for Profit sector. At times I have wondered whether the advice a minority of lawyers and accountants are providing to their Not for Profit clients is deliberately misleading in order to generate additional business.

In this context, we do need to remember that the Not for Profit sector is a big target. It employs over 1 million Australians and has a turnover that is in excess of $100 billion. Many would like a slice of that pie and if scaring clients into paying for additional advice works, there will be a minority who will seek to capitalise on this opportunity.

As we conclude another week in which two parliamentary committees have considered the revised ACNC Bill, it is clear that the weight of evidence presented supports the Parliament proceeding with passing the Bill and that most in the sector are opposed to any further delays.

The Greens, who hold the balance of power in the Senate, now appear to be supportive, while also being concerned to ensure there are appropriate protections in place for the sector.

WA Greens Senator Rachel Siewert, a long time champion of the sector, has repeatedly raised concerns about the autonomy of NFPS, particularly in the light of current moves to impose gag clauses on some Queensland NFPs. There are likely to be some suggested amendments or processes to flow from the latest round of parliamentary hearings, but these should not be significant enough to delay the Bill any further.

When Parliament returns for its next two week sitting, the ACNC Bills will be debated in the Lower House, probably passed and referred to the Senate, where, subject to a few amendments to be moved by the Greens, the Bill should receive final approval enabling the ACNC to begin official operations on 1/10/12.

Thankfully, once the ACNC is officially in existence, we will all be able to lose the focus on the details of enabling legislation, and shift our attention to addressing the many real and pressing issues currently facing the broader Not for Profit sector.

It will be good to be able to step back and let the ACNC get on with the work of becoming an effective and responsive regulator committed to strengthening the Not for Profit sector.

Are we there yet? Almost!