Charity Definition Delay Not to be Underestimated

The Opposition and the Greens continue to mount arguments against the Coalition Government’s decision to amend Social Services legislation that will delay the introduction of a new charity definition until late 2014.

And  it’s expected that there will be an amendment introduced to remove the delay to implementation of the Charity Definition in the final hours of the Parliamentary sitting in 2013.

Social Services Minister Kevin Andrews said in Parliament last week that he would be moving government amendments to introduce a new measure to the Social Services and Other Legislation Amendment Bill 2013 – which will delay the commencement of the Charities Act 2013 by nine months from 1 January 2014 to 1 September 2014.

The Charities Act 2013 defines "charity" and "charitable purpose" for the purposes of all Commonwealth legislation.

In an adjournment debate in Parliament, Labor Senator Ursula Stephens said the significance of the delay was not to be underestimated.

Senator Stephens served as Parliamentary Secretary for Social Inclusion and the Voluntary Sector in the Rudd Labor government where she led the change agenda for Australia’s Not for Profit sector including pushing through a National Compact between the sector and  Government.

Senator Stephens also said the new considerations in the Charities Act definition would make “some very specific provisions”.

“The first has implications for indigenous organisations: One departure from common law principles relates to entities with native title or other traditional rights in connection with the land,” she said.

“These entities, which might fail a public benefit test because they provide benefits only to indigenous individuals who are related, or have some other special relationship with the other potential benefit recipients, are treated as being for the public benefit.

“We know that there are instances of philanthropic funds not being able to support projects in remote communities because these entities did not have DGR (deductible gift recipients) status.”

She said another provision related to the presumption of benefit.

“Consistent with the common law, the statutory definition retains presumptions of benefit for certain charitable purposes,” she said.

“These purposes are the relief of poverty, distress and disadvantage of individuals or families; preventing and relieving sickness, disease or human suffering; the care and support of the aged and individuals with disabilities; advancing education; and advancing religion. The bill extends the presumption to the whole of the public benefit test for these purposes.

She said the third provision would enshrine advocacy as a charitable purpose.

“…Reflecting the Aid/Watch decision that charities may have a purpose to generate public debate about a charitable purpose,” she said.

“That means it allows for advocacy around a charitable purpose – It allows for an entity to have a charitable purpose, including a sole purpose, of promoting or opposing a change in the law or government policy relevant to another charitable purpose.

“And finally the issue of disaster relief and recovery.

“The bill extends common-law principles related to the purpose of assisting rebuilding, repairing or securing assets after a disaster, in furtherance of the purposes of exempt entities within the meaning of the Income Tax Assessment Act 1997. This purpose is included within the charitable purpose of advancing social or public welfare.

“The effect of this is to extend existing charitable purposes to include re-establishing Not for Profit community assets after a disaster, independently of the relief of individual distress.”

The Australian Greens said the Government had clearly already made up its mind on changing the definition of a charity, and were trying to delay the implementation of the Charities Act in order to do this.

“The Government have continually spoken about consulting with the sector, but it is becoming clear that they’ve made up their mind on some very significant issues, such as getting rid of the ACNC and changes to the Charities Act,” Senator Rachel Siewert, Australian Greens spokesperson on Families and Community Services, said.

“This is typified by the way they made a last minute amendment to delay the commencement of the Charities Act 2013 in a large patchwork piece of legislation, and tried to avoid proper scrutiny of their law making.

“It is clear from the Senate Inquiry into this issue that the majority of charities were not aware that a delay to the commencement of the Charities Act was being considered.

“I am very concerned by the possibility of the Government moving to change the definition of a charity or what is deemed to be charitable work, particularly in regards to the threat this poses to advocacy.

“Such a move would, unfortunately, be very in keeping with the behaviour of the last Liberal Government, which sought to control the sector and limit their influence.

“Delays or changes to this Act will just create more uncertainty for charities who work hard to serve, defend and promote the broader needs of our community.”

The Legislation was referred to a Senate Committee which is due to report back to Parliament today – the final sitting day for 2013.

Earlier this week Not for Profit leaders told an urgently convened Senate Committee meeting in Canberra that Coalition Government plans to delay the start of new charities legislation puts future planning in jeopardy.

Given the long Senate agenda for the final sitting day it is likely the Social Services Act will not be debated and the Charity Definition will come into force on the first January 2014 by default.

The CEO of the Community Council for Australia, David Crosbie told the hearing that “The previous Parliament passed legislation to provide a clear and widely supported definition of charity which was dt to come into force from January 2014.

“It is unfortunate that the NFP sector was not properly consulted about whether they want a delay,” Crosbie told the Committee.

World Vision CEO Tim Costello told the Committee that the new definition is extraordinarily important for all of the sector.

“With the consultations and over 200 submissions made, I have not heard of anyone in the sector who was troubled by this definition. They all feel it gives greater clarity and certainty. I have not heard anyone in the sector saying we need more time to consult on a definition.

“When you say that maybe this is now going to be pushed out to September and there will be consultation, in my capacity as chair of CCA, members ask why that will happen when this was the least contested, least difficult issue. This is the thing that everyone in the sector is united around,” he said.