Summary and recommendations
Religions and charities, and other not-for-profit
organisations in the 'third sector',[1]
play an important role in the community and in the economy. They receive
significant tax concessions. It is therefore important that they are
transparent and appropriately accountable. The bill before the Committee goes
some way to address this requirement and promote confidence that religious and
charitable organisations receiving tax concessions generate a net benefit to
the public, not just to their own members. The Committee views the bill,
however, as too narrow to respond to the broad range of issues identified by
the Committee.
The Committee regards 'charities' as altruistic bodies which
seek to help members of the community in need. The role of charities is to
mobilise their members and supporters to help others, not to just act in
their members' private interests. Their motives mean that all true charities
are not‑for‑profit organisations (but not all not‑for‑profit
organisations are charities). Charities provide some social and community
services that governments cannot provide at all or cannot provide as
effectively. The Committee agrees with the view that the work of charities therefore
reduces the burden on taxpayers of providing social services.
A national commission
The Committee notes the previous inquiries conducted by
parliamentary committees, the Productivity Commission and the recent Henry
Review. Notwithstanding their work, there remains a serious lack of information
in relation to the not-for-profit sector; for example, estimates of the value
of tax concessions range from $1 billion to $8 billion.
The earlier inquiries all recommended various changes to the
regulatory oversight of the not-for-profit sector. The Committee believes the incoming
government should increase transparency and accountability in the sector. A
national commission, which incorporates a public benefit test in the broader
regulatory framework, should be established, consistent with international best
practice.
The commission should not be regarded as an additional
bureaucratic impost; it would rather replace a complex array of state and
territory regulatory bodies, streamlining processes for charities and reducing
their compliance costs. It would increase public confidence in charities by
improving their transparency as well as being a source of advice and assistance
to charities.
The Committee agrees with the view expressed to it that there
comes a time when a government has to make a decision either to do something or
to stop saying that it is going to do something, because the matter has been on
the agenda for many years. It is now time for action.
Recommendation
The Committee recommends that the incoming government work
through COAG to establish a single independent national commission for not‑for-profit
organisations. The incoming government should establish a working group, or use
the COAG Business Regulation and Competition Working Group. The working group
should consult extensively with the sector in a timely manner to address issues
arising from the establishment of a commission which applies a public benefit
test. The Australian model should draw on the Charity Commissions in the United
Kingdom and New Zealand.
Recommendation
The Committee recommends that the working group consider the
functions and role of an Australian commission which should include, but not be
limited to, the following:
- promote public trust and confidence in the charitable sector;
- encourage and promote the effective use of charitable
resources;
- develop and maintain a register of all not-for-profit
organisations in Australia using a unique identifying number (for example an
ABN) as the identifier;
- develop and maintain an accessible, searchable public
interface;
- undertake either an annual descriptive analysis of the
organisations that it regulates or provide the required information annually to
the ABS for collation and analysis;
- educate and assist charities in relation to matters of good
governance and management;
- facilitate, consider and process applications for registration
as charitable entities;
- process annual returns submitted by charitable entities;
- supply information and documents in appropriate circumstances
for the purposes of the Tax Acts;
- monitor charitable entities and their activities to ensure
that registered entities continue to be qualified;
- inquire into charitable entities and persons engaging in
serious wrongdoing in connection with a charitable entity;
- monitor and promote compliance with legislation;
- consider, report and make recommendations in relation to any
matter relating to charities; and
- stimulate and promote research into any matter relating to
charities.
The Committee would expect a commission to adopt a tiered
reporting system to ensure that small not-for-profit organisations are not
overburdened by the costs of compliance.
The Committee would expect legislation establishing a
commission to be referred to it in due course.
A public benefit test
The Committee supports the application of a public benefit test
in the context of broader reform.
The Committee agrees, however, with the preference expressed by
the Scrutiny of Bills Committee that it would be better for a public benefit
test to be in legislation, where it would be subject to more parliamentary
scrutiny, than be set by a minister through regulations, as proposed by the
bill.
Recommendation
The Committee recommends that the incoming government should
follow the emerging international best practice and work with the Council of
Australian Governments to amend legislation governing not-for-profit entities
to include a definition and test of 'public benefit'.
Cults
In relation to the activities of cult like organisations and
the consequences for individuals and society of failing to take steps to
protect the community from unacceptable behaviour by cult like organisations, the
Committee believes that sufficient evidence was put before it to suggest that the
behaviour of cults should be reviewed with a view to developing and
implementing a policy on this issue that goes beyond taxation law. The
Committee notes the evidence in relation to the response of the French
government and the establishment of Miviludes.
Recommendation
The Committee recommends that the Attorney-General's
Department provide a report to the Committee on the operation of Miviludes and
other law enforcement agencies overseas tasked with monitoring and controlling
the unacceptable and/or illegal activities of cult-like organisations who use
psychological pressure and breaches of general and industrial law to maintain
control over individuals. The report should advise on the effectiveness of
Miviludes and other similar organisations, given issues that need to be
addressed to develop an international best practice approach for dealing with
cult-like behaviour.
Navigation: Previous Page | Contents | Next Page