Preliminary Pages
Chair’s foreword
The Bills will establish an independent, national regulator
for the charities and not-for-profit sector. The Australian Charities and Not-for-profits
Commission will become a one stop shop. Charities and not-for-profits will
provide streamlined information to the Commission, which will determine their
charitable status and pass on officially required data to other Commonwealth
agencies, including the Tax Office. It will implement flexible, proportional
regulation in accordance with entities’ size and through graduated enforcement
powers such as warnings and enforceable undertakings.
These Bills have been a long time coming. The current
regulatory framework for the sector is fragmented, inconsistent, and
uncoordinated across a range of government agencies. It meets neither the
sector’s needs nor those of the wider community.
A national regulator for the sector was first proposed in
2001 and has been a consistent theme in reviews of the sector since then.
Charities and not-for-profits have been subject to an inefficient regulatory
framework spread across many agencies and more than one level of government.
The Bills offer a way to remedy this.
The sector itself supports the change. Bodies in the sector
must prove their bona fides each time they deal with government, and they
anticipate the day when this information is located in one easily accessible
place.
Broadly, the committee covered three major policy areas in
the inquiry. The first is the capacity of the Commission to reduce red tape.
Work has already begun. The Commonwealth is seeking to ‘turn off’ any
duplication, such as reports to the Australian Securities and Investments
Commission or other Commonwealth agencies. It is also discussing whether States
and Territories might wish to do the same with their associations legislation
to the extent that these organisations are covered by the Bills. This is a long
term project, but the committee is confident that, over time, duplication will
be minimised.
Some in the sector were also concerned about reporting and
governance standards and how the Commission’s requirements would interact with
those of other State and Federal bodies. The Not-for-profit Sector Reform
Council made this argument in evidence:
Given that the government has taken on board the sector's
request for further time to discuss and be consulted in relation to the
reporting requirements and the governance standards, it can take on its role
from day one to be engaged in those consultations about how it will implement
its requirements under the legislation.
However, the Committee has made recommendations to increase
the flexibility for the Commission and the sector by allowing the Commission to
accept reports and materials from other agencies for a limited time, and to
annex existing and sector-developed standards to the bills.
The second policy area was the liability of directors,
trustees and management committees for the conduct of their organisations. Key
stakeholders were very concerned about how these provisions would operate. The
committee found the legislation and explanatory materials unclear and noted
that at times they did not appear to match the policy intent. For the sake of
clarity, the committee has recommended that these provisions should be redrafted.
The third main policy area revolved around procedural
fairness. The committee has made a number of recommendations to ensure that
organisations are notified and have the opportunity to respond prior to
enforcement action.
There have been considerable efforts to harmonise business
regulation across the country recently, and it is only fair that a similar
process occurs for the charities and not-for-profits sector. The sector holds
great hope that the Bills will deliver this result and the committee agrees that,
with some amendments, this will occur. The Bills should pass.
On behalf of the committee, I thank the organisations that
assisted the committee during the inquiry through submissions or participating
in the hearings in Canberra. I also thank my colleagues on the committee for
their contribution to the report.
Julie Owens MP
Chair
Terms of reference
On Thursday, 5 July 2012, the Assistant Treasurer and
Minister Assisting for Deregulation, the Hon. David Bradbury MP, referred
exposure drafts of the following Bills for inquiry and report:
n the Australian
Charities and Not-for-profits Commission Bill 2012; and
n the Australian
Charities and Not-for-profits Commission (Consequential and Transitional) Bill
2012.
The Minister requested that the committee report by Tuesday,
14 August 2012.
List of recommendations
2 Analysis of the Bills
Recommendation 1
That the objects of the Australian Charities and
Not-for-profits Commission Bill 2012 explicitly include the reduction of red
tape.
Recommendation 2
That the Explanatory Memorandum include material on the
meaning of ‘public trust and confidence’ and the way that it might be
interpreted.
That the guide to the Act reflect the educative and enabling
role of the Commission in supporting transparency and accountability in the
sector.
Recommendation 3
That the Commissioner have discretion to accept reports or
material prepared for other agencies and levels of government as reports for
the purpose of the reporting framework under the Bills. This arrangement should
be time limited and be reviewed as the lodge-once use-often process is
developed.
Recommendation 4
That the Government consider incorporating existing or
sector-developed governance standards into the Bill through regulation, in
addition to a default set of governance standards.
Recommendation 5
The Government investigate ways to strengthen protection in
the Bills for private donors who wish to keep their philanthropy private.
Recommendation 6
The Committee recommends that Treasury redraft Division
180—Obligations, liabilities and offences, of the Australian Charities and
Not-for-profits Commission Bill 2012, with a view to clarifying its intent and
operation.
Recommendation 7
The Committee recommends that the Australian Charities and
Not-for-profits Commission Bill 2012 be amended to provide that the
Commissioner provide written notice of intent, and an opportunity for the
entity to be heard, before a decision is enforced to revoke the registration of
an entity or suspending or remove responsible entities.
The Commissioner should be exempt from these provisions if
they are satisfied that the circumstances require immediate action.
Recommendation 8
The Committee recommends that clause 40-5 of the Australian
Charities and Not-for-profits Commission Bill 2012 be amended to:
require
the Commissioner to provide written notice of intent to the relevant registered
entity, and an opportunity for the entity to be heard, prior to publication of
the Commission’s intention to publish information under clause 40-5(f); and
allow
the details of matters published on the ACNC Register under clause
40-5(f) to be removed from the register once an appropriate amount of time has
elapsed, the matters in question have been resolved and there is no public
interest grounds for retaining the information.
Recommendation 9
The Explanatory Memorandum to the Bills clarify that the
Commissioner has a discretion not to impose an administrative penalty.
Recommendation 10
The Committee recommends that the Australian Charities and
Not-for-profits Commission Bill 2012 be amended to provide for a review of the
legislation after it has been in operation for five years.
Recommendation 11
Subject to the recommendations in this report, the House pass
the Australian Charities and Not-for-profits Bill 2012 and the Australian
Charities and Not-for-profits Commission (Consequential and Transitional) Bill
2012.