Five Year Review of Australian Charities and Not-for-profits Commission Legislation
Monday 29 January 2018 @ 10.50 a.m. | Legal Research
On 20 December 2017, the Federal Government announced the terms of reference for the five-year review of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (the ACNC legislation) and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Act 2012 (Cth). The five year review is required by the legislation and was due as both Acts had commenced operation in December 2012. The review is being conducted by the Federal Treasury Department (Treasury) which is currently taking submissions which are due to close on 28 February 2018.
About Charities and Current Regulation
Australian charities are reported as having annual revenue of $143 billion, an amount which is around 8 percent of Australia’s GDP, and altogether employ more than 1.3 million people. They also engage more than three million others in volunteering their time and effort to helping others - a figure that the Treasury states could increase to six million volunteers when the broader not-for-profit sector is considered. In a recent assessment the Treasury identified approximately 257,000 non-profit organisations operating in Australia.
Registered charities in Australia’s are reported as numbering 55,000 and are regulated by the Australian Charities and Not-for-Profits Commission (the Commission) under the current not-for-profit regulatory framework - a framework does not extend to other not-for-profits. In referring to this framework and the review, the Treasury says:
Review's Terms of Reference
The terms of reference set out for the review require the Review Panel to evaluate the suitability and effectiveness of the ACNC legislation, having particular reference to:
- Examination of the extent to which the objects of the ACNC legislation continue to be relevant.
- Assessment of the effectiveness of the provisions and the regulatory framework established by the ACNC legislation to achieve the objects.
- Consideration of whether the powers and the functions of the ACNC Commissioner are sufficient to enable these objects to be met.
- Consideration of whether any amendments to the ACNC Acts are required to enable the achievement of the objects and to equip the ACNC Commissioner to respond to both known and emerging issues.
The Australian Charities and Not-for-Profits Commission's Submission
On 19 January 2018 the Commission published its submission for the ACNC Review. It makes 40 recommendations in its submission, with some of its key recommendations as follows:
- Consider whether measures could be introduced at the Commonwealth level to protect a charity’s accumulated charitable income and assets after its ACNC registration has been revoked
- Consider adding the following objects in section 15-5 of the ACNC legislation:
(a) To promote the effective use of the resources of not-for-profit entities; and
(b) To enhance the accountability of not-for-profit entities to donors, beneficiaries and the public.
- Consider whether a statutory definition of "not-for-profit" should be introduced for the purposes of the ACNC legislation and the Charities Act.
- Consider amending the ACNC legislation to authorise the Commissioner to collect and display on the Register information provided voluntarily by a registered charity for that purpose where the information would assist the public to understand the structure, operations or impact of the registered charity.
Reaction and Comment
In its submission the Commission indicates that, its recommended changes to the ACNC legislation would:
- Enhance the effectiveness of the regulatory framework;
- Increase the accountability and transparency of charities by ensuring the public has access to relevant information on the ACNC Register;
- Better enable the achievement of the objects of the ACNC Act; and
- Within constitutional constraints, ensure that the ACNC Commissioner has sufficient powers to meet those objects.
The reaction however, to the Commissions submission, it has been reported, has been to describe it as "over-reach" in particular where the submission speaks of promoting “the effective use of the resources of not-for-profit entities” and to “enhance the accountability of not-for-profit entities to donors, beneficiaries and the public”. Criticism defended by the Charities Commissioner, Gary Johns, who is reported as saying the changes are “ . . . designed to encourage the responsible and accountable use of charitable resources” and are similar to the regulator’s powers in the United Kingdom".
The Guardian reports the Chief Executive of the Community Council for Australia, David Crosbie, responding to the proposed changes, by saying that the regulator was already able to make recommendations about efficiency and did not require new objects:
Final Report and Submissions
The Report on the Review’s findings and recommendations is to be made to the Government by 31 May 2018 and the report is then to be laid before each House of the Parliament within 15 sitting days of its receipt. Details for making a submission can be found here.
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