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Monday, 17 September 2012
Page: 10774


Mrs PRENTICE (Ryan) (17:50): Hundreds of thousands of Australians each year participate in volunteering across Australia through local sports clubs, scout groups, surf lifesaving clubs, religious groups and other community organisations. The most recent census showed that more than three million Australians participated in voluntary work for an organisation or group. Of course, this figure does not include the many millions of Australians who conduct selfless voluntary work for others in the normal course of their lives without even considering it to be volunteering their time. The disparity is reflected in the Australian Bureau of Statistics' 2010 general social survey, which indicated that more than six million Australians volunteer every year, including many from different cultural backgrounds who are frequently not aware that some of their work in the community is actually volunteering.

Their work is funnelled through the charities and not-for-profit sector, with thousands of Australians managing and handling the many hours of administration, financial accounting and reporting, and compliance with federal, state and territory regulations. There are people like Craig Michaels at Connected, parents and volunteers at the Glenleighden School, Gwen Braga through her involvement in many community organisations, Anne Huggett at Mitchelton Meals on Wheels and Leith Manifold at Meals on Wheels Western Suburbs, as well as those at Kenmore and Ashgrove in my electorate, Merv Brown at Gaythorne RSL, Jutta Godwin of the Cubberla-Witton Creek Catchment Network, the wonderful members of the Moggill and Brookfield Country Women's Association and Cecily Walker of the Indooroopilly Senior Citizens, to name just a few. I am sure every member of this House could spend hours listing the enduring hard work of those who give up their time to assist others in their communities. It is no different in Ryan. Indeed, who can forget Brisbane's 'mud army' during the 2011 floods?

In November last year, we saw an attack on volunteerism by the Gillard Labor government in their changes to occupational health and safety laws, which effectively turned volunteers into workers, leaving community groups burdened with strict regulations accompanied by harsh punishments for noncompliance. Those changes last year meant that a Meals on Wheels worker could be fined up to $300,000 or jailed for up to five years due to noncompliance with the so-called harmonised laws. Under the auspices of harmonisation, the Gillard Labor government failed to support the volunteering, charity and not-for-profit sector in this country. That same process has been occurring with the bills before the House today, with a Labor government that has failed once again to consult appropriately with the sector itself, failed to provide certainty with regard to the obligations and responsibilities of organisations and those governing the organisations, and failed to devise legislation that would ease the regulatory burden.

The House of Representatives Standing Committee on Economics has previously conducted an inquiry into draft legislation proposed by the government, and the Parliamentary Joint Committee on Corporations and Financial Services tabled its report on 10 September 2012, just a few weeks after the bill was introduced into parliament on 23 August 2012. I note that previously the government introduced revised legislation on 6 July 2012 and set a deadline for submissions to the House economics committee of 20 July 2012, giving community organisations and the sector only nine working days to respond to changes that would so fundamentally change the sector.

These reports have exposed a number of issues with the draft legislation, issues highlighted in the 43 submissions to the inquiry from organisations across the board, including the Salvation Army, Anglicare, World Vision, the Institute of Chartered Accountants, the Australian Institute of Company Directors and the Independent Schools Council of Australia. Previously, organisations such as Surf Life Saving Australia, which would be heavily impacted by these changes, have made submissions. The concerns raised through these inquiries have not been adequately addressed to the satisfaction of key stakeholders in the sector, nor for that matter to the satisfaction of the coalition. For that reason, we oppose these bills.

As many members have commented, the Australian Charities and Not-for-profits Commission Bill 2012 and the associated Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012 primarily seek to establish the Australian Charities and Not-for-profits Commission, ACNC. Originally, this was supposed to come into operation by 1 July 2012, then 1 October 2012. Of course, the Senate Community Affairs Legislation Committee delivered its report on 12 September 2012.

Presently, there is no single institution responsible for the regulation of the not-for-profit sector. For both different and overlapping purposes, different parts of the NFP sector are across Commonwealth, state, territory and local governments. At the federal level, the Australian Taxation Office and the Australian Securities and Investments Commission act as de facto regulators in various areas. The Australian Taxation Office looks at organisations seeking to access tax concessions, including income tax exemption and deductible gift recipient status. This required endorsement from the ATO makes it the default determiner of charitable status, while ASIC has a smaller role, regulating approximately 11,000 NFP entities incorporated as entities.

There are over 600,000 entities in the NFP sector, of which approximately 440,000 are small, unincorporated entities. Less than one-tenth, 59,000, are determined by the Australian Bureau of Statistics to be what is called 'economically significant'—that is, they employ paid staff or have a significant tax base. Naturally, state and territory governments have certain governance and reporting requirements on entities that receive state and territory funding as well as regulate incorporated associations and charitable trusts. Not-for-profit non-government schools also have quite onerous reporting to, for example, the Department of Education, Employment and Workplace Relations, through their financial questionnaire, which is described in the submission by the Independent Schools Council of Australia as an 'annual collection of financial income, expenditure and liabilities from all non-government schools receiving Australian government general recurrent grants'. Their submission also goes on to list the other bodies to which many schools must report, including ASIC, state and territory registrars of associations and the ATO.

Of course, in an ideal world, it would be fantastic that a not-for-profit entity could register its details with one commission, once a year, and not have to worry about duplicating that administrative burden to comply with all the federal, state and territory and local government levels. Not-for-profit agencies have raised the issue of inconsistent and increasingly and excessively complex reporting requirements. Sadly, today's bills do not achieve that aim. Instead, there is a considerable lack of clarity in the bills about the specific steps which need to happen before the ACNC comes into place. If, as the government claims, these measures will result in a red-tape reduction for charities by streamlining regulatory requirements, then why have they not been up-front about how or why the federal government is going to supplant the roles which the states currently undertake?

In one of the many submissions the Australian Institute of Company Directors has made in this area, specifically in relation to the most recent report, comments included:

… no agreement has been reached with the States...

…   …   …

As it currently stands, the Bill therefore adds an existing layer of regulation for charities currently required to comply with State legislation.

They say they are not satisfied at all that proper steps have been taken to liaise with states and territories for them to agree to hand over their powers to a Commonwealth regulator. Anglicare noted in their submission that harmonisation of regulations across jurisdictions will require 'a lengthy transition period'—more evidence that the industry is extremely concerned about this legislation. Another measure in these bills which is of great concern to the not-for-profit sector is the prescriptive implementation of the set of external conduct standards which will apply to all registered entities, regardless of the entity type. The governance standards can cover a broad range of issues including the content of an entity's governing rules and the processes which a registered entity must have in place. The many thousands of volunteers who organise and run charities and not-for-profit organisations across Australia do not want a new regulatory burden or prescriptive conduct standards. They just want some advice and direction from people with volunteering experience so they can get on with their volunteer work. I fear that the conduct standards imposed on all registered entities with the ACNC will act as a disincentive for Australians to become involved in charitable and not-for-profit organisations and even more so in the setting up of new organisations.

I note that the Community Council for Australia:

… supports the ACNC Bills on the basis that they provide for the establishment of an independent and responsive regulator for the charities and not-for-profit sector.

The CCA represents a very impressive list of charities and has on its board members such as Brett Williamson from Surf Life Saving Australia and the Reverend Tim Costello of World Vision Australia. For large well-established charities and not-for-profits with experience and capability in terms of administration, it is possible that the ACNC could achieve its overarching purpose for streamlining reporting and conduct. However, many submissions expressed the view that it would be difficult for people in regional areas working in other very small not-for-profits to know exactly what is required of them from the ACNC. Indeed, as the Australian Catholic Bishops Conference noted:

A fundamental value is the independence of the charities. Their ability to organise their structure and governance to suit their own activities should not be compromised by prescriptive and unnecessary standards.

Many submissions echoed this sentiment. A one-size-fits-all approach to every charity and not-for-profit, the coalition believes, will decrease versatility within the sector. I understand that there are concerns in the community about the conduct of some organisations to which they donate their money, but that is not a justification for burdensome regulation that applies to each and every charitable and not-for-profit organisation.

This is why the coalition opposes the passage of these bills today. However, we also have a plan to assist Australians effectively in this area. On 18 June 2012, the shadow minister for families, housing and human services, the member for Menzies, announced that the coalition would support a small, independent charities commission, which would serve as an educative and training body for the sector. Such a commission would indeed support the sector by providing information about the process of registration for new organisations, it would advocate for the rights of these organisations and, further, it would help facilitate the interaction between government and the charitable and not-for-profit sector. This type of coordination is what the coalition supports, real on-the-ground support for community organisations, rather than a centralised government decreeing to each and every organisation in this country the exacting reporting and conduct requirements proposed in this legislation which will ultimately be handed down as regulation.

Members should resist any push that proposes a government-knows-best view and indeed any push that centralises functions of government to the Commonwealth where there does not exist any rational basis to do so. We must respect personal and community responsibility which we see so often in the charity and not-for-profit sector. We know that by fostering community spirit we reduce reliance on government.

At present, although these measures proposed in the ACNC bills have undergone many revisions, it is certainly not a process anyone would describe as exhaustive. The government addressed some concerns coming from the sector in the revised versions of the legislation, but ultimately I do not accept that the government has adequately addressed those concerns. The coalition will always support volunteering in Australia and we will always support charities and the not-for-profit sector. In that area it is incumbent upon government to reduce red tape and to remove the duplication of services where appropriate. These bills do not achieve that aim, and therefore do not support volunteering or charities nor the not-for-profit sector. For that reason, I oppose these bills.

Debate adjourned.