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Monday, 17 September 2012
Page: 10789

Ms O'DWYER (Higgins) (18:48): I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. I join with those who have spoken in this place about the very good work done by charities and not-for-profits in our community, in our country and around the world. I think that, on this, both sides of the chamber would agree.

My own electorate of Higgins is full to the brim with schools that nurture young minds, hospitals that heal bodies, training and employment agencies that invest in skills development and find job opportunities for those who need them, welfare agencies that provide food, shelter, and hope for some of the most disadvantaged in our society, and aged-care facilities that provide care for those who cannot care for themselves. These organisations and more were established, and are run, by various religious denominations and not-for-profits.

We are told that the measures in the bills before the parliament today will make it easier for these organisations to perform good works. We are told that the measures will simplify regulation, reduce compliance costs and reduce the time spent by the directors, staff and volunteers of these organisations in managing the red-tape burden. We are told that the change in the regulatory regime will increase transparency and confidence in the sector. If this were true then of course we on this side of the chamber would support the bills. However, sadly, this is not the case. In fact, these bills are a cruel hoax on the not-for-profit and charitable sector.

In the time available to me today I will highlight four aspects of these bills. First, these bills will increase, not decrease, the regulatory burden on the not-for-profit and charitable sector through a significant amount of duplication. Second, despite the fact that the government say there will be simplification of the regulatory burden between the states and territories and the Commonwealth, there will be no simplification because there has been no agreement with state and territory governments to hand over powers. Third, there are significant concerns about the scope of powers of the new regulator—concerns that the new regulator will be able to interfere and intervene in not-for-profits without good cause. And, fourth, we believe that the significant changes mooted in these bills will actually put off a number of people who would hitherto have looked forward to participating in our local communities in becoming directors of not-for-profits or charitable institutions.

I am a little perplexed as to why this government even has a Minister for Finance and Deregulation. Each time we stand in this place to discuss a new bill, we are faced with more regulation, more administration and more red tape. Be it child care, health care, financial services or industry, this government has added more complexity and more costs to business without requiring or delivering productivity gains. Now it is the not-for-profit sector that the government has in its sights.

As we know, the government puts facts and evidence to one side when making decisions about regulatory intervention and pursues, in many cases, ill-conceived and unwarranted legislation. This is true in this instance. How do we know? During the consultation process, as short and deficient as it was—nine working days between the release of the exposure draft and the introduction of the legislation—a number of comments were made about how this legislation would increase, not decrease, regulation and compliance requirements. To see that, you only need look at some of the comments made by those that provided submissions. The Australian Baptist Ministries said:

In our view the increase in compliance obligation will make it more difficult to fill volunteer roles within local congregations as well as requiring more time to be spent on compliance matters and therefore less time on matters that will provide a benefit to the community.

The Australian Conservation Foundation warned that rather than remove duplication, the ACNC bills would duplicate reporting obligations. The Australian Council of Social Services stated:

The Bill does not yet contain any provisions that make it explicit that the reduction of unnecessary compliance and regulatory burdens is a core object of the Bill, nor does it identify these kinds of reforms as policy directions or drivers of the ACNC’s purpose or activities. There must be a direct link between the reduction of red tape and the objectives and functions of the ACNC.

Catholic Health Australia confirmed that:

… the effect of the Bills would be to add additional regulation to the operation of most not-for-profit organisations.

Community Employers WA submitted:

A key objective is the reduction of red tape and duplication with regards to compliance, accountability and transparency.

It has not to date, and remains, unclear that the Bill will achieve this. This is a potentially a significant failing, but remains pivotal to the success of the Australian Charities and Not-for-profits Commission. This needs to be more prescriptive.

Mission Australia concluded that the bill:

… is not sufficiently well balanced by a commitment to enable the not-for-profit sector, to reduce duplication of reporting and to provide public confidence in the sector …

The list goes on and on. Yet, despite this overwhelming evidence that it does not achieve the objectives, the government simply refuses to acknowledge that this bill is not a good idea for the not-for-profit and charitable sector and that, in fact, it will increase the regulation and red tape on this sector rather than reduce it.

The government say we should simply trust them with the detail. We should simply trust them that, at some point in the future, harmonisation between the states and territories and the Commonwealth will occur. When it comes to matters of trust, of course, with this government they have proved very much wanting in this regard. I go to the comments of Linda Lavarch who heads up the Not-for-profit Sector Reform Council. She said:

Removing the current regulatory duplication and providing a one-stop shop for not-for-profits can only be achieved through a collaboration between the Commonwealth, state and territory governments.

Mr Bill Daniels of the Independent Schools Council of Australia said at the hearing:

There has been no discussion whatsoever with the states or, indeed, with the Commonwealth department that I am aware of that has involved the independent sector on any reduction in reporting requirements.

This, of course, adds up to additional compliance red tape and regulation. The government are asking us to trust them in their actions despite the distinct lack of detail. Time and time again, when they have announced policies without the appropriate details, they have been found wanting. We have seen it with the recent announcement of their dental policy; we have seen it with the response to the Gonski review which lacks any detail whatsoever. The government do not have proven ability to furnish comprehensive policies with details, which means gross uncertainty for stakeholders and it means that we as a parliament would not be doing our job properly if we allowed this legislation to proceed.

Through discussions with stakeholders and throughout the inquiry by the House Standing Committee on Economics it has been made clear that no meaningful progress has been made by the government in its attempts to have the states and territories agree to harmonise their laws. Based on the coalition's discussions with state governments it seems unlikely that states will hand over their powers and submit to the Commonwealth in the foreseeable future—a gaping hole in the government's plan. Not only has the government failed to provide the details of harmonisation with the states and territories, it has failed to ensure its own departments are ready to hand over their regulatory powers to the ACNC.

This issue is of particular concern for independent schools which will be required to report much of the information they report to the department of education to the ACNC as well as to state authorities. If an information-sharing agreement is not reached between the ACNC and the department of education, the ACNC will serve as an additional layer of regulation and red tape for independent schools. Not only have the government failed to harmonise the relationship between the states and territories and the Commonwealth, they have failed to harmonise the relationship between their departments and the ACNC. It has been made very clear to the Australian people in recent times that the government cannot be trusted to provide detail with their policies. This is yet another reason why we cannot support the legislation.

The third point I would like to raise today is that it is a concern to us that the government is creating a regulatory superpower and the powers of this regulator certainly exceed its requirements. This bill will establish a new statutory office, the Australian Charities and Not-for-profits Commission which will be a Commonwealth level regulator for the not-for-profit sector. The ACNC commissioner will, in turn, have a wide range of enforcement powers. These powers are similar to those given to other Commonwealth regulators such as ASIC, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission. Why would a charity, not-for-profit or local community group need to be subjected to the same regulatory powers as some of the largest companies in the nation?

These bills provides the ACNC with the authority to: issue warning notices; issue directions; enter into enforceable undertakings; apply to the courts for injunctions; suspend or remove responsible entities; and appoint acting responsible entities. This overreach of powers was recognised by Community Employers WA who put to the inquiry that:

The level of regulatory powers of the ACNC, such as procedural fairness and sanctions, are concerning and could lead to a misuse of law in dealing with organisations justly and fairly. It is also contrary to the concept of ‘light touch’ regulation.

This was confirmed by Ewen Crouch, Chairman of Mission Australia, who stated:

I do believe that the information-gathering, monitoring and sanctioning powers, including the ability to remove a director, are very heavy-handed. I would think they would be quite problematic from a regulator's perspective. It is not something that any other regulator in Australia has any experience with and I do wonder why this regulator would want to have those powers and whether they would know how to use them.

It is simply not appropriate for such unknown powers to be invested with this new regulatory body without any evidence that there is any harm whatsoever that needs to be corrected. We were told a number of times when we were conducting the inquiry with the House Standing Committee on Economics that there needed to be increased confidence in the sector. Yet, it was clear to us in all of the evidence provided that there was significant trust and confidence in the sector. The government was trying to provide a solution where there was, in fact, no serious problem.

The fourth area I would like to raise today is the consequences of introducing such legislation. The consequences of this bill will be felt deeply by the charities and not-for-profit sector, as well as by the entire community. We know this because we have heard a significant amount of evidence from a number of eminent Australians such as John Colvin, who is the CEO and managing director of the Australian Institute of Company Directors, who asked, as David Gonski had already pointed out, 'Why should we have a system in Australia which would make us the laughing stock of the world by having liabilities for volunteers greater than those for not-for-profits?' This would discourage many people from going on to boards for not-for-profit organisations and charities. The government should get out of the way of the good work being done by not-for-profit organisations and let them get on with helping people and helping our community. It is clear that there will be an impact on the operation of charities which will in turn impact on the likelihood of people either willing to get involved or stay involved with these organisations.

When speaking about this bill, David Gonski said it will not assist in 'fostering volunteerism in the sector'. The high level of liability that the bill attaches to individuals will severely restrict the likelihood of attracting community members to the boards of charities and not-for-profit organisations. The bill will not foster volunteerism but may, in fact, restrict it.

Mr Gonski also said directors of such organisations may not want to branch out and make these not-for-profit's do really well because they will be scared that they will not be able to adhere to a black letter law approach. Such a consequence will mean that organisations will be less successful and less likely to expand and grow and increase their services and contribution to the community—a profoundly perverse result of this legislation.

It is interesting that I quote Mr Gonski here because Mr Gonski is well known to the government. Mr Gonski is the author of the review into school funding. The government recently responded in the broadest possible terms to this report and praised Mr Gonski for his work and approach to the inquiry yet here in this instance Mr Gonski is being ignored by this government. I have listened to his concerns as outlined and the coalition has listened to his concerns. Perhaps the government should do so as well.

As such, for all the reasons I have outlined this evening, there is no way that the coalition can support these bills. For the reasons mentioned, we want to see a very vibrant not-for-profit and charitable sector. We want to encourage volunteers to contribute to this sector and to go on contributing to this sector. These bills unfortunately will not allow them to do that in the way that we have come to know. It is most certainly not perfect in the way it is currently regulated but these bills will make it even worse. As such, we will not support it. We believe there is a better way, which was outlined by the shadow minister that will, in fact, reduce red tape and regulation, and which will reduce administrative and compliance costs. As such, we support the changes we brought forward that will restore hope, reward and opportunity for all Australians.