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Tuesday, 18 September 2012
Page: 11046


Ms O'NEILL (Robertson) (17:50): I rise in support of the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. There have been a number of participants in this debate over the last couple of days and I have to say that, for a sector which is held in such high esteem by members on both sides of the chamber, it might be surprising to people who have been listening that there can be such division on this issue. It seems from my reasonably close encounter with the legislation through the overview by the Joint Parliamentary Committee on Finance and Corporations that there is a resounding voice from the sector itself willing, urging and, indeed, in many cases demanding that this bill goes through in the interests of the sector and of the services they provide to the Australian community.

One of the key points we keep hearing from those opposite, who continue with this litany of fears and campaign of negativity, is a concern about red tape. Importantly, this bill provides the sector with an opportunity to have a one-stop shop, one place to which they can provide critical information about how their charity is working. It also provides a place to which the Australian community can go and find out information about the charities they so generously support on so many occasions, not just when crisis situations emerge but also as they look around their local community and feel compelled to act in support of local people and local issues.

I make these comments in the context of what has preceded this moment, where we find ourselves on the cusp of passing this legislation through the House at the end of a period of seven reviews since 1995, five of those reviews in just the last four years. Mr Deputy Speaker, I alert you to the range of reviews that have been undertaken across this sector, with many, many committees having had a look at this and each one of them encouraging the very action we are proposing to take.

I am not the only person who believes this. I think a number of people on the other side, in their heart of hearts, agree with this issue. In 2006, a member of the Senate, warning that effective reviews of charitable status are not regularly undertaken by the Australian Taxation Office—which currently oversees the charity sector—said this:

BRW’s Adele Ferguson put the potential consequences of this benign regulatory neglect more starkly, observing:

Without adequate supervision or transparency, the not-for-profit sector is a ticking bomb. It would take just two or three scandals to harm all the good that the other charities are doing. Even larger charities such as the Salvation Army concede that the sector needs reform ...

Heeding that advice, which has been repeated on many occasions since 2006, Senator Brett Mason said:

I have little doubt that the vast majority of organisations are doing the right thing and are doing great work. The problem is that we cannot sort out the many good not-for-profit groups from the handful of bad ones or those who are underperforming. It is my belief that this threatens the donor-charity trust relationship within the sector at large.

It is here that government needs to step in and provide clarity where confusion prevails.

This is in the interests of clarity and in an effort to avoid confusion and that very real concern that all the good done by the charities—and the goodwill to those charities—could be undone by a few bad eggs. Senator Mason goes on to say:

Aside from setting up an independent regulator, some of the other significant initiatives warrant thought.

That is what we have done. With further consultation—wide and extensive consultation—with the sector, we have come to these particular bills.

I want to take a moment to look at the objects of the bill. The objects of the bill have been clarified at the request of the sector, which, in a hearing before the House Standing Committee on Economics, made a number of very powerful arguments which resulted in no fewer than 13 amendments to the draft legislation, which have now formed the essence of the legislation before the House. The sector requested that the objects of the bill be made very clear. It wanted the bill to articulate that the framework to be overseen by the ACNC will be to maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector—the sector requested that that be transparently stated. The framework overseen by the ACNC will support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector. It will promote the reduction of unnecessary paperwork, because duplications in the Australian not-for-profit sector occur. These are the intents of this bill and they are clearly the intents of the sector as well.

Why does this matter so much? Those listening might be keen to hear just how large this sector is and why it is critical, as Senator Brett Mason had indicated and as the sector itself is indicating, that we have the ACNC, this one national body overlooking our charities and not-for-profit sector. The real facts are that Australia's not-for-profit sector is quite large, certainly diverse, and is responding to a range of different needs and sectors in the community. There are about 600,000 entities engaged in economic, social, cultural and environmental work. About 60,000 of the 600,000 entities are charities and 21,000 of them have deductible gift recipient status. That was at 21 July. Amongst that mix, about 5,000 of the charities are constituted as companies and there are about 136,000 not-for-profit incorporated associations. Currently they are registered with states and territories.

I know those opposite are making much of the fact that the states and territories are already doing this job. They are saying: 'Why is the federal government coming in over the top? Why do we need a national regulator?' Again I repeat: we need a national regulator because those in the sector are calling for a national regulator. As I said, 136,000 of them are registered with the states and there is no clarity for people who want to find out about them. There is no easy pathway for people who are contributing to these charities to find out what is going on. There are also, in addition, 440,000 organisations that are small, unincorporated not-for-profit participants. Given the size of the sector and the clear beneficial objects of the bill, it is not surprising that we stand on this side of the chamber supporting this legislation.

But we are not the only ones who support this legislation. Clearly there is support within the not-for-profit sector for a national regulator, and the introduction of the ACNC is supported by a range of groups from every possible sector. Welfare groups, social welfare organisations, healthcare providers, international aid organisations and religious entities all support this bill. The Australian Council of Social Service noted in its submission that the sector itself has 'long championed' the introduction of a national not-for-profit regulator. The Department of the Prime Minister and Cabinet has argued that the establishment of the ACNC is a result of the sector's long-term advocacy for national regulatory consistency.

From the National Roundtable of Nonprofit Organisations, we have an articulation that there are about 12 million words, 39,000 pages, on the public record in support of the case for establishing this national regulatory body. They urge us to get on with this, not to go on with the continual delay. They say:

Once again, we are at the altar of the reforms we want and need and we ask for the support of our national parliament and of the states and territories to deliver for us better and smarter regulation. We don’t want to be jilted yet again.

Yet, with 12 million words, 39,000 pages, of resounding support from the sector—indeed, overwhelming requests from the sector over many, many years—we still have those on the opposite side of the chamber saying: 'No. We know better than the sector. Our wisdom is greater than the 39,000 pages of wisdom collected from the sector. We, the 'noalition', know better than Australia's not-for-profit and charity sector.' The breathtaking arrogance would surprise me, except that I have been here for two years and have listened to their constant carping negativity, their discussion of fear, their amplification of anxiety about the future and their determination to stop every move in a positive direction for this country.

Philanthropy Australia was one of the participants in the hearing that was most recently convened here in parliament, just a couple of weeks ago. We heard from Mr David Ward of Philanthropy Australia. This was his assessment of the current regulatory regime that those opposite seek to uphold and continually seem to argue is quite adequate for the job—despite the fact that Senator Brett Mason, I think, actually articulated very clearly what the threat of doing nothing in this sector is. David Ward said:

The current arrangements are so fragmented that the commencement of reform is absolutely needed. … I am on a small not-for-profit run by volunteer boards which was volunteers only up until recently. It is required to produce audited financial statements, has ASIC reporting requirements, has ATO reporting requirements, is technically regulated by one state attorney-general, has six state fundraising licences and files information to seven separate agencies.

At the other extreme there are charitable funds, claiming in excess of $1 million of franking credit refunds annually, in cash, from the ATO—totally legitimately, I would add—which are currently not required to produce financial statements, which are not audited and which report to no-one.

In our view, neither of these examples is satisfactory.

I think any ordinary Australian would consider Mr Ward's view very valid. Indeed it is not satisfactory that there are onerous requirements heaped on charitable entities that are operating across states, with a whole sector able to get franking credits to the tune of $1 million without being forced to report. The establishment of the ACNC—its change from its current preparatory status to a fully-fledged statutory body after the passage of this bill—will make sure that that is no longer the case, that there is fair and transparent reporting.

I also want to make the point that, amongst those we heard from, there was a real desire for what the chair of the ACNC, Susan Pascoe, was articulating as a 'report once, use often' regime. It is a form of passport for all the charities and not-for-profits to be able to identify critical information, to have that information available for funding bodies that might be seeking to get money into the community to support particular causes, to be able to go to a website, find the details and the data, just as any ordinary Australian would, and for that reporting to be in a format that is simple and accessible. Once that report is established, it would be available as a working document for many, many agencies to be able to refer to.

The notion of reporting once and being able to use often is something that is extremely attractive to those in the sector who are burdened by incredible levels of paperwork currently. This legislation is Labor leading—leading in a way that listens to the community, that respects the voice of those who know, that listens and responds in an appropriate way to enable them to get on with the job that they want to do and that encourages the states to come on board and make sure that they make this an accessible and better-functioning sector. (Time expired)