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Tuesday, 18 September 2012
Page: 11075


Mrs BRONWYN BISHOP (Mackellar) (20:00): As many of my colleagues have pointed out, this legislation is, to put it mildly, heavy-handed. But I think we have to frame it in the context of our different approaches to the philosophy of the volunteer. Those of us who follow the philosophy of individualism as distinct from the philosophy of collectivism, which is the philosophy of the Labor Party, believe that the accent must always be on the individual, allowing the individual to reach their maximum potential, having an obligation to put your hand out to assist a neighbour to reach their potential. At every aspect it is looking at the improvement of life. Collectivists will always look at putting regulation on people and look for a collectivist outcome where the individual can be sacrificed to that outcome—and this is classic legislation of a collectivist type.

I often like to describe the volunteer sector, and volunteers, as being like the mortar between the bricks of an edifice, that holds it together. The edifice is our society, and it is the volunteers that hold it together—without them, it would collapse. At every turn in our life we look somewhere where someone is volunteering to assist someone else. That degree of altruism, which is part and parcel of that volunteering spirit, is something that enriches our community as a whole. And anything that sets out to diminish that ought to be condemned; hence, I condemn this legislation.

The 2011 census showed that 1.3 million people over the age of 50 had volunteered for a charitable organisation in the previous 12 months. That says something pretty terrific about the Australian people, and that is without even going to organisations like surf-lifesaving, like the rural fire services, like Rotary, like Soroptimists—like the myriad organisations which all find there is a way they can serve their fellow beings and part of their community. The statistics tell us that there are 600,000 entities in Australia that call themselves not-for-profit. Around 11,000 of them are incorporated under the Corporations Act, federal legislation, and 400,000 of them enjoy tax exempt status of one form or another, usually income tax.

That means it has been part and parcel of our policy always, for those of us who have followed the development of the common law and the development of where religious and charitable purposes became part of that construct, to say that where good works were being done they ought not be subject to the sorts of tax impositions that people who are doing it for commercial purposes should be. The whole law of trusts has evolved over hundreds over years, and we have certain meanings, even in our tax act, for education purposes and hospitals, just to give examples. But these are all organisations where people are volunteering their time and their effort to ensure that something good happens in our community. I suspect that the real intent of this legislation is to move a number of entities that currently enjoy tax-free status to become taxpayers instead. Instead of people giving and contributing their time, which is just as important as the government giving out grants, that will start to be curtailed.

I notice that, within not-for-profit entities we do include trade unions and employer organisations. It is interesting. I can give personal experience along the way that, in a certain organisation of which I have been a part, where volunteers have been carrying out particular tasks, there has been a complaint from an organised union against those volunteers saying: 'That should become paid employment'—when the generosity and the interaction between the people who are giving the service and the people who are receiving it is fulfilling for both parties.

So it is terribly important that we continue to characterise the essential nature in Australian life of the volunteer. Whenever I attend my citizenship ceremonies—and I attend as many as I can, because I think it is such an important decision that people are making in their lives, to decide to give their allegiance to this wonderful country—I point out that part of being Australian, part of getting to know your community and becoming part of it, is becoming a volunteer and there are myriad opportunities to do it. But, of course, when we go into the hospital sector, when we go into people who are looking after people with disabilities and when we are looking at schools, these are areas where again this concept has grown through the common law that people who are grouped together to carry out something that is considered worthwhile in our community should be given preferential tax treatment or allowed to be exempt therefrom.

It is interesting that the comments from a wide group of people about the very legislation itself, I think, have become quite critical to the debate. One of the main aims that is said to be in favour of the legislation is that it will reduce red tape. There is not a single comment that I can lay my hands on that says this legislation will actually reduce red tape. By setting up this commission, we are once again setting up a very large bureaucracy, and it will have punitive powers. Whereas some people have said that this legislation aims to have universality of treatment of the entities that make up the not-for-profit sector, in fact that is not true in the intrinsic nature of the legislation itself. In fact, the legislation allows by regulation a minister to discriminate against some groups in favour of other groups—that is my language. The language of the legislation is that you can give exemptions and treat some not-for-profit entities different from others, but we are yet to see this regulation.

I think it is important to quote the Australian Institute of Company Directors, who say:

The Bill lacks detail about the proposed interaction between the ACNC, the Corporations Act and other legislation, and about governance and external conduct standards, which we consider make it impossible to provide meaningful comment on the Bill as a whole.

Key parts of the Bill are confusing and overly complex and need to be redrafted.

The Bill in its current form will represent a major retrograde step by imposing substantial and unwarranted compliance costs on charities.

The Bill will make it harder for charities to attract or retain experienced directors due to the heavy-handed approach taken in respect of director responsibilities.

In addition:

It is clear that some of the measures contained in the Bill … will hurt rather than foster the activities of charities.

They also say that this premise of reform will 'create a complex maze of requirements which will be unintelligible to most individuals they are intended to apply to' and that the liability which attaches to individuals in unincorporated bodies is potentially much higher than it is for incorporated bodies. On this basis it may be that many unincorporated bodies will choose to incorporate where this is possible, with additional cost.

Carers Australia say:

We also had serious reservations regarding the constitutional validity of legislating on governance requirements for organisations that are not federally regulated agencies, and the apparent disregard of important administrative law concepts such as procedural fairness.

That eminent body created as an Australian innovation and taken up by the British parliament—the Scrutiny of Bills Committee—had a few things to say as well. It looked at the governance standards and said, regarding clauses 45-10 and 50-10:

These clauses provide, respectively, for the making of governance standards and external conduct standards by regulation. The bill thus sets up a framework for the making of the key accountability and conduct standards for not-for-profit entities, leaving the standards to be developed in regulations. Compliance with these standards is a condition of registration and breach of the standards may lead to enforcement action.

I think enforcement action is pretty drastic. It can remove people. It can virtually put the organisation into administration. It can even proceed against some people with imprisonment of one year as a penalty. It says specifically about the external-to-Australia conduct standards to be developed that they should be in primary legislation, not in regulation. Therefore, they have recommended as follows:

The Committee therefore seeks the Treasurer's advice as to whether the external conduct standards can be included in the bill …

Pending the Treasurer's reply, the Committee draws Senators' attention—

because it reports to the Senate—

… to the provisions, as they may be considered to delegate legislative powers inappropriately, in breach of principle 1(a ) (iv) of the Committee's terms of reference

that it should indeed be placed in the primary legislation and not in secondary legislation.

They also make comment on strict liability provisions. They say that for a responsible entity—that is, one who has been removed, who has been suspended because of a number of offences and who attempts to influence the operation of the registered entity—the offences are strict liability and carry a maximum penalty of a one-year imprisonment, 50 penalty points or both.

Again, the committee says:

… given that the offence is punishable by imprisonment the Committee seeks the Treasurer's further advice as to why strict liability is appropriate, taking into account the principles stated in The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

Again, strict liability comes in in subclause 100-71 and subclause 100-75. It says that there is a very brief explanation regarding the commissioner—that is, the commissioner of this new charities commission—making a property vesting order:

Subclause 100-70(1) provides that if the Commissioner makes a property vesting order to vest the property of a registered entity in an acting responsible entity, that the former trustee or former trustees are required to give the acting responsible entity all books relating to the registered entity's affairs that are in the former trustee's or former trustees' possession, custody or control. Failure to comply with this obligation within 14 days of the Commissioner making the order is an offence of strict liability.

Again, the committee wants to know why it has to be a strict liability offence and, again, why it should not be in the enabling legislation.

Concern after concern is registered. There is an item relating to independent schools. It says that the smooth functioning of this new commission is 'dependent on a number of Commonwealth departments agreeing to either hand over their regulatory powers' to the new commission or 'harmonise their regulatory requirements' with the commission. It says:

This issue is of particular concern to independent schools, which will be required to report much of the information to the ACNC that they currently report to the Department of Education and Workplace Relation (DEEWR), as well as to state education authorities.

If an information-sharing agreement is not reached between the ACNC and DEEWR, the ACNC will effectively serve as an additional layer of regulation and red tape for independent schools many of whom are already drowning in compliance.

Again, the powers and penalties that are to be placed leave a lot to be desired.

This is an ill-thought-out bill. This bill is heavy handed. I can wave pages and pages of quotes from people in the not-for-profit sector who simply say that this bill does not cut red tape, that it indeed adds to compliance requirements and that it will do nothing for the sector as a whole. Again I say very simply that it is designed to turn many of the non-taxpaying entities into taxpaying entities.

It also provides, with regard to the external test—or, rather, the 'in Australia' test, on which of course the High Court ruled in a particular way which the government did not like and so the government is now, in this legislation, overturning that High Court decision—that once again the commissioner may vary the 'in Australia' requirements in the act by regulation, to favour some people over others. For instance, could it possibly be that a Labor Party minister would favour the trade unions in activities out of Australia, acting in another country with regard to industrial relations? There are so many questions that are unanswered. It is very well that the not-for-profit sector, which is carrying out good works with the aim of assisting our fellow Australians, should find that this is oppressive legislation and that it has good reason to fear it.

Should we be elected we will abolish this act. We will repeal it and replace it with a policy that has been outlined by our relevant minister, which means that there will be benefits to charities and not-for-profits so that we can see that the wonderful work volunteers do is well and truly revered by the people who serve in this place.