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Tuesday, 18 September 2012
Page: 11084


Mrs MARKUS (Macquarie) (20:40): I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012, the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012 and the Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012. The charitable and not-for-profit sector in our nation forms an integral framework of support and services that is woven into the fabric of all our communities. The role of government and indeed its responsibility is to assist, not place barriers and obstacles in the path of, those seeking to deliver good outcomes and real, practical support and assistance to our communities. With this legislation, the current Labor government not only fails to assist the charitable and not-for-profit sector but introduces a policy framework that will harm the sector's capacity to deliver services. The proposed new regulation of charities and not-for-profits will not reduce red tape. It treats the sector as untrustworthy, it will hinder their activities and it will also discourage the involvement of volunteers in particular.

This suite of bills establishes a new statutory office, the Australian Charities and Not-for-profits Commission. As detailed in the bills, this commission would be the Commonwealth level regulator and add further red tape to Australian charities and not-for-profit organisations. The sector does not support the proposed creation of a large new regulator for charities and not-for-profits. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth. In effect, the new regulator will impose an additional layer of red tape, thus not achieving the main objective. What this will mean, particularly for small charities, is that they will have to divert some of their resources from face-to-face, grassroots contact to additional administrative assistance.

There are approximately 600,000 charitable entities in the not-for-profit sector, and all members of this parliament would agree that these play an integral role in our communities. As I have already said, they provide vital services and fill service gaps on a daily basis. I would like to mention just a few such organisations that operate across the nation and in my community: Anglicare, the Australian Conservation Foundation, Catholic Social Services Australia, UnitingCare, the Red Cross, Mission Australia, the Salvation Army, Surf Life Saving Australia, the RSPCA, World Vision and Relay For Life. Locally, we have Nova Employment at Richmond and Springwood, Blue Mountains Cancer Help, Hawkesbury Community Kitchen, the Blue Mountains World Heritage Institute, Slow Food Blue Mountains, Salvation Army clothing stores and one ADTC. These are only a few of the organisations that deliver face-to-face, grassroots assistance to our local communities.

This suite of bills introduced by the government is set to decimate the not-for-profit and charitable organisations in my local community. By again refusing to work with the states and territories, the Gillard government is adding yet another roadblock to this incredibly important sector. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth, so this regulator would be an additional layer of red tape. Under the commission, Australian charities would now need to report to the appropriate state or territory and the Commonwealth commission.

Martin Laverty, the CEO of Catholic Health Australia, stated:

At the moment, we actually do have a degree of harmonisation in that an organisation can choose one of two options: regulate under the Corporations Act or regulate under a state or territory association. This will create a third.

As a result, this bill does not even come close to reaching its primary objective of reducing regulation. Instead it sets about to stifle the industry and the incredible volunteers who dedicate their time and personal resources to ensuring that these organisations remain successful. Unless and until the states and territories agree to hand over their powers to the Commonwealth regulator and harmonise their laws, these bills are going to add an additional layer of red tape.

It has been made clear throughout the course of the inquiry by the House economics committee and coalition discussions with stakeholders that no real progress has been made by the government in its attempts to have the states and territories agree to harmonise their laws. Moreover, based on our discussions with relevant state ministers, the coalition does not believe it is likely that they are going to submit to handing over their powers in this space to the Commonwealth in the foreseeable future.

The Australian Council for International Development stated:

The present drafting of the ACNC Draft Bill does not reassure the ACFID or its members that it will actually reduce red tape because the drafting indicates that there is yet to be agreement with the states and it does not deliver a 'one-stop shop' for the establishment of a charity or reporting by a charity.

Susan Pascoe, from the Australian Charities and Not-for-profits Commission Implementation Taskforce, stated:

You are only going to achieve full red tape reduction with the involvement of the states and territories.

The Conservation Council of South Australia said:

Whilst there is a national 'one-stop shop' and a 'report once, use often process', there remains a major problem in that at this stage state regulation will continue to apply.

The establishment of the commission is effectively telling the sector that they need a watchdog to promote transparency and trust in the sector. The community already trusts this sector and there is no identification by the government of the mischief that warrants the suite of powers that would be granted to the new commission. Labor's approach reverses the cornerstone assumption of trust, essentially creating legislation that assumes people who volunteer to be involved in such organisations are untrustworthy, that they seek to misuse rather than serve their communities.

The ACNC will have far-reaching powers, elevating it to being one of the most powerful Commonwealth regulators. The bill provides the ACNC Commissioner with a range of enforcement powers. These powers are modelled on those given to other Commonwealth regulators such as ASIC, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission.

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. The bills specify the conditions that must be satisfied before the ACNC Commissioner can use the enforcement powers, the scope and range of the ACNC's enforcement powers, and the associated penalties for contravening enforcement powers issued by the ACNC Commissioner. The ACNC Commissioner would be able to exercise enforcement powers only over registered entities.

The Australian Catholic Bishops Conference said:

The lengthy list of powers proposed in the ACNC bill focuses on matters which appear more appropriate for a criminal investigation authority rather than a body which is intended to promote and educate.

The Australian Council of Social Service stated:

The bill contains no requirement on the ACNC to inform or hear an organisation before it makes an adverse decision against that organisation.

Carers Australia said:

There is a lack of remedial compensation for an organisation wrongly deregistered unless they take action in the Federal Court. We also have serious reservations regarding the constitutional validity of legislating on governance requirements for organisations that are not federally regulated agencies and that apparent disregard of important administrative law concepts such as procedural fairness.

World Vision Australia said:

World Vision Australia considers that the tone and structure of the enforcement powers continue to suggest a heavy-handed approach weighted against the interests of registered entities and responsible entities. Further efforts should be made to ensure that the powers are better targeted, fairer, are not used to inappropriately interfere with an organisation's legitimate operations and do not impose undue costs on an entity in taking action against the ACNC.

The bill will have an impact on schools also. The smooth functioning of the commission is also dependent on a number of Commonwealth departments agreeing to either hand over their regulatory powers to the ACNC or harmonise their regulatory requirements. The 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, Employment and Workplace Relations, as well as to state education authorities. Because the government is not willing to work with the states and cannot ensure that they will harmonise existing procedures within the department, these schools will be placed under additional pressure and red-tape burden.

The Australian Catholic Bishops Conference, in referring to this issue, is quoted as saying:

All groupings of systemic schools, independent Catholic secondary schools and many primary schools will be classified as "large charities" and therefore be subject to the highest level ACNC financial reporting and accountability requirements.

The outcome for schools is an unreasonable compliance burden …

The associated Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012 has a range of broad-reaching objectives, most of which are the 'in Australia' special conditions. The 'in Australia' test will require tax-exempt entities to operate principally in Australia and pursue their purposes principally in Australia. The controversial amendments relate to situations where a tax-exempt institution provides money, property or benefits to another entity that is not itself an exempt entity. In this case, if the donee entity uses the money, property or benefits outside Australia, the exempt entity must take that into account in determining whether it is operating principally in Australia. This government's solution to every problem is red tape, roadblocks and regulation. Since 2007 this government has introduced more than 18,000 new regulations which they claim will increase productivity and create more efficient processes. Yet they have removed only around 80 regulations.

But the coalition has a plan. In June 2012 the member for Menzies announced the coalition's approach to the charities commission, which will be a small educative and training body for the not-for-profit sector, as opposed to supporting the creation of a heavy-handed regulatory body that would add to the red-tape burden for charitable organisations and duplicate state and territory regulations.

This piece of legislation is not about empowering charitable organisations and institutions to deliver better service. It is not about accountability. It is about placing burdens of additional red tape, disincentives and barriers, to them being able to deliver the real practical services that they do not just to our local community but also in raising funds from generous Australians for assistance overseas.