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Tuesday, 30 October 2012
Page: 8460


Senator BOYCE (Queensland) (17:47): I am pleased to have the opportunity to continue my remarks on these bills. I was in the somewhat unusual position of being a member of the two committees that inquired into the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-Profits Commission (Consequential and Transition) Bill 2012—that is, the Joint Committee on Corporations and Financial Services and the Senate Standing Committee on Community Affairs. I feel that I certainly have had the opportunity to see quite closely the potential for the operation of these bills.

As I noted earlier, we are in the bizarre position where Senator Xenophon has found it necessary to seek an amendment to these bills, asking the government to introduce legislation detailing the definition of 'charities' and of 'charitable purposes' in the legislation. One thing that we were assured of by Treasury, by the ATO and by others involved in the inquiries that we had was that the organisations involved—the charity sector, the not-for-profit sector—had been fully consulted at all stages in regard to the development of the commission.

It beggars belief, in my view, that this can be claimed when we still have the situation where we do not know what 'charity' means to the government and what is going to be covered by this. Certainly, there is a small group of quite large organisations that are currently under the aegis of the Australian Taxation Office that will be initially covered by this legislation. However, we have this assurance about all the wonderful consultation that went on and yet, even at this late stage, we have concerns from large numbers of small organisations, in particular, about this legislation and about whether it is going to achieve anything.

The preamble to the Australian Charities and Not-for-profits Commission Bill 2012 states:

It is important that a national regulatory system that promotes good governance, accountability and transparency for not-for-profit entities be introduced to maintain, protect and enhance public trust and confidence in the not-for-profit sector.

As I outlined earlier, there is currently no problem with the public trust and confidence in the not-for-profit sector. They are a very strong and trusted part of our civil society. The coalition members of the corporations and financial services committee certainly do not accept that the current Commonwealth regulatory regime, which is based on ASIC and ATO regulation, is broken and we do not, therefore, agree that there is a premise for a new regulatory super megastructure to take that up.

We are also not at all persuaded by the government's view that this reform will reduce the regulatory burden on the sector, because, as I said earlier, many of the charities and not-for-profits that are currently regulated by state and territory governance are fine with the degree of regulation that they have. They are operating well. This government has seen fit to do all this consultation, apparently, allegedly, with all the groups in the sector but not with the state and territory governments, the people being asked to handover their regulatory powers in this area. They may well be happy to get out of the sector, but there is nothing in what this government has told us to suggest that there will be an improvement in the degree of red tape.

The laudable aim of the Australian Charities and Not-for-profits Commission is that once you are ticked off as a suitable charity or a not-for-profit by the ACNC, you would not have to register with anyone else, any other agency or any other government department. In practice, the odds of this happening of course are very low. This government's history of negotiating agreements through COAG would not make you believe that anything like a smooth and simple agreement is going to be developed by this organisation.

We already have the situation where 90 staff are to be hired by the Australian Charities and Not-for-profits Commission. Yet, during the inquiry we were told that there would be no need for the charities commission to have a large staff or a large budget because the Attorney-General's Department would supply their back-office administration needs. How can you have it both ways? Why on earth do you need 90 staff to look after a couple of thousand national charity organisations, if you do not even need those staff to do the basic administrative tasks and that is to be left to the Attorney-General's Department? In doing that, you would have to wonder about the independence of the Australian Charities and Not-for-profits Commission. You have to worry about its independence if the Attorney-General's Department is dotting the i's and crossing the t's.

The coalition absolutely support a reduction in red tape in this sector. We also support anything that will efficiently assist to improve governance and other standards within the not-for-profit sector. On that basis, we would support the establishment of a small charities commission, the sort of thing that the government tried to suggest was what they first had in mind that would provide education and training, especially about governance and other regulatory issues required for the not-for-profits to meet their goals.

The way the government has structured this will mean the Australian Charities and Not-for-profits Commission will have more power than ASIC in how it perceives mistakes or problems by anyone who acts as a director or a committee member. The bill gives the ACNC power to deregister any organisation if it is conducting its affairs in a way that may cause harm or jeopardise the public trust and confidence in the not-for-profit sector. 'Public trust' and 'confidence' have not been defined. The witnesses indicated this would lead to uncertainty and the possibility of expensive litigation to clear up the meaning of these expressions. This happened, for example, in the UK when the Charity Commission proposed that independent non-government schools would only qualify for charitable status if they offered bursaries to poor pupils. That was overturned but only after expensive litigation through the courts. This sort of philosophical undermining of how charities work, this idea that the government can control what charities do by sleight of hand, is quite frightening.

These bills are supposed to stop red tape and provide a one-stop shop whereby charities do not have to register with three or four different organisations every time they want funding. I would like to point out the situation with non-government schools. Despite the alleged reduction in red tape, even if this bill were to be successfully passed, even if the state and territory governments were to agree, non-government schools would have to report not only to the ACNC but also to DEEWR, in accordance with their funding agreements and the School Assistance Act; to ACARA, the Australian Curriculum, Assessment and Reporting Authority; My School data collections; and to state and territory government minimum standards and reporting requirements for registered schools, including financial accountabilities. That does not sound to me like a very large reduction in red tape.

As the government set this out, what was going to happen was that a small commission would work as an assistance to the not-for-profits. What we have primarily ended up with is a situation of policing and enforcement. The commission will have the power to investigate any breach of the law and to remove a responsible person. Yet there has never been any evidence put forward about non-compliance that would suggest that the commission should have more power to remove people from boards of governance or from management committees than ASIC has to remove company directors from these groups.

We also have the situation that, in the main, small organisations are driven, staffed and supported by volunteers. What volunteer in their right mind is going to get themselves involved in a governance situation that (a) is unclear and (b) where more time is spent worrying about ticking boxes and filling in forms than it is in actually providing charitable services? Why would anybody do it? This has certainly been a major concern of many of the witnesses to the group.

Father Brian Lucas from the Catholic Church has said:

Much has been said about the need for reduction of red tape. That was very much the rationale that led a number of the various government inquiries to recommend a national regulator. You will have heard, I am sure, that there is still concern in many sectors that particular legislation that we are now dealing with does not bring about the reduction of red tape that was envisaged.

Mission Australia said that they remain concerned that the bills as drafted are more prescriptive in certain areas and do not reflect sufficient work having been done by federal agencies to reduce red tape and duplication. They also suggest that there are concerns about ensuring the independence of the charity and not-for-profit sector.

The Australian Catholic Bishops Conference said that they are:

… sceptical about the wisdom of accepting an initial increase in red tape—

which this commission will be—

in the hope that it may be reduced in the future. The ACBC looks to the Commonwealth to obtain assurances from the states and territories and a published timeline committing to a reduction in red tape at the national level.

Further, the ACBC:

… remains concerned the legislation … does not reduce red tape and in fact increases red tape for the sector.

Of course, they point out:

This is contrary to the stated objectives of the legislation.

I do not think anyone should be surprised that this government manage to come up with legislation that is contrary to its stated objectives, because I think their objectives are not transparent and not accountable for in the way that the government would like to have people believe.

I asked a number of questions during the inquiry on the topic of the consultation that had gone on, and I was assured that there had been lots of it. I asked for evidence of this. There was not any. There was no evidence. Certainly the larger groups, such the Red Cross and others, said, 'Yes, we were consulted.' Where was the evidence that smaller groups, the sorts of groups that we all know hold our communities together—the small groups that work in footy clubs, disability areas and right across the board; charitable areas of all sorts—had been consulted? The answer was, 'They have'.

We had a submission from Mr John Church, who shared our concerns. In his submission he said:

The Government in the explanatory memorandum (some 325 pages) says it will consult with stakeholders and peak bodies yet as no analysis has been done of the small organisations to see if they are represented by peak bodies.

This is the usual mishmash of philosophical skulduggery and overblown regulation that one has come to expect from the Labor government, and the coalition will not support these bills in this form.