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Parliamentary Joint Committee on Intelligence and Security
30/01/2018

CROSBIE, Mr David, Chief Executive Officer, Community Council for Australia

Committee met at 08:35

CHAIR ( Mr Hastie ): I declare open this public hearing of the Parliamentary Joint Committee on Intelligence and Security. Today's hearings encompass the committee's inquiries into the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2017 and the Foreign Influence Transparency Scheme Bill 2017. These are public proceedings, although the committee may agree to a request to have evidence heard in camera or may determine that certain evidence should be heard in camera. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. In accordance with the committee's resolutions of 12 October 2016, this hearing will be broadcast on the parliament's website and the proof and official transcripts of proceedings will be published on the parliament's website. Those present here today are advised that filming and recording are permitted during the hearing. I also remind members of the media who may be present or listening on the web of the need to fairly and accurately report the proceedings of the committee.

I now welcome Mr Crosbie, representing the Community Council for Australia, to give evidence today. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make an opening statement before we proceed to discussion.

Mr Crosbie : Thank you, Chair. I welcome the opportunity to present to the committee. I would like to make a very brief opening statement. I should explain that the Community Council for Australia is a peak body for the charities sector. Our role is to try and enhance the work of charities. We are not a union for charities. We don't think everything that happens in charities is great. We're a very broad church. We have on our board the CEOs of World Vision, RSPCA, Musica Viva, Hillsong Church, The Smith Family, Life Without Barriers and Wesley Mission. Our membership is also very broad. We're independently funded through membership fees.

Part of our primary work has been trying to create a regulatory environment that enhances rather than restricts the work of charities—which is why I'm here, because it appears to me that this bill is all encompassing for any charity that receives any kind of support or donation from outside of Australia. The bill suggests that any charity in any kind of arrangement with anyone outside of Australia, including donors and supporters, will be required under quite strong laws—jail penalties et cetera—to register, and ignorance of the scheme is explicitly not a defence. The registration process, while it's not clear, appears quite onerous. I know there are a number of important exemptions, including humanitarian aid, but it's not clearly defined, and I don't believe that these exemptions cover the vast majority of charities in Australia that receive international philanthropy and support.

If commercial activities are carved out, why aren't charitable activities? My reading is that, in practice, if an international company like Diageo seeks to influence our alcohol policies, that's okay. There is no inappropriate influence there. But if the Bill & Melinda Gates Foundation gives money for alcohol research, via the Foundation for Alcohol Research and Education, they would have to register. Extending this view, pharmaceutical companies, mining companies et cetera, don't have to register, but health groups, environmental groups and others not engaged in humanitarian aid who are in any way involved in public policy would have to register.

I should note at this point that charities already face significant regulations and limitations on their capacity to engage in political activities. A charity cannot support a particular political candidate, cannot support a particular political party, cannot donate to a political party and cannot hand out how-to-vote cards. No such restrictions apply to business or any other vested interest groups. Charities can advocate only for their charitable purpose.

I should also note that the community is very concerned about the amount of money charities spend on administration. It seems to be an ongoing debate in the media. It's also clear that governments all claim to be committed to reducing red tape. There is no way that this new legislation will not impose significant new administrative costs on any charity that raises funding from anyone overseas.

CCA believes the carve-outs in the proposed bill are inadequate to allow charities to continue to accept overseas donations and to pursue their legitimate charitable purpose without having to satisfy a whole new range of reporting and compliance activities. CCA supports the Law Council of Australia recommendation that charitable entities registered with the Australian Charities and Not-for-profits Commission should be exempt from the registration scheme.

Finally, let me say that charities are very well-regulated in Australia. In fact, with the charities regulator, the Australian Charities and Not-for-profits Commission, charities' compliance in Australia is higher than anywhere in the world. To be a charity an organisation must demonstrate that they deliver a public benefit. Charities do not seek political power or monetary gain. Their bona fides have to be well-established and reported on. Any charity not pursuing its charitable purpose can be subject to a complaint from anyone and the complaint will be investigated. Charities found not to be pursuing their purpose or seen to be pursuing a political purpose will be deregistered. So, I fail to see what the issue is with charities receiving donations from overseas and advocating for their charitable purpose and why we would want to create a whole regulatory structure, compliance and red tape for charities that do receive any kind of donation from overseas. Thank you.

CHAIR: You talked about the potential onerous administrative burden that the FITS would pose for your organisation and others like yours. Can you give us a sense of how you would anticipate that would play out? Give me a sense of how much additional work that would create for your organisation?

Mr Crosbie : It's difficult to know, because the registration process is not clear. But my reading of the bill is that if you receive any money from a donor overseas and you are engaged in any kind of public advocacy, which almost every charity I know is, then you're going to have to register with the scheme, and the registration process appears to involve documenting all your communication activities, all your materials, the nature of your agreement, if you get a funding agreement or a donation, and reporting all that to a registration body. All that requires separation out of that particular source of income, identifying it, documenting it, reporting it, which is all work that you currently don't have to do and all work that takes you away from doing what the community expects you to be doing, which is pursuing your charitable purpose.

CHAIR: As a peak body representing a number of not-for-profits, can you give us a sense of what your involvement with our political institutions is like, in terms of advocacy?

Mr Crosbie : We would certainly be seen as an advocacy organisation, because we advocate for better regulations for charities. What I'm doing here is advocating. I think it's very important to understand that almost every charity I know becomes an advocate. I've worked in a whole range of charities—I won't go through my CV. If you're a charity that provides blankets and food to the homeless, you may start out, as many charities do, filling a gap. So you start by offering blankets and food to the homeless, and you do that year after year. After a while, you are seeing the same people and you're offering them blankets and food and you think, 'Well, maybe we should try to find somewhere for these people to live.' At that point you start looking at what shelter is available, what housing is available, and all of a sudden you're an advocate, because you start talking about the need for particular kinds of shelter and the need for particular kinds of housing. Almost every charity I know is engaged in that kind of advocacy, whether they're representing a community or a cause. You can pick the dead fish out of the stream as much as you like and clean it up year after year, but eventually you may want to stop the stream being poisoned. Then you become an advocate. That's what happens to most charities: they start off filling a gap, meeting the need, but then they try to prevent having to fill that gap, at some point, and become advocates. Almost every one of our members advocates around their particular cause, whether it's Musica Viva advocating for music education, or the RSPCA advocating for animal welfare, or Save the Children advocating around reducing youth detention. Every charity I know of not only provides charitable services but also advocates to try to reduce the need for them to provide those services.

Mr LEESER: I'm familiar with the existence of the ACNC but I'm not familiar with its operations, to the extent you would be. In order to try to compare and contrast, I wonder if you might take some questions about the way in which the ACNC operates.

Mr Crosbie : Sure.

Mr LEESER: In relation to the ACNC, there is no requirement for charities to disclose their donation sources, is there?

Mr Crosbie : The ACNC return requires any organisation that has more than $250,000 in income to detail that income. So, you have to say the sources of that income. If you go on the ACNC website—

Mr LEESER: Do you have to say that's donation income or do you have to list specific donors?

Mr Crosbie : You don't have to list specific donors but you have to say your sources of income.

Mr LEESER: Do you have to say whether it's foreign income and from which countries, or do you need to—

Mr Crosbie : I don't believe so.

Mr LEESER: What about for the nature of the lobbying work and influencing work that charities do? Is there any requirement to disclose that as part of the work that the charities registered with the ACNC do?

Mr Crosbie : I think it would be impossible to identify that work. I'm not sure whether you're familiar with what's happened in the UK or in Canada, where there have been—particularly in Canada—attempts to try to restrict to 10 per cent of their activity the amount of advocacy work that any charity does. There has just been a major report produced about the failure of that legislation, because it's almost impossible to identify what is or isn't advocacy. This is what really worries me about this bill. Within the bill it talks about if you're influencing the public. Because the public are part of the political process, you're engaged in the political process. It seems bizarre to me that only politicians are allowed to express views on any kind of issue like education, health or welfare, or areas where charities have real expertise and knowledge. I don't know of a single charity that does not express views about how to respond to their cause or their community. So, in my view, every charity engages in advocacy. Is advocacy a CEO speaking to a Probus Club a media interview? Is it a meeting with a government official about funding? Is it a submission? At what point do you say that you're engaged in what you call political activities and what we see as charities pursuing their charitable purpose?

Mr LEESER: This particular piece of legislation is looking at the influence of foreign organisations. You mentioned foreign foundations earlier. The Rockefeller Foundation was famously involved in an anti-coal advocacy paper a few years ago. That just happened to be disclosed on the particular document that was produced. But had that not been disclosed the public would have been none the wiser. There is nothing that the ACNC does to effect that disclosure of foreign donation sources of the sort the Rockefeller Foundation was making in that anti-coal advocacy paper.

Mr Crosbie : If the Rockefeller Foundation were registered with the ACNC they would not have to disclose the nature of their advocacy activities. My focus would be: is the charity pursuing the purpose for which it has been registered? And if it's not it's in danger of being deregistered. So, the Rockefeller Foundation cannot come to CCA and say, 'We want you to advocate against coal,' because if I advocated against coal it would not be part of my charitable purpose and I would be deregistered.

Mr LEESER: But they could give money to Greenpeace to advocate against coal?

Mr Crosbie : Well, they can give money to Greenpeace and Greenpeace would have to comply with their charitable registration, which means they would only be able to pursue the purpose for which they're registered as a charity and they would not be able to act politically. They would not be able to give money to a political party, support a particular candidate, support a particular party or hand out how-to-vote cards. If they did, the ACNC would be in a position to deregister them or seek undertakings that that behaviour ceases.

Mr LEESER: To your knowledge, has the ACNC deregistered any charities?

Mr Crosbie : Yes.

Mr LEESER: On what grounds?

Mr Crosbie : Well, this is one of the problems we have. The ACNC was established under the ATO and the secrecy act prevents us knowing any details about why an organisation was deregistered. We also are not privy to what investigations were undertaken and what undertakings were given by charities. I served on the ACNC advisory board for three years and in that capacity I had access to some of the details about some of these investigations, which, under the acts that establish the ACNC, I cannot speak about publicly. I would suggest that that's one of the changes we should be seeking to make to the ACNC, because I think public trust and confidence in the ACNC would be greatly enhanced if we could actually say why organisations were deregistered—13,000 organisations have been deregistered—and what undertakings, if any, have been given by charities in response to ACNC investigations. There have been more than 1,300 investigations into charities.

The last time the ACNC commissioners appeared before a Senate estimates committee, it was interesting to me because we had both Greens representatives talking about how the ACNC had been too harsh on green groups, and, I think it was Senator Abetz, complaining about the Catholic Education Office having received letters for writing to people suggesting how they should vote. To me, the activities of the ACNC have been exemplary and outstanding, but we don't know, and most of us don't know, exactly what those enforcement activities have been.

Mr LEESER: You would not support, I take it, the extension of the registration and disclosure obligations that we are seeking to put here into the ACNC? So your argument is not that there is, as it were, a duplication of regulators; your argument is that you don't like scheme?

Mr Crosbie : There have been arguments in the High Court over many years about sources of income compared to charitable purpose. If a charity is pursuing its purpose, and doing so within the regulations, whether the income came from running funeral parlours—in the case of the Word High Court decision—or whether it came from donations, whether those donations were raised on a website and some of the donors were living overseas, to me is not the issue. The issue is not the source of income. The issue is whether the charity is pursuing its charitable purpose. If it is then it is satisfying the public benefits test and it is satisfying the requirements of its registration. That's what we should be pursuing. Frankly, we already have quite a lot of work in the charities sector making sure that charities do pursue their purpose and focus on their purpose and make that their goal.

Senator McALLISTER: Mr Crosbie, your last answer answered my question.

CHAIR: Any other questions?

Senator BUSHBY: Yes. Thank you, Mr Crosbie, for assisting us today. You've stated that if a charity isn't doing the right thing, if it's not meeting its charitable purpose, it will be deregistered. But the issue here is about transparency. How do we actually know that it's not doing that? Is it about getting the appropriate examination to ensure that it is acting within its charitable purpose? I'm sure the vast majority of charities do the right thing, even when they are supported by a foreign principal, but there is also no doubt that there are foreign principals that have sought to influence politics in Australia. I'm not saying it is the case, but it is potentially the case that they could seek to do that through a charity. How would your proposal expose that outcome? If a foreign principal was trying to influence Australian politics in some nefarious sort of way, how would your proposal give a degree of satisfaction to the public that it is being appropriately examined and will be exposed if it's happening?

Mr Crosbie : I have two concerns about that. One is the notion that it's nefarious—

Senator BUSHBY: No, I'm not saying that. I'm saying it could be. There is no doubt that nefarious activities are—

Mr Crosbie : It can only be nefarious if it's not the charitable purpose.

Senator BUSHBY: But how do you know that? How is it exposed?

Mr Crosbie : The other exception I take is with this foreign-principal idea. If someone living in a foreign country donates to the Australian Conservation Foundation and the Australian Conservation Foundation advocates for better environmental policies, are they a foreign principal interfering in the running of this government? The way this bill reads, they are. That's exactly what this bill says. It implies that, if you receive money from overseas, they are a foreign principal, a donor, and if you advocate in a public space for particular policies then you're interfering in our democracy in a way that only politicians should be allowed to. That, I think, is the implication, rather than people, communities or charities pursuing their purpose.

Senator BUSHBY: With respect, Mr Crosbie, you didn't answer my question. There is a mischief that currently exists. Certainly most people seem to accept that. This bill is designed to address that mischief. You're saying that in respect of charities or not-for-profits it is not required because there is another path to deal with that. How does that other path actually address that mischief?

Mr Crosbie : I don't see that there is a mischief in the charities sector. If I nefariously want to promote the advancement of the Chinese policy on something, I'm not going to go to some homelessness group and say, 'I want you to now advocate for the advancement of this Chinese policy.'

Senator BUSHBY: So you're saying that there is no scope whatsoever for a foreign principal to utilise a not-for-profit for this purpose?

Mr Crosbie : If the charitable purpose of a charity was to advocate for a particular cause, they would be subject to the ACNC investigations.

Senator BUSHBY: That is what I am trying to get at. How would the ACNC investigation process expose that?

Mr Crosbie : You're asking me how the ACNC—

Senator BUSHBY: They're not going to be doing it in an open way. They are going to be doing it in an underhanded or as secretive way as they possibly can.

Mr Crosbie : I'm not sure of the question. Is the question: how does the ACNC conduct investigations? As I have said, there have been well over 1,000 investigations and 13,000 deregulations. The ACNC actively investigates charities now. You can lodge a complaint, I can lodge a complaint or anyone can lodge a complaint and it will be investigated. If there is any concern about any charity, I encourage people to lodge a complaint.

I can tell you now the one thing that charities hate is charities doing the wrong thing, because it damages our brand. That's why we fought so hard to establish the charities regulator. That's why our voluntary compliance rate with charity regulation in Australia is higher than anywhere in the world. We want accountability. We wanted the information that is now available on the ACNC website to be up there. We are the ones that have been seeking accountability and transparency. No charity wants to be seen to be acting politically. I know of no charity that is interested in being partisan or being seen in that way. It damages their brand; it damages the whole charity brand. We have a regulator that is doing an amazing job. It is recognised around the world as an outstanding regulator. The fact that its inquiries and investigations are not public, I think, has ended up with us having these kinds of discussions, where people don't know the extent of the charities regulator's enforcement of charities pursuing their charitable purpose.

Senator BUSHBY: I think I will have to leave it there, but it's not so much about charities doing the right thing as charities potentially being used by a foreign principal—

Mr Crosbie : If that's the case, lodge a complaint with the ACNC. If they're not pursuing their purpose, they will be deregistered. Can I just contrast that with what happens with business. From a charity perspective, we lose the public policy debates to the most rich and powerful influencers, who tend to be large, multinational companies who are pursuing vested interests. They are trying to make money. They have an exemption in this bill. Diageo can come in here and lobby as much as it likes about alcohol policy and taxes, but if the health groups that may have a different perspective have received a donation from overseas, making them subject to a foreign principal, they would have to register. It just seems bizarre to me that you would carve out the interests of business to pursue vested interests and monetary gain, but charities who have had to demonstrate that they're for a public benefit and which report against that and are regulated and have limitations, none of which applies to business, are subject to this. If you are interested in foreign influence, I suggest you look at what happens. If you ask me, the most influential foreigners around our politics are probably people who own media companies.

Mr DREYFUS: I just want to see if I can distil what you have said. Your position is that charities engaging in advocacy is an entirely legitimate activity, provided it is within the scope of the purposes of that charity. Is that right?

Mr Crosbie : Yes.

Mr DREYFUS: Your further proposition, as I understand it, is that the Australian Charities and Not-for-profits Commission is an adequate, or perhaps more than adequate, regulator of the charities sector in relation to that aspect of charitable work—namely, charities keeping within their purposes.

Mr Crosbie : Yes.

Mr DREYFUS: Further, as I understand your submission to the committee, you're suggesting that, because of the ACNC's regulation, there is no need to subject charities in Australia to this transparency scheme and all of the obligations that it carries with it.

Mr Crosbie : Yes.

Mr DREYFUS: Perhaps as a final point, you've drawn attention to the fact that individuals directly employed by foreign businesses are entirely exempt from all of the requirements of this legislation, no matter what political activities they choose to engage in.

Mr Crosbie : Yes.

Mr DREYFUS: Thank you.

Senator WONG: I will be brief. I apologise if you outlined this at the commencement of your evidence, Mr Crosbie, but I had a media matter I had to attend to. Picking up where Mr Dreyfus left off, I'd like to understand precisely what sort of amendment to the division 4 exemptions you are proposing we consider to enable charities to do, as you say, what they should be allowed to do.

Mr Crosbie : We support the Law Council's recommendation that charities registered with the Australian Charities Not-for-profits Commission should be exempt.

Senator WONG: Entirely?

Mr Crosbie : Yes.

Senator WONG: Would you contemplate any changes to the disclosure requirements under the ACNC and related legislation to deal with some of these concerns?

Mr Crosbie : I don't think charities object to transparency. If it's part of the ongoing regulatory structure—so there's not a new layer of administration—I don't think there would be significant concerns. There would be some but not significant concerns about having to identify sources of income as part of the annual information statement to the ACNC.

Senator WONG: Thank you.

CHAIR: Mr Crosbie, would you agree that the transparency scheme seeks to register lobbyists and political campaigners who are seeking to influence government or political processes in this country? Is that your understanding of it?

Mr Crosbie : I have to say, reading the bill, it seems an incredibly broad catch-all that's overreached into a number of areas. But, if you're asking me do I support the idea that we shouldn't have foreign countries and operatives operating in Australia and influencing election outcomes and things, then, yes, I support the bill in principal.

CHAIR: It wasn't so much a question of support, but that you understand the intent, which was to protect our political and governmental processes. The bill explains those processes, which include federal elections, political parties, influencing independent candidates, proceedings of parliament, federal government decisions and decisions of independent MPs. What I've heard from you today is that charities aren't interested in influencing those processes. Is that right?

Mr Crosbie : No; charities want to influence those processes in order to have stronger communities.

Senator WONG: They're allowed to do that.

CHAIR: I know; I'm just making it clear.

Mr Crosbie : As I said in the opening, I don't know of a single charity that doesn't advocate.

CHAIR: Sure.

Mr Crosbie : Advocacy on behalf of their cause or their community is exactly why they were established, why the community support them, why they get donations and why they exist. There seems to me within the bill to be an implication that people speaking up for causes or issues is a problem. That is exactly what makes our democracy strong, and I think we should be encouraging more input from charities, community groups and civil society into the way government shapes policies and makes laws, because then we'll have better laws and we'll have stronger communities. Trying to restrict those activities harms our democracy. I think you can make a case that that's what's happened in a number of democracies where those voices have been quietened and trust and confidence in democracy have diminished.

CHAIR: Thank you very much. Are there any further questions?

Mr DREYFUS: Just a quick follow-up. Mr Crosbie, charities are already prohibited, are they not, from giving money directly to any political party?

Mr Crosbie : Not only that; I would say that charities are incredibly disadvantaged in the public policy process. Charities cannot fly the foreign minister and deputy leader of government to India to meet with their mining magnate friends. We're not able to conduct research that we provide exclusively to certain political parties. We haven't got the resources to have staff based in political offices or have staff doing work for politicians and parties. In most instances, I would say that the charity sector feels incredibly disadvantaged compared to vested interest. Often it's a case of public interest versus vested interest. Public interest is almost invariably represented by charities and vested interest by businesses seeking to maximise their profits. We are already restricted but businesses are not. This is yet another bill that says 'Businesses, you go for it. But, charities, if you receive any money from overseas, you'd better register with us and give us everything that you do'. If we actually believe that charities are there for public benefit it seems anathema to suggest that they need stronger regulation than business.

Mr DREYFUS: Thanks, Mr Crosbie.

CHAIR: I have one final question, What percentage of the charities you represent are religious in character?

Mr Crosbie : I'd guess 20 per cent. Many charities in Australia have a religious basis. On my board, I have Hillsong Church and Wesley Mission—and whether or not World Vision and Save the Children have a religious basis, I think they do have a religious basis originally. Unlike some other countries, many charities in Australia do have a religious base. I would just say that, if you do have questions about the religious exemptions, we do have Catholic Social Services here and I am sure Joe and others would be willing to answer about the concerns that they have raised in their submission about the religious exemptions not being very useful from their perspective.

CHAIR: Thank you very much for your attendance today. If you have been asked to provide any additional information, could you please forward that by 2 February. You will be sent a transcript of your evidence so that you can many any corrections.

Mr Crosbie : Thank you, and thank you for listening.