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Charity Fundraising in the 21st Century
07/11/2018
Current framework of fundraising regulation for charities and options for reform

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

[13:27]

CHAIR: Welcome. I understand information on parliamentary privilege and the protection of witnesses and evidence has already been provided to you.

Mr Crosbie : It has.

CHAIR: The committee has received your written submission. I now invite you to make a brief opening statement and then we'll proceed to some questions.

Mr Crosbie : I just want to make six quick points, as well as reinforcing what's in our submission. I'll start by thanking you for this inquiry. It's so good to be able to actually talk about a really significant issue for the charity sector.

The first point I want to make is that the charity sector is actually a very significant part of the economy; it's a very big part of our lives. It turns over $134 billion, and we're talking about 57,000 charities with more than $230 billion in assets. It matters what happens in this sector. It employs 1.3 million people.

Charities are not seeking to avoid accountability or transparency. As I think you will have heard, charities trade in trust. It's one of the reasons that we, as charities, have so strongly supported the ACNC and continue to support the ACNC—I think over 80 per cent of the sector. Any compromise to trust damages our brand. We know that when there are major stories in the media about charities doing the wrong thing, it actually impacts on charitable giving.

Fundraising regulations, which may seem minor to many people, are actually a huge issue across the sector. I'm always surprised by how big it is, but whenever we do surveys—we've done surveys through Pro Bono News and other surveys—it's one of the No. 1 issues for charities. And in terms of red tape and compliance, it is the No. 1 issue. It has a real impact on charities in many ways: not just the regulatory impost, but also the way it impacts on our relationships with potential fundraising partners.

It's one of those areas where you just find yourself banging your head against the wall and thinking, 'What is happening here?' There is a long history of regulatory failure. Twenty-three years ago, this was identified as an issue that needed to be fixed. It's been identified time and time again. I hear that we need to 'harmonise'. I'm not a young man, but I think I've heard that phrase for well over a decade. I've watched enthusiastically from the sideline as various COAG committees, led by this jurisdiction or that jurisdiction, have sought to do this—even the federal Treasury at one point, frustrated with the inability to harmonise fundraising regulations, put out their own discussion paper about possible federal legislation. Of course, what that did was stimulate the states to say, 'We should harmonise,' and we entered the process of failure again where we didn't harmonise. I well remember we had it on the agenda for consumer affairs ministers—I think it was in 2012 or 2013, when David Bradbury was Assistant Treasurer—and it was taken off the agenda because it wasn't seen as a significant issue by the consumer affairs ministers. And I have to say that my board asked me to criticise that very strongly.

The current regulations are clearly not fit for purpose. You will have heard stories, and we've provided examples. They just don't work, and most charities are non-compliant. The regulations are not only not observed, but also they're not enforced. That doesn't mean they don't have a huge impost on people or a negative impact on the sector.

We know, from the work that has been done over a long period of time, that the best solution we have at the moment is the #FixFundraising solution of slightly amending the ACL. I sat here and listened to the ACCC give evidence. No-one is asking the ACCC to be a regulator for the charities sector. If there are issues with governance, with the way charities are using money, with whether they're advocates or not: these are issues for the sector regulator. No-one's asking the ACCC to be involved in those issues. We just want to ensure that the small area of interaction around fundraising that is not clearly, definitely covered by the Australian Consumer Law is covered, which would require some minor amendments. When we look at what enforcement does happen around this country, it is mostly through the ACL.

I might stop there, apart from saying we are beyond frustrated with the inability of regulatory authorities in this country to provide charities with a capacity to operate their fundraising regimes in the 21st century. Time and again we raise concerns, we put out media releases, we get it on agendas, we get it on various kinds of reform agendas, red-tape reduction agendas, but it just doesn't happen. It's kind of a slap in the face for the charities sector, because you wonder, if we were a business sector that employed 1.3 million, would we still be asked to go through these really ridiculous regimes of regulation? Thank you.

Senator ABETZ: Is the CCA a registered charity in its own right?

Mr Crosbie : It is, with the ACNC.

Senator ABETZ: Your organisation represents organisations?

Mr Crosbie : Yes.

Senator ABETZ: On page 5 of your submission, under 'Informing principles for fundraising regulation reform', you told us:

… the first principle of any proposed new fundraising regulations should be to encourage and support fundraising activities undertaken by charities.

I suppose you say that from the perspective of being a representative of organisations. I don't argue with that, but I suppose I would put a balancing view about protecting donors as well—the general public—who don't necessarily have organisations advocating for them here. When people put their hands in their pockets to give a few coins or, indeed, a few notes to charities, they don't organise themselves into a lobby group, if you like, to come to parliamentary committees. But, nevertheless, the need to encourage and support fundraising activity is, I think, very good for any society. We see what we can do to assist and encourage each other, so all strength to your arm in that regard. But please understand that some of our questions may relate to protection of the public.

Mr Crosbie : I accept that, and I think it's a good point. My response would be, in part, that if we do the wrong thing it costs us all. If a charity does the wrong thing then I can tell you that the people who are most upset by that are those in the charity sector. I've had organisations ringing me to ask that we close down media coverage of this issue or that issue because their donations are going down and they directly attribute it—I don't know how accurately we can say this—to the fact that there has been negative coverage of what was seemingly a good cause, seemingly engaged in charitable fundraising, but which turned out to be some kind of scam, sham or misappropriation. No-one hates that more than the charities sector. So promotion of fundraising, from our perspective, is about building trust, not undermining it. Anything that undermines trust is a negative.

Senator ABETZ: So pursuing good—pursuing support of fundraising—of course, does not mean that you don't want to look after donors. In fact, looking after them to the very best of your ability is of support to all your member organisations.

Mr Crosbie : Yes, exactly right.

Senator ABETZ: Thanks for that. On page 4 of your submission you said that the ACNC:

… has proved to be a positive step towards red tape reductions …

Some have told us that that is not necessarily so. Can you tell us of your experience and about how the ACNC has assisted in reducing red tape?

Mr Crosbie : There was a time—and I think we've had these discussions going back quite a while—when, if I wanted to do something like hire a church hall, get a deduction for my payroll tax in Victoria or seek some kind of concessional place in a fundraising application to a charitable trust, I would have had to provide a set of documents that would, in a sense, prove that I was a charity. Those documents would often involve letters from the ATO, ASIC registers and a range of other documents, and the requirements varied. I can now say, 'I am ACNC charity registered number so-and-so.'

Similarly, the charity sector is very broad in its activities. Some departments at the state and territory and federal levels no longer require charities to complete a whole lot of organisational identification information, because they draw it from the ACNC register. The fact that there is an annual return and that in that annual return all the board directors or their equivalents, the income of the organisation and its primary activities are listed has enabled charities not to have to duplicate that information in numerous different forms to numerous regulatory funding bodies from local governments right through to major funders and the federal government.

Senator ABETZ: Going back to the protection of charitable organisations and confidence in the system, do you have a definition of 'charity' or 'charitable' that you would seek to offer the committee, given the representative role that you have? Further, should that term be, if you like, a protected term so that organisations that are not registered as charities are not able to use it in their objectives as they seek to present themselves to the public?

Mr Crosbie : We've reached the position within our organisation where if you're not registered with the ACNC you cannot be a member of our organisation. Unless you are a registered charity with the Australian Charities and Not-for-profits Commission, you cannot be a member of the Community Council for Australia. Increasingly, I think that is the standard that some philanthropic funders and others are adopting. On the proposed changes to DGR registrations: it was quite a complex system where there was an environmental register, an arts register, an overseas aid register, a health register—the suggestion that they be rolled into the ACNC to me strengthens the capacity to say that you're either registered and reporting every year and providing those details—

Senator ABETZ: Your organisation supports that move?

Mr Crosbie : Yes.

Senator ABETZ: Good; thank you.

Mr Crosbie : I think I was on the board of the ACNC when we initiated the charity tick for organisations that comply with the ACNC registration requirements and do so in a timely manner. They can get a tick. I know some organisations put it on their websites.

Senator ABETZ: What about organisations that assert that they are charitable in their objectives, but one would have to agree that they are not? Should a legislative stop be put to that?

Mr Crosbie : It's a good question, and I'd have to say that I'm pretty confident that that's exactly where we would want the Australian Consumer Law to say that they are misrepresenting the nature of their organisation. If I look at recent actions in relation to misrepresentation of charitable status—and I'm not a lawyer, and I'm not across the full detail of this case—the Belle Gibson case in Victoria involved an element of exactly what you're talking about. It was under Australian Consumer Law that she was taken to court and prosecuted and had to repay money and make good on some of her assurances about how money would be used.

Senator ABETZ: On page 6 of your submission—and you referred to it in your verbal submission as well—you said that the current fundraising regulations aren't fit for purpose. Is there one framework that you would say is the best out of—

Mr Crosbie : Other than the Northern Territory?

Senator ABETZ: You like the Northern Territory one? I thought you might say that! But apart from its regime—

Mr Crosbie : There are two aspects to legislation, and I think you know this as well, Senator—probably better than most people. One aspect is the legislation and the other is the enforcement. Often it's the enforcement that creates the issue or not the issue. We have a whole range of laws in our country that are enforced to various degrees, and often common sense prevails when we're deciding, for instance, whether to have drunk—intoxicated—patrons on licensed premises; it's illegal, but we could probably have gone and found a few yesterday afternoon! I didn't see a whole lot of action taken. The issue for me is how it is enforced. I look at the same thing around liquor-licensing-commission laws: there are really good liquor-licensing commissions that work with their communities and try to create safe events and oversee things, and there are liquor-licensing commissions that take a more hands-off approach, which I don't think is quite as effective.

Unfortunately this is an area of government activity that has not been well resourced. Even if the legislation was good, I think there are fewer than 20 people around Australia employed in this area, across all the jurisdictions, so they just haven't resourced it. I could give you the name of a popular online website based in America, one that funds people to raise money, and we could look up animal charities in Tasmania. We would find a whole range of people asking for money, and we'd have no idea whether they're registered charities or not. There is no control. It's not even an Australian platform; it's a US platform. People can say, 'I'm the new designer dog protection society,' or 'the noddle society' or, 'I like your pencil preservation society,' or whatever. I'd encourage you to, at some point this afternoon, go online or get one of the staff to go online and see how many fundraising appeals in any given area of human or animal condition there are available. I feel like asking some of the state regulators: 'How many of those have you even looked at? How many of them are compliant with fundraising regulations?' I would bet my house—that's about all I have!—that over 50 per cent are not registered in any way and many of them will not be charities. But we don't know any of that.

Not only that but, if we're talking about where it's going, the really big companies like Google and Facebook run big charities but don't call them charities. They've decided the compliance involved in running a charity requires too much transparency and too much accountability. They run their charities out of their businesses as promotional arms. Increasingly, to me, a lot of the fundraising happens person to person through electronic forms outside any of these regulatory processes or legislative requirements. And I think it's only increasing, which is why it's very important that the fundamental principle—you say you are collecting money from me for this purpose and you are this and you do that—be challenged. If we rely on only looking at registered charities or only looking at people in our jurisdiction, we will miss the vast majority of fundraising as it's starting to happen in Australia and around the world.

Senator ABETZ: Thank you for that. The issue of 20 enforcement people around Australia is something the committee might have a look at, given the size of the charitable sector. I think we were given a figure of $139 billion or something.

Senator SIEWERT: That's what you just said, isn't it, Mr Crosbie?

Mr Crosbie : Yes, a $134 billion turnover.

Senator ABETZ: It's a big sector with only 20 people. My final question: would it be appropriate for police checks to be required of people sitting on charitable organisational boards or committees?

Mr Crosbie : The short answer is no. The reason is—I don't know whether you know my past, Senator—that I have been in prison—as a teacher but not as a criminal! I ran Odyssey House in Melbourne, the large drug treatment service, for some time, and I argued for some time that we needed clients and former clients to be involved in our board to ensure we had good representation. Former clients often have criminal records that they are very embarrassed by. They've recovered. They are no longer engaged in those activities and have clearly created new lives for themselves. But a police check would quickly reveal that they were previously involved in various kinds of crime, and I wouldn't like to preclude people who've previously had significant issues in their lives from having input into charities—although I agree with you about the principle of ensuring that those involved in charity boards and charity governance are appropriately committed to the cause and able to follow through. We probably do need to look at the boards of some charities in terms of the way they're structured and the way they operate. There's a whole argument about board reform. I think we have a range of problems associated with charity boards that probably need to be looked at, but the sort of blanket police rule, check, is not one that I support and many of the charities that work with really marginalised people will struggle to support it. This is because, increasingly, we want to hear the voices of the people who use our services.

CHAIR: Mr Crosbie, you talked about Google and Facebook. How do they deal with the compliance burden?

Mr Crosbie : They don't.

CHAIR: They just ignore it.

Mr Crosbie : Yes. They're not charities. It's just part of their business operations. It's an expense.

CHAIR: But they are running philanthropic and charitable fundraising areas, aren't they?

Mr Crosbie : Yes. But when I give to global online funding I'm not necessarily getting a tax deduction for doing that, and, increasingly, that's less of an issue for people.

CHAIR: That they don't get a tax deduction for doing so? Okay. Your membership's quite broad. Have you come across any examples where our current fundraising framework has created an obstacle or disincentive for sponsorship, partnership or other relationships due to the legal complexities involved?

Mr Crosbie : When corporate lawyers look at the fundraising regulations—I had this member, who I won't identify, who came to me and said: 'David, we need your help. We're working with a really major Australian retailer who's prepared to do a fundraising program that would be worth well over half a million dollars a year.' Their corporate lawyers, doing due diligence, said, 'You cannot comply with all the charity regulations and be consistent,' because the expenditure requirements in one jurisdiction around the money conflicted with the expenditure requirements in another jurisdiction. I said: 'Oh, don't be silly. Who is going to enforce that? You have to understand, yes, there are regulations but, generally—' and they said: 'Yes, but these are corporate lawyers and they look for risk. That's their job. They've looked at this and they will not enter into this partnership. Can you come and meet with them?'

So I went and met with them and I could not convince them. I'm not always that convincing, I have to say. In that situation I was unable to convince them that there was no risk. I said, 'If you, to the best of your ability, comply with every fundraising regulation in this country, and you make a sincere effort to do that and meet the requirements, there is no regulatory body in this country that will come after you.' This is a very reputable charity and a very well-known big-brand retail corporate organisation. They didn't do it, and that partnership folded.

CHAIR: So the sponsorship just fell over.

Mr Crosbie : Yes. It's interesting, because I'd never looked—again, I'm not a lawyer—through all the laws to see if you could comply with them all, if you were running a major national fundraiser that had physical collections in each jurisdiction. But their argument was that you couldn't, as corporate lawyers for a major corporate company that ran a retail outlet.

Senator SIEWERT: There have been a number of comments that people are, potentially, breaking the law accidentally or, should I say, not meeting legal requirements around Australia.

Mr Crosbie : Of course. I went and pulled it—in Senate estimates on 1 March last year you were talking to the ACNC Assistant Commissioner, David Locke. You asked him, and I think it's worth—I can just give this to Hansard, this brief extract. I'm going to paraphrase, but I'm happy to table this if that's appropriate. You asked, 'What percentage of charities are currently compliant with all the national and various fundraising rules that operate around Australia?' There was quite a detailed response given by Mr Locke. He gave the example of Queensland, where they have approximately—rounded—10½ thousand charities, and 2½ thousand have fundraising licences. So 8,000 are operating without a licence. Then you suggested, 'Do you think you could extrapolate that to the rest of Australia?' And he basically said yes. So you're talking about around 20 per cent of registered charities in Queensland that are actually registered to fundraise. I'm sure that over 60 per cent would be fundraising and that that figure would be consistent across Australia. Since March 2017, when that estimates hearing was on, I think there is now more online fundraising and less compliance than there was then.

CHAIR: If you could just table that document, that would be great. Thank you. Can I just take you back to this issue around obstacles and disincentives and things. Do you think that charities are actually able to take advantage of the new platform for fundraising? Technological change has been so dramatic in the past 10 years, let alone the past 30 years. If not, what are the consequences where charities can't keep up or can't comply?

Mr Crosbie : There are probably three categories of charities. One is that they don't know and they just do it. I think there is a lot of that. Probably the majority is people who think, 'We'll do a fundraiser; we're a charity.' And they do it on their internet platform homepage, have a 'give' button and just incorporate it into their new web design. I don't know that they're aware that they're meant to comply with anything. I think there are a lot of charities who are fundraising without fundraising licenses—not because they said, 'We won't get one,' but because they didn't think it is required.

There is another category that know there is a whole lot of work involved in doing it, but they're not sure if they need to do the work, so they just go ahead anyway and wait to see if anything happens.

Then there is another category that know. Often it is the bigger charities who have in-house lawyers or who have lawyers on their boards. They feel as though they have to try to do the right thing and comply with all the regulatory requirements of being a good charity. For those it's an incredibly onerous process. In our submission, I went through how I was on the board of a charity that ran a national fundraiser through the internet, and I think it took us three months, but we kept the record of the amount of staff time. It was over a month of full-time staff. I had to send my police check and my passport to Western Australia. It was just an absurd process by any measure. I was on that board, but there were also some very senior legal people who felt we should comply. I've lost that argument as well. I said: 'Really? Can't we just comply in the jurisdiction we're in and take the risk in the others?' The irony is that the Western Australian fundraising regulator wrote to that charity and said, 'We want to know that you're spending the money you've raised in Western Australia within the next 12 months in Western Australia,' or some other requirement that was a bit beyond us, really.

So you get the people who really try to do it, and for them it's a lot of work. You get the people who sort of throw their hands in the air and say, 'Maybe we're meant to do it, but let's see if anything happens.' Then you get the people who just don't know. In all cases except for the top one, there will be very little, if any, consequence. I'm relying on the University of Queensland analysis. We talk about fewer than 20 staff, but I think there were fewer than 20 actions taken in 12 months around the country around fundraising breaches. They may say they are involved in education. I sat with part of the Queensland regulatory body who were saying they were doing a good job, and I opened my iPhone and said: 'Here are all these fundraising people asking me for money. How many of them are registered?' They said: 'We don't want to know about that, David. We haven't got the resources to go and look at all of those.'

The reality is that the consumer in this case is getting no protections. The only protection we really have is the ACNC. Again, I'm in a slightly privileged position in the sense that I was on the ACNC board for three years. I can tell you that people do complain about governance and they do complain about fundraising to the ACNC, and the ACNC investigates, but it doesn't yet have the powers of an ACL. I'm really relying on people with much more expertise than me, like Mr O'Bryan and others, who provided advice that the ACL does cover most of what we do.

I've been sitting in roundtables with the ACCC and have met with representatives from the ACCC and Treasury around this issue, and I find their reluctance to accept they have responsibility in this area bizarre. It doesn't even match their own behaviour. Less than two weeks ago they were the group that put out a warning about sham charities. Clearly, it's a priority for them or else they wouldn't be doing media releases and having their senior staff going on media outlets talking about the need to watch out for sham charities. You can't on the one hand say, 'It's important enough for us to prioritise it as a media story and get our senior staff out there talking about it,' and then say, 'No, it's not important enough for us to allocate some resources to looking at complaints.'

Again I'd emphasise that no-one's asking them to look at governance, no-one's asking them to look at record keeping, no-one's asking them to look at the size of the collection boxes or the ridiculous—

Senator SIEWERT: Whether they're on a stick? We know about the stick.

CHAIR: Yes, we know about the stick.

Mr Crosbie : Yes, the length of the stick! The current regulations aren't enforced, so you can just put them to one side and ask, 'What do we really need?' I certainly would support, as good practice, a code that goes beyond the current Australian Consumer Law and beyond what the ACNC does, but I'd see that initially as a voluntary code unless we see that there's reason for it to be strengthened. And I don't think we have seen that there's reason for it to be strengthened.

Let's be honest here: the vast majority of prosecutions around inappropriate fundraising are fraud. They're me putting on a fireman's suit, walking around with a bucket and saying, 'I'm collecting for the fires in'—wherever they are—and people giving me money. And then I take off my fireman's suit and take the money home. That's the biggest kind of fundraising fraud we have in this country—opportunistic fraud and misrepresentation. Very few charities—a minuscule number of charities—are involved in that kind of deception. Those that are, I can tell you now, as a charity sector, we want deregistered and we want out, preferably without too much media, because when we get the media it impacts our brand.

CHAIR: You talked about the area of government activity not being well enough resourced and said there are only about 20 people. That really surprises me, because in some of the other areas I've been involved with the government have moved quite openly and seriously to ask for philanthropic support and support from charities and to go into partnership with them. I think that's a great idea. I don't have any problem with that. But, if we're doing that but are not making sure that the charity area can work as easily as it can in the best way it can, aren't we just causing problems for ourselves?

Mr Crosbie : We're definitely causing huge problems. As I said, the really frustrating thing is that it's not new. We've had these discussions. We keep having these discussions. As if the New South Wales government, who have just passed new legislation, are going to harmonise their legislation! Victoria led two attempts to harmonise legislation, and I think South Australia led one. Each of them went for two years. I don't know how many person hours have been accumulated in senior officials flying around the country to agree they can't agree after years of meeting, but if ever there was an area of failed regulation, with history showing us failure after failure, it's fundraising.

I really like the fact that the Treasury put out their own discussion paper about having national fundraising guidelines, because it really spooked all the states and territories into actually trying to do something. But then we all put in submissions and that didn't go anywhere either.

CHAIR: I think Treasury are up next, so we'll be able to have a chat to them about some of that. Senator Siewert. We have run out of time, but that's all right—no pressure.

Senator SIEWERT: Yes, no pressure. In your commentary and in answer to questions and in your opening statement, you made some comment about the ACCC and the issues that they're raising about why they shouldn't take it on. Can you expand on that a bit more, in terms of your response to their response? They raised a number of points during the session. Can you briefly comment on those issues?

Mr Crosbie : Sure. My understanding is that they feel as though they can't be a sector regulator, and, therefore, they can't enforce Consumer Law as it relates to donations to charities.

Senator SIEWERT: My take on it is at the minutiae and that that should be done at a state level.

Mr Crosbie : Yes. The argument was—and I think in their opening letter, from memory, there are nine dot points—about things that they don't think they could do, including monitoring of collection boxes, keeping of records, disclosures around phone calls, badging of collectors et cetera. They're saying that it's not the business of the ACCC to be involved in that, and I agree, but no-one's involved in that. That's not happening. No-one's going out measuring collection boxes and seeing who opens them. No-one's checking that the phone call's or the website's being made compliant or that records are kept. No-one's asking them to do anything other than enforce Australian Consumer Law. When they say, as I heard the ACCC representatives say, 'But that would be a governance issue,' of course, we don't want the ACCC involved in governance issues. That's the responsibility of the ACNC. If people have concerns about who's on the board or where the money's going, please complain to the ACNC. The more complaints we get and the more we get people who are doing the wrong thing out of our sector, the better.

I think it does get down to that issue of resources. We don't have many resources; we only have 80 cases a year. You're not seriously asking us to take on charity regulation. No, we're not. We're just saying: enforce Australian Consumer Law and let's clarify that it does apply to donations, which is really the sticking point in the law—and, again, I'm not a lawyer. That will be enough, because all the other issues around inappropriate behaviour by charities are rightly already the responsibility of the ACNC.

Senator SIEWERT: Where people had individual cases, like the case we were referring to earlier, your contention is that they are such big cases they would essentially then be taken on by the ACCC under the Consumer Law as one of the 80 cases.

Mr Crosbie : My understanding is that simply having the capacity to refer to the ACCC or knowing that your complaint would be taken up is often enough in Consumer Law. It's often enough. If I'm buying a television and they don't do the right thing, I'm not expecting that the ACCC's going to represent me in a court case. But I know that I'll get some backup, and the company will be concerned and they will try to make restitution rather than be publicly identified as not meeting Consumer Law requirements. And I would expect exactly the same thing to happen to charities, even more so because charities rely even more on their good name and levels of trust to continue to function. So, if you were saying to me, 'One of the problems we have with the ACNC'—and I know that this is under review—'is that we can't actually identify when complaints have been made and investigate what the outcomes of those complaints are,' I think that's a weakness around the ACNC, because I actually think that kind of public highlighting can be very powerful. The ACCC can do that around inappropriate consumer practices. I doubt very much whether Belle Gibson raised much money for her supposed charity once the fact that the ACCC was involved was publicly highlighted. So I don't think it means that they have to take on thousands of court cases around people complaining about fundraisers. I think that's an absurd interpretation. I think what it would mean—they already have responsibility for most areas of fundraising—is that it would enable people to actually highlight that this was an avenue that you can pursue if you feel as though the charity has in some way misled you over a fundraising exchange.

Senator SIEWERT: So, to put it in a nutshell, we've got a whole lot of regulation now that isn't working.

Mr Crosbie : Yes, and very few people comply with it.

Senator SIEWERT: A large number aren't compliant through the various ways you've articulated. So then you improve it, get a harmonised approach across Australia and increase the powers for the ACCC to do some of that work, being aware that you've got a better regulatory process but you're not going to be doing the nuts and bolts that are not being done anyway now?

Mr Crosbie : I don't see that the states and territories in this area perform any kind of useful function. I see no role for the states and territories in this area, because it's not being done at the moment. You get the kneejerk new legislation, as we have in New South Wales at the moment, and they add new things and take things away. But, for as long as they're not enforcing it, the regulatory requirements sit there like ephemeral clouds that float across the sky and don't bring any rain. They're there, but they don't even cast a shadow. They exist as a set of legislation, but they're observed more in the breach.

So I don't know what function the states and territories currently perform other than creating a whole lot of work for people who are really desperate to try to comply for a whole range of individual organisational reasons. I see very little benefit in them being involved. I think the ACNC should be used more by the community. I think we've got a fantastic basis for a really good charities regulator that can investigate any wrongdoing in charities. It already has those powers and does do that: thousands of complaints have been investigated. We know that Consumer Law applies to most fundraising situations, and that's what's being used at the moment for any major enforcement action around this country. I haven't heard any examples of any enforcement action from states and territories that comes anywhere near the level of enforcement—and even education now, with this sham charities campaign from the ACCC in the last month. No states and territories are running those kinds of campaigns. They're not investing that kind of resourcing. So, for me, states and territories aren't doing anything useful other than creating roadblocks.

Senator SIEWERT: Thank you. Can I go back to the role of the ACNC. From the discussion that we've just had and the comments you make in your submission, you'd beef up the ACNC legislation as well?

Mr Crosbie : I don't think you need to. If I've got a complaint—if Senator Abetz's pencil charity appoints Mr Fountain Pen and Mrs Fountain Pen as board directors and they appoint all their children to the board and they don't do anything to promote the preservation of pencils but going on using fountain pens and collect—

CHAIR: You've been listening to Senator Abetz.

Mr Crosbie : Yes.

Senator ABETZ: Very wise!

Senator SIEWERT: Also, I think you're favouring fountain pens over pencils!

Mr Crosbie : That would be an ACNC matter, because it's inappropriate to have that kind of governance structure and it's inappropriate to not use your resources for the charitable purpose—preservation of pencils—that you were set up for. You already have quite a lot of power. What we don't have is public disclosure: 'This group's a bit iffy; we're looking at them,' or, 'We've got an undertaking from them that they'll get rid of all the people off their board and properly have pro-pencil people involved,' or whatever the outcome of the investigation is. We don't have a capacity to understand that that's happened, and I think that's a weakness. But, other than that, I don't see that there needs to be a major change to the ACNC. Again, to me that wouldn't be an ACCC issue. It's an issue of a charity behaving badly.

ACCC are about consumer issues. The point at which they knock on my door and ask, 'Will you donate to this charity?' and I donate to the charity and then it's not a charity, that's ACCC. We know it already is. That's what's being prosecuted. If they take the money and use it completely differently, that's an ACCC issue. It is already. It's misleading and deceptive conduct. I don't think we necessarily need any major beefing of any laws. We just need to make it very clear—and apparently, the lawyers tell me, you can do this with some minor legislative changes—that all donations should be treated as consumer interactions. I think that's fair enough.

There are some charities, I have to say, and there are even some groups in the fundraising area, who have a reluctance to do that. I'm a bit, and my members generally are, firmer about that. We want a strong charities sector, and if you enter into an arrangement with people where they're supporting you then you've got to be transparent and accountable. We would strengthen that, not weaken it in any way. We think calling it a 'consumer interaction' actually strengthens it and strengthens the capacity of the law and the ACCC to take action.

CHAIR: Thank you, Mr Crosbie, for your submission and for attending today.

Mr Crosbie : Thank you.