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Wednesday, 19 March 2014
Page: 2386

Mr ANDREWS (MenziesMinister for Social Services) (10:50): I move:

That this bill be now read a second time.

Th is is the first of two b ills to implement the g overnment ' s election commitment to repeal the Australian Charities and Not-for-profits Commission.

The c ommission is established under the Australian Charities and Not-for-profits Commission Act 2012 and commenced operation on 3 December 2012 under legislation introduced by the previous government.

An organisation must be registered as a charity by the c ommission before it can receive charity tax concessions and other Commonwealth exemptions and benefits from the Australian Taxation Office. However, the process has resulted in an increased red tape burden for many organisations.

The commission was established with the intention of it being a single reporting point for charities. How ever, this has not eventuated— the majority of charities continue to provide information to multiple jurisdictions in the course of conducting their business as charities.

Establishing the commission has introduced new powers in information collection, monitoring and compliance that are not available to Commonwealth bodies with comparable powers in relation to enforcement and removing responsible persons (such as the Australian Taxation Office, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority).

The additional oversight and reporting burdens on the charitable sector are particularly onerous given the absence of harmonisation across all jurisdictions.

The majority of the sector which are unincorporated organisations (approximately 21,000 of whom are registered charities) are now subject to this new regulatory regime, whereas they previously fell largely outside of the sector's regulatory framework.

The large number of incorporated associations (approximately 136,000, around 6,000 of which are charities) already regulated under relevant state and territory acts now have duplicated reporting requirements.

Charitable trusts, accountable to the state Attorneys-General, are now regulated at the Commonwealth level, with obligations or compliance activity they were not subject to previously.

Given that the regulators in place before the c ommission was established can provide similar regulatory oversight at a lesser cost both in terms of administrative costs to g overnment and in terms of costs imposed on regulated entities the introduction of a specialist regulator to monitor and enforce a codification of generally applicable laws has not proven to be the best use of Commonwealth funding.

The government made a clear commitment during the recent election campaign to abolish the commission.

With this bill, we are taking the first step towards implementing this election commitment—and we want to remove the regulatory impost on the sector as soon as possible, to ensure that organisations are not reporting unnecessarily.

Repealing the c ommission will remove unnecessary regulatory control over the civil sector, and move instead towards Commonwealth support for the sector to self - manage.

The repeal is consistent with the broader deregulation agenda to boost productivity by removing any excessive, unnecessary and overly complex red and green tape imposed on business, community organisations and individuals.

Vesting powers in a separate entity to oversee and regulate charities runs counter to the deregulation approach, which takes a risk-based approach to oversight of the institutions of civil society, whether they are for-profit or not-for-profit.

This b ill will repeal the Australian Charities and Not-for-profits Commission Act 2012, thereby abolishing the commission.

However, this bill will not take effect until the enactment of a later bill, which will provide the details of the arrangements replacing the commission. This two-stage approach allows the government to affirm its intention to repeal the commission, while working through the legislative and administrative issues involved in winding down the commission's operations and establishing the National Centre for Excellence for civil society.

This bill allows the minister to determine, by legislative instrument, a successor agency to deal with certain transitional matters.

The bill will provide transitional arrangements for matters such as transferring to the successor agency records held by the commission, any outstanding Ombudsman investigations, and annual reporting requirements.

There will be continued protection for information disclosed for the purposes of the Australian Charities and Not-for-profits Commission Act 2012.

I commend the bill to the House.

Debate adjourned.